Weeks 3 and 4 (MGT-252)

Before passage of laws affecting negotiable instruments:

the right to 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

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

all of the specific elements mentioned are necessary

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

True

Punitive damages are usually awarded based on malicious conduct. T/F

True

The freedom of contract is:

a hallmark of the law of contracts

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

all of the other specific choices are correct

Negligence is:

choices a and b

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

deliberate deception

One well-known business tort is:

intentional interference with contractual relations

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

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

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

misrepresentation

Governments disfavor bearer instruments because:

none of the other choices are correct

In the event of a breach of sales contract by the seller, all reasonable costs or direct expenses associated with the delay in receiving the goods or in tracking down substitute goods are included in the:

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

A promise to do something or to refrain from doing some specific thing is a(n):

offer

The right to privacy is:

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

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

the Uniform Commercial Code

Once established, assumption of risk:

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

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

Chapter 7

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

False

If the buyer relies on the seller's skill or judgment to select the goods for a unique purpose, an express warranty of merchantability may be created. T/F

False

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

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. T/F

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. T/F

False

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

False

Under Article 2, an acceptance is invalid if the parties intend to form a contract but the offeree's acceptance contains different terms from the original offer. T/F

False

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

Lee cannot expect contract law to provide a remedy

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

Liquidated damages

A group of workers applied for work at a company looking to hire workers. They 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. T/F

True

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

True

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. T/F

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. T/F

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. T/F

True

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

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. T/F

True

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

True

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

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

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 element(s) of the tort of intentional interference with contractual relations is (are):

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 of concerning ultra-hazardouse activities has been applied to:

all of the other specific choices

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(s):

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

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

asbestos

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

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

both a and b are necessary

Businesses can:

can be involved in both negligence and intentional torts

A form of check in which the bank is both the drawer and the drawee is called a(n):

cashier's check

A person may hold legal title to a good if:

choices a and b are correct

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

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

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

express warranty

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

"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 containing "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"

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

intentional misrepresentation

An offer that terminates by operation of law through ________________ occurs when a court decision or legislation makes an offer illegal after it has been made.

intervening illegality

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

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

none of the other choices are correct

In contract law, an agreement means there is a mutual understanding between the parties as to the 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

For a contractual relationship, it is essential that:

privity exists between the parties

A(n) _____________ 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

A major purpose of tort law is to:

provide compensation for injured parties by wrongdoers

Parties engaging in ultrahazardous 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

The legal standard articulated in MacPherson v. Buick Motor, regarding negligence in of producers of products dominated product liability law until:

the 1960s, when strict liability was added

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

the existence of a 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

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

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

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

Design defect cases focus on:

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

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

Substantial performance

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 a price be paid for the good