MGT 352 Weeks 3-4

_________ of the bankruptcy code means liquidation and fair distribution of the debtor's non-exempt assets to the creditors.

Chapter 7

The substantial factor test and the proximate cause rule produce significantly different results in negligence cases.

False

If Scott makes a nonbinding promise to Lee and then fails to fulfill it:

Lee cannot expect contract law to provide a remedy

Chuck eats two pounds of potato chips a day for 20 years. He becomes obese and dies from high blood pressure at age thirty. Doctors attribute his death to consumption of the chips. In a suit against the chip makers, Chuck's heirs will probably:

Lose because of Chuck's assumption of risky behavior

________ means that the contract basically has been fulfilled and payments must be made.

Substantial performance

The code that was designed to promote uniformity of the laws relating to commercial sales of goods is known as

The Uniform Commercial Code

Punitive damages are usually warded based on malicious conduct.

True

To prove intent for an intentional tort, the plaintiff must show willful misconduct by the defendant.

True

the sophisticated user defense and bulk-supplier doctrine are similar in reducing liability for product sellers.

True

The most active area of strict liability litigation based on the concept of unknown hazards involves which product

asbestos

To transfer an instrument made "to the order" of the payee, the payee must:

both a and b are necessary

A form of check in which the bank is both the drawer and the drawee is called a

cashier's check

Negligence is

choices a and b

A person may hold legal title to a good if:

choices a and b are correct

Ford promises to deliver 100,000 new cars to Hertz by June 1 for its rental fleet. Ford only delivers 98,300 of the cars by June 1 and promises the rest soon. Ford has

engaged in substantial performance; Hertz may not reject all the cars.

Without _________ a contract may be void.

genuine consent by both parties

The law of product liability is primarily concerned with:

harms suffered by buyers and other persons who use defective products

Dee, a debt collector, calls old Mr. Thompson ten times a day about his debts. She call him names and threatens to have him beat up. This causes him severe anxiety attacks each time they speak. Dee may be best sued for:

infliction of emotional distress

One well-known business torts is:

intentional interference with contractual relations

When false information is intentionally presented as fact there may be a tort of

intentional misrepresentation

A disclaimer of an implied warranty is permitted if the disclaimer uses the word merchantability and the disclaimer:

is conspicuous

The proximate cause of an injury is the ________ cause of the injury.

legal

With respect to warranty disclaimers, under the UCC a seller:

may disclaim any warranty so long as the disclaimer follows UCC rules

_________ is quite similar to fraud; it requires a false statement to significantly influence the making of a contract.

misrepresentation

If Andy discovers a defect in the product his company manufactures after the product has already been sold and does not disclose it and Kathleen is injured while using the product she can sue him for:

negligence

The manufacturer of goods is liable in tort to users for foreseeable harms caused by defects in the goods. This is:

negligence in tort

Under the rule of caveat emptor, the producer of a defective product that caused injury to a consumer was:

none of the other choices

Because the UCC's warranty requirements create a tough standard, sellers may wish to reduce their liability by issuing:

none of the other choices are correct

Governments disfavor bearer instruments because:

none of the other choices are correct

The ________ agrees to make the payment, such as the bank making a payment based on a document presented to it.

none of the other choices are correct

The subject matter of a sales contract is not considered a good under Article 2 unless

none of the other choices are correct.

A promise to do something or to refrain from doing some specific thing is an

offer

In contract law, an agreement means there is a mutual understanding between the parties as tot he substance of the contract. This agreement between the parties is reached through

offer and acceptance

An implied warranty is

one the law inserts into the relationship regardless of the actual contract terms

An express warranty is:

one the manufacturer contractually provides to the consumer

For a contractual relationship, it is essential that:

privity exists between the parties

A __________ is a note promising to repay borrowed money, probably with interest.

promissory note

The uniform commercial code (UCC) was designed to

promote uniformity of the laws relating to commercial sales of goods

Nominal damages can be important because:

proof of breach may be related to other legal issues

The right to privacy is

protected by the tort of invasion of privacy, a fairly recent development in tort law

A major purpose of tort law is to:

provide compensation for injured parties by wrongdoers

Parties engaging in ultra-hazardous activities are liable for injuries:

regardless of the level of care exercised in carrying out the activity.

The remedy of _______ may be used to prevent unjust enrichment

restitution

One who by experience and expertise is aware of the possible health hazards associated with the use of a product and who has an obligation to inform its employees and customers of potential hazards is referred to as a:

sophisticated user

Strict liability under contract law for injuries caused by defective products is based on :

the existence of warranty

An express warranty may be created by all but which of the following:

the guarantee the buyer reasonably expects for the product

The assumption of risk defense requires that:

the injured party knew or should have known of the risks involved in a situation and voluntarily assumes the risk

The law of torts reflects all EXCEPT:

the international perspective on liability

Which is not a necessary element of negligence?

the wrongdoer's actions were motivated by malice

To be liable of a tort in negligence, one must have owed a duty of care to the party who suffered an injury.

true

Dangers that were not known or not fully appreciated at the time,the product was manufactured are known as _______ and account for the largest dollar volume and greatest number of product liability cases.

unknown hazards or latent defects

Once established, assumption of risk:

usually bars the plaintiff from recovery even if the defendant was negligent

Design defect cases focus on

whether an injury to users could have been prevented by designing the product differently.

An injunction is a court order to pay compensatory damages for a breach of contract.

False

If the buyer relies on the seller's skill or judgment to select the goods for unique purpose, an express warranty of merchantability may be created.

False

Liquidated damages may be any amount, so long as both parties to a contract agree to the sum.

False

Paul buys a bottle of Great Wine. He drinks it and becomes very ill. Doctors find the wine contained anti-freeze. Paul may not sue Great Wine because he assumed the risk of drinking alcohol, an inherently dangerous product.

False

Producers who do not know of that their products are potentially dangerous, because such dangers are not revealed until after years of use, are not liable for damages.

False

"No Gordo" is a common artificial sweetener. Researchers find it is responsible for cancer of the liver in some people. A person with liver cancer, who has eaten products containment "No Gordo" for years, wants to sue manufacturers who used the sweetener. In this case:

He may sue in strict liability for unknown hazards against all makers of "no Gordo"

__________ are an amount specified in the contract to be paid in the event of breach.

Liquidated damages

One concept behind the tort of invasion of privacy is to:

Protect individual rights to solitude and freedom from unwarranted public wxposure

A group of workers applied for work at a company looking to hire workers. There were locked in an enclosure and the police were called to report trespassing. The workers could sue for false imprisonment as they had good reason to be on company property.

True

A quasi-contract is not a true contract; the courts impose an obligation to prevent an injustice.

True

If a supplier delivered goods that violated a trademark or patent, there would be a violation of the warranty of title.

True

Restitution is an equitable remedy that may be used to prevent unjust enrichment when one party accepts benefits provided by another that were not under contract

True

The buyer may recover damages from a non-performing seller equal to the difference between the contract price and the cover price, plus incidental and consequential damages.

True

The courts have held that firms in an industry could be held liable jointly for damages done by products they had produced.

True

The doctrine of strict liability in tort applies primarily to cases of manufacturing defect, failure to warn, and to design defects.

True

The legal rules governing injury from asbestos in the United States are much tougher on producers than is the case in the United Kingdom.

True

A tort is

a civil wrong not a breach of contract

The legal relationship that consists of the rights and duties of the agreeing parties growing out of promises is:

a contract

The freedom of contract is

a hallmark of the law of contracts

During the 20th century, when consumers were injured as a result of using defective products, courts adopted a new legal standard that could apply to such cases, so that negligence was no longer the only standard:

a strict liability standard

In one case, a man who was drunk wanted to recover money another man owed him. he pulled a gun and, in the course of a struggle, accidentally shot the man who owed the money. the man who was shot sued for battery. A court is likely to hold that the man with the gun:

acted in self-defense once the struggle began, so was not responsible for the accidental shooting

The key elements of the tort of intentional interference with contractual relations is

all of the other choices

When a person suffers an injury due to deliberate deception, there may be a tort of:

all of the other choices may be correct

The rule concerning ultra-hazardous activities has been applied to:

all of the other specific choices

Business organizations lobby Congress to impose federal statutory limits on tort damages because they claim that:

all of the other specific choices are correct

Product misuse can be used as a defense in a product liability suit if:

all of the other specific choices are correct

Which of the following is one of the UCC's requirements for an instrument to be negotiable

all of the other specific choices are correct

Defenses against strict liability include

all of the other specific choices are possible

Defenses against strict liability

all of the other specific choices are possible.

False imprisonment is the deprivation of a person's liberty without justification. To establish a cause of action, the plaintiff must show:

all of the other specific choices must be shown

Which of the following is ( are) necessary elements to prove defamation:

all of the specific elements mentioned are necessary

Intentional conduct that places a person in fear of immediate bodily harm or offensive contact is the tort of:

assault

Jan owes you $500. Since you owe Bob some money, you give Bob the right to collect the money Jan owes you. This is:

assignment

If the consumer knows the risks associated with the use of a product and still chooses to use it he is:

assuming the risk and thus relieving the manufacturer of liability

The basic elements of a contract include agreement, lawful subject matter, and:

consideration, legal capacity, and genuine consent.

If a party fails to perform a nonbinding promise

contract law will not provide a remedy

Fraud, misrepresentation, fraudulent misrepresentation and deceit are all examples of torts caused by:

deliberate deception

A ___________ is created by a seller's promise or guarantee as to the quality, safety, performance, or durability of goods being sold.

express warranty

Under the strict liability doctrine, the focus is on the ______, rather than the reasonableness of the conduct of the manufacturer.

problems with the product

When the obligations of a contracted have been performed, the contract is:

terminated or discharged

Before passage of laws affecting negotiable instruments:

the right payment was a contract right that could not be sold

If the parties to a sale under the UCC do not specify when the title to the goods passes, then, assuming the goods did not have to be moved, title passes to the buyer when:

the seller delivers the title documents

Intentional torts occur when:

the tortfeasor is found to have intended to invade a protected interest and the tortfeasor knew, or should have known, of the consequences of the act that resulted in an injury

By definition a sale under Article 2 of the UCC requires that

title to the goods pass from the seller to the buyer and that price be paid for the good

M agrees to buy Z's house. At the last minute, Z refuses to finish the deal. If the court orders specific performance, M gets the house at the contract price.

true

For a contract to be valid, its subject matter must be lawful. A contract is illegal and unenforceable if its subject matter:

violates state or federal statutory law