Business Law Final

Consider the following timeline. June 1—Y receives an offer in the mail from X. June 2—X mails letter of revocation. June 3—Y mails acceptance at 5 p.m. June 4—Y receives the revocation. June 5—X receives Y's acceptance. Do X and Y have a contract? A. Yes, as of June 3. B. Yes, as of June 5 C. No

A. A contract was formed at 5 p.m. on June 3. Since a revocation is usually not effective until it is received, the letter that X mailed on June 2 had no effect until June 4, when Y received it. And by that time a contract had already been formed, because the acceptance counted as soon as it was sent.

Ann, Bob, and Carol are involved in a pro-life organization. Ann and Bob often carry signs in a picket line in a park near an abortion clinic. Ann's condemns abortions in a general way. Bob's claims that a doctor who works at the clinic across the street does not have a medical license, and the claim is untrue. Carol hands out pro-life leaflets to coworkers at a corporation where she works, but her boss asks her to stop. Which of the three have engaged in protected free speech? A. Ann B. Bob C. Carol D. Ann and Bob E. Ann and Carol

A. Ann has a right to voice her opinion. Bob, by engaging in defamation, is not protected. Carol is not protected in her situation because she is working at a private company, and not for the government.

Bill says, "I hate Steve!" Steve's boss hears the exclamation, and later fires Steve because he no longer trusts him. Steve has to go into business for himself. Tom says, "Steve stole $1000 from me when I hired him to do my taxes!" This is not true. Steve's largest client fires him. Bill has committed __________________ , and Tom has committed _______________ . A. no type of defamation; slander per se B. no type of defamation; libel C. slander; slander per se D. slander; libel

A. Bill has given his opinion, and has not stated something that is verifiably false, so there is no defamation even though Steve has suffered a negative consequence. Tom has lied to another person about Steve, and because it involves Steve's professional reputation, it amounts to slander per se and not just ordinary slander.

Jack and Jill each own a Chewbacca action figure. Jill's is even still in its original box. Their toys, like most of the figures from the same production run have a problem - the feet fall off at the slightest touch. The few figures in the world that have sturdy feet are worth fifty times what the flawed figures are worth. Carl Collector talks to Jack over the phone. "Does the Chewie you are selling have the 'feet fall off' thing?" he asks. Jack glances at his footless action figure. "Nope," he replies. Carl agrees to buy it. Carl next calls Jill and asks her the same question. Jill doesn't know one way or the other, since her action figure is still in the box. She could find out if she looked, but she is not about to check too closely. "No way," she says. "The feet are sturdy." Carl agrees to buy it. Jack has committed ________________ , and Jill has committed __________________ . A. fraud; fraud B. fraud; innocent misrepresentation C. innocent misrepresentation; fraud D. innocent misrepresentation; innocent misrepresentation

A. Both have committed fraud. Jill recklessly made a false statement, and Jack did so intentionally.

After a long day of creating online course materials, Prentice and Bredeson have a fender-bender in the faculty parking lot. They briefly consider fighting, but they soon realize that neither is particularly good at fighting, so they decide to sue each other instead. At trial, the evidence shows that at the time of the accident, Prentice was behind the wheel eating a cheeseburger and fiddling with his radio, and that Bredeson was talking on two cell phones. The jury concludes that the wreck was 60% Bredeson's fault and 40% Prentice's fault. Bredeson will recover 40% of his losses in which type of system? A. pure comparative negligence B. modified comparative negligence C. both A and B D. None of the above

A. Bredeson gets nothing in a either type of modified system, because he is over half at fault. Bredeson can recover 40% of his losses in a pure comparative system. He end up with that amount because his award will be reduced by the 60% of the blame that falls on him.

Max, a resident of Texas, sues the Houston Police Department after he is arrested during a protest. He claims his free speech rights under the U.S. Constitution have been violated. He seeks $50,000. Can he bring his claim to federal court? A. Yes B. No

A. Don't be too distracted by the "above or below $75,000" issue. The number of dollars involved is relevant only in a diversity of citizenship situation. Max can sue no matter how much his is seeking because his case is based on federal law and jurisdiction is based on a federal question. Had Max's suit been a claim based on state law, he could successfully file in federal court only if he and the defendant were citizens of different states and more than $75,000 was at stake.

Rick, when he was 16 years old, bought a used car from Car World for $5,000. He drove the car for a year and put 15,000 miles on the odometer. He was also involved in a minor accident. At age 17, Rick wants to disaffirm the contract with Car World and get a full $5,000 refund. Car World objects. Its owner says, "Look, the car has higher miles that it did last year, and even if it wasn't damaged from the wreck, I could only sell it for $4,000. And with the damage on top of the higher miles, I can't sell it for more than $3,000. And besides, I sold this car more than a year ago - I shouldn't have to issue any refund at all." What refund should Rick receive if a court applies the rule that is applicable in most states? A. $5,000 B. $4,000 C. $3,000 D. None

A. In a most states the minor is entitled to the full amount that he or she paid without any deduction for damage or depreciation, even if a contract is fully executed.

Watkins Fuel Co. sued competitor Carroll Independent Fuel Co. for trademark infringement. Carroll registered the domain names of Watkins-fuel.com, watkinsfuel.net, watkinsfuel.org, and similar marks. Both firms sell heating oil, kerosene, and diesel oil. Watkins has long been the leader in these markets in Washington and Oregon, the states where it operates. Carroll also operates there, selling to the same high-end customers that Watkins targets. Plaintiff's name (Watkins Fuel Co.) is trademarked with the USPTO. Watkin's president found out about all of this when customers began asking him if his company had been purchased by Carroll. They wondered, because when they were on the Internet, the web address watkinsfuel.com (and others) landed them at Carroll's website. Watkins sued. Which of the following is true? A. Watkins will probably win on a trademark infringement theory B. Watkins will probably win on a trademark dilution theory. C. Watkins will probably lose on both theories

A. It is fairly clear that Carroll has created a strong likelihood of consumer confusion and infringed on Watkins' trademark. However, it is not probable that Watkins' mark meets the required definition of "famous" and therefore it is likely ineligible for protection under anti-dilution statutes.

Ann sues Bill in a negligence lawsuit. What type(s) of damages can she seek? A. compensatory damages B. punitive damages C. both A and B D. None of the above

A. Of the types of cases we have examined so far, only in intentional tort cases can a plaintiff seek punitive damages

Paul Plaintiff sues Donna Defendant in a tort case. He accuses her of running a stop sign and hitting his car and seeks damages to compensate him for his losses. Paul's case will be a ___________ lawsuit. In the case, Paul's burden of proof will be to prove his case ____________________ . A. civil; by preponderance of the evidence B. civil; beyond a reasonable doubt C. criminal; by preponderance of the evidence D. criminal; beyond a reasonable doubt

A. Private cases between private people or companies are civil lawsuits. In such cases, plaintiffs must present enough evidence to prove their claims true by a preponderance of the evidence

Roger shows up at his friend Fred's house. Fred did not invite him over, but Fred is glad to see him, and the two sit down to watch a baseball game. Later, Roger uses a bathroom at Fred's house, and he receives an electrical shock from a light switch. Fred knew that the switch was badly wired, because his cousin received a shock from the same switch last week. Did Fred have a legal duty to warn Roger about the faulty switch? A. Yes B. No

A. Roger is a licensee. As such, Fred is obligated to warn Roger about hidden dangers on his property if Fred has actual knowledge of them.

Ronny sells his successful seafood restaurant to Ken. Initially, Ronny plans to retire. But in the weeks after handing the restaurant over to the new owner, many of Ronny's customers reach out to him and tell him how much they miss having him around. Ronny decides to open a brand new seafood restaurant a few blocks away from the old one. This infuriates Ken, who points out that Ronny agreed to a noncompete clause in the contract that transferred ownership of the old restaurant to Ken. In it, Ronny promised not to open a competing restaurant for one year in the same town. "It's a free country," Ronny says. "It's a new business under a new name. You only bought the old one. Leave me alone." The noncompete clause _______________ the ancillary requirement. If Ken sues to enforce it, a court probably ____________ issue an injunction ordering Ronny not to open a new restaurant for a year. A. meets; will B. meets; will not C. fails to meet; will D. fails to meet; will not

A. The noncompete is a part of a larger agreement, so it meets the ancillary requirement. It is also limited in geographic area and for a reasonable amount of time, and as such, it is enforceable against Ronny.

"How much would you want for it?" Dean asks. "Oh. Ah...I'll sell it to you for $50." "I'll take it," Dean says. "Oh, ah...OK," Bill says. "But, you know, I didn't really want to sell it. I, ah...I really never meant to, you know, make a real contract or anything. I was just, ah, just talking." Has Bill made an offer? A. Yes, because his objective intent was to make an offer. B. No, because his subjective intent was to not make an offer. C. No, because he did not use the word "offer" in the statement underlined above. D. No, because he did not write his offer down.

A. The underlined statement would seem, to a reasonable listener, like a specific proposal to make a specific deal. Bill's secret, "in his own mind" intent may be different, but subjective intent is not relevant. He does not need to use the word offer or (as we shall see later) put the proposal in writing to make an offer.

Walter makes watches. One summer, he invents a new configuration of gears that allows for a watch to keep track of multiple time zones in an entirely new way. He works alone for countless hours, and does not share his work with anyone. The new configuration was very difficult to dream up, and required a significant amount of expertise and imagination. He calls the new watch the "Neptune", and plans to start selling it in his shop. It starts selling very well very quickly. Is Walter's design the kind of thing that can be protected as a trade secret? A. Yes B. No

A. The watch design checks all 4 boxes from the items listed above the example

A promises on June 1, 2020, to perform for two-hours at a wedding reception on August 12, 2021. Does this contract need to be in writing to satisfy the Statute of Frauds? A. Yes B. No

A. This contract must be in writing to be enforceable. Even though the performance itself will take only two hours, by the contract's terms that performance must occur more than one year after the contract was made.

Carl challenges a statute under his 14th Amendment right to equal protection. He argues that the law makes distinctions based upon race, and that it must be struck down. The court will apply ______________ scrutiny to the claim. If it wishes to keep the law in place, the government will have to convince the court that it is necessary to further a(n) ______________ state interest. A. strict; compelling B. strict; important C. intermediate; compelling D. intermediate; important

A. When a law makes distinctions based on race, courts will apply strict scrutiny. That standard requires that states demonstrate a compelling interest if they wish to seek to have the challenged law remain in place.

Milton Friedman argued that corporations are agents of _______________ . He _______________ argue that corporations should be socially responsive. A. capital; would B. capital; would not C. society; would D. society; would not

B.

Consider Abner v. Doubleday, a case that will be heard by a U.S. Court of Appeals. Which of the following can you say is definitely true? A. Abner was the plaintiff in the original lawsuit brought to district court. B. Abner is bringing the appeal to the U.S. Court of Appeals. C. Abner was the defendant in the original lawsuit brought to district court. D. Both A and B are definitely true.

B. Abner might have been either the plaintiff or defendant originally. But since Abner is listed first for the appellate case, Abner is definitely the side bringing the appeal.

Ted is Jane's boss. Almost every week for the last two years, he has started the Monday morning meeting with a dirty joke. Most of them are about sex. Jane has had enough. Which of the following types of sexual harassment has Ted probably committed? Assume that the company does not have any particular sexual harassment policy. A. quid pro quo B. hostile work environment C. both A and B D. None of the above

B. Although bosses are the usual perpetrators of quid pro quo harassment, no sexual advances or demands for sexual contact were made here. But, persistent dirty jokes likely meet the severe or pervasive requirement, and Ted has very likely created a hostile working environment.

Rex tries to make decisions in such a way as to benefit as many people as possible. Sam tries to treat everyone as he would wish to be treated. Rex takes a _________________ approach to decision making, and Sam follows a ______________ approach. A. utilitarian; utilitarian B. utilitarian; deontological C. deontological; utilitarian D. deontological; deontological

B. Doing the greatest good for the greatest number is the goal of utilitarianism. Following moral rules, such as the Golden Rule, is the hallmark of deontological ethics.

Paul Plaintiff, a resident of Texas, files a lawsuit in Texas against Don Defendant, a resident of California. Don receives notice of the lawsuit, and tells his lawyer, "I don't want to travel to Texas to be sued by this guy." Don's lawyer says, "Maybe you don't have to." The lawyer argues that the Texas court lacks personal jurisdiction over Don. Paul's lawyer asserts that the court does have personal jurisdiction, and that the case should proceed. Six months before, Don travelled to Texas, signed a contract with Paul while he was there, and returned to California. He has made no other trips to Texas, and has had no other interactions with the state. In Paul's lawsuit, he alleges that Don has breached that contract. Which of the following types of personal jurisdiction does the Texas court have over Don? A. General personal jurisdiction B. Specific personal jurisdiction C. Both A and B D. None of the above

B. Don engaged in a specific act (signing the contract) in the forum state (Texas), and the lawsuit arises out of that specific act. Don has no long term presence in Texas or regular Texas activities, and so there is no general personal jurisdiction.

Vince goes to a baseball game. The back of his ticket says, "team is not liable for injuries in the stands." Vince has a few beers, and taunts the shortstop throughout the game. Late in the game, Vince says something very unpleasant about the shortstop's mother. The shortstop drops his glove, charges into the stands, and beats Vince senseless. When Vince gets out of the hospital, he sues the team. The team wants to escape liability, and points out that their exculpatory clause on the back of Vince's ticket covers this kind of thing. Will a court likely enforce the exculpatory clause and prevent Vince from seeking damages? A. Yes B. No

B. Even though this is a recreational activity, exculpatory clauses only cover negligence, and not intentional wrongful acts. Vince can go ahead with his lawsuit.

Picture a Rolex. Oyster Perpetual. Self-winding. Certified Chronometer. Nice. But this Rolex has a problem. Because Seller Sam once dropped it, its second hand and the shaft that turns it is bent ever so slightly. No one would really notice. But every so often, the flaw causes the movement to get stuck, and the watch stops keeping accurate time. To avoid committing fraud, does Seller Sam have an obligation to disclose this defect to Ben Buyer? A. Yes, but only if Sam is a watch expert or in the business of selling watches. B. Yes, whether or not Sam is a watch expert or in the business of selling watches. C. No, because if he doesn't make a false statement, he can't commit fraud

B. Generally, sellers (expert or not) have an obligation to disclose latent, or hidden, defects.

The general standards that constitute the smallest amount of ethical conduct necessary for the functioning of civilization are referred to as ______________________ . These standards ____________ require defense or justification. A. the moral minimum; do B. the moral minimum; do not C. virtue ethics; do D. virtue ethics; do not

B. If people do not comply with these standards, they help diminish the social and economic relationships that cause a society to function effectively. As such, these principles do not require defense or justification.

Fred is a prospective juror in a case in which Al Attorney will be asking for $10,000,000 in damages. During voir dire questioning, Al gets the feeling that Fred will be unlikely to award such a large sum. He does not have a good argument that Fred will be biased or will fail to be impartial, but he would still like to keep him off the jury. To do so, Al will probably have to use which type of challenge? A. challenge for cause B. peremptory challenge C. neither would be effective for keeping Fred off the jury

B. Judges will grant challenges for cause only if a prospective juror seems likely to biased. But peremptory challenges can be used for most reasons as long as they are not used in a discriminatory way.

Lauren is distracted by a bee in her car, and while paying attention to the bee, she fails to notice Ron's car until it is too late to avoid a collision. Has Lauren been negligent per se? A. Yes B. No

B. Lauren has not violated a law, like a posted speed limit. She may be held liable for causing the accident, but she has not been negligent per se.

Tom discovers a new type of tree while exploring deep in a forest on a remote island. No one appears to have used it for anything before, and Tom would like exclusive rights to sell the wood. Sarah creates a new wood-like product in her lab. It is substantially stronger than any known natural wood. Can Tom and Sarah obtain patents that will cover their respective discoveries? A. Tom can receive a patent B. Sarah can receive a patent C. Both Tom and Sarah can receive a patent D. Neither can receive a patent

B. Newly created substances are patentable, but naturally occurring substances are not

Imagine that Peter, who works for Pepsi, puts 200 cans of Pepsi into an empty vending machine on Monday morning. Later that day, Karl Klutz buys a Pepsi from the same machine and takes it out onto a second floor balcony. Karl sees Vince Victim down below, waves to him, and fumbles the Pepsi. The can describes a perfect arc and conks Vince on the head, knocking him unconscious. When he comes to, Vince feels like filing a lawsuit. Whose actions are a proximate cause of this injury? A. Peter B. Karl C. Both A and B D. None of the above

B. Only Karl's action is a proximate cause. Peter is sort of involved in all of this, in the sense that, if he had not restocked the empty machine, this accident might not have happened. But he would not be considered a proximate cause, because a jury would not say, "Ah, you should have known better - you should have foreseen that this kind of thing would happen if you did your job and put cans in the machine." Karl's actions would be a proximate cause, because a jury would say that he should have foreseen that if he dropped the can from a high place he might injure someone, and that he should have been more careful to hold onto it.

Walter makes watches. No smart watches, digital watches, or even battery powered watches for him - he works with tiny gears and makes old fashioned mechanical watches. One summer, he invents a new configuration of gears that allows for a watch to keep track of multiple time zones in an entirely new way. He calls the new watch the "Neptune", and plans to start selling it in his shop. Which of the following can Walter probably trademark? A. The design for his new kind of gear movement B. The name of his new kind of watch: "Neptune" C. Both A and B

B. Product names are often trademarked. Designs and inventions are usually protected as trade secrets or with patents, which are described over the next two modules.

Alice is distracted by her navigation system and strikes Al's car with her car. Brenda is driving 50 miles per hour over the posted speed limit while drunk, blindfolded, and talking on two cell phone when she strikes Bill's car. Which of them has likely committed an intentional tort? A. Alice B. Brenda C. Both A and B D. None of the above

B. Simple carelessness like Alice's leads to negligence lawsuits. Deliberate actions, and reckless actions like Brenda's, lead to intentional tort cases.

Sue rents a Segway scooter. While riding around downtown, she spots her arch enemy Archie, who is standing on a sidewalk facing away from her and looking at his phone. Sue grimaces, sets her shoulders, and accelerates to the Segway's top speed of 5 miles per hour. With a look of pure rage, she zeroes in on Archie, who is still looking at his phone and scrolling through an endless stream of nothing in particular. Eventually, Sue reaches Archie and runs into him from behind, knocking him down to the sidewalk. Archie never saw it coming. In the fall, he breaks his wrist. What torts has Sue committed? A. Assault B. Battery C. Both A and B D. None of the above

B. Since Archie was never afraid, Sue has not committed assault. But, since she deliberately acted and caused a harmful bodily contact, she has committed battery.

Consider the following three businesses and organizations: -A church requires that employees in its youth ministry be Christians. -A large computer manufacturer requires that its employees be Christians. -A small dry cleaners that employs 10 people requires that its employees be Christians. Which of these could be successfully sued under the Civil Rights Act? A. The church B. The computer manufacturer C. The dry cleaners D. B and C E. A, B, and C

B. The church, as a religious organization, can discriminate in favor of members of its own faith. The dry cleaning business is too small - with fewer than 15 employees, it is exempt from Title VII. The computer manufacturer is acting illegally.

A child says, "All my friends are allowed to text as late as they want to!" Her parents reply, "If everybody else jumped off a cliff, would you jump, too?" The child is forming her belief about acceptable conduct through a filter of... A. obedience to authority B. conformity bias C. groupthink D. false consensus effect

B. The conformity bias tells us that people tend to take their cues as to proper behavior in most social contexts from the actions of others.

In January of 2020, Ron is hired by a television network to write a screenplay as a work for hire for an upcoming episode of one of their popular programs. He delivers the work, and the episode is filmed and airs later in the year. Also in 2020, Ron writes and publishes a science fiction novel. Ron passes away in 2040. Will the copyright on the screenplay or the novel expire first? A. The screenplay B. The novel C. They will expire at the same time

B. The copyright on the screenplay will expire in 95 years because it is a work for hire, so it expires in 2115. The copyright on the novel will expire 70 years after Ron's death, or in 2110.

Bredeson teaches at UT and also writes textbooks for different publishers. While at UT, he has regular teaching and committee assignments. He reports to a department chair and a Dean, and he is paid a regular salary. While working for UT, he is an _________________ . When writing the books, he is commonly paid a flat rate per project. "We'll pay you X number of dollars to write a 300-page textbook on business ethics by June 1," the publisher might say. The publishers typically do not set specific hours, and he does not typically have the writing managed while it is being done. While writing the books, Bredeson is an __________ . A. employee; employee B. employee; independent contractor C. independent contractor; employee D. independent contractor; independent contractor

B. The teaching work meets all three of the main criteria for employees, and the writing meets all three for contract workers.

Jed promises to move his neighbor's furniture to a new apartment next Saturday, and the neighbor agrees to pay $300 for Jed's work. What kind of contract does Jed have with the neighbor? A. unilateral B. bilateral

B. The two parties have exchanged promises, and so like most contracts, this one is bilateral. The parties intend to be bound at theme they exchange the promises

June does not qualify for a car loan. She calls her aunt from the car dealership, and the aunt decides to help out her favorite niece. Over the phone, the aunt tells the general manager of the finance department, "Go ahead and loan her the money, and if she misses the payments, I'll make them." The aunt's promise ____________ contain the elements of a guaranty contract. If the car dealer makes June the loan, and if June fails to make payments, the aunt's promise ______________ be enforceable. A. does; will B. does; will not C. does not; will D. does not; will not

B. This is a guaranty arrangement, but because it is not put into writing, it will not be enforceable against the aunt under the statute of frauds.

Jack loses a huge sum in a lawsuit with Pat Plaintiff, and he does not pay Pat for a long time. Pat's lawyer goes back to court and seeks the court's help in collecting what is owed. The court issues a document that empowers a sheriff to seize Jack's car and sell it at auction to raise part of the money. The court issues a second document that orders Jack's bank to deliver some of Jack's deposits into the custody of the court. The first document is a writ of ______________ , and the second document is a writ of __________________ . A. execution; execution B. execution; garnishment C. garnishment; execution D. garnishment; garnishment

B. Writs of execution empower law enforcement officers as described, and writs of garnishment order third parties to turn over assets belonging to another to the court.

I say to you, "I'll sell you this pen for one dollar." "How about 50 cents?" you ask. "Well, I don't really know much about rap," I reply. "No," you say, shaking your head. "For the pen. I'll pay you 50 cents for the pen." "Ah," I say. "No, that's not enough." "OK, OK, I'll buy it for $1," you say. Do we have an accepted offer? A. Yes B. No

B. You have rejected my original offer (to sell the pen for $1) and have replaced it with a counteroffer (to pay $0.50), which I have rejected. It is too late for you to accept my original offer, because once terminated, an offer cannot be accepted. No deal.

Tina has a dispute with her next-door neighbor. The neighbor's tree fell over onto her garage roof and caused significant damage. The neighbor has been slow to agree to pay for the damage. Tina says, "I'd like to work this out quickly, and I hope that I can still be friends with my neighbor later - it would be awkward to live next door to someone who is angry with me." Based on Tina's comments, she should start with which of the following? A. A trial B. An arbitration C. A mediation

C. A mediation will help her meet her desires for a faster resolution that is more likely to allow the parties to move past the dispute and coexist peacefully.

Consider the following three employees. -Ann was fired in 1960 because of her religious faith. -Ben was fired in 2018 for objectively poor work performance. -Carl was fired in 2018 because of his religious faith. Which of them would have been in a good position to sue under the Civil Rights Act and win their case? A. Ann only B. Ben only C. Carl only D. A and C E. B and C

C. Ann's firing happened before the Civil Rights Act existed. Ben's firing was not related to anything prohibited by the Civil Rights Act, and so under the employment at will doctrine his firing is acceptable. Carl has a valid claim.

Lenny hires Richard to demolish a small office building on a property that he has acquired. Richard will used controlled explosions to bring the old building down. When he does the job, Richard uses too much dynamite. A chunk of the old building is blasted across the street and destroys Pam's parked car. Can Pam sue Lenny for Richard's action? A. Yes, if Richard is an employee of Lenny's. B. Yes, if Richard is an independent contractor. C. Yes, absolutely, whether Richard is an employee or an independent contractor. D. No, absolutely not.

C. Because Richard is involved in an ultra-hazardous activity, Lenny is liable whether Richard is an employee or an independent contractor

Ann lives in a state that has a 2-year statute of limitations and a 10-year statute of repose on negligence cases. Two bad things happen to her in 2018. First, she is involved in a car accident that is entirely the fault of Donny Driver. Immediately after the wreck, she is operated on by Sally Surgeon. Sally does a careless job of reconstructing Ann's elbow, but it is done in a way that causes no initial pain and that Ann does not even notice until 2020. Now it is 2021. Ann is frustrated by her elbow pain, and decides that she wants to sue both Donny and Sally. Can her lawsuit proceed if the defendants raise the defenses described in this section? A. Yes, against Donny and Sally. B. Yes, against Donny only. C. Yes, against Sally only, D. No.

C. Because she was not able to detect the botched surgery until 2020, the 2-year statute of limitations was tolled and did not begin to run until 2020, so the lawsuit against Sally can proceed. It is too late to sue Donny in 2021, because it has been more than 2 years since the accident.

Under the Supreme Court's modern interpretation of the Commerce Clause, the most important factor in determining whether a business' activities count as interstate commerce is whether... A. any customers reside in states other than the business' home state B. any physical items (goods) cross from one state to another C. the activities have any appreciable effect on interstate commerce D. the transactions are substantial in number, or involve a substantial sum of money E. none of the above

C. Before the 1930s, the Court paid more attention to whether items crossed state lines or used interstate rivers or railroads. Today, though, the Court is most concerned with whether the activities have an effect on interstate commerce. Most business activities do, and so most business activities can be regulated by the federal government.

Al contracts to sell land in Montana to Bob for $60,000. Bob later discovers - after signing the contract but before paying for the land, that the actual value of the land is only $30,000. Even though Al did not mislead Bob in any way, Bob refuses to pay, and Al sues. Can Al enforce the contract? A. No, because of the preexisting obligation rule. B. No, because of the peppercorn rule C. Yes

C. Bob is liable on his promise to pay $60,000, even though what he received was worth much less. Al incurred a detriment when he promised to convey the land—the surrender of his right to retain the property. The presence of this detriment constituted a consideration sufficient to support Bob's promise to pay; and Bob's claim of inadequacy is therefore of no relevance.

Imagine that Peter, who works for Pepsi, puts 200 cans of Pepsi into an empty vending machine on Monday morning. Later that day, Karl Klutz buys a Pepsi from the same machine and takes it out onto a second floor balcony. Karl sees Vince Victim down below, waves to him, and fumbles the Pepsi. The can describes a perfect arc and conks Vince on the head, knocking him unconscious. When he comes to, Vince feels like filing a lawsuit. Whose actions are causes in fact of this injury? A. Peter B. Karl C. Both A and B D. None of the above

C. Both Peter's and Karl's actions are causes in fact. If you eliminate either's actions, the accident doesn't happen. But as we will see shortly, it is very unlikely that Peter will be held responsible for Vince's injuries.

Paul owns two properties outside Woodsfield, Ohio. Gary, after viewing both acreages, makes Paul a written offer to purchase one for $18,000. Paul accepts the offer. It later develops that Gary had one property in mind while Paul, after reading the description contained in Gary's offer, honestly and reasonably believed that Gary was referring to the other property. Who can rescind the agreement? A. Paul B. Gary C. Both can rescind the agreement D. Neither can rescind the agreement

C. Either party can rescind the agreement, because there was a mutual mistake about the identity of the contract's subject matter.

Max sues the Houston Police Department after he is arrested during a protest. He claims his free speech rights under the U.S. Constitution have been violated. Jack sues MegaCorp over crop losses after MegaCorp dumps toxic chemicals into a river that eventually runs across his farm. He sues based on the federal Clean Water Act and also under Texas tort law. Which of these two plaintiffs could bring their case to federal court? A. Max B. Jack C. Both A and B D. None of the above

C. Max's case is based on the federal Constitution, so it's in. And although Jack's lawsuit is based on both state and federal law, since one of his claims raises a federal question a federal court would also have subject matter jurisdiction over his case.

Carol and Debby bring separate lawsuits under their 14th Amendment right to Equal Protection. Carol challenges a law that she claims makes distinctions based on gender. Debby challenges a law that she says makes distinctions based on the income level of residents of her state. If the government wishes to keep the challenged laws in place, it will have to convince the court the law is necessary to further a(n) ______________ state interest in Carol's lawsuit and a(n) ______________ state interest in Debby's lawsuit. A. rational; rational B. rational; important C. important; rational D. important; important E. compelling; important

C. Most social and economic regulations are subjected to the rational basis test. Laws or government policies that make distinctions based on gender must be justified as furthering important government interests when challenged in court on 14th Amendment grounds.

Zehmer is a farmer who owns the Ferguson farm. Lucy is a neighbor who has attempted to buy that farm before. Lucy sees Zehmer in a restaurant and tells him: "I bet you wouldn't take $50,000 for that farm." Zehmer replies: "Yes, I would, too. You wouldn't give fifty." The parties then talked about a potential deal for 40 minutes, writing up one version and then amending it when it dawned on them that Zehmer's wife needed to agree. The document the Zehmers signed said: "We hereby agree to sell to W.O. Lucy the Ferguson Farm complete for $50,000, title satisfactory to the buyer." The parties were drinking alcohol during this time, but were not so drunk as to not understand what they were doing. Later, when Lucy tried to pay, the Zehmers claimed that they were only kidding—it was all a big joke. Lucy sued to enforce the deal. Does a contract exist? A. No, because Zehmer lacked the required subjective intent to sell. B. No, because the offer was not sufficiently definite. C. Yes.

C. Objective intent is the key to whether an offer exists, not subjective (in your own mind) intent. The court held that a reasonable party in Lucy's shoes would not have known that Zehmer was joking. The price was fair, the parties negotiated for 40 minutes, and they put the deal in writing and signed it. And while the offer could have been more specific (with the farm's address, acreage, etc.) there is enough information in the offer for a court to determine what each side is promising the other. The basic deal is clear - the farm for the $50,000.

Alpha Company would like to give $10,000 to be used to fund ads that will seek to help elect Senator Smith. Alpha also runs many kinds of advertisements on TV and the internet, and hopes to be allowed to continue to do so without restriction. The ___________________ is/are protected as free speech. A. political donation B. advertisements C. political donation and advertisements

C. Political speech by corporations and truthful commercial speech by corporations each receive First Amendment protection.

Sidney signs a contract to sell her vacation house. Tom makes an agreement to work as an engineer for a local tech company. Veronica makes a deal in which she will sell her collection of rare books. Which of these contracts would be covered by Article 2 of the Uniform Commercial Code? A. Sidney's only B. Tom's only C. Veronica's only D. A and B E. B and C

C. Sidney is selling non-movable real estate, and Tom is selling his labor, or services. Veronica is selling tangible, movable property, or goods.

Cobb purchases a gemstone from Drury for $25 and leaves Drury's house. At the time of contracting, both parties believe the stone is a topaz. In fact, it turns out to be an uncut diamond worth $700. Drury sues. This scenario is an example of a _______________ mistake, and Drury ____________ be able to rescind the contract. A. unilateral; will B. unilateral; will not C. bilateral; will D. bilateral; will not

C. Since both parties were mistaken about the true character of the contract's subject matter, it is a bilateral mistake. Drury can have the contract rescinded, thereby recovering the stone.

A wife attacks her husband with an ax, knocking him down. As she is about to decapitate him, a bystander intervenes, catching the ax on its downward flight. The bystander's hand is badly mutilated. The husband jumps up and promises to pay the bystander $1,000 for saving his life. When he later does not pay, the bystander sues the husband. Is consideration present that supports the promise to pay the $1000? A. Yes B. No, because the bystander did not suffer a detriment C. No, because the promise to pay did not induce the detriment D. No, because the wife caused the detriment to the bystander and she isn't a party to the lawsuit

C. The plaintiff has clearly suffered a detriment in that she did something that she didn't have to do (stick out her hand to save the husband's life), and it is exactly what the husband bargained for. However, the promise did not induce the detriment. That is, because the husband made his promise after the bystander acted, we cannot say that his promise caused

When Congress passes a statute, it exercises ______________ power. If someone challenges the law in court and argues that the new law violates a part of the Constitution, the courts will use their power of ______________ to evaluate the law. A. executive; judicial review B. executive; separation of powers C. legislative; judicial review D. legislative; separation of powers

C. The power to create new laws is legislative power, and the power to assess the Constitutionality of the new laws is judicial review

A fast food restaurant in a college town would benefit from a contract between a construction firm and the university calling for the construction of a four-level parking facility on campus property just across the street from the restaurant. The builder breaches the contract with the university by refusing to go ahead with the project, and the university looks like it may scrap the plans for the parking garage altogether. Can the owner of the restaurant sue to enforce the construction contract? A. Yes, because it is a creditor beneficiary. B. Yes, because it is a donee beneficiary. C. No, because it is an incidental beneficiary. D. No, because a third party that has not signed an agreement never has rights to enforce the contract.

C. The restaurant owner cannot recover damages from the builder as an unintended, incidental beneficiary. The university and the construction firm did not enter into this contract with a view to benefitting the fast food restaurant. But, intended creditor and donee beneficiaries are third party "outsiders" who do have rights.

In 1890, Congress passed the Sherman Antitrust Act. In 2008, Congress passed the Genetic Information Nondiscrimination Act. Which of these is/are a statute? A. The Sherman Antitrust Act B. The Genetic Information Nondiscrimination Act C. Both A and B D. None of the above

C. Written laws passed by legislative bodies like Congress are statutes.

Alice buys a copy the game Elf War on CD-Rom. She makes a single backup copy and gives the copy to her sister. Has Alice violated the game's copyright? A. No, because consumers are allowed to make a single backup copy. B. No, because of the fair use defense. C. No, for reasons A and B. D. Yes

D. A backup copy is allowed, but it cannot be given to another person, including a family member. And since she copied the entire game and reduced the market for new copies (now her sister has no further need to buy her own copy), Alice has not made a fair use of the software.

Roger copies 6 of the 7 elements of Barbara's patent, but does not have anything that is the substantial equivalent of the 7th element in the patent. Which of the following is true? A. Roger has literally infringed on Barbara's patent. B. Roger has violated Barbara's patent under the doctrine of equivalents. C. Both A and B. D. None of the above

D. All elements must be copied for literal infringement to have occurred. And, since at least one element is not substituted with a substantial equivalent, Roger has not committed a doctrine of equivalents type infringement.

Ron loses his discrimination claim in federal district court. If he wishes, he can appeal his case to a ________________ court. If he loses there, he can seek to have his case reviewed by ________________ . A. a general trial court; his state's supreme court B. a general trial court; the U.S. Supreme Court C. A U.S. Court of Appeals; his state's supreme court D. A U.S. Court of Appeals; the U.S. Supreme Court

D. Appeals from a federal district court would proceed to a federal appellate court, and eventually perhaps to the U.S. Supreme Court, although the Supreme Court grants only a relatively small percentage of requests for writs of certiorari

Paul Plaintiff, a resident of Texas, files a lawsuit in Texas against Don Defendant, a resident of California. Don receives notice of the lawsuit, and tells his lawyer, "I don't want to travel to Texas to be sued by this guy." Don's lawyer says, "Maybe you don't have to." The lawyer argues that the Texas court lacks personal jurisdiction over Don. Don's lawyer asserts in a court filing that the court does have personal jurisdiction, and that the case should not proceed. He does not say anything else about the case in the filing. Don's lawyer has filed a(n) _____________________ . This action ______________ give the Texas court personal jurisdiction over Don. A. appearance; does B. appearance; does not C. special appearance; does D. special appearance; does not

D. Don's lawyer has limited his claim to a lack of jurisdiction, and so it counts only as a special appearance and is not considered a "formal step to defend a lawsuit".

Consider the following people, and whether each has the ability to disaffirm a contract. -Al is insane in fact. He signed an agreement, and he understood its nature and effect. -Bob has consumed five beers. He signed an agreement, and he understood its nature and effect. Which of these people can disaffirm their contract? A. Al B. Bob C. Both Al and Bob D. Neither

D. It is not enough to be insane in fact or intoxicated. In addition, one must be unable to understand the nature and effect of the agreement made to be able to disaffirm.

Sam sues AlphaCo, his former employer. In his case, he alleges that AlphaCo illegally discriminated against him. During discovery, Sam's lawyer asks AlphaCo for its employment records over the last 10 years. The lawyer also wants to talk to Sam's former supervisor under oath and ask him about Sam's termination. The demand for the employment records is a(n) _______________ . The lawyer would like to talk to the former supervisor as part of a(n) ______________ . A. interrogatory; interrogatory B. interrogatory; deposition C. request for production of documents; interrogatory D. request for production of documents; deposition

D. The demand for business records is a request for production of documents. The questioning of the supervisor will be a deposition because the lawyer will be talking to him in person, and not by submitting a written request for information, which would be an interrogatory.

Walter makes watches. No smart watches, digital watches, or even battery powered watches for him - he works with tiny gears and makes old fashioned mechanical watches. One summer, he invents a new configuration of gears that allows for a watch to keep track of multiple time zones in an entirely new way. He calls the new watch the "Neptune", and plans to start selling it in his shop. What type of mark is "Neptune"? A. generic B. descriptive C. suggestive D. arbitrary

D. The name "Neptune" as applied to the watch has no relationship to the planet Neptune or the mythical figure Neptune. As such, it is an arbitrary mark like Apple for electronic devices.

Fred places a verbal order at a store for a new Tag Heuer watch. He pays the full price -$1000 - at the time of the order. The clerk says the watch will arrive in about a week. The next morning. Fred changes his mind about the watch. He goes to the store and argues that he should be able to cancel the order and get his money back. The store refuses, and Fred sues, citing the statute of frauds. Does Fred have a valid argument that the statute of frauds should allow him to escape this deal? A. Yes, because the watch costs more than $500. B. Yes, because the watch has not yet been delivered. C. Yes, because he is purchasing the watch from a merchant. D. No.

D. The watch is a "good", and as such, the fact that it costs at least $500 would often be relevant. But, the UCC calls for the enforcement of verbal contracts, even when goods do cost at least $500, in some circumstances, one of which is when the goods have been paid for and the payment accepted.

A recent study found that people who are in the center of social networks, who acts as brokers of information for others in the network, are more likely to believe that these others share their moral judgments than are other members of the networks. This finding indicates that people at the center of social networks are especially susceptible to the phenomenon of: A. obedience to authority B. conformity bias C. groupthink D. the false consensus effect

D. This effect is the tendency to believe that other people think the same way that we do. Because of it, honest people often believe that, if they are honest themselves, then others will be honest as well.

Zena signs an arbitration agreement on her first day at a new job in which she agrees that if she has any disputes with the company in the future, she will not sue and will only pursue a remedy in arbitration. A year later, Zena has a car accident with Barry. Afterwards, they sign an agreement that they will arbitrate the dispute. A month after that, Zena does not get an expected promotion at work, and she thinks it is because her supervisor dislikes her personally and not because of the quality of her work. Now, Zena is upset at both her employer and at Barry, and she would like to "have her day in court" with both of them. That is to say, she wants to sue both, and not go through arbitration. Can she do so? A. She can sue her company only B. She can sue Barry only C. She can sue both her company and Barry D. No, she must arbitrate both disputes.

D. Whether signed before or after an event that leads to a dispute, arbitration is generally binding.

Adam sues Brenda and claims that Brenda's dog bit his leg. Brenda receives a copy of Adam's complaint, and in her answer, she alleges that her dog bit Adam when he was trespassing in her yard late at night, that he destroyed her fence when he ran away from the dog, and that he should pay $500 to compensate her for the fence repairs. Characterize the components of Brenda's answer. A. It contains a denial B. It contains a defense C. It contains a counterclaim D. A and C E. B and C

E. She does not deny that Adam's claim of a dog bite is true. She asserts instead that there exists a legal justification for the bite. So, she raises a defense and does not make a denial. And, by asking for money to repair the fence, she raises a counterclaim.

Billy, age 10, walks into a baseball card shop and tells the owner that he has an Aaron Judge rookie card. The owner offers to pay Billy $25 for the card if he brings it by tomorrow. Billy says, "It's a deal," shakes the owner's hand, and leaves. Select the correct descriptive terms from the pairs below that apply to this deal. unilateral -or- bilateral valid -or- voidable -or- void express -or- implied executed -or- executory governed by common law principles -or- governed by UCC principles

This is a bilateral (promise for a promise), voidable (because Billy is a minor and can back out of it), express (stated), executory (unfinished) contract governed by UCC principles (because a baseball card is a thing or a "good").