Legal Business Environment

3 Fred takes Betty to dinner at a very expensive and exclusive restaurant. The menu does not mention the prices. The server takes their order and both Fred and Betty enjoy the meal immensely. When the bill arrives, Fred refuses to pay because the menu had no prices and because he and the server never engaged in conversation indicating an offer and acceptance. The server said, "Are you ready to order?" and when Fred said "Yes," the server merely asked, "What may I get you tonight?" In the context of this scenario, which of the following statements is true?

Fred must pay based on an implied-in-fact contract theory. Explanation: In this scenario, Fred must pay based on an implied-in-fact contract theory. Implied-in-fact contracts arise from the conduct of the parties rather than from words. For instance, asking a person such as an accountant for professional advice implies a promise to pay the going rate for this advice even though one does not make an express promise to pay for it.

7 Which of the following is not true of an arbitrator's award?

It is subject to judicial review on the merits of a decision. Explanation: An award is not subject to judicial review on the merits of a decision. Only when fraud or other clearly inappropriate actions by an arbitrator can be shown is a court willing to reverse the award granted in a voluntary arbitration proceeding.

8 The ideas and philosophies that explain the origin of law and its justification are called __________.

jurisprudence Explanation: The ideas and philosophies explaining law's origin and its justification are called jurisprudence. Jurisprudence is the philosophy of law.

3 The judges who make up the U.S. Supreme Court are known as __________.

justices Explanation: The judges who make up the U.S. Supreme Court are known as justices.

10 Subject matter jurisdiction is defined as __________.

a court's power over the issues involved in a case. Explanation: Subject matter jurisdiction is a court's power over the issues involved in a case.

9 Josh borrows Amanda's car to get to school. Josh is obligated to exercise __________.

a very high duty of care Explanation: In this scenario, Josh is obligated to exercise a very high duty of care. In a bailment for the sole benefit of the bailee, such as where the bailee has borrowed an object, the bailee owes a very high duty of care, one that is greater than merely what is "reasonable."

6 In a negligence suit, the plaintiff must prove that the defendant __________.

actually caused the injury Explanation: In a negligence suit the plaintiff must prove that the defendant actually caused the injury. The courts term this cause in fact.

4 If a judge issues an order for a party to take a particular action or to cease from an action, the judge has ordered __________.

an injunction Explanation: An injunction is an order by a judge either to do something or to refrain from doing something. In the case of trade secrets, the injunction orders those who have misappropriated the trade secret to refrain from using it or telling others about it.

1 Duress means __________.

force or threat of force Explanation: An example of a contract in which mutual agreement is lacking includes those induced by duress. Duress is defined as force or threat of force. The force may be physical or, in some instances, economic.

4 Larry sells a truck to Tim. He does not mention to Tim that the truck has a faulty engine. The truck broke down after a week. Tim has to replace the engine, which costs him $2,000. In this case, Tim can sue Larry for the tort of __________.

fraud Explanation: In this case, Tim can sue Larry for the tort of fraud, as Larry failed to disclose the fact about the truck's faulty engine. One can prove fraud by giving evidence that another has harmed them by failing to disclose a material (important) hidden fact.

10 A local zoning ordinance criminalizes writing anything on public and private properties, including one's own private property. This law is most likely to be unconstitutional based on the __________.

overbreadth doctrine Explanation: This law is most likely to be unconstitutional based on the overbreadth doctrine. It means that the legislators have gone too far in seeking to achieve a goal.

8 Which of the following is part of the pretrial procedure?

The discovery process Explanation: The discovery process is a part of the pretrial procedure. Discovery aids trial preparation by permitting the parties involved in litigation to learn how a witness will answer questions prior to actual questioning at the trial.

8 Which of the following clauses allows for the separation of church and state?

The establishment clause Explanation: The establishment clause states that Congress shall make no law respecting an establishment of religion and thereby guarantees freedom of religion through the separation of church and state.

5 What percentage of tort cases filed in the U.S. District Court are reportedly settled prior to trial?

98 percent Explanation: The Department of Justice reports that 98 percent of tort cases filed in the U.S. District Courts are settled prior to trial. This high percentage is evidence that many parties are eager to avoid high litigation costs.

9 Which of the following is a type of fraud that occurs when the victim pays money to someone in anticipation of receiving something of greater value, then receives little or nothing in return?!

Advance fee scheme Explanation: An advance fee scheme is a fraud that occurs when the victim pays money to someone in anticipation of receiving something of greater value, then receives little or nothing in return.

4 __________, one of the seven elements of principled, interest-based negotiations, are outcomes that are possible without the agreement of the other party in a negotiation.

Alternatives Explanation: Alternatives, one of the seven elements of principled, interest-based negotiations, are outcomes that are possible without the agreement of the other party in a negotiation. In essence, alternatives are the thing that parties to a negotiation can do away from the bargaining table.

3 Anna's friend grants her a life estate in one of his homes. Anna lives there until she gets married and then moves to another home with her husband. Anna's sister is looking for a place to live, so Anna gives the home to her sister, Susie. Which of the following events will end Susie's ownership of the property?

Anna dies. Explanation: In this scenario, Susie owns the property until Anna dies. A life estate grants an ownership in land for the lifetime of a specified person. In this case, Anna has a life estate which ends upon her death.

2 What is the definition of a trade secret?

Any formula, pattern, machine, or process of manufacturing used in one's business that may give the user to obtain an advantage over its competitors. Explanation: A trade secret is defined as any formula, pattern, machine, or process of manufacturing used in one's business that may give the user to obtain an advantage over its competitors.

10 __________ is the technique used in collective-bargaining contracts to settle grievances that employees have against their employers.

Arbitration Explanation: Arbitration is the technique used in collective-bargaining contracts to settle grievances of employees against their employers. Arbitration is able to resolve disputes arising out of labor contracts without resorting to judicial intervention.

8 Books-R-Us, Corporation faces issues on various fronts like accounting discrepancies, false advertisement, and retailer relations. Books-R-Us wants to settle its disputes in a quick and cost-effective manner. Which of the following method of dispute resolution is Books-R-Us most likely to choose?

Arbitration Explanation: Books-R-Us is most likely to choose arbitration to settle the issues. The primary reason for the use of arbitration is the laudable goal of providing a relatively quick and inexpensive resolution of disputes. Arbitration also has the advantage of submitting many disputes to experts for solutions. In this case, Books-R-Us can resort to arbitration to deal with its multiple issues by availing itself of the expertise of arbitrators at costs lesser than those of litigation.

2 Which of the following is not an example of a white-collar crime?

Assault Explanation: White-collar crime usually means any illegal offense that occurs in a business or professional setting. Such crimes are generally committed for personal financial gain. These crimes are not dependent on the threat of physical force or violence. Some examples of white-collar crimes include counterfeiting, forgery, income tax evasion, embezzlements, fraud, etc.

1 Which of the following statements is true of factors influencing agency decisions?

At public hearings, interested parties are allowed to present evidence in support of, or in opposition to, a proposed rule or regulation. Explanation: At public hearings, interested parties are allowed to present evidence in support of, or in opposition to, a proposed rule or regulation. As a result, the best means of influencing a quasi-legislative decision of an administrative agency is to participate in the adoption process.

10 Which of the following is an example of a bailment?

Borrowing a friend's bike for a day Explanation: Borrowing a friend's bike for a day is an example of a bailment. In many common situations, an owner puts an object protected by personal property into the intentional possession of another person with the understanding that the other person must return the object at some point or otherwise dispose of it. This property arrangement is known as a bailment.

4 Which of the following is an example of a bailment done for the sole benefit of the bailee?

Borrowing a laptop from a friend Explanation: Borrowing a laptop from a friend is an example of a bailment done for the sole benefit of the bailee. The owner of the laptop is the bailor and receives no benefit from lending the laptop to the bailee. In a bailment for the sole benefit of the bailee, such as where the bailee has borrowed the object, the bailee owes a very high duty of care, one that is greater than merely what is "reasonable."

5 Which of the following protect individuals from the power of the government, including individuals accused of crimes?!

Civil liberties Explanation: The Bill of Rights was Congress's response to concerns that the Constitution gave too much power to a central government at the expense of the individual citizen. Often referred to as "civil liberties," these rights protect individuals from the power of government, including individuals accused of crimes. The Bill of Rights also protects businesses from excessive regulation.

4 __________ property is an ownership fence, which applies to resources like land that more than one individual owns jointly.

Common Explanation: Common property applies to resources like land that more than one individual owns jointly. Individuals and business organizations can possess, use, and transfer their private resources through the law of property.

5 Which of the following statements is true of trade secrets?

Establishing the existence of a trade secret is a critical step in the control of valuable knowledge resources. Explanation: Establishing the existence of a trade secret is a critical step in controlling valuable knowledge resources. The failure to maintain secrecy, or to prove that the knowledge was secret in the first place, can mean that competitors may be able to access it.

9 Nelly and Mario are graffiti artists who create designs and paintings depicting social issues that affect their community. They make sure their artwork is not obscene and does not incite a hateful reaction. They exhibit their art pieces at art shows. In this case, which of the following First Amendment protections may be applied to the actions of Nelly and Mario?

Freedom of speech Explanation: In this case, the actions of Nelly and Mario are protected by freedom of expression. Freedom of speech, sometimes referred to as freedom of expression, covers both verbal and written communications. This protection relates to governmental action that restricts people's ability to express themselves.

10 __________ is a complete defense to fraud as it is inconsistent with the defendant's intent to defraud or willfulness, purposes essential to the charges.

Good faith Explanation: Good faith is a complete defense because good faith on the part of a defendant is inconsistent with intent to defraud or willfulness, purposes essential to the charges. A person who expresses an opinion honestly held or a belief honestly entertained does not have fraudulent intent even though the opinion is erroneous or the belief is mistaken.

10 Harry files an application and receives a patent from the U.S. Patent Office for an abstract idea. He tells his friend Sally about his idea. A few months later, Sally attempts to sell Harry's idea as her own. Harry files a lawsuit against Sally for patent infringement. Which of the following is true of the outcome of Harry's case?

Harry will lose because Sally can accurately assert that he does not have a valid patent. Explanation: Harry will lose the lawsuit because Sally can accurately claim that he does not have a valid patent. The subject matter of Harry's patent, an abstract idea, is unpatentable. In a lawsuit for patent infringement, the infringer will often allege that the patent is not valid. If the patent is found to be invalid, the infringer will win the lawsuit.

6 Which of the following statements is true of misappropriation?

If one acquires a secret from another who has a duty to maintain secrecy, and one knows of that duty, misappropriation has occurred. Explanation: If one acquires a secret from another who has a duty to maintain secrecy, and one knows of that duty, misappropriation has occurred. On the other hand, innocently acquiring a secret from another without knowledge of their theft is generally not misappropriation.

5 Which of the following is a similarity between joint tenancy and tenancy in common?

In both forms of ownership, the tenants can usually force the separation of ownership under the doctrine of partition. Explanation: Joint tenancy and tenancy in common are forms of concurrent ownership. In both of these forms of ownership, the property interest is undivided, but the tenants in common can own different shares of the resource whereas the joint tenants must have equal ownership shares. The owners themselves, or the creditors, of a joint tenancy or tenancy in common can usually force the separation of these concurrent ownerships under the doctrine of partition.

1 Which of the following best defines phishing?

It is pretending to be a financial institutions or company in order to get individuals to reveal their personal information. Explanation: Phishing is pretending to be financial institutions or companies in order to get individuals to reveal their personal information. It is one of the most common forms of identity theft.

1 Which of the following statements is true of freedom of the press?

It is usually construed to prohibit prior restraints on publications. Explanation: Freedom of the press is not absolute. The press is not free to print anything it wants without liability. Rather, freedom of the press is usually construed to prohibit prior restraints on publications. If the press publishes that which is illegal or libelous, it has liability for doing so.

2 Which of the following describes an element of a conflict?

It leads to disputes when coupled with claims that are rejected. Explanation: Conflicts lead to disputes when coupled with claims that are rejected. Conflicts exist when there are two or more points of view.

8 Which of the following statements is true about joint tenants?

Joint tenants must have equal ownership shares. Explanation: In both joint tenancy and tenancy in common, the property interest is undivided, but the tenants in common can own different shares of the resource (e.g., two-thirds and one-third), whereas the joint tenants must have equal ownership shares (e.g., one-half and one-half).

1 __________ refers to the power of a court, at the state or federal level, to hear a case.

Jurisdiction Explanation: Jurisdiction refers to the power of a court, at the state or federal level, to hear a case. For any court to hear and decide a case at any level, it must have subject matter jurisdiction, which is the power over the issues involved in the case.

5 Which of the following is one of the major criticisms of the jury system in the United States?

Jurors vote their prejudices. Explanation: One of the criticisms of the jury system in the United States is that jurors vote their prejudices. Many argue that jurors are not qualified to distinguish fact from fiction and that their emotions are too easily swayed by skilled trial lawyers.

1 Which of the following philosophies of law tries to go beyond just the words of law to examine what law enforcement officials, administrators, prosecutors, and judges are actually doing as they carry out, interpret, and apply laws?

Legal realism Explanation: Legal realism tries to go beyond just the words of law to examine what police, administrators, prosecutors, and judges are actually doing as they enforce, interpret, and apply laws. When Supreme Court Justice Oliver Wendell Holmes Jr. said that "law is what officials do about it," he reflected the jurisprudence of legal realism.

8 In most states, a jury's decision must be unanimous because __________.

Many believe that the truth is more nearly to be found if the jury acts only on one common conscience. Explanation: In most states, a jury's decision must be unanimous because many believe that the truth is more nearly to be found if the jury acts only on one common conscience. However, there is growing evidence that the requirement of unanimity is taking its toll on the administration of justice in the United States.

1 When the disputing parties resolve all matters of contention that they can through mediation and agree to arbitrate the unresolved matters, they are said to be using an alternative dispute resolution technique known as __________.

Med-Arb Explanation: When the disputing parties resolve all matters of contention that they can through mediation and agree to arbitrate the unresolved matters, they are said to be using an alternative dispute resolution technique known as Med-Arb. The opportunities to use mediation in beneficial ways are limited only by the creativity of the parties involved.

6 Mike rents a car from Brandy Car Rentals ata rate of $40 per day. In this scenario, which of the following statements is true?

Mike is under a duty to use "reasonable care" to take care of the car. Explanation: In this scenario, since it is a mutual benefit bailment, Mike should use "reasonable care" to take care of the car rented from Brandy Car Rentals. In a mutual benefit bailment, such as a rental arrangement, the bailee is under a duty to use "reasonable care" in taking care of the object in possession, but if an act of God destroys or damages the object, the bailee is not likely liable to the bailor.

1 Which of the following statements is true of patent enforcement?

Multiple intellectual property rights can cover the same article. Explanation: A fundamental concept in patent law is that patents only convey the right to exclude others from making, using, selling, and importing the invention. They do not include the right to use the invention. At first glance, the latter point may seem counterintuitive. Can you really own a patent and have no right to make a product that is covered by it? The answer, surprisingly, is yes, and the key to understanding it is to realize that multiple intellectual property rights can cover the same article. There is often more than one patent to a product.

5 __________ takes place when one who has a duty to act reasonably instead acts carelessly and causes injury to another.

Negligence Explanation: Negligence takes place when one who has a duty to act reasonably instead acts carelessly and causes injury to another. In the United States, more lawsuits allege negligence than any other single cause of action.

9 In the context of patentable subject matter, which of the following characteristics indicates that the invention is new and different from the prior art?!

Novelty Explanation: The characteristic of novelty indicates that something is new and different from the prior art (the previous state of knowledge in the field). The test is met when no single piece of prior art meets all of the elements of an invention's claims. However, under patent law, even if an invention is otherwise new, it fails the novelty test if it has been described in a publication, sold, or put to public use more than one year before a patent application on it is filed (the one-year grace period).

6 What is the term for the trial jury that returns a verdict in criminal and civil cases?

Petit jury Explanation: The petit jury is the trial jury that returns a verdict in both criminal and civil cases. The Sixth and Seventh Amendments to the Constitution guarantee the right of trial by jury in both criminal and civil cases.

6 Which of the following is true about making arrests in "exigent circumstances"?

Police officers are allowed to conduct a search without a search warrant. Explanation: If "exigent circumstances" exist, in which police believe that evidence may be destroyed, they may conduct a search without a warrant.

7 __________ is the authority that a state or local government has to protect the public's health, safety, and general welfare.

Police power Explanation: Police power is defined as a state or local government's authority to protect the public's health, safety, and general welfare. Police powers are not limitless.

9 __________ law jurisprudence believes that law is simply the commands of the state backed up by force and punishments.

Positive Explanation: Positive law jurisprudence believes that law is simply the commands of the state backed up by force and punishments.

5 __________ property applies to resources that you own as an individual.

Private Explanation: Private property is an ownership fence that applies to resource that you own as an individual.

8 In the context of patentable subject matter, which of the following refers to a method for doing things?

Process Explanation: One of the most controversial areas of potentially patentable subject matter concerns "processes." Historically, business methods like double-entry bookkeeping were considered unpatentable, but they are after all processes, methods for doing things.

7 __________ represents the proposition that those engaged in activity are legally liable only for the foreseeable risk they cause.

Proximate cause Explanation: It is not enough that a plaintiff suing for negligence prove that the defendant caused an injury in fact. The plaintiff also must establish proximate causation. Proximate cause is, perhaps, more accurately termed legal cause. It represents the proposition that those engaged in an activity are legally liable only for the foreseeable risk that they cause.

2 Which of the following is a type of regulatory authority which gives an administrative agency the ability to issue rules that have the impact of laws?

Quasi-legislative Explanation: Administrative agencies have either one or both types of regulatory authority. A quasi-legislative agency can issue rules (regulations) that have the impact of laws.

7 __________ law both protects ownership and sets limits on private resource use.

Regulatory Explanation: Regulatory law both protects ownership and sets limits on private resource use.

7 Because he is the first member of the family to graduate from college, Robert's parents promise to buy him a new but inexpensive car. They have the money to buy the car and Robert is excited to receive his gift. On graduation day, his parents tell him that they have decided to use the car money for other bills and that there will be no car. In this situation, can Robert sue his parents?

Robert cannot sue because he did not suffer any legal detriment in reliance on the promise. Explanation: In this case, Robert cannot sue his parents. The promise to give something to another—in other words, a promise to make a gift—is not binding as a contract because no bargained-for consideration supports the promise.

10 Smith Incorporated sends a letter dated August 1 to Cervaille Stores, offering to sell 20 table lamps to Cervaille Stores for $80 each. Cervaille Stores provides a consideration of $160 to Smith Incorporated to keep the offer open for at least two weeks. On August 8, Smith Incorporated receives an offer from Shine Retailers Incorporated to purchase the table lamps at a price of $85 each. Can Smith withdraw its offer made to Cervaille Stores?

Smith cannot withdraw its offer as the agreement is in the form of an option. Explanation: In this scenario, Smith Incorporated cannot withdraw its offer made to Cervaille Stores as it is an option. Under the Uniform Commercial Code, the rules of consideration also do not apply to a firm offer. A firm offer exists when a merchant offering goods promises in writing that the offer will not be revoked for a period not to exceed three months. This promise binds the merchant, although the offeree buyer gives no consideration to support it.

10 __________ jurisprudence supports the idea that law can and should change to meet new developments in society.

Sociological Explanation: Sociological jurisprudence supports the idea that law can and should change to meet new developments in society.

8 Which of the following types of fraud occurs when the victim sends money or gives out personal or financial information to individuals they do not know personally?

Telemarketing fraud Explanation: Telemarketing fraud occurs when individuals send money to people they do not know personally or give personal or financial information to unknown callers.

3 The __________ to the U.S. Constitution reinforces federalism by reserving some powers to the states and to the people.

Tenth Amendment Explanation: The Tenth Amendment to the U.S. constitution reinforces federalism by reserving some powers to the states and to the people. The concept of federalism recognizes that each level of government has a separate and distinct role to play.

6 Zippers, Corporation constructed a zip-line course on government land after signing a lease agreement with the state government. A few years after signing the agreement, the state authority sanctioned the Never-ending Tunnel Company to build a long tunnel through the land where the zip-line course exists. The proprietors of Zippers, Corporation claim that the state violated their existing agreement. Which of the following is most likely to be applied in this case between Zippers, Corporation and the state government?

The contract clause Explanation: In this case between Zippers, Corporation and the state government, the contract clause is most likely to be applied. Under the contract clause, states cannot enact laws that impact rights and duties under existing contracts. The limitation on state action impairing contracts has not been given a literal application. In this case, the state authority had impaired an existing contract with Zipper, Corporation by entering into a new contract with the Never-ending Tunnel Company.

6 Which of the following statements is true of arbitration?

The decisions arising from arbitration are binding on the disputing parties. Explanation: The decisions arising from arbitration are binding on the disputing parties. The distinctive characteristic of this form of alternative dispute resolution is an arbitrator's decision on the merits. In essence, the arbitrator takes the place of the jury and judge in the litigation process.

3 Which of the following is an advantage of a nolo contendere plea?

The defendant avoids the cost of a trial. Explanation: Nolo contendere is Latin for "no contest." It allows sentencing just as if the defendant pleaded guilty or was found guilty. Pleading "nolo," as it is sometimes referred to, advantages the defendant by avoiding the cost of trial and avoiding the effect of a guilty plea or finding in a subsequent civil action. Criminal convictions may provide a basis for civil damage suits. This can be avoided by the nolo contendere plea.

1 In the context of tort law, what is intent?

The desire to bring about certain or substantially likely results. Explanation: In the context of tort law, intent is the desire to bring about certain results. But in some circumstances, the meaning is even broader, including not only desired results but also results that are substantially likely to result from an action.

4 Which of the following statements is true of trial by jury?

The right to trial by a jury is preserved in civil suits at common law when the amount in controversy exceeds $20. Explanation: In civil cases, the right to trial by a jury is preserved in suits at common law when the amount in controversy exceeds $20. Although juries are used in only a very small percentage of all cases, they remain critical to the administration of justice.

2 In the context of legal framework, which of the following statements is true about the property system?

The state legally recognizes when people have exclusive property rights in scarce resources. Explanation: In the property system, the state does not plan what people should have nor does it acquire and redistribute resources to them. Rather, the people themselves determine how resources are distributed through voluntary exchange, usually for money that they use to acquire other resources they need or want. The role of the state is to recognize legally when people have exclusive property rights in scarce resources and to allow them to enforce their rights through legal institutions like courts.

3 Which of the following statements is true of the rule of law?

There are four universal principles that define the rule of law, according to the World Justice Project. Explanation: According to the World Justice Project, an organization seeking to advance the rule of law around the world, four universal principles define the rule of law.

2 Which of the following statements is true of the role of judges in U.S. courts?

They apply the law to the facts of a case. Explanation: Judges in U.S. courts apply the law to the facts of a case.

7 Which of the following statements is true of the role of jurors in U.S. courts?

They determine the facts from conflicting evidence. Explanation: Jurors determine the facts from conflicting evidence. The facts as found by a jury are given great deference.

2 Which of the following statements is true about contract laws?

They enable private agreements to be legally enforceable. Explanation: Contract law enables private agreements to be legally enforceable. Enforceability of agreements is desirable because it gives people the certainty they need to rely on promises contained in agreements. A contract need not be a formal, written document, and those who make such an agreement do not have to use the word "contract" or recognize that they have made a legally enforceable promise.

7 Seth takes his laundry to Denise's Dry Cleaners. When Seth gets his clothes back, he notices that two of his shirts are now ripped. The shirts were in perfect condition when he brought them in. In this scenario, which of the following statements is true?

This was a mutual benefit bailment and Denise's owedSeth a duty of reasonable care. Explanation: In a mutual benefit bailment, the bailee has an absolute duty to return the object to the bailor (or to dispose of it as the bailor directs) and becomes liable to the bailor for failing to do so correctly. In a mutual benefit bailment, such as a rental arrangement, the bailee is under a duty to use "reasonable care" in taking care of the object in pos¬session.

3 Ellis, a resident of New York, wants to bring a tort claim against Timothy, a resident of Texas, for damage to Ellis's house in New York. To use a long-arm statute to obtain personal jurisdiction over Timothy, the New York court must find that __________.

Timothy committed the tort in New York Explanation: To obtain personal jurisdiction over Timothy under a long-arm statute, the New York court must find that Timothy committed the tort in New York. The typical long-arm statute allows a court to obtain jurisdiction over a defendant even though the process is served beyond its borders if the defendant has committed a tort within the state.

2 Jim, a restaurant manager, punched a customer who treated a waiter poorly. In this scenario, the customer can sue Jim for __________.

battery Explanation: In this case, the customer can sue Jim for battery. A battery is an illegal touching of another which is done without justification or consent of the person touched. In this scenario, Jim punched the customer, and that illegal touching was a battery.

9 Explanation: If a prospective juror admits bias favoring one of the parties to a trial, that person is most likely to be excused for __________

cause Explanation: If a prospective juror admits bias favoring one of the parties to a trial, that person is most likely to be excused for cause. In addition to the excuses for cause, a plaintiff and defendant are given a certain number of challenges, known as peremptory challenges, for which no cause or reason need be given to excuse a prospective juror.

1 A secured transaction involves a creditor who has sold something on credit or made a loan to a debtor who agrees to give the creditor a security interest in a valuable object, called __________.

collateral Explanation: A secured transaction involves a creditor who has sold something on credit or made a loan to a debtor who agrees to give the creditor a security interest in a valuable object, called collateral.

7 The Fifth Amendment is best known for its protection against __________.t!

compulsory self-incrimination Explanation: The Fifth Amendment is best known for its protection against compulsory self-incrimination. When a person giving testimony pleads "the Fifth," he or she is exer¬cising the right to this protection. The privilege against self-incrimination protects an accused from being compelled to testify against himself or herself.

3 If a business wishes to protect its trade secrets, a first step is to __________.

conduct a trade secret audit to identify confidential knowledge-based resources Explanation: If a business wishes to protect its trade secrets, it will first conduct a trade secret audit to identify confidential knowledge-based resources. It is useful for all businesses to conduct a trade secret audit, which simply lists all the valuable forms of information possessed by the business, including formulas, plans, reports, manuals, research, and knowledge of customers and suppliers.

9 The legal mechanism for evaluating the existence of an incentive or inducement for a person's promise which will establish a binding contract is called __________.

consideration Explanation: There must be some incentive or inducement for a person's promise, or it is not binding. The legal mechanism for evaluating the existence of this incentive is consideration, the receipt of a legal benefit or the suffering of a legal detriment.

2 When a defendant files a counterclaim against the plaintiff, the defendant becomes a __________.

counterplaintiff Explanation: The defendant becomes a counterplaintiff when a counterclaim is filed.

5 If a defendant does not respond in any way to a complaint, the court may enter an order of __________ and grant the plaintiff the relief sought.

default Explanation: If a defendant does not respond in any way to a complaint, the court may enter an order of default and grant a plaintiff the relief sought by the complaint.

6 Another name for the mailbox rule is the __________.

deposited acceptance rule Explanation: Another name for the mailbox rule is the deposited acceptance rule. Unless the offeror specifies a particular time, the acceptance usually binds the parties when the offeree dispatches it. Since the offeree frequently mails the acceptance, the acceptance becomes binding when it is "deposited" with the postal service—hence the deposited acceptance rule.

4 At the federal level, the Supreme Court __________ class-action suits.

discourages Explanation: At the federal level, the Supreme Court discourages class-action suits. Federal cases require that members of the class be given notice of the lawsuit; actual notice and not merely notice by newspaper publication is usually required.

8 Under comparative principles, a plaintiff's contributory negligence ______.

does not bar recovery Explanation: Under comparative principles, a plaintiff's contributory negligence does not bar recovery. It merely compares the plaintiff's fault with the defendant's and reduces the damage award proportionally.

6 In the context of property, contract law __________.

enables an owner to exchange resources, especially at a future date Explanation: Contract law enables an owner to exchange resources, especially at a future date.

9 The rules of evidence protect confidential client communications to a lawyer in order to __________.

encourage full disclosure by clients. Explanation: The rules of evidence provide that confidential communications to a lawyer are privileged to encourage full disclosure by a client. The law does not permit a lawyer to reveal such facts and testify against a client, even if called to do so at a trial.

4 Contractors promise the laborers working on a building that their wages will be paid at the end of every month. The laborers, in return, promise to work starting at the beginning of the subsequent month. When the laborers have worked for the entire month and are awaiting their wages at the end of the month, the contract is __________.

executory Explanation: In this scenario, since the laborers are awaiting their wages, the contract is executory. It is an executory contract because the contractors have not yet fulfilled their promise of paying the wages due. An executed contract is one in which the parties have performed their promises. When the parties have not yet performed their agreement, it is called an executory contract.

2 The separation of powers between levels of government is known as __________.

federalism Explanation: The separation of powers between levels of government is known as federalism. This concept recognizes that each level of government has a separate and distinct role to play.

8 Valid consideration can include any promise to do something one has no obligation to do, refrain from doing something one has the right to do, or in the case of a unilateral contract, a performance when there is no obligation to do so. This is known as a(n) __________.

legal detriment Explanation: Valid consideration can include any promise to do something one has no obligation to do, refrain from doing something one has the right to do, or in the case of a unilateral contract, a performance when there is no obligation to do so. That is the definition of a legal detriment.

5 Brett offers to sell his old cell phone to James for $65. James says he will accept the offer if Brett lowers the price to $60. James has __________.

made a counteroffer Explanation: In this case, James has made a counteroffer. If the acceptance changes the terms of the offer or adds new terms, it is not really an acceptance but a counteroffer. A counteroffer has the effect of rejecting the original offer and sending back a new offer for a different contract.

9 When a losing party in an arbitration proceeding makes allegations of bias against an arbitrator, the allegations __________.

normally do not affect the results of arbitration Explanation: When a losing party in an arbitration proceeding makes allegations of bias against an arbitrator, the allegations normally do not affect the results of arbitration. Courts generally do not allow such allegations to form a basis for overturning a panel's award unless there is evidence of overt corruption or misconduct in the arbitration proceedings.

3 A negotiation between a seller and a buyer began with each party stating their respective expectations in a competitive style. The seller started with as high an asking price as is considered reasonable. Likewise, the buyer began with the lowest reasonable price. In the context of negotiation methods, this scenario is an example of __________.

positional bargaining Explanation: In the context of negotiation methods, this scenario is an example of positional bargaining. In positional bargaining, the disputing parties typically begin in a competitive style by stating their respective expectations.

5 A municipal zoning ordinance attempts to regulate the placement of satellite dish antennas in residential areas by specifying size and location requirements. The Supreme Court rules that the zoning ordinance is unconstitutional, as it violates the Federal Communications Commission Regulation law. In this case, the ruling of the Supreme Court illustrates the concept of __________.

preemption Explanation: In this case, the ruling of the Supreme Court illustrates the concept of preemption. When a federal law preempts a subject, then any state law that attempts to regulate the same activity is unconstitutional under the supremacy clause.

1 When a petition for a writ of certiorari is filed to the Supreme Court, the party initiating the petition is the petitioner and the other party is known as the __________.

respondent Explanation: When a petition for a writ of certiorari is filed to the Supreme Court, the party initiating the petition is the petitioner and the other party is known as the respondent. If the review of a case is conducted in intermediate appellate court, the losing party may petition the highest court in the system for a writ of certiorari.

9 Strict products liability applies to __________.

retail sellers Explanation: A major type of strict tort liability is strict product liability, for the commercial sale of defective products. In most states, any retail, wholesale, or manufacturing seller who sells an unreasonably dangerous defective product that causes injury to a user of the product is strictly liable.

4 If laws are inconsistent, which level of legislation will be given the lowest priority?

state and local laws Explanation: If laws are inconsistent, the order of priority in determining which law to follow is (1) U.S. Constitution, (2) U.S. laws, (3) state and local laws. State and local laws have the lowest priority. In allocating power between federal and state levels of government, the Constitution, in Article VI, makes it clear that the Constitution is supreme under all laws and that federal law is supreme over a state law or local ordinance.

7 In the context of utility patents, the term "claims" refers to __________.

the details about the subject matter that an inventor regards as the invention Explanation: In the context of utility patents, the term "claims" refers to the details about the subject matter that an inventor regards as the invention. To obtain a patent, an inventor must pay a filing fee and file an application with the U.S. Patent and Trademark Office. In the case of a utility patent, the application must, in words and drawings, (1) explain how to make and use the basic invention; (2) show why the invention is different from prior art, that is, from all previous and related inventions or state of knowledge; and (3) precisely detail the subject matter that the inventor regards as the invention (called claims).

2 Article 6 of the Treaty on European Union, called the Maastricht Treaty, says the EU is "founded" on __________.

the rule of law Explanation: Article 6 of the Treaty on European Union, called the Maastricht Treaty, says the EU is "founded" on "the rule of law." There are no countries with strong, diverse economies that do not have the rule of law.

7 A judge may grant a motion for summary judgment if the moving party can show that __________.

there are no material disputed issues of fact Explanation: If there are no material disputed issues of fact, the judge will decide the legal issues raised by the case and enter a judgment in favor of one party over the other. Even if the motion for summary judgment is not granted in full, its use often narrows the issues for trial.

4 A grand jury transcript may be used at a trial __________.

to impeach a witness Explanation: A defendant may use a grand jury transcript at a trial to impeach a witness, to refresh the witness's recollection, or to test his or her credibility. The disclosure of a grand jury transcript is appropriate only in those cases where the need for it outweighs the public interest in secrecy, and the burden of demonstrating this balance rests upon a private party seeking disclosure.

3 A group of teenagers hops over a fence surrounding a farm. The fence has a sign that reads, "Private Property. Keep Out." They use the farm as a party spot. The owner of the farm hears the noise and asks them to leave. The teenagers refuse to do so and threaten the owner with violence to silence him. This is an example of the tort of __________.

trespass Explanation: To enter another's land without consent or to remain there after being asked to leave constitutes the tort of trespass. As the group of teenagers refused to leave the farm even after being asked to leave, they committed the tort of trespassing.

6 The usual rule is that the information sought in discovery is discoverable as long as the information __________.

will lead to evidence admissible during a trial Explanation: The usual rule in the scope of discovery is that the information sought in discovery is discoverable and an objection is overruled as long as the information will lead to evidence admissible during a trial. Generally, judges provide a very broad or liberal interpretation of the degree of discoverable information.