BUS101 - Module 4 - Week 2 Legal Environment
What is a contract?
an agreement that is enforceable by law
Sylvania claims that their light bulbs "last 10 times longer and use 75% less energy than standard bulbs." This is an example of:
an express warranty
Sylvania provides light bulbs that, one might assume, are safe to use and will last for a reasonable period of time. This is an example of:
an implied warranty
The Clayton Act is characterized as:
antitrust legislation
To protect businesses and consumers against unfair business practices that limit competition and control prices is the primary goal of:
antitrust legislation
An enforceable contract creates legal obligations, and failure to comply with them creates a:
breach of contract
When a supplier fails to perform their obligations in a contract, it is called a:
breach of contract
________ is the failure of a party to fulfill their obligations under the contract.
breach of contract
David is looking to buy a used kayak through an online auction. He wants some type of protection, however this sale would be covered by the principle of:
caveat emptor ("buyer beware")
Shelly is interested in buying a used Jeep from a private individual. She would really like to have some type of warranty, however this sale would be covered by the principle of:
caveat emptor ("buyer beware")
Judges decisions that establish precedent and bind future courts is known as:
common law evolving law stare decisis statutory law
This group makes up the largest economic group:
consumers
Specific performance refers to the circumstance where a court orders a party to carry out their duties under the:
contract
The covenants in a ________ describe the details of what the parties commit to do or not do.
contract
Patents, trademarks and copyrights are three main ways to protect:
intellectual property
A tort:
is a wrong that creates a legal liability.
If the wholesaler and retailer both exercise due care, which of the following parties can be held liable in a negligence suit about a defective product?
the manufacturer
Statutory law is:
law passed by Congress
A body of rules with legal force and effect, prescribed, recognized and enforced by a controlling authority describes:
law.
Common law is the body of law that is based on:
legal precedent
Kate and Felice have come to an agreement. Kate will sell Felice a specific number of her prescription pills for a set dollar amount. This is not a legal contract because it fails to meet which requirement(s) of a contract:
legality
The Federal Trade Commission Act created the Federal Trade Commission, an agency charged with:
litigating cases involving deceptive trade practices
Most roads in the United States have a stated speed limit. This is an example of what purpose of law?
maintaining order
Many people buy a product based upon the warranty provided by the:
manufacturer
The Clayton Act prohibits mergers and acquisitions where the effect:
may be substantially to lessen competition, or to create a monopoly
The Clayton Act addresses specific practices, such as:
mergers and interlocking directorates
After mopping up a spill, store employees forget to put "Caution: Wet Floor" signs in the area. Soon afterwards, a shopper slips on the wet floor and injures herself. What is this is an example of?
negligence tort
Proving a breach of duty is one of the requirements to prove:
negligence.
Precedent means that future cases are decided by similar previous cases unless:
new precedent is established
An implied warranty of merchantability assures that a product is a reasonably fit for:
ordinary use
An auto mechanic has an idea to make a tool that will make his job easier. He has a machinist friend make a prototype of it. To protect his idea he needs a:
patent
A programmer hacks software code to understand how it works. Then she writes a program that replicates the implementation of a solution that has already been granted intellectual property protection. This is an example of a:
patent violation
A landlord fails to make improvements to keep the balconies of his apartment building at a level of repair that meets the city code. After several warnings from the city, one of the balconies falls and smashes the furniture and barbecue of one of the tenants. Another tenant is near the balcony when it falls but no one sustains physical injuries. Compensatory damages may include:
payment for damaged property and/or mental suffering.
Examples of compensatory damages include:
payment for mental anguish.
Common law is based on:
precedent
Stare decisis refers to:
precedent established by prior court rulings in similar cases
When a tort or harm is caused by a product, the legal question is whether there is a product defect and, therefore, product liability. In pursuing a product liability case based on negligence, plaintiffs generally claim a manufacturer failed to meet one or more of the following standards:
product design, product manufacture, and product warning or instructions
Strict liability tort law has evolved from:
product liability negligence
The Fair Credit Reporting Act (FCRA) was intended to:
protect consumers from willful and/or negligent inclusion of information in their credit reports
The United States Constitution sets limits on the branches of government. This is an example of what purpose of law?
protecting individual rights and liberties
A man takes another man to court over a property disagreement. This is an example of what purpose of law?
resolving disputes
Laws that are based on an act of Congress are:
statutory law
The legal age for purchase of alcoholic beverages is defined by:
statutory law
"Unfair methods of competition" are banned by the:
Federal Trade Commission Act
The ________ prevents unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce.
Federal Trade Commission Act
Federal consumer protection laws are mainly enforced by:
Federal Trade Commission, Consumer Financial Protection Bureau, FDA & US Department of Justice
The ________ provides that the warranty of merchantability and warranty of fitness are implied unless they are explicitly disclaimed "as is".
Uniform Commercial Code
If Nick and Raphael form a partnership that restrains trade, but not unreasonably so, would this be legal under the Sherman Act?
Yes, the partnership is legal under the Sherman Act.
Which of the following is NOT a claim for a product liability case?
a breach of contract
Which of the following is one of the three typical claims for a product liability case?
a design defect
Which is an examples of a tort suit?
a tenant who damages a landlord's property
Strict liability:
acknowledges that some products are inherently dangerous.
________ is a legally enforceable agreement.
A contract
Which of the following best describes a "breach of contract"?
A failure, without legal excuse, to perform any promise that forms all or part of the contract
Describe warranties
A first basis of recovery in products-liability theory is breach of warranty. There are two types of warranties: express and implied. Under the implied category are three major subtypes: the implied warranty of merchantability (only given by merchants), the implied warranty of fitness for a particular purpose, and the implied warranty of title. Under warranty law there must have been a sale of the goods; the plaintiff must bring the action within the statute of limitations; and the plaintiff must notify the seller within a reasonable time. The seller may limit or exclude express warranties or limit or exclude implied warranties. Contracts
Which of the following best describe a contract?
A legally enforceable agreement
A warranty is defined as:
A promise that goods sold will meet stated standards and that has legal implications
Summarize consumer protection and antitrust laws
A range of laws regulate consumer affairs, and their aim is to protect consumers from unscrupulous business practices or potentially dangerous products. Some of the most far-reaching consumer protection laws are the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Food, Drug, and Cosmetics Act, and the Uniform Deceptive Trade Practices Act. Antitrust legislation is another kind of consumer protection that aims to prevent unfair business practices that limit competition or control prices. The three core federal antitrust laws are the Sherman Act, the Federal Trade Commission Act, and the Clayton Act.
The rule of law is a principle that applies the authority of law to:
All persons, businesses, and other entities
Warranties can be either expressed or implied. Which of the following statements best explains an express warranty?
An express warranty is created by the seller's words or actions.
The four elements of a legally enforceable contract are:
An offer and acceptance, consideration, capacity and legality
The merger of large corporations who compete in the same market must pass the scrutiny of:
Antitrust legislation
Barb has bipolar disorder and when properly medicated is able to understand the provisions of a contract to purchase a home. Under the contractual capacity requirement her home purchase contract may be void if:
Barb failed to take her medication on the day she signed the contract
Damages intended to compensate a victim are:
Compensatory
The way a court "remedies" a wrong is by awarding monetary payment, referred to as "damages." Which of the following statements accurately describes the difference between compensatory and punitive damages?
Compensatory damages are intended to compensate a plaintiff for the wrong; punitve damages are intended to punish a defendant and deter similar behavior
Law is defined as:
Conduct approved and enforced by government
________ is a form of protection provided to the authors of "original works of authorship," including literary, dramatic, musical, artistic, and certain other intellectual works.
Copyright
List and describe the elements of a legally enforceable contract, and explain the consequences of breach of contract
Every transaction in business creates a contract (agreement) between the parties. In order to determine whether a valid, enforceable contract exists, the following questions must be answered: (1) Did the parties reach an agreement? (2) Was consideration present? (3) Was the agreement legal? (4) Did the parties have capacity to make a contract? (5) Was the agreement in the proper form? Remedies available against someone who breaches a contract include damages, specific performance, and restitution. Frequently the party who is not in breach must choose between tort and contract remedies.
Copyrights are a form of intellectual property protection that give a creator: of Unlike patents and trademarks, that are administered by the USPTO, copyrights are administered by the Library of Congress. However, like patents and trademarks, a copyright gives its creator the exclusive right to his or her original work for a limited time.
Exclusive right to an original work for a term exceeding the author's life.
Guidelines for how credit reporting agencies may conduct business are part of the:
Fair Credit Reporting Act
The Uniform Commercial Code provides what types of warranties?
Implied warranties and express warranties
Implied warranties of merchantability and warranties of fitness are categories of warranty that are:
Imposed by the Uniform Commercial code
Define tort law, and explain the role of product liability in tort law
In common law jurisdictions, a tort is a civil wrong that unfairly causes someone else to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Torts may result from negligent as well as intentional or criminal actions. Product liability is the area of law in which product manufacturers, distributors, and sellers are held responsible for the injuries caused by their products. When someone pursues a claim under a tort, the goal (or legal remedy) is usually the award of damages. Damages are an award, typically of money, to be paid to a person as compensation for loss or injury.
Explain the purpose and characteristics of intellectual property law
Intellectual property refers to creations of the mind—creative works or ideas embodied in a form that can be shared or enable others to recreate, emulate, or manufacture them. There are three main ways to protect intellectual property: patents, trademarks, and copyrights.
Intellectual property is intangible. How would you best describe its value to businesses?
It can be a company's most significant asset.
________ are conduct approved and enforced by the government of and over a certain territory.
Laws
Statutory law is the body of law that is based on:
Legislation passed by congress
In a civil society, law is required to establish what personal behavior and business practices are right or wrong based on a society's values and circumstances. Specifically, law serves the following purposes:
Maintaining order, establishing standards, resolving disputes, and protecting individual rights and liberties.
Which of the following statements best describes the calculation of damages for breach of contract based on expectation interest?
Monetary award that may include direct damages, consequential damages, and or incidental damages
The Sherman Act is legislation focused on addressing:
Monopolistic business practices
________ awards the inventor with the exclusive right to make and sell an invention for a period of time.
Patent
The goal of antitrust legislation is to:
Promote competition and achieve associated price, choice, quality, and innovation benefits
Which of the following statements best describes the rationale for consumer protection legislation?
Protect and reassure consumers and support economic growth
________ is effective because the majority of citizens recognize the importance of adhering to the law.
Rule of Law
________ consists of four aspects: due process, separation of powers, an open and transparent system of making laws, and predictable and uniform application of the laws.
Rule of law
________ is a principle under which all persons, institutions, and entities are accountable to laws that are publicly promulgated, equally enforced, independently adjudicated, and consistent with international human rights principles.
Rule of law
Strict liability is a ________ liability that applies when a tort or harm results from ________.
Significantly higher level of; ultrahazardous activity or defective products
________ refers to the circumstance where a court orders a party to carry out their duties under the contract.
Specific performance
Companies planning large mergers or acquisitions must notify the government in advance to abide by:
The Clayton Act
Which "Act" addresses specific practices, such as mergers and interlocking directorates?
The Clayton Act
In antitrust legislation, this act deals greatly with "monopolization":
The Sherman Act
Negligence is a category of tort that involves:
The harm that arises from unintentional action
Explain the meaning and purpose of law
The law as we defined it is a set of rules of conduct or procedure established by custom, agreement, or authority. It refers to the entire the body of rules and principles governing the affairs of a community and enforced by a political authority. The main purposes of the law are to establish standards, maintain order, resolve disputes, and protect liberties and rights.
Which of the following is true about an agreement between two individuals to form a partnership that restrains trade, but not unreasonably so?
The partnership is legal under the Sherman Act.
The USPTO defines a trademark as "a word, phrase, symbol, or design, or a combination thereof, that identifies and distinguishes the source of the goods of one party from those of others." In order to be registrable, a trademark/service mark must be perceived as unique or unlikely to cause confusion. Which of the following statements best describes the bases of that determination?
The visual appearance, sound and meaning of the trademark, and relatedness of the goods/services.
Differentiate between statutory and common law
There are different sources of law in the U.S. legal system. The U.S. Constitution is foundational; U.S. statutory and common law must be consistent with its provisions. Congress creates statutory law (with the signature of the president), and the courts interpret both statutory and constitutional law. Where there is neither constitutional law nor statutory law, the courts function in the realm of common law.
Property rights are one of the factors that economists refer to as "rules of the game" or the institutions that give individuals and businesses an incentive to not only develop, but continuously improve, the goods and services they invent. The purpose of intellectual property law is:
To create a framework that incentivizes value creation specifically new ideas and inventions while also providing access to the public goods and services created
Antoine and David are 12 years old when they agree that if either one of them ever earns more than $200,000 in one year he will buy the other one a new car. After college, Antoine starts a company that provides transportation to senior citizens who cannot drive. When David reads in the newspaper that Antoine's business has been purchased by a healthcare provider for $5 million, David believes that he is owed a new car. The agreement for the new car between Antoine and David was not a legal contract because it fails to meet which requirement(s) of a contract?
contractual capacity
A young author writes a novel that is based on the story of Harry Potter, including Harry and several of the other characters in his new story. This is an example of a:
copyright infringement
A young man writes a novel that is based on the story of Star Wars, including Luke Skywalker and several of the other characters of the story. This is an example of a:
copyright infringement
The ________ in a contract describe the details of what the parties commit to do or not do.
covenants
The Fair Credit Reporting Act:
creates guidelines under which credit reporting agencies may conduct business
When both parties are relieved of their obligations under the contract, the courts may issue a:
discharge of duties
The FDA has the authority to:
educate the public and establish and enforce regulations for goods under its authority
Negligence may result in:
emotional, economic, or reputational damage.
What are four main purposes for law?
establishing standards, maintaining order, resolving disputes, and protecting liberties and rights
Kiowa is looking to get a new pair of bluetooth headphones. The pair at the top of his list are stated to have a battery life of 20 hours. This is an example of an:
express warranty.
The Targus adjustable pedestal is designed to act as an adjustable stand for computer monitors. The reseller specifically states that the stand holds up to 100 pounds. This is an example of an:
express warranty.
Goodyear all weather windshield wipers are marketed for use in extreme weather conditions, which include snow, heat, rain and ice. This is an example of an:
extended warranty implied warranty of merchantability. express warranty. implied warranty of fitness
To establish negligence a plaintiff must prove the defendant:
failed to take actions and that this failure caused harm.
A patent awards the inventor with the exclusive right to make and sell an invention:
for a limited period of time
A breach of contract is when a party in a contract fails to:
fulfill their obligations
Intellectual property law governs the protection of:
ideas
The Uniform Commercial Code provides that the warranty of merchantability and warranty of fitness are:
implied
CTEK markets its MUS Polar Battery Charger for use in extreme cold conditions. This is an example of:
implied warranty of fitness.
An ________ assures that a product is reasonably fit for ordinary use.
implied warranty of merchantability
Under an/the ________, a product must do what it's supposed to do.
implied warranty of merchantability
The Graco highchair is designed for babies and toddlers. The reseller specifically states that the highchair holds up to 45 pounds. This is an example of an:
implied warranty of quality express warranty implied warranty of merchantability implied warranty of fitness
The principle of caveat emptor
insufficient for consumers safety
A contract is a promise between two parties. However, in order for the contract to be legally enforceable it must meet certain criteria, such as:
the parties must agree to exchange something of value
A USPTO patent grants an inventor:
the right to exclude others from making, using, offering for sale, or selling the invention in the United States or importing the invention into the US for the patent term
One of the basic objectives of antitrust laws is:
to create and maintain a competitive market
The primary goal of antitrust legislation is:
to protect businesses and consumers against unfair business practices that limit competition and control prices
Tort law is different from criminal law in that:
tort lawsuits have a lower burden of proof.
A wrong that creates a legal liability is known as a:
tort.
A ________ gives the owner the right to prevent others from using a company's product name or logo.
trademark
Nike uses a "swoosh" on their apparel. This is an example of a:
trademark
A television commercial decides to use Pepsi without permission. This is an example of a:
trademark violation
Specific performance refers to the circumstance where a court orders a party to carry out their duties:
under the contract
The Federal Trade Commission Act bans:
unfair methods of competition
Strict product liability does not require:
unreasonable conduct
The word "tort" is derived from the French word meaning to harm or to be in the wrong. In a legal context, a tort is ________ that is generally remedied through payment of monetary damages.
violation of civil law
A ________ is a guarantee or promise that provides assurance by one party to another party that specific facts or conditions are true or will happen.
warranty
A ________ is a guarantee that a product meets certain standards of performance.
warranty
Many people buy a product based upon the ________ provided by the manufacturer.
warranty