Business Law Midterm Questions/Answers

Lisa trespasses on Mega Corporation's property. Through the use of reasonable force, Mega's security guard Ned detains Lisa until the police arrive a short time later. Mega Corporation is most likely liable for

1. Assault and Battery 2. False Imprisonment 3. Intentional Infliction of Emotional Damages A: None of the above (correct!)

Eli, driving while intoxicated, causes a car accident that results in the death of Frank. Which of the following best describes what could occur to Eli:

1. He could be arrested and charged with a crime. 2. He could be sued for the tort of negligence.

Sources of law that could affect the real estate development where the Trader Joe's on Shelbvyville Road is located include:

1. Laws passed by the legislature of the Commonwealth of KY 2. Rules established by various federal administrative agencies 3. Case law.

Granny Smith's Apple Pie, LLC bought specialized pie-making equipment from Bob's Food Production, Inc. Granny Smith's paid for the equipment up-front, but Bob's Food Production refused to deliver the equipment, so Granny Smith's brought a lawsuit against Bob's Food Production for breach of contract. The contract is silent about issues of jurisdiction and venue. In determining whether or not the Kentucky state court has jurisdiction over Bob's Food Production, the court will likely look at which of the following factors:

1. The state in which Bob's Food Production, Inc. is incorporated in. 2. The amount and type of activity Bob's Food Production, Inc. has conducted within the state of Kentucky. 3. Whether Bob's Food Production, Inc. has sufficient minimum contacts with the Commonwealth of Kentucky.

Matt, a recent college graduate, starts his own coffee shop in Louisville (because he feels there is a lack of coffee shops to choose from in his hometown). Not a creative fellow, he names his company: Moonbucks Coffee Company. Al, an executive vice president at Starbucks Coffee Company, comes to Louisville for a family friend's wedding. While in town he notices Moonbucks and pays them a visit. He is in shock and awe at the similarities between not only the name of the local coffee shop, but also the décor and environment the local coffee shop is trying to create. Upon returning to Seattle, he contacts Starbucks' general counsel, Jon, and demands that Jon get the court to force Moonbucks to cease their use of the name "Moonbucks Coffee Company." To accomplish Al's goal, the best remedy that Jon should seek from the court is known as _______________.

An injunction.

Henry, a resident of Nevada, sued Adam, a resident of Utah, in the federal court in California for damages arising from an automobile accident that occurred in Los Angeles, California. Harry had purchased his car in Arizona. Assuming all jurisdictional requirements are satisfied, which state's rules of substantive law will the court most likely use?

California

While texting on his phone, Dan is making a left turn and hits Ann who is driving over the speed limit through the intersection. Ann sustains injuries and sues Dan for negligence. The court finds that Dan is 80% at fault for hitting someone while making a left turn and texting on his phone, and that Ann is 20% at fault because she was speeding. The court finds that while Ann has suffered $100,000 in damages, she will receive only $80,000 because she was 20% responsible for the accident. This result is based on the doctrine known as

Comparative Negligence

Davidson Development, Inc. is incorporated in Delaware and has its principal place of business in Kentucky. Nathan, a citizen of Kentucky, sues Davidson Development in federal court in Kentucky for an alleged breach of contract. Nathan is seeking $100,000 in damages. Davidson Development wants the suit removed from federal court to state court. Davidson Development's best argument is

Complete diversity is lacking, so there is no federal jurisdiction.

Property Owner, LLC, as landlord, enters into a commercial lease with Big Retail, Inc., as tenant. Under the terms of the lease, Property Owner agrees to build a building for Big Retail to lease. Property Owner hires Bob's Contractors Co. to build the building. The building is not ready at the agreed-upon date, so Big Retail sends a letter to Property Owner terminating the lease. Property Owner brings a lawsuit against both Big Retail and Bob's Contractors. In response to being sued by Property Owner, Big Retail turns around and sues Property Owner. The name of the lawsuit filed by Big Retail against Property Owner in response to the initial lawsuit filed by Property Owner is best identified as a

Counterclaim

Same fact pattern as Question 64. In addition to suing Property Owner, Big Retail also brings a lawsuit against Bob's Contractors. This type of lawsuit is best identified as a

Cross-claim

If a corporation is incorporated in Delaware, has its main office in New York, and does substantial business in California, but its president lives in Connecticut, in which state courts can the corporation most likely be sued?

Delaware, New York and California.

In Ed's lawsuit against First National Bank, the discovery process would include all of the following, except

Ed's petition.

A business is only subject to the jurisdiction of those states in which it is incorporated.

False

A counterclaim is prepared by a plaintiff as an answer against a defendant's initial petition or complaint.

False

A federal court always has diversity of citizenship jurisdiction over a particular dispute when the plaintiff and defendant are from two different states.

False

A federal court has jurisdiction over federal questions, so long as the amount in dispute exceeds $75,000.

False

A landowner traditionally owes the same duty of care to anyone who comes onto his property.

False

A writ of certiorari is a type of equitable remedy available when someone defaults under a contract.

False

Defamation is one person's use of another's name without permission.

False

Living in the United States, all the states have the same laws so there is no advantage in trying to bring a lawsuit in California versus in New York.

False

Negligence is a type of intentional tort.

False

Procedural law is that aspect of the law that regulates and controls the rights and duties of persons and is used to resolve disputes.

False

Punitive damages are awarded in every tort lawsuit.

False

Stare decisis is a doctrine obligating judges to help persons who have failed to protect their own rights.

False

Tiny is a big dude. He works as a security guard and is employed by a large retail store, JC Quarters. On a cold day in February, he notices a patron, Jimmy, sneakily putting gloves and scarves in his shopping bag from another department store in the same shopping mall. Tiny wastes no time in placing Jimmy in a back closet of the store for the next 10 hours and only letting him out after the store has closed. Jimmy wastes no time in hiring a local attorney to sue JC Quarters because he believes he was wrongfully restrained by JC Quarters and had every intention of buying the gloves and scarves. The intentional tort that best describes the claim that Jimmy wants to bring against JC Quarters is known as ______________________.

False Imprisonment

Harry was waiting for a train on a station platform at King's Cross. Hagrid, while carrying a small package wrapped in newspaper, was rushing to catch a train that had begun to move away from the platform. As Hagrid attempted to jump aboard the moving train, he seemed unsteady and about to fall. A railroad station employee on the train car, Snape, reached forward to grab him, and another employee on the platform, Tom, pushed Hagrid from behind to help him board the train. In the process, Hagrid's package fell on the railroad tracks and exploded, because it contained fireworks. The repercussions of the explosion caused scales at the other end of the train platform to fall on Harry, who was injured as a result. Harry sued the railroad company for damages. The train station's best defense is most likely:

Harry's injury was not reasonably foreseeable

As a judge, H. Potter applies rules from case law. These rules primarily come from

Judicial opinions from courts of appeal and higher courts.

Bob, a doctor, hires Mike, an accountant, to balance Bob's accounts. Bob is dissatisfied with the work and sues Mike, alleging negligence. Mike may successfully defend against the suit by proving that

Mike's work is consistent with that of a reasonable and prudent accountant.

Sam's Bottles, Inc., a corporation out of New Mexico, must file for bankruptcy. Because of exclusive jurisdiction, Sam's Bottles:

Must file for bankruptcy in Federal bankruptcy court.

Of the following, which best outlines the chronological progression through a a lawsuit:

Petition, answer, counterclaim, discovery

Same fact pattern as Question 60. Jimmy's attorney, Jon, is a legal stud. Having demonstrated that both JC Quarters and Tiny are liable for the injuries sustained by Jimmy, he goes in for the kill looking for significant damages on top of the damages to cover Jimmy's medical bills. He is able to demonstrate to the jury that the actions and intent of JC Quarters and Tiny were extreme, malicious, and willful, and that a message should be sent to other retail stores to deter future wrongdoing. The type of damages and award that Jon is seeking on behalf of Jimmy are best known as ______________________.

Punitive damages

Richard goes to the local amusement park and watches passengers on a ride that flips them upside down. After watching a few times, Richard decides to ride. He properly fastens the seat belt and keeps his hands and feet inside the ride at all times, but he seriously bumps his head when the car flips upside down, resulting in whiplash. After receiving medical care, Richard files a civil lawsuit against the park, seeking payment for his medical bills and pain and suffering. The amusement park's best defense is likely ___________________.

Richard assumed the risk.

The Car Company buys gas pedals and other parts from subcontractors and puts them in its vehicles without changing their composition. If the pedals or other parts from the subcontractors are defective, the following persons may be liable for any damage caused by the defects under principles of product liability

The Car Company and the subcontractors.

Tiny is a big dude. He works as a security guard and is employed by a large retail store, JC Quarters. On a cold day in February, he notices a patron, Jimmy, sneakily putting gloves and scarves in his shopping bag from another department store in the same shopping mall. Tiny wastes no time in forcefully removing Jimmy from the store. In the process of removing Jimmy from the store, Tiny breaks Jimmy's hand and nose and causes significant emotional distress. After seeking medical attention at a local hospital, Jimmy wastes no time in hiring a local attorney to sue both Tiny and JC Quarters. Jimmy is awarded a judgment of $250,000. If this state has adopted joint & several liability, Jimmy can seek to recover the entire award of damages from

Tiny and/or JC Quarters.

A Texas corporation may be subject to a lawsuit in Vermont if the Texas corporation has sufficient minimum contacts within Vermont.

True

A person who commits a crime may also be sued by the injured party in civil court under tort law.

True

A product liability action based on negligence does not require the plaintiff and the defendant to be in privity of contract.

True

A small claims court is an example of a court of limited jurisdiction.

True

A state court can generally exercise jurisdiction over any property within the boundaries of the state.

True

A summons is issued by the court and then it, along with a copy of the petition, is served to the defendant, and it notifies the defendant of the date by which he is required to file a response to the plaintiff's allegations.

True

A tort is a civil wrong, other than a breach of contract, for which a remedy is provided in the form of an action for damages

True

An action may be legal but not necessarily ethical.

True

Law can be classified into areas of public and private law. Public law includes those bodies of law (such as constitutional law, administrative law, and criminal law) that affect the public generally.

True

Most, if not all, states have adopted what are known as long-arm statutes to give a court personal jurisdiction over a non-resident.

True

Proximate cause exists when the connection between an act and an injury is reasonably foreseeable and therefore strong enough to justify imposing liability.

True

The reasoning and principles for a decision by a Federal Court of Appeals or the United States Supreme Court are considered a source of law in America.

True

The use by one person of another person's likeness without permission and for the benefit of the user constitutes the tort of appropriation.

True

Under criminal law, the defendant is prosecuted by the appropriate government official, whereas in civil law, the defendant is sued by the individual citizen.

True

Venue relates to and defines the particular territorial area within the state, out of all those with jurisdiction, in which the case should be filed and tried, and is often based on convenience.

True

When determining which state's law to apply in a dispute between persons from two or more states, courts will look to principles of conflicts of law.

True

With respect to negligence, the concept of actual causation can generally be summarized as the "but-for" test.

True

Kelly is injured when she slips and falls on Layla's sidewalk. To determine whether Layla owed a duty of care to Kelly, Layla is subject to the standard of

a reasonable person.

Jim files a suit against Kay. Before going to trial, the parties meet, with their attorneys to represent them, to present their dispute to a third party who is not a judge but who renders a legally binding decision on the parties. This is most likely an example of

arbitration.

Louis first threatens to hit Micah, and then he actually hits and injures Micah. Micah files a lawsuit against Louis to recover damages to cover his medical bills. Micah will most likely recover under

assault and battery.

Don is an employee of Excel Company. He says that Fiona, Excel's office manager, is stealing from their employer. The statement—which is false—is defamatory

if made to a co-worker.

The Idaho Supreme Court rules against Jiffy Mart in a dispute Jiffy Mart has over a constitutional issue. Jiffy Mart files an appeal and writ of certiorari with the United States Supreme Court. The U.S. Supreme Court does not hear the case. The US Supreme Court's refusal to hear the case

means that the decision of the Idaho Supreme Court will remain the law in Idaho.

The legislature of the state of Missouri enacts a new statute that sets standards for the liability of businesses selling defective products. This statute applies

only in Missouri.

OK Dry-Cleaning lowers its costs and runs lots of advertising that causes the regular customers of its competitor, Purity Cleaners, to use OK Dry-Cleaning instead of Purity Cleaners. This is most likely

ordinary competition.

In Ben v. City Car Dealership, a state supreme court held that a youth (a minor) had discretion whether to cancel a contract for the sale of a car. Now a trial court in the same state is deciding Daphne v. Even Steven Auto Deals, Inc., a case with similar facts. Under the doctrine of stare decisis, the trial court is likely to Correct!

permit the minor in the Daphne case to cancel the contract.

Motor Oil Corporation, an Ohio corporation, moved its headquarters to Kentucky because it does a significant volume of business in Kentucky. As part of its ongoing business in Kentucky, Motor Oil enters into a contract with Tom's Trucks, LLC, a Kentucky company, for buying and selling oil filters. Six months after entering into the contract, Tom's Trucks believes that Motor Oil Corp. has breached their contract. Tom's Trucks files a suit against Motor Oil Corp. in Kentucky. As to Motor Oil Corp., a state district court in Kentucky most likely has

personal jurisdiction over Motor Oil Corp.

George has a badly infected right foot. Dr. Smith, George's physician, prescribes amputation. During the operation in which Dr. Smith had complete and exclusive control of the situation, Dr Smith amputates the left foot. In George's suit against Smith, George's best theory for recovery is

res ipsa loquitur.

Inferior Company sells products that are poorly made. Jack, who has never bought an Inferior product, files a suit against the company, alleging that its products are defective. The company's best ground for dismissal of the suit is that Jack does not have

standing.

The City Council of Austin, the Texas state legislature, and the U.S. Congress enact laws. These laws constitute types of

statutory law.

Jill is a state appellate court judge. In this capacity, Jill's legal opinion and holding in a particular case may establish a particular rule of law. Under the doctrine of stare decisis, the legal decision must be adhered to by

the appellate court and courts of lower rank.

Under Ohio's state constitution, the Ohio Environmental Protection Agency issues a new rule. The Polk County Commission approves a new property tax measure. Professors and students at Ohio Law School publish the results of their most recent legal research. Sources of law do not include

the results of legal scholars' research.

The U.S. Congress enacts a new federal statute that imposes liability on businesses emitting significant amounts of a certain pollutant into the environment. This statute most likely applies

to all of the states.