Legal Environment of Business Exam 2

Deviation from the required performance pertaining to a contract is said to be material when the deviation does not result in a substantial change in value of the contract. T/F

FALSE

Employees of print media organizations are not afforded a qualified protection from defamation liability even if they have acted in good faith and with the absence of malice. T/F

FALSE

If an individual was legally declared to be incompetent by a court prior to entering into a contract, most states will consider the contract to be voidable. T/F

FALSE

In the absence of a manufacturing or design defect, failure to warn cannot render a product unreasonably dangerous. T/F

FALSE

Only written contracts are considered to be enforceable. T/F?

FALSE

Susan offered to pay Roger $50 to walk her dog for the next 8 days. Roger responded that he was available to walk the dog for the next 8 days for a fee of $60. Roger's statement is an acceptance of Susan's offer. T/F

FALSE

one who commits a tort is a tort-actor. T/F

False- they are a tortfeasor

Which of the following elements of a contract pertains to the fact that there is an offer and agreement between the involved parties?

Mutual Assent

If one party to a contract uses any form of unfair coercion to induce another party to enter into or modify a contract, the coerced party may avoid the contract on the basis of _____.

duress

When performance of an obligation has become illegal subsequent to the contract but prior to performance, the contract will most likely be terminated on the basis of _____.

impossibility

Under the Copyright Act, the copyright duration for a book written in 1985 by a single author is ____ years.

70 years from the death of the author. WHY- Copyright protection is an intangible right granted by the Copyright Act of 1976 (a federal statute) to the author or originator of an original literary or artistic production, whereby the artist is invested, for a specified period, with the sole and exclusive privilege of multiplying copies of the work and with the right to profit from its publication and sale. Under the Copyright Act, the copyright duration for a book written by a single author is 70 years from the death of the author.

Which of the following is most likely to be considered void automatically?

A contract that violates a public policy.

Which of the following is true of contracts with minors?

A minor may force the concerned adult to complete the contract.

The parties to a contract agree on terms and perform the contractual obligations in good faith in order to complete the contract. This completion is known as _____.

Discharge

A(n) _____ is created when the parties involved have knowingly and intentionally agreed on the promises and performances.

Express Contract

Tom is a retailer who sells various brands of nasal sprays for children. Tom is unaware that one of the brands he sells contains components that are dangerous for children. In this situation, Tom will not be liable in strict liability torts. T/F

FALSE

Without any exception, courts will enforce a contract in which the offer states that failure to respond will be considered an acceptance of the offer. T/F?

FALSE

According to the rule of addition, if an infringing device does more than is described in the patent application of a protected invention, then no infringement has occurred. T/F

FALSE WHY- A literal infringement also occurs if an infringing device does more than is described in the patent application of the protected invention. This literal infringement is known as the rule of addition.

According to the patentable subject matter standard, materials common to nature, such as penicillin, are patentable. T/F

FALSE WHY- According to the patentable subject matter standard, some mathematical algorithms, materials common to nature (penicillin, for example), and unapplied ideas are not patentable. Ultimately, patent laws cover processes and ideas based on human ingenuity.

Copyright protection is a tangible right granted by the Copyright Act of 1976. T/F

FALSE WHY- Copyright protection is an intangible right granted by the Copyright Act of 1976 to the author or originator of an original literary or artistic production, whereby the artist is invested, for a specified period, with the sole and exclusive privilege of multiplying copies of the work and with the right to profit from its publication and sale.

If a copyrighted work is used for a commercial or profitable purpose, the unauthorized user cannot assert that the work was used under the fair use defense. T/F

FALSE WHY- If the use of infringed material is for some commercially profitable purpose, this will weigh heavily against the infringer. This is not to say that commercial use is a complete bar to assertion of fair use.

The International Court of Justice sits in Luxembourg and is the final arbiter of the codes governing European Union (EU) member countries. T/F

FALSE WHY- The International Court of Justice (also known as the World Court) is based in the Netherlands and its main functions are to settle legal disputes submitted to it by member states and give advisory opinions on legal questions submitted to it by duly authorized international organs, agencies, and the U.N. General Assembly. The European Court of Justice sits in Luxembourg and is the final arbiter of the codes governing European Union (EU) member countries.

The World Trade Organization (WTO) is intended to promote stability of world currencies. T/F

FALSE WHY- The WTO promotes and has certain authority over disputes involving trade barriers. The International Monetary Fund (IMF) is intended to promote stability of world currencies and provide temporary assistance for countries to help prevent the collapse of their economies.

Under the rule of omission, infringement occurs even when the alleged infringing invention lacks an essential element of the patent holder's claims in the patent application. T/F

FALSE WHY- The courts have developed three rules for determining whether literal patent infringement has occurred. Under the rule of omission, when the alleged infringing invention lacks an essential element of the patent holder's claims in the patent application, infringement has not occurred.

Discovery of protected information through independent research or reverse engineering is misappropriation. T/F

FALSE WHY- Trade secret owners have recourse only against misappropriation. Discovery of protected information through independent research or reverse engineering (taking a product apart to see how it works) is not misappropriation.

Similar to the U.S. Constitutional requirement that full faith and credit be given to judgments of the courts of sister states, the principle of comity requires that courts of one nation accept the judgment of a foreign court. T/F

FALSE WHY-One important concept related to judicial decisions as a source of international law is comity. Comity is the general notion that nations will defer to and give effect to the laws and court decisions of other nations. However, comity is not a legal doctrine that requires courts to accept the judgments of foreign courts. Rather, it is rooted in the idea that reciprocal treatment is a necessary element of international relations.

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards resulted in the limited enforceability of arbitration awards worldwide. T/F

FALSE WHY-The major difference between international and domestic arbitrations is that international arbitration awards have very wide enforceability in many countries. This is largely attributable to the acceptance of international treaties such as the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which allows for the enforcement of arbitration awards in many major countries provided that the arbitration is international.

Private international law primarily addresses relations between individual countries and international organizations. T/F

FALSE WHY- Private international law focuses on regulation of private individuals and business entities. Public international law primarily addresses relations between individual countries and international organizations.

Mediation and conciliation are growing in popularity as international dispute resolution procedures. Both involve an adjudicative process, always without the involvement of a neutral third party. T/F

FALSE WHY- The growing popularity of mediation and conciliation, both of which first took root in the United States but have gained increasing support in other jurisdictions, reflects a high degree of frustration with the cost and delays often associated with traditional dispute resolution procedures. Mediation and conciliation both involve a consensual (rather than adjudicative) process, often with the involvement of a neutral third party. Such forms of dispute resolution may loosely be described as third-party-assisted negotiation.

The Foreign Corrupt Practices Act was created to prevent foreign officials from bribing U.S. companies or officials. T/F

FALSE WHY-The Foreign Corrupt Practices Act (FCPA) of 1977 was enacted principally to prevent corporate bribery of foreign officials. This act has three major parts: (1) It requires the keeping by corporations of accurate books, records, and accounts; (2) it requires issuers registered with the Securities and Exchange Commission to maintain a responsible internal accounting control system; and (3) it prohibits bribery by American corporations of foreign officials.

An assignment is a transfer of future rights under a contract by one party in a contract to a third party.

FALSE - An assignment is a transfer of current rights (not future rights) under a contract by one party in a contract to a third party. The party making the assignment is known as the assignor, and the third party receiving the rights is the assignee.

Implied contracts are formed to remedy situations in which one party suffers losses as a result of another party's unjust enrichment. T/F

FALSE - An implied contract is one in which the agreement is reached by the parties' actions rather than their words. Quasi contracts are formed to remedy situations in which one party suffers losses as a result of another party's unjust enrichment.

A party suing another for breach of contract is not required to demonstrate tender of performance in order to meet the "clean hands" maxim.

FALSE - Clean hands requires that the party show that it had no fault in the breaching of the contract and that it was ready, willing, and able to perform its required obligations under the contract. This readiness to perform is called tender of performance.

Negligence is a result of a person's willful intent to cause harm to another person or property. T/F

FALSE - Negligence is an accidental (without willful intent) event that caused harm to another party. An intentional tort is one in which the tortfeasor was willful in bringing about a particular event that caused harm to another party.

The mailbox rule governing common law contracts provides that the acceptance of an offer is generally effective as soon as the acceptance is received by the offeror. T/F

FALSE - The mailbox rule provides that the acceptance of an offer is generally effective upon dispatch of the acceptance when sent in a commercially reasonable manner

The statute of frauds does not apply to contracts made in consideration of marriage. T/F

FALSE - The statute of frauds primarily applies to five types of contracts: contracts that involve the sale of interest in land; contracts that cannot be performed in under one year; contracts to pay the debt of another; contracts made in consideration of marriage; contracts for the sale of goods for $500 or more and lease transactions for goods amounting to $1,000 or more.

According to the doctrine of accord and satisfaction, rendering a substitute performance does not guarantee a discharge of obligation until the original performance contracted for is accomplished. T/F

FALSE -Under the doctrine of accord and satisfaction, one party agrees to render a substitute performance in the future (known as accord), and the other party promises to accept that substitute performance in discharge of the existing performance obligation. Once the substitute performance has been rendered, this acts as a satisfaction of the obligation.

In a trademark infringement claim, it is not necessary to provide evidence of consumer confusion in order for the mark holder to prevent another from using the holder's mark. T/F

FALSE- WHY- For a trademark holder to prevent another from using the holder's mark, the holder must prove that the use of the mark by another will be likely to cause consumer confusion as to the source of the goods. Courts use the eight-factor Polaroid test to assess likelihood of confusion.

The law provides protection against interference from third parties to existing contracts only and not to potential contracts. T/F

FALSE- In addition to providing protection against interference from third parties in existing contracts, the law also protects interference with potential contract (prospects) or other business relationships. The protections and definition of interference are similar to the existing contractual interference rules.

Mutual assent refers only to the written acceptance of an offer. T/F

FALSE- Mutual assent means that for a contract to be valid, the parties must reach an agreement using a combination of offer and acceptance.

Janet sells toys for children. If she sells a defective toy, she can only be held liable for the injury caused by the toy if she was aware that the toy was defective. T/F

FALSE- She can be held liable for the injury caused by the toy even if she was unaware that it was defective. Strict liability torts, in which a tortfeasor may be held liable for an act regardless of intent or willfulness, apply primarily in cases of defective products and abnormally dangerous activities (such as major construction demolition).

Michael has been hired as an attorney at a law firm. However, his contract remains valid only if he passes the bar exam within a year of joining the firm. The law firm is not obligated to retain the contract if Michael does not pass the bar exam. This is an example of a condition precedent. T/F

FALSE- This is an example of a condition subsequent. A condition is categorized as either a condition precedent, where the event that must occur before performance under a contract is due, or a condition subsequent, where the event occurs after the performance under the contract and discharges the parties' obligations.

Quarter Inc. is an Italian company that set up its ventures in the United States. It sells watches—designed and manufactured in Italy—in the United States. For the past few months, Quarter Inc. has not been doing well and has not paid rent for its establishment. According to the Foreign Sovereign Immunities Act (FSIA), which of the following most likely applies to Quarter Inc.?

Quarter Inc. can be legally charged because sovereign immunity does not apply to foreign entities engaged in a commercial enterprise on U.S. soil. WHY-According to the FSIA, Quarter Inc. can be legally charged because sovereign immunity does not apply to foreign entities engaged in a commercial enterprise on U.S. soil. The FSIA is a federal statute that explicitly prohibits U.S. courts from rendering judicial actions against foreign nations or their government officials unless (1) the foreign nation has waived its immunity either explicitly or by implication, (2) the foreign nation is engaged in some commercial enterprise on U.S. soil, or (3) the foreign nation's actions have a direct effect on U.S. interests.

A contract is simply an agreement that a court of law will recognize and enforce. T/F?

TRUE

A failure to act may be a tort if it causes a loss to be suffered by another party. t/f

TRUE

A nominal amount of money, such as one dollar, is sufficient consideration to form a valid contract. This is true even if the other party's consideration is much more valuable. T/F?

TRUE

Although the good faith requirement is ordinarily met by the parties simply performing their obligations completely, the law recognizes that there are some cases in which one party does not perform completely yet has still acted in good faith and is entitled to enforce the remaining obligations in the contract against the other party. T/F

TRUE

Laws that cover individuals who are injured by a product, known as products liability laws, may take the form of state common law or state statutes. t/f

TRUE

Liquidated damages are damages that the parties in a contract agree to ahead of time. T/F

TRUE

Robert called a cleaning service and hired them to clean his apartment. The service staff mistakenly cleaned Brandon's apartment, which was situated directly above Robert's. The category of contracts that will require Brandon to pay the cleaning service even though he did not ask for it is a quasi-contract. T/F?

TRUE

The rule preventing recovery for reasonably avoidable damages is often called the duty to mitigate. T/F

TRUE

When a party to an agreement owes a duty to perform and fails to fulfill her obligation, she is said to have discharged her obligation to the other party. T/F

TRUE

Courts are reluctant to allow fair use as a defense if a copyright holder demonstrates that the value of a copyrighted work will be diminished by allowing its use. T/F

TRUE WHY- Courts are reluctant to allow fair use as a defense if a copyright holder demonstrates that the value of a copyrighted work will be diminished by allowing its use. Fair use cannot impair the marketability or economic success of the copyrighted work.

Public international law addresses relations between individual countries and international organizations. T/F

TRUE WHY- One important distinction necessary to understanding international law is that it may be categorized as either public international law, which primarily addresses relations between individual countries and international organizations, and private international law, which focuses on regulation of private individuals and business entities.

Jeff legally registered various website domain names with the word "cataclysm" in them, a word that is the trademark of the famous company Cataclysm Inc. Jeff then sold these domain names to Cataclysm Inc. at a much higher rate. This is an example of cybersquatting. T/F

TRUE WHY- This is an example of cybersquatting. The Anticybersquatting Consumer Protection Act (ACPA) provides remedies to trademark owners from users who engage in cybersquatting.

The U.S. Patent and Trademark Office (USPTO) grants protection to trade dress characteristics so long as the mark holder proves that the trade dress provides an exclusive link to the source product in the consumer's mind. T/F

TRUE WHY- Traditionally, courts have allowed trade dress protection for sounds, scents, textures, shapes, and color combinations for businesses such as restaurants. Trade dress characteristics can be protected so long as the mark holder proves that the trade dress provides an exclusive link to the source product in the consumer's mind.

The General Agreement on Tariffs and Trade (GATT) includes minimum requirements and standards for all areas of intellectual property protection and provides an infrastructure for enforcement and dispute resolution. T/F

TRUE WHY- The United States and other similarly situated countries have backed the adoption of multinational minimal standards for intellectual property protection and an enforcement structure empowered with the ability to allow trade embargoes and other remedies designed to ensure that signatory countries comply with the agreement. As part of the General Agreement on Tariffs and Trade (GATT), administered by the multinational World Trade Organization (WTO), the agreement to set these standards is known as the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS). TRIPS covers minimum requirements and standards for all areas of intellectual property protection and provides an infrastructure for enforcement and dispute resolution.

The parties to an international dispute are typically corporations or government entities, while domestic dispute resolution can involve relatively small claims by individuals. T/F

TRUE- WHY-The parties to an international dispute are typically corporations or government entities, rather than private individuals, while domestic dispute resolution can involve relatively small claims by individuals. Many countries, recognizing that different considerations apply to international disputes, have provided for a separate legal regime to govern international dispute resolution.

A store owner who suspects someone of shoplifting, and detains him or her for 4-5 hours while investigating, may have committed the tort of false imprisonment. T/F

TRUE- Merchants must be careful when detaining an individual suspected of shoplifting. The Restatement provides limited protection for merchants so long as the individual is reasonably suspected and the detention is short in duration. In some cases, courts have interpreted that to mean as few as fifteen minutes.

Parties to a contract may substitute another party to perform any duties owed under the agreement. Which of the following statements is true of this act of delegation?

The delegator suffers liability for the breach of contract.

Which of the following is true of a contract that involves a partial breach by one of the parties?

The nonbreaching party under the contract may not be relieved from performing his duties.

A(n) _____ is best defined as a contract that one party may, at its option, either disaffirm or enforce.

Voidable Contract

Which of the following factors will a court most likely examine to determine the source of law governing a hybrid contract?

The value of goods versus the value of services.- In determining the source of law governing a hybrid contract, courts will examine allocation of price in the contract (value of goods versus value of services) and uniqueness of the services

Dev agrees to sell Walter a house in 60 days. At the planned time, Dev breaches the agreement by refusing to sell the house. Because Walter wanted the particular house for its personal significance, he cannot be compensated with another house. In this case, the court will most likely require Dev to sell Walter the house as promised. Which type of equitable remedy is indicated in this scenario?

a specific performance

Which of the following acts would be considered negligence per se? a. Alan drives his car at 60 mph in a 35 mph zone because he does not see the speed limit sign. b. Rita fails to notify the school administrator that the stairway in her school library is broken. c. Nate gets an aggressive dog because he wants his home guarded. d. Talia forgets to warn her guests that the cream used in the dessert is not fat-free.

a. Alan drives his car at 60 mph in a 35 mph zone because he does not see the speed limit sign. WHY- Violations of safety statutes are referred to as negligence per se. In the above scenario, Alan's act of driving his car at a speed beyond the accepted limit because he does not see the speed limit sign is a violation of a safety statute, and it would, thus, be considered negligence per se.

Which international legal systems use written law as their highest source of law? a. Civil law systems. b. Common law systems. c. Religious-based legal systems. d. Mixed legal systems.

a. Civil law systems. WHY- Countries using civil law systems have drawn their body of law largely from the Roman law heritage, which uses written law as the highest source, and have opted for a systematic codification of their general law. They rely heavily on written codes to define their laws and do not favor the notion of courts filling in any gaps in the statutes. Rather, these courts apply the code law to individual cases without the mandate of following cases that have been decided by previous courts considering the same questions. Most European, Latin American, African, and Asian countries use civil law systems.

The Trademark Dilution Revision Act (TDRA) includes factors for a court to consider in determining whether there is dilution by blurring. Which of the following is NOT one of the factors specified by the TDRA? a. The degree of consumer confusion brought about by an infringing mark. b. The degree of recognition (fame) of an infringing mark. c. The degree of inherent or acquired distinctiveness of an infringing mark. d. The degree of similarity between an infringing mark and a famous mark.

a. The degree of consumer confusion brought about by an infringing mark. WHY- In addition to bringing an infringement claim under the Lanham Act, holders of famous marks may also enforce their rights via the Federal Trademark Dilution Act of 1995 as amended by the TDRA of 2006. In a dilution claim, evidence of consumer confusion is not necessary in order for the mark holder to prevail.

_____ occurs when a copyright owner can prove that she has legal ownership of the work in question and that the infringer copied the work without permission. a. Direct infringement b. Indirect infringement c. Contributory infringement d. Vicarious infringement

a. direct infringement WHY- Direct infringement occurs when the copyright owner can prove that she has legal ownership of the work in question and that the infringer copied the work without permission. While the first element is straightforward, the second element is more complex than appears at first glance.

Max is a waiter at a five-star restaurant. He was offered $500 to obtain the recipe of the chef's signature dish and pass it on to Jack, a chef from another, less popular restaurant. Considering that the recipe is one of the trade secrets of the five-star restaurant, Max will most likely be charged with _____. a. misappropriation b. trademark infringement c. trademark dilution d. disparagement

a. misappropriation WHY- In this case, Max will be charged with misappropriation. Most state statutes use the definition of misappropriation from the Uniform Trade Secrets Act: (1) the acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means or (2) any disclosure or use of a trade secret of another without express or implied consent.

The doctrine of res ipsa loquitur is concerned with a. pointing to facts that infer negligent conduct without a showing of exactly how the tortfeasor behaved. b. defending against defamation claims by using the right of absolute privilege. c. using international norms as the basis for judging transactions that involve two countries. d. establishing that the injured party in a strict product liability case had already assumed the risk.

a. pointing to facts that infer negligent conduct without a showing of exactly how the tortfeasor behaved.

Liability for a defective product can be triggered even when a. the seller has exercised all possible care in preparation and sale of the product. b. the product is not expected to reach the user without a substantial change in its condition. c. the seller is not engaged in the business of selling such a product. d. the injured party can prove that the product was not received at all.

a. the seller has exercised all possible care in preparation and sale of the product. WHY- The Restatement (Second) of Torts in § 402A specifically indicates that liability still exists even if the seller used all possible care. However, liability under § 402A is triggered only when the seller is engaged in the business of selling such a product, and the product is expected to and does reach the user or consumer without a substantial change in the condition in which it is sold.

Which of the following situations involving infringement is most likely to be protected by a fair use defense? a. A student borrows a textbook from her university library, makes copies of it, and sells it to her friends. b. A professor studies an experiment in a published journal and draws analogies with it during a class lecture. c. A researcher compiles content from various published textbooks and sends it for publishing as her own work. d. A playwright uses the book Pride and Prejudice to create a screenplay for his next satire.

b. A professor studies an experiment in a published journal and draws analogies with it during a class lecture. WHY- The situation that is most likely to be protected by a fair use defense is when a professor studies an experiment in a published journal and draws analogies with it during a class lecture. If the use of the work is to further education or scholarship, courts are more likely to be sympathetic to an assertion of fair use. Short phrases and limited use of the copyrighted work are often protected by the fair use defense.

The _____ provides that its International Arbitration Rules apply only in the absence of any designated rules. a. London Court of International Arbitration (LCIA) b. American Arbitration Association (AAA) c. International Chamber of Commerce (ICC) d. International Court of Arbitration

b. American Arbitration Association (AAA) WHY- Except for the AAA, which provides that its International Arbitration Rules apply only in the absence of any designated rules, the other two sets of institutional rules (the ICC Rules of Arbitration and the LCIA Rules) are applied to the arbitrations administered by the arbitration bodies.

Which of the following statements is true of international arbitration? a. Arbitration is only considered international if the subject matter of the dispute involves two states from a country. b. International arbitration usually has no connection with the country in which the arbitration is being held. c. International arbitration awards can only be enforced in the country that the dispute originates in. d. Arbitration that is international is always administered by a single, universal arbitration forum.

b. International arbitration usually has no connection with the country in which the arbitration is being held. WHY-Arbitration is considered international if the parties to the arbitration are of different nationalities or the subject matter of the dispute involves a state other than the country in which the parties are nationals. An international arbitration usually has no connection with the country in which the arbitration is being held, other than the fact that it is taking place on its territory.

Which of the following is true of the International Court of Justice? a. It is the final arbiter of the codes governing European Union (EU) member countries. b. It gives advisory opinions on legal questions submitted to it by duly authorized international organs. c. It coordinates aid to developing international organizations and takes steps toward eliminating bribery and other corruption from developing economies. d. It is intended to promote stability of international currencies and provide temporary assistance for countries to help prevent the collapse of their economies.

b. It gives advisory opinions on legal questions submitted to it by duly authorized international organs. WHY- The International Court of Justice (also known as the World Court) is the judicial branch of the United Nations. It is based in the Netherlands and its main functions are to settle legal disputes submitted to it by member states and give advisory opinions on legal questions submitted to it by duly authorized international organs, agencies, and the U.N. General Assembly.

Which of the following is true of product liability? a. Only those who are in a direct purchase agreement can sue for negligence. b. Warranty laws impose liability even in the absence of negligence. c. Retailers do not share the duty to warn consumers of the dangers a product may cause. d. If a seller has not made a specific representation about the product, the buyer is not protected by warranty.

b. Warranty laws impose liability even in the absence of negligence. WHY- Warranty laws are important protection for purchasers because they impose liability even in the absence of negligence. When the seller makes a representation of fact about a product, this is known as an express warranty. If the seller has not made a specific representation about the product, the buyer may still be protected by a Uniform Commercial Code-imposed implied warranty.

The Lanham Act does not provide protection for ______ trademarks because they are not inherently distinctive, except when they have acquired a secondary meaning. a. fanciful b. descriptive c. arbitrary d. suggestive

b. descriptive WHY- Because descriptive marks are not inherently distinctive, they are not protected under the Lanham Act unless they have acquired a secondary meaning. Descriptive-mark holders must provide evidence that the general public connects the mark with the mark holder's product or service rather than with the ordinary meaning of the term.

In order to qualify as defamatory, a statement made by a defendant about a plaintiff must be a. states without intention to harm b. provable as false c. merely unkind d. true and based on actual facts

b. provable as false

"Already Gone" is a popular brand of kitchen disinfectant. The mark "Already Gone" best fits into the _____ category. a. fanciful trademark b. suggestive trademark c. descriptive trademark d. arbitrary trademark

b. suggestive trademark WHY- The mark "Already Gone" fits into the suggestive trademark category. Marks that suggest the product or service without literally describing it are considered highly distinctive. Courts classify a mark as suggestive if imagination, thought, and perception are required to understand how it is tied to the underlying product or service.

Which of the following is true of the different categories of patents? a. An important subcategory of design patents is the business method patent. b. All patents last for a period of 20 years from the date of filing the application. c. All patents must meet the novelty standard to be protected. d. A utility patent covers the invention of new and useful designs for manufacture.

c. All patents must meet the novelty standard to be protected. WHY- An invention or process must be unique and original, and a patent applicant must show that no other identical invention or process exists. The statute delineates the guidelines for this novelty standard based on a three-prong test.

Which of the following is protected under the Copyright Act? a. Methods of operation b. Discoveries c. Choreographic works d. Abstract ideas

c. Choreographic works WHY- Under the Copyright Act, protected works include literary works, musical works, dramatic works, choreographic works, motion pictures, sound recordings, and pictorial or graphical works. Works that cannot be protected include ideas, procedures, processes, systems, methods of operation, concepts, principles, and discoveries, no matter how they are explained, illustrated, or described.

Which of the following statements accurately describes a feature of the U.N. Convention on Contracts for the International Sale of Goods (CISG)? a. The CISG gives buyers an absolute right and obligation to cure. b. The CISG requires an offer for the sale of goods to have complete terms in order to be valid. c. The CISG specifically provides that contracts are not subject to requirements as to format. d. The CISG provisions apply to transactions in which one party is a nonmerchant.

c. The CISG specifically provides that contracts are not subject to requirements as to format. WHY- The CISG has no formal writing requirement (such as the UCC's statute of frauds) and specifically provides that contracts are not subject to requirements as to format. A totality of the circumstances, such as course of past dealing, evidence of oral or written negotiations between the parties, and industry practice, may be sufficient to prove that an enforceable contract exists.

In cases of fraudulent misrepresentation, the law is most likely to allow the innocent party to recover when a. the tortfeasor is unaware that the material fact is false. b. the misrepresentation of the fact is immaterial. c. the innocent party relied on the misrepresentation. d. the parties did not suffer any damage.

c. the innocent party relied on the misrepresentation. WHY- In cases of fraudulent misrepresentation, the law allows the innocent party to recover if (1) the misrepresentation was a material fact known to be false by the tortfeasor (or was a reckless disregard for the truth); (2) the tortfeasor intended to persuade the innocent party to rely on the statement, and the innocent party did, in fact, rely on it; and (3) damages were suffered by the innocent party.

The three primary sources of international law are a. civil law systems, common law systems, and religious-based legal systems. b. copyrights, patents, and trademarks. c. treaties, customs, and judicial decisions. d. preamble, amendments, and articles.

c. treaties, customs, and judicial decisions. WHY- International law can provide individual countries with some degree of harmonized standards that increase reliability and encourage fairness, due process, and barrier-free trade among nations. The three primary sources of international law are treaties, customs, and judicial decisions.

Linda has signed a two-year-long contract with HNS Inc., a clothing retail store, to work as a sales trainee. Linda's parents are outraged because Linda is not yet 18 years of age. In this scenario, which of the following elements of the contract between Linda and HNS Inc. has most likely been missed?

capacity to contract

If a hybrid contract is predominantly for services, and the goods are incidental, then the contract is governed by _____.

common law

Which of the following individuals is protected against defamation claims through a qualified privilege? a. A prosecutor who makes a statement against an accused during a court proceeding. b. A member of Congress who makes a criticizing statement during a congressional hearing while in office. c. A state legislator who makes an allegation in the course of carrying out her duties. d. A non-government official who relies on and cites an official public document while making an allegation.

d. A non-government official who relies on and cites an official public document while making an allegation.

Which of the following is true of sovereign immunity? a. It cannot be waived by a foreign country. b. It allows no exceptions. c. It prevents governments from fulfilling contractual obligations. d. It exempts nations from jurisdiction by other nations' courts.

d. It exempts nations from jurisdiction by other nations' courts. WHY- Sovereign immunity is one of the oldest doctrines of international law. In general, this doctrine holds that, with some exceptions, nations are exempt from jurisdiction by other nations' courts.

Which of the following is true of common law systems? a. They operate in countries that have drawn their body of law largely from Roman law heritage. b. They are used exclusively by European, Latin American, African, and Asian countries. c. They rely heavily on written codes to define their laws and do not favor the notion of courts filling in any gaps in the statutes. d. They strongly favor use of case law, as opposed to legislation, as the ordinary means of expressions of general law.

d. They strongly favor use of case law, as opposed to legislation, as the ordinary means of expressions of general law. WHY-Although there are differences from country to country, this category generally includes countries whose law, for the most part, is technically based on English common law concepts and legal organizational methods that strongly favor use of case law, as opposed to legislation, as the ordinary means of expressions of general law.

Which of the following individuals is most likely to avoid liability for defamation through absolute privilege? a. Mel, a journalist, who makes a debasing statement about a CEO of a multinational company. b. Chloe, a media person, who quotes an actor and calls him a chauvinist. c. Jade, an environmentalist, who makes a statement based on an official public document. d. Vicky, a criminal attorney, who makes a statement about an accused during a trial.

d. Vicky, a criminal attorney, who makes a statement about an accused during a trial. WHY? - Absolute privilege, whereby the defendant need not offer any further evidence to assert the defense, is given to judicial officers and proceedings. This includes judges, lawyers, and, in some cases, witnesses. In the above scenario, Vicky, a criminal attorney, is most likely to avoid liability for defamation through absolute privilege; the others are likely to appeal for qualified privilege.

The intentional touching of another person, without that person's consent, in a harmful or offensive manner is called _____. a. civil assault b. arson c. battery d. voyeurism

d. battery

France enacted a national law pertaining to the import and export requirements for certain types of wine. If the United States defers to the French law and honors its import and export requirements, it is exhibiting a. protocol. b. sovereign immunity. c. convention. d. comity.

d. comity WHY-If the United States defers to the French law and honors its import and export requirements, it is exhibiting comity. Comity is the general notion that nations will defer to and give effect to laws and court decisions of other nations. It is rooted in the idea that reciprocal treatment is a necessary element of international relations.

While acquiring rights for trademark protection, a mark holder may use the symbol TM to indicate that the a. mark is registered with the U.S. Patent and Trademark Office (USPTO). b. holder thinks that the mark should be protected even though it is not distinctive enough. c. mark cannot be used by anyone, even if he or she used the mark in commerce prior to the registration. d. holder considers the mark distinctive enough even though it is not yet registered with the USPTO.d,

d. holder considers the mark distinctive enough even though it is not yet registered with the USPTO. WHY- A mark holder typically uses the symbol TM to indicate that the mark is not yet registered with the USPTO, but the holder is indicating that he considers the mark distinctive enough to be protected and, in some cases, that the application for registration is pending.

Zoe charges a product liability case against Green-On Inc. stating that the brand's product caused her skin allergies. Zoe may pursue a legal remedy against Green-On Inc. under all of the theories listed below except a. negligence b. warranty c. strict liability d. trade libel

d. trade libel

Todd offers to shovel the snow off Maria's patio for $25. Maria agrees verbally and shakes Todd's hand to sign off on the agreement. When Todd has completed the shoveling job, Maria pays him the $25. This scenario best illustrates a(n) _____.

express, bilateral contract

Based on the fact that Josh's bike is less than a year old, has recently been serviced, and is perfect for mountain riding, Rick agrees to buy the bike and signs Josh's contract. However, Josh is aware that, in reality, his bike is much more than a year old. In this scenario, Josh's behavior is reflective of _____.

guilty knowledge

Nate agrees to sell his boat to Tina. In the contract, Nate agrees to deliver the boat in two weeks, but Tina learns that he is looking for another buyer who will pay a higher price. Tina turns to the court to stop Nate from selling his boat to any other party. In this case, she is seeking _____.

injunctive relief

When two parties have imperfectly expressed their agreement and this imperfection results in a dispute, a court may change the contract by rewriting it to conform to the parties' actual intentions. This contract modification is called _____.

reformation

Builders Inc., an experienced contractor, requested a bid from a supplier for lumber needed to complete a project. When responding to the bid, the supplier made a clerical error, and offered $30,000 worth of lumber for $3,000. Builders sent an e-mail accepting the offer. If this situation turns into a legal dispute,

the Court is likely to find that this is a unilateral mistake. However, since Builders knew (or should have known) that there was a mistake, the supplier will not be held to the $3,000 quote.

An aggrieved party is entitled to recover consequential damages when

the damages are a result of the breach of the contract.