MGT 3300 Midterm

In MacPherson v. Buick, where the wheel on a new Buick collapsed, causing the car to crash, injuring MacPherson, the court of appeals held MacPherson could sue:

Buick for negligence under tort law

____ are foreseeable damages that result from a seller's breach.

Consequential damages

In Deschamp v Treasure State Trailer Court, the Montana Supreme Court held:

Deschamps claims were precluded under the parol evidence rule.

A company cannot be a defendant in a tort suit since a firm is not a natural person. T/F

False

After secured creditors are paid, all other creditors share the proceeds of the debtor's estate equally. T/F

False

In Derosier v. Utility Systems, the Court of Appeals held that Derosier was only entitled to $22,829.00 in general damages, but not consequential damages. T/F

False

In the K-Mart Corporation case, the bankruptcy court allowed K-Mart to continue paying its "critical vendors" in favor of its other vendors under the doctrine of necessity. T/F

False

In the case of Parish v. ICON, the Supreme Court of Iowa found that the manufacturer was responsible for safety defects in the trampoline. T/F

False

There are no defenses available in strict liability cases; manufacturers must pay whenever a consumer is injured. T/F

False

Every state except ____ has adopted UCC Article 2.

Louisiana

In Crest Ridge Construction v. Newcourt, where an order for construction materials that Crest Ridge needed was rejected for failure to meet credit terms, and Crest Ridge had to find a higher-cost replacement and sued Newcourt for damages, the appeals court held that:

Newcourt was liable for breach of contract because there was sufficient evidence that the two companies had formed a contract under the definition found in the UCC

A business is liable for the tort actions of its employees if carried out within the scope of their jobs. T/F

True

A man was injured when riding a mechanical bull at a state fair. The ride was working properly, but riders usually get bucked off. The man signed a waiver that he accepted the possibility of injury from a fall. When he sued for his injuries, you would expect the court to throw out the suit if the waiver clearly stated the dangers. T/F

True

A tort is broadly defined as a civil wrong, other than a breach of contract, for which the law provides a remedy. T/F

True

After a buyer breaches a contract for the sale of goods, the seller can resell the goods (or the remaining balance of the goods) to another buyer. T/F

True

Although all parties to a sale under the UCC must meet the UCC's good faith standard, merchants must meet even higher standards of honesty and good faith. T/F

True

Contract law is primarily state common law. T/F

True

In Caley v. Gulfstream Aerospace the court held that when employees were told a new dispute resolution policy would be imposed on them if they kept working that getting to keep working was adequate consideration, so there was a contract. T/F

True

In Fordyce Bank v. Bean Timberland, where the bank had a security interest in proceeds from the sale of timber by Bean, the court held that timber buyers had no knowledge of the bank's interest so were not responsible for its loss on the loan to Bean. T/F

True

In a case alleging interference with a contractual relation, the defendant must have known the plaintiff had a contract with a third party. T/F

True

Negligence involves a breach of a duty of care owed to another person by either an act or a failure to act. T/F

True

Res ipsa loquitur means "the thing speaks for itself." T/F

True

Strict liability for defective products may arise from either an implied warranty or an express warranty. T/F

True

The UCC does not apply to the sale of investment securities. T/F

True

The basic elements of a contract are: offer, acceptance, consideration, lawful subject matter, and genuine consent. T/F

True

The creditor is responsible for liquidating all of the debtor's exempt property in bankruptcy proceedings. T/F

True

The debts owed to secured creditors have the greatest protection in bankruptcy proceedings. T/F

True

The difference between the contract price and the price a buyer must pay for replacement goods when a seller is in breach is called cover. T/F

True

The main author of the Restatement (Second) of Torts is the American Law Institute. T/F

True

Under the common law, a contract is not formed unless there is no question that an offer has been accepted. Article 2 provides that a contract can be formed in any manner, including "conduct" that shows an agreement between the parties. T/F

True

The freedom of contract is:

a hallmark of the law of contracts

Negotiable instruments do not include:

all of the other choices are negotiable instruments

A binding promise is:

central to the modern definition of contracts

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

deliberate deception

A contract is a(n) ____ if it arises from the actions rather than the expressions of the parties.

express contract

Article 2 of the UCC covers the sale of:

goods

The UCC defines good-faith dealings as:

honesty in fact in the conduct or transaction incurred

In Squish La Fish v. Thomco Specialty Products, involving an adhesive that did not work as hoped in product packaging, the company that bought the adhesive sued the seller for a tort called:

negligent misrepresentation

Although commercial paper may be either negotiable or nonnegotiable, only ____ fall under the UCC.

negotiable instruments

A tort is:

none of the other choices

A(n) ____ is a note promising to repay borrowed money, probably with interest.

promissory note

In Greenman v. Yuba Power Products, Greenman was injured when a tool his wife bought him malfunctioned. The Supreme Court of California imposed liability based on:

strict liability in tort

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

the Uniform Commercial Code

Scienter is:

the intent to defraud

Contract law governs the enforceability of:

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

In Fuerschbach v. Southwest Airlines, where Fuerschbach was "arrested" by the police as a prank at work, the appeals court held that there could be a tort of assault and battery by the police because:

the officers intended to cause an offensive contact and did cause an offensive contact

The one who receives payment from a negotiable instrument is called:

the payee

If a repossessed product is sold for more than what is owed by the debtor:

the seller is obligated to return the difference

Which of the following is not an element needed to show negligence:

the wrongdoer intended to invade a protected interest of the injured party

In Palsgraf v. Long Island Railroad, where Palsgraf was hit by machinery that fell when an explosion occurred at a train station, and she sued the railroad for negligence, the New York high court held that the railroad:

was not liable because of a lack of proximate cause