BADM 300 FINAL

Imagine that, after 2 days the contract between the management company and the buyer is entered into, the buyer learns that the management company was not authorized by Sarah. At this point, Sarah has not yet ratified the contract. Can the buyer withdraw from the unauthorized contract? Yes No

Yes A third party may withdraw from an unauthorized contract any time prior to ratification.

Imagine that you are the owner of a Starbucks shop, and you hire a manager. When you hire her, you tell her that she will be managing your business with a very general language. In this situation, will the manager have implied authority to hire employees, receive money, and direct the business? Yes No

Yes That manager will have implied authority to hire employees, receive money, and direct the business. These actions will be based on contracts reasonably necessary to conduct the business. The manager's authority would be implied from your express authority to hire her as a manager.

Imagine a 25-year old individual. This individual wants someone to buy a house for him. Can he hire a 10-year old agent? Yes No

Yes The 25-year old individual is not a minor. Therefore, this individual has contractual capacity and can be a principal. The question is about the legal capacity of the agent. There are no limitations as to who can be an agent. In this case, even if the minor could not enter into a contract on her own behalf, she does have the capacity and power to act as an agent on behalf of the principal.

Sonya and Taylor enter into an oral contract that is required to be in writing to be enforceable. Such a contract is normally a. voidable by a party who does not wish to follow through with it. b. void. c. valid. d. voidable but only by consent of both parties.

a. Every state has a statute that stipulates what types of contracts must be in writing. Typically, this statute is referred to as Statute of Frauds. It denies enforceability to certain contracts that do not comply with its writing requirements. Specifically, a contract that is oral when it is required to be evidenced by a writing or an electronic record is voidable by a party who does not wish to follow through the agreement

Lucy agrees to work for Mung Manufacturing, Ltd., as a Chinese/ English/ French translator. In determining whether a contract has been formed, an element of prime importance is a. the parties' intent. b. Mung's base of operations. c. the duration of the work. d. Lucy's language capabilities.

a. This is the best choice because it refers to the element of intent. In contract law, particularly in the context of the objective theory of contracts, the intent of the parties to enter into a contract is very important. According with the objective theory of contracts, a party's intention to enter into a legally binding contract is judged by objective facts.

Country Style, Inc., makes landscaping tools. Country could be liable for a warning defect if there is a foreseeable risk of harm posed by a product and a. the omission of a warning renders the product not reasonably safe. b. there is a reasonable alternative design. c. there is a lack of care in making of the product. d. there is insufficient insurance coverage.

a. A product can be considered defective because of inadequate instructions or warnings. According with the Restatement (Third) of Torts, Products Liability, Section 2(c), a product is deemed defective "when the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the instructions or warnings renders the product not reasonably safe".

Patricia commits an act via e-mail against Othman Finance Company, a business in California, where the act is a cyber crime. Patricia resides in New York where the act is not a crime. Prosecution of Patricia in California involves questions of a. jurisdiction. b. "maximum contacts." c. the immunity of Internet service providers. d. encryption.

a. Cyber crime raises numerous issues in the investigation of crimes and the prosecution of offenders, especially because it is hard to determine the "location" of a cyber crime. This raises questions of jurisdiction.

Imagine that I am the owner of Jimmy John's, which is a food chain. If a hire Philip as my manager for an indefinite period of time, I have the right to tell him at what time he must show up for work and how he is going to conduct his job. This makes him: An employee, a general agent, and a servant; A servant and special agent; A general agent and special agent; A master, an independent contractor, and real estate agent.

a. This makes him an employee, a general agent, and a servant.

The power of judicial review has remained unchallenged since which Supreme Court decision? a. Marbury v. Madison b. Texas v. Johnson c. Miranda v. Arizona

a. Marbury v. Madison

Which of the following acts normally do NOT constitutes a conversion? a. Temporarily borrowing a friend's textbook and then returning it. b. The taking of electronic records and data without the owner's permission. c. Mistakenly believing that you are entitled to goods that are not your own.

a. Temporarily borrowing a friend's textbook and then returning it.

Trespass to Land

5. Trespass to land requires that a person remains on the land. 6. For trespass to land occur you have to enter onto, above, or below the land surface owned by another. 7. A real property owner must establish that a person is a trespasser. 8. A guest in your home is typically not a trespasser.

When a state exercises jurisdiction over property within that state, this type of jurisdiction is called in personam. a. True b. False

False

The basic purpose of tort law is to punish criminal wrongdoers. a. True b. False

False. The basic purpose of tort law is to provide civil remedies for the invasion of protected interests. Tort law creates a legal cause of action when a legal right is breached by the wrongdoing of another. See The Basis of Tort Law.

Slander of Title

Publishing false information about another's legal ownership of property that results in financial loss to the property's owner.

Precise Engineering Corporation has a contract with Quik Mart Stores to provide customized software for Quik's inventory control system. Retail Outlets, Inc., Quik's competitor, induces Sam, a Precise subcontractor who is writing code for the Quik software, to delay delivery of the code for one week. As a result, Precise's delivery of the software is delayed, and Quik sustains $500,000 in lost profits. On what ground could Quik recover damages from Retail Outlets?

Quik could file an action against Retail Outlets based on wrongful interference with a contractual relationship. The elements that Quik must prove are that (1) a valid, enforceable contract existed between two parties; (2) a third party knew that this contract existed; and (3) the third party intentionally caused the breach of the contract for the purpose of advancing that party's own interest. For a successful tort action, Quik must also show that the third party's act caused damages. Facts that satisfy all of these elements are set out in the problem. There was a valid, enforceable contract between Precise and Quik. Retail Outlets knew of this contract. Retail Outlets intentionally interfered with this contract, causing its breach, for the purpose of advancing its own interest (undercutting the profit of its competitor). Quik suffered lost profits as a result of Retail Outlets' act.

Let us imagine a real estate agent who I hire to help me purchase a home. I may hire her, but there will not be continuity of service. Once I have accomplished the mission of buying a house and the agent has been paid for her service, I will not have her conducting businesses or transactions on a regular basis for me. Therefore, the real estate agent is: A special agent; A general agent.

Special agent The real estate agent is a special agent because she is in a principal-agent relationship that does not involve a continuity of service.

Dan negligently crashes into a median, causing a major traffic jam. Sara, who was caught in traffic, was late for work and lost her job. Months later, because Sara lost her job, she was unable to make mortgage payments and lost her home. Was Dan's one-car accident a but-for cause of Sara's loss of her home? True False

T. True Sara's loss of her home would not have occurred but for Dan's negligent one-car accident. This might seem strange. However, we still have to consider foreseeability. Foreseeability will determine whether the defendant will be liability for all consequences of his negligent conduct or whether there is some limitation to that liability.

An implied contract is not an actual contract. a. True b. False

b. False Implied contracts (or implied-in-fact contracts) are contracts. However, as opposed to express contracts, here the conduct of the parties, rather than their words, creates and defines the terms of the contract.

A farmer needs to purchase a replacement part for a tractor. The tractor parts dealer listens to the farmer's request and describes the replacement part that will fix the tractor. The farmer relies on the dealer's advice and buys the replacement part. Which of the following implied warranties will apply to the farmer's purchase of the replacement part? Implied Warranty of Merchantability. Implied Warranty of Fitness for a Particular Purpose. Implied Warranty of Title. All of the above.

d. * An implied warranty of merchantability is imposed upon merchant sellers and it requires that goods meet certain minimum quality standards. Here, the dealer is a merchant because he is selling tractor parts, and tractor parts are subject to transaction. Therefore, the implied warranty of merchantability is triggered. * An implied warranty of fitness for a particular purpose also applies. It applies where the seller has reasons to know, at the time of contracting, the particular purpose for which the buyer is buying the goods and the buyer is relying on the seller's skillful judgment to select or furnish suitable goods. Both criteria are satisfied here because the dealer knew about the tractor parts the buyer needed, and the buyer relied on the dealer's expertise in selecting the tractor parts. * Finally, there is also an implied warranty of title. This consists of a promise by the tractor parts dealer that he actually owns those goods as opposed to what would have happened if the dealer had stolen the goods from someone else.

Duffy is a passenger in a car that Caleb is driving when an accident occurs. Both Caleb and Duffy are emotionally rattled, but neither is physically hurt. Caleb is not liable to Duffy on a negligence theory because a. both parties were emotionally rattled. b. Caleb apparently did not intend to cause an accident. c. Duffy must have been comparatively negligent. d. Duffy was not injured.

d. Caleb is not liable to Duffy on a negligence theory because Duffy was not injured.

A Rhode Island state statute requires machinery in industrial plants to include automatic shut-off switches accessible to each employee working on the machine. Steel Company's equipment does not have the switches. Trudy, a Steel employee, suffers an injury that an accessible shut-off switch would have prevented. Trudy's best theory for recovery is a. assault. b. assumption of risk. c. invasion of privacy. d. negligence.

d. Here, Trudy's best theory for recovery is negligence. Steel Company's failed to comply with a duty of reasonable care established by Rhode Island statutory law.

Richard is an avid baseball fan and attends baseball games whenever he can. Richard considers himself an expert on all things, including risks, related to baseball. One day a ball flies into the stands, hits Richard in the head and seriously injures him. Richard can probably successfully win a case against the sports stadium based on a. negligence. b. breach of duty of care. c. defamation. d. none of the choices.

d. In this case, Richard is a licensee. Property owners must discover and remove any hidden dangers that might injure a licensee. Some risks, however, are so obvious that the owner need not warn them. Here, the risk of having a ball flying in the stands during a baseball game is obvious. Note, however, that the obviousness does not discharge a property owner's duty to maintain the premises in safe condition. Still, in these circumstances, Richard, who was very familiar with the game, assumed the risk inherent to attending a baseball game.

Coffee Roasters, Inc., sells whole bean and ground coffee to Delicioso Deli under an existing contract. When the cost of coffee beans increases, Delicioso agrees to a price increase, but later wants to cancel the contract. Delicioso may a. cancel the contract immediately. b. cancel the contract only after accepting a final shipment. c. cancel the contract only on reasonable notice. d. not cancel the contract.

d. In this situation, Delicioso cannot cancel the contract because there was not a breach of contract on the part of Coffee Roasters, Inc. Also, in this case, there are no evidences that the seller failed to make an adequate delivery of the goods.

Liu enters Mountain Triathlon, an athletic competition in which Liu has never competed. Regarding the risk of injury, Liu assumes the risks a. attributable to the triathlon in any way. b. different from the risks normally associated with the triathlon. c. greater than the risks normally associated with the triathlon. d. normally associated with the triathlon.

d. Regarding the risk of injury, Liu assumes the risks normally associated with the triathlon. Assumption of risk, one of the defenses to negligence, requires (1) knowledge of the risk and (2) voluntary assumption of the risk.

Kelby enters into a contract with Lara on a social media network to buy her stock in Mobile Devices Corporation. Neither party prints out a hard copy. Under the Electronic Signatures in Global and National Commerce Act (E-SIGN Act), this contract can a. be "denied legal effect" if it falls under UCC Article 2. b. be "denied legal effect" unless a hard copy is printed. c. be "denied legal effect" until it is signed on paper. d. not be "denied legal effect" solely because it is in electronic form.

d. The Electronic Signatures in Global and National Commerce Act (E-SIGN) provides that no contract, record, or signature may be "denied legal effect" solely because it is in electronic form. Put differently, the electronic signature is as valid as a signature on paper and an e-document can be enforceable as a paper document.

Concurrent jurisdiction exists when both federal and state courts have the power to hear a particular case. a. True b. False

True Concurrent jurisdiction is the jurisdiction that exists when two different courts, such as a federal and a state court, have the power to hear a case.

Corporations, like persons, can be liable for crimes. a. True b. False

True Corporations are legal persons. As a consequence, also they can be criminal liable. Naturally, corporations cannot be imprisoned, but they can be fined or denied certain legal privileges (e.g. licenses).

Let us assume that there is a lawsuit based on a defective hip replacement. An elderly individual decides to have a hip replacement. After surgery, the hip replacement is introduced, but there are problems with the hip all of them resulting from an unreasonably dangerous condition. The elderly man sues alleging numerous injuries and back problems. The company responsible for the hip replacement may argue that that back condition was completely unrelated to the artificial hip. However, the plaintiff may say he never had any back problems until the artificial hip was introduced. Asking if the defective hip replacement caused or not the plaintiff's back injury is the same as asking whether the hip replacement was a proximate cause of the plaintiff's back injury. True False

True Depending on the jurisdiction, the following requirements for product liability based on strict liability must be met: 1. The product must be unreasonably dangerous to the user or consumer because of its defective condition; 2. The defective condition must be a proximate cause of the injury or damage. NOTE: This is the same as causation you learned in the context of tort liability (chapter 5) based on negligence.

Every state has a statute that stipulates what types of contracts must be in writing. a. True b. False

True Every state has a statute that stipulates what types of contracts must be in writing. This statute is called the Statute of Frauds. As opposed to what the name may hint, this statute does not apply to fraud. It denies enforceability to certain contracts that do not comply with its writing requirements.

False imprisonment occurs when a person restrains another intentionally and without justification. a. True b. False

True False imprisonment is the intentional confinement or restraint of another person's activities without justification.

There is at least one federal district court in every state. a. True b. False

True Federal district courts are the equivalent of a state trial court of general jurisdiction. There is at least one federal district court in each state.

A state court can exercise jurisdiction over an out-of-state defendant who does business in the state over the Internet. a. True b. False

True For a court to exert personal jurisdiction over a defendant, the defendant must have minimum contacts, such as the presence of a sales person within the state. There may be, however, personal jurisdiction problems if the defendant is out-of-state, but engages into Web activities. Courts have developed a "sliding-scale" standard to identify business contacts. The following rules apply. 1. When the defendant conducts substantial business over the Internet (such as contracts and sales even using a smartphone), jurisdiction is proper. 2. When there is some interactivity through a Web site, jurisdiction may be proper, depending on the circumstances. A single contact can satisfy the minimum contacts requirement. 3. When a defendant merely engages in passive advertising on the Web, jurisdiction is never proper.

Goods associated with real estate often fall within the scope of Article 2. a. True b. False

True Goods associated with real estate often do fall within the scope of Article 2 (UCC 2-107). A contract for the sale of minerals, oil, or gas is a contract for the sale of goods if severance, or separation, is to be made by the seller.

Let us assume that I hire a real estate agent who is going to sell my property for $600,000. Let us also assume that I tell my real estate agent not to reveal my name to the buyer because I am a very private person and I do not want anyone to know that I am selling my property. So, I let my agent tell the buyer that she was acting on my behalf. However, I specifically instruct her not to disclose my name to the potential buyer. If there is a breach of contract on the part of the principal, would the agent be liable? True False

True Here, the principal is partially disclosed. Hence, the agent would be liable if the principal breached the contract. In general, when the principal is partially disclosed, the agent is also treated as party to the contract. In fact, both principal and agent would be jointly and severally liable.

Let us assume that I want to open a business and I want to open my business in a specific shop. Given that I am not really good at negotiating real estate contracts, I seek the assistance of a real estate agent and give her instructions to buy a particular retail area. My agent walks into that particular property and tells the owner "I am working on behalf of Lécia. I would like to make an offer for this property for 200K". The owner of the property and the agent enter into an agreement. Am I or am I not a disclosed principal? True B. False

True I am a disclosed principal. The property owner knows that the principal exists and that the agent is working on behalf of the principal.

If goods in every respect conform to a contract, the buyer or lessee does not have a right to reject the goods. a. True b. False

True If goods in every aspect conform to a contract, the buyer or lessee does not have the right to reject the goods because, in this case, the rules that provide this remedy for breach of contract, that is, UCC 2-601 and 2A- 509, do not apply.

Tort law is a field of law meant to compensate those who have suffered a loss or injury due to another person's wrongful act. True False

True In a tort action, one person or group brings a personal suit against another person or group to obtain compensation (monetary damages or other relief for the harm suffered).

A principal has the right to control an agent's conduct in matters entrusted to the agent. a. True b. False

True In an agency relationship, the principal has the right to control the agent's conduct in matters entrusted to the agent. In turn, the agent must exercise his or her powers "for the benefit of the principal only".

In certain circumstances, bargains are so oppressive that the courts relieve innocent parties of part or all of their duties. a. True b. False

True In certain circumstances, bargains are so oppressive that the courts relieve innocent parties of part or all of their duties. Such bargains are considered unconscionable because they are so unscrupulous or grossly unfair.

Punitive Damages

Awarded in tort cases to punish the wrongdoer and to deter others from similar wrongdoing.

Few securities can be resold without registration. a. True b. False

B. False Most securities can be resold without registration. The Securities Act of 1933 provides exemptions for resales by most persons other than issuers and underwriters.

Imagine that your delivery driver delivers sandwiches to home 1 and home 2. On his way to home 3, he is texting and causes an accident. A third party is injured. Was the driver's conduct within the scope of employment? True False

. True In this scenario, this driver's conduct was within the scope of employment. He was employed to drive a car and deliver sandwiches. His conduct was within the time and space limits of employment because it was during the time/hours you hired him to work. The fact that he was driving was solely to serve the employer.

List the main elements of fraudulent misrepresentation in the order in which they should normally appear:

1. Misrepresentation of material facts with knowledge of their falsity. 2. An intent to cause another party to rely on the misrepresentation. 3. Justifiable reliance on the misrepresentation. 4. Damages suffered as a result of that reliance. 5. A casual connection between the injuries suffered and the misrepresentation.

Smith and Jones went hunting. Smith saw a deer in close proximity to Jones, but he tried to shoot the deer anyway. Smith's shot hit Jones in the arm. While Jones was being transported to a hospital, his ambulance was involved in a car accident, which resulted in further injuries to Jones's head. A court, in deciding Smith's liability to Jones, may look at the relevant hunting statute. True False

A. True If Smith violated a hunting statute (or even a rule) that specifies when you can shoot at an animal, such violation would be strong evidence of breach of duty.

You negligently leave your keys in the car. Your car is stolen. 1 month later, the person who stole your car sells it to some little old lady who bought the car for full value and started driving. A year later that old lady was driving her car and got into a car accident. She injured some other party. Was your decision to negligently leave the keys in the car a "but for" cause of the injury of that later individual? True False

A. True But for your decision to leave the keys in that car, the robber would had never sold the car to the old lady, and that little old lady would not have gotten into that particular accident. Thus, in this situation there would be but for causation.

Henry was driving extremely carefully down Green Street in Champaign at 10.30pm. on a Tuesday night. In fact, he was driving 5 m.p.h. below the speed limit, with his music off and windows open so that he could pay closer attention to the road. Despite Henry's best efforts, he hits George who sprinted out into the road in an effort to run away with a women's purse he had just taken. Several witnesses explain that Henry could not have avoided the accident because George sprinted out into the street without warning. George is injured and sues Henry for $100,000. George will be able to successfully demonstrate that Henry's decision to drive down Green Street was a but-for cause of George's injuries. True False

A. True If Henry was not driving on the street, George would not have been injured. Because there would have been no car accident. So, this is true, but this is only one part of the causation fact or test (i.e. 'but-for' causation). But for Henry's decision to drive down Green Street, George would not have been injured.

Smith and Jones went hunting. Smith saw a deer in close proximity to Jones, but he tried to shoot the deer anyway. Smith's shot hit Jones in the arm. While Jones was being transported to a hospital, his ambulance was involved in a car accident, which resulted in further injuries to Jones's head. Smith will be liable to Jones for Jones's head trauma. True False

A. True It was Smith's shooting that placed Jones in the ambulance. Thus, but for Smith's shooting, Jones would not be in the car accident and would not have suffered the head injury. You also need to consider whether the car accident was a sufficient intervening cause to relieve Smith of liability. If the problem stated that the ambulance was intentionally targeted (i.e. a terrorist act), then Smith would be relieved of liability for the head injury. If the ambulance was simply involved in an accident, however, then Smith is still liable. Note distinction between an accident and an intentional intervening act (intentional tort or crime).

Assume you get into a car accident with another individual. As a result of that car accident, the other driver injures her left leg. She is taken by ambulance from the accident site to the hospital. On the drive into the hospital, the ambulance gets into a car accident. The driver was driving at a normal speed and going through a red light as it should, but unfortunately another driver did not see the ambulance and ran into the ambulance. As a result of that accident, the injured person who earlier had just injured her left leg, now suffered a head injury. Was the accident between the ambulance and that other car an intervening cause? True False

A. True It was an intervening cause because a it was a later independent cause for which the defendant was not responsible.

Judicial review is the process by which a court decides on the constitutionality of legislative enactments and actions of the executive branch. a. True b. False

A. True Judicial review is up to the judiciary branch of the government, that is, the courts. The judiciary can decide, among other things, whether the laws or actions of the other two branches - executive and legislative - are constitutional. Remember Marbury v Madison and the implications of this landmark case for the power of judicial review of the United States Supreme Court.

Pete (Wisconsin resident) and Dave (Iowa resident) are both driving down Green Street in Champaign. Dave becomes distracted and slams into Pete, totaling the car. Pete sues Dave for $83,000. If Pete filed the case in an Iowa state court, the court could obtain personal jurisdiction over the parties. True False

A. True Pete, the plaintiff, consented to the court's jurisdiction by filing the case. The court also has personal jurisdiction over Dave, the defendant, because Dave is a resident of Iowa.

Pete (Wisconsin resident) and Dave (Iowa resident) are both driving down Green Street in Champaign. Dave becomes distracted and slams into Pete, totaling the car. Pete sues Dave for $83,000. A Wisconsin state court would have subject matter jurisdiction over Pete's case. True False

A. True Remember that state courts almost always have subject matter jurisdiction in all cases. This does not necessarily mean the court will be able to hear the case and render a binding decision. A court must have both subject matter jurisdiction AND personal jurisdiction over the parties to hear the case and render a binding decision.

Assume you get into a car accident with another individual. As a result of that car accident, the other driver injures her left leg. She is taken by ambulance from the accident site to the hospital. On the drive into the hospital, the ambulance gets into a car accident. The driver was driving at a normal speed and going through a red light as it should, but unfortunately another driver did not see the ambulance and ran into the ambulance. As a result of that accident, the injured person who earlier had just injured her left leg, now suffered a head injury. Would you also be liable for that head injury? True False

A. True The intervening cause does not operate independently of the original negligence. In other words, the intervening cause is foreseeable. After you caused the accident and the person was injured and had to be taken by ambulance to the hospital, all subsequent events occurred because of the car accident. If there was no car accident, the individual would not have been in the ambulance and it would not have allowed that future event (the head injury) to occur.

Henry was driving extremely carefully down Green Street in Champaign at 10.30PM, on a Tuesday night. In fact, he was driving 5 m.p.h. below the speed limit, with his music off and windows open so that he could pay closer attention to the road. Despite Henry's best efforts, he hits George who sprinted out into the road in an effort to run away with a woman's purse he had just taken. Several witnesses explain that Henry could not have avoided the accident because George sprinted out into the street without warning. George is injured and sues Henry for $100,000. Will George be able to successfully demonstrate that Henry owed him a legal duty not to drive negligently? Yes No

A. Yes The facts have been set up to show that Henry did everything right. Everybody loves him. However, you should focus on the question. Everyone owes everyone else a duty not to drive negligently. Here, Henry certainly owed George and everyone else a duty not to drive negligently. By acknowledging this, you are not stating that Henry was negligent.

Let us assume that I want to open a business and I want to open my business in a specific shop. Given that I am not really good at negotiating real estate contracts, I seek the assistance of a real estate agent and give her instructions to buy a particular retail area. My agent walks into that particular owner property and says "I am representing a principal in this transaction. I would like to offer you 200K for this property". The owner of the property and the agent enter into an agreement. In this situation, what is the status of the principal? Disclosed principal? Partially disclosed principal? Undisclosed principal?

B. In this situation, the principal is partially disclosed. The property owner knows that the agent is acting on behalf of a principal, but the property owner does not know exactly who the principal is.

Imagine that Apple does sue Tidal for breach of the exclusivity agreement with the rapper. Apple could file an action in a federal district court because this is a federal question. True False

B. False Apple's claims, or cause of action, are not based on a federal question, that is, on the U.S. Constitution, a treaty or federal law. Thus, in this case, only state courts would have original subject-mater jurisdiction.

All intervening causes relieve a defendant of liability for negligence. True False

B. False Certain types of intervening causes do relieve a defendant of liability for negligence. They are called "supervening" or "superseding" causes. However, not all intervening causes relieve the defendant of liability for negligence. For instance, in a simple car accident, you injure someone else. That person gets into an ambulance. On the way to the hospital, the ambulance gets into an accident. In that situation, although the person you initially injured in the accident might have also been injured in the ambulance accident, you are not relieved of liability because it was foreseeable that that would have occurred. Again, only intervening causes qualifying as supervening or superseding relieve the defendant for liability.

The courts consider legitimate competitive behavior permissible only if it does not result in the breaking of a contract. True False

B. False Competitor behavior is permissible provided the competitor does not know of the contract's existence and did not induce the breach. Bona fide competitive behavior - through aggressive marketing and advertising strategies, for instance - is permissible interference even if it results in the breaking of a contract.

A failure to return personal property is disparagement of property even if the rightful owner consented to the initial taking. True False

B. False Disparagement of property occurs when economically injurious falsehoods are made about another's product or property.

Disparagement of property occurs when economically injurious falsehoods are made about another's reputation rather than another's product or property. True False

B. False Disparagement of property occurs when economically injurious falsehoods are made about another's property, not about another's reputation. This is a general term in tort law that can be specifically referred to as slander of quality or slander of title.

Against a charge of a violation of the Securities Act of 1933, only an issuer of stock can assert the due diligence defense. a. True b. False

B. False Due diligence can be presented by a defendant as a basic defense to charges of violations under the 1933 Act. This is one of the most important defenses because it can be asserted by any defendant, except the issuer of the stock

You negligently leave your keys in the car. Your car is stolen. 1 month later the person who stole your car sells it to some little old lady who bought the car for full value and started driving. A year later that old lady was driving her car and got into a car accident. She injured some other party. Were the injuries of that individual foreseeable? True False

B. False Even if causation in fact is established, the plaintiff also has to proof that the injury was foreseeable. In that scenario, the injury is highly extraordinary. It is highly extraordinary that that injury would be the result from leaving the keys in your car. This is a very hard standard for the defendant to win on. This is another part of the test that usually favors the plaintiff when it comes to proofing.

Henry was driving extremely carefully down Green Street in Champaign at 10.30pm. on a Tuesday night. In fact, he was driving 5 m.p.h. below the speed limit, with his music off and windows open so that he could pay closer attention to the road. Despite Henry's best efforts, he hits George who sprinted out into the road in an effort to run away with a women's purse he had just taken. Several witnesses explain that Henry could not have avoided the accident because George sprinted out into the street without warning. George is injured and sues Henry for $100,000. George will be able to successfully demonstrate that Henry breached his duty not to drive negligently by failing to act as a reasonable person would act under the circumstances. True False

B. False George certainly will not be able to demonstrate that Henry was negligent because Henry was doing everything he possibly could to avoid an accident. In fact, he was the depiction of a reasonable person. He was doing better than any other driver in the world would do to avoid an accident. Thus, Henry would not be negligent here, and George would be unable to demonstrate that.

Austin takes Tim's iphone as a joke and hides it so that Tim is unable to find it for several days. She even uses it to call her mom. Here, Austin has engaged in a trespass to personal property, but she has not committed a tort of conversion. True False

B. False Here, Austin has not only engaged in a trespass to personal property, but also committed the tort of conversion.

Two days after the contract has been entered into between the management company and the buyer, the purchased property is burned down. Can Sarah ratify the contract that was entered into between her agent and the buyer and, consequently, ask the buyer to pay the price? True False

B. False In general, the power of the principal to ratify is terminated by: The 3rd party's death or incapacity; or If circumstances have so materially changed since the contract was entered into that it would be inequitable to hold the 3rd party liable. In this case, Sarah cannot ratify the contract and ask the buyer to pay the price because the subject-matter of the contract has dramatically changed. The principal (Sarah) would no longer have the power to ratify the contract after her property burned down.

John swings a bat intending to hit Darren, but misses and hits Theo instead. Theo cannot sue John for the tort of battery because John's intent to hit Darren cannot be transferred to Theo. True False

B. False Intent can be transferred when a defendant intends to harm one individual, but unintentionally harms a second person. This is called transferred intent. Therefore, in these circumstances, Theo can sue John for the tort of battery because John's intent to harm Darren can be transferred to Theo.

Brian, who owns a small chain of restaurants, is interested in opening a new restaurant in a very popular part of town. One of the available buildings is owned by the neighboring restaurant owner, James. James purchased the building as an investment and would like to rent it out to a reliable tenant. James prefers to rent the building to a business that will not directly compete with his restaurant. Brian hires Rebecca, a real estate agent, to enter into negotiations to rent the available building from James. Brian informs Rebecca that she has the authority to enter into a five-year lease on his behalf for any amount below $5,000 per month. Assume that when Rebecca is negotiating the deal with James, she informs James that she is entering into the lease on Brian's behalf. They agree to a five-year lease for $4,000. Brian changes his mind before moving in. Rebecca will be liable for the rental contract. True B. False

B. False James cannot hold Rebecca liable for the rental contract. Agents are going to be liable upon a contract unless two requirements are met: (1) the agent is authorized; and (2) the principal is disclosed. Both of these requirements were met in this case.

Imagine that you hire Jo to manage your Starbucks shop, but you say he cannot make lattes himself. Can Jo still do those lattes if, in the course of his work, he has the opportunity to? True False

B. False Jo cannot do lattes because that would contradict the expression of authority by the principal. Jo would have to hire someone else to do those lattes.

Joe is a bartender at a piano bar in Alabama. This state has passed a dram shop act. One night, Adam, who was visibly intoxicated, sits at the bar weeping because he had just lost his job. Joe, deeply touched by the situation, offers Adam three martinis to make him feel better. He even said that it was on the house. When Adam is ready to leave the carpark of the bar, he hits Lee, another customer who was walking towards the piano bar. Joe will not be liable for the injuries sustained by Lee because Adam was already intoxicated when he entered the piano bar. True False

B. False Joe will be liable for the injuries caused by Adam even if Adam was already intoxicated when served by the bartender Joe. Under the dram shop acts, it is not necessary to prove that the bartender , tavern owner, or social host was negligent.

Sam was driving 100 mph in a 45 mph speed zone at midnight. Joe jumps in front of Sam's car and Sam hits him. Even if Sam was driving 45 mph, Sam would have hit him. Even if Sam was driving 45 mph, Sam would have caused the same injury. Was Sam's speeding a but-for cause of Joe's injuries? True False

B. False Joe's injuries would still have occurred if Sam was driving 45 mph. In other words, the fact that Sam was driving a 100 mph was not a but-for cause of Joe's injuries because, even if Sam was driving 45mph, the same exact injuries would have occurred. Therefore, we cannot say that Sam's driving 100 mph was the but-for cause of Joe's injuries.

Negligence is always determined by comparing the defendant's conduct to a minimum standard of conduct outlined in a state statute or administrative regulation. True False

B. False Negligence is always determined by comparing the defendant's conduct to the conduct of a reasonable person. This standard may be determined by a statute or administrative regulation establishing a minimum level of conduct and providing that a certain conduct is negligent. In the absence of a statute, the trier of fact, compares the conduct of defendant to that of what the trier of fact believes is reasonable in the circumstances

Let us assume that Sarah ratifies the sales contract. Ten days after she ratifies, the buyer learns that the contract was not initially authorized by her, that is, the management company that sold the property was acting on its own. The buyer realizes that he or she is overpaying. Can the buyer terminate the contract because there was no initial authority? True B. False

B. False Once ratification has occurred, no notice needs to be provided to third parties. In this case, the buyer is going to be bound to the contract.

While riding his bike, Paul negligently hits Claire, who is walking in the sidewalk. As a result of the impact, Claire falls and fractures her hip. While she is waiting for help to arrive, a small plane crashes nearby and explodes, and some of the fiery debris hits her, causing her to sustain severe burns. Will Paul be liable for Claire's burns caused by the plane crash? True False

B. False Paul will not be liable for the burns caused by the plane crash because the risk of a plane crashing nearby was not foreseeable. The plane crash is an intervening cause. However, it was not foreseeable. In other words, the plane crash is a supervening or superseding cause.

Statements made by attorneys and judges in judicial proceedings are NOT privileged communications and may be the basis for defamation. True False

B. False Statements made by attorneys and judges during a trial are absolutely privileged and may not be the basis for defamation.

Strict liability is a category of liability by which the trier of fact strictly applies the elements of negligence to determine whether the tortfeasor was or was not at fault. True False

B. False Strict liability or liability without fault does not involve acts that departure from a reasonable standard of care. Put differently, liability for damages is imposed for reasons other than fault.

I hire a student from my class to act as my agent. I ask him or her to sell my used computer. I tell him or her that I want to sell it for $250 and I am not willing to accept a lower price. Would the agent have the express authority to sell the computer for $100 and also sell my computer bag? True False

B. False The agent would not have the express authority to sell the computer for $100 or my computer bag because he or she was only given express authority to sell the computer for $250. The agent was not given authority to sell it for less or sell the bag.

Imagine that your employee drops off sandwiches in houses 1 ,2, and 3. On the way back (note that he is not going out of his way), he stops to pick up some fast food. After picking up his food and while returning to the sandwich shop, he gets into an accident and injures a third party. Was the conduct of the driver sufficient to relieve the employer's liability? True False

B. False The conduct of the driver would most likely be considered a "detour". A detour is a minor deviation from the scope of employment. It is insufficient to relieve the employer of liability.

Otto, a kidney donor, sustained injuries to his cervical spine and to the muscles on the right side of his body as a result of the surgery to harvest his kidney. He sued the hospital and physicians involved in the transplant operation for damages. Otto asserted res ipsa loquitur because this type of injury could not have occurred in the absence of someone's negligence. The court inferred that negligence occurred. In this case, even if the court inferred that negligence occurred, the burden of proof would not shift to the hospital and physicians involved in the transplant? True False

B. False The court asserted that this is the kind of injury that can only occur as a result of someone's negligence. The court considered that facts spoke for themselves. Thus, in this case, the burden of proof would shift to the hospital and physicians involved in the transplant.

Assume you get into a car accident with another individual. As a result of that car accident, the other driver injures her left leg. She is taken by ambulance from the accident site to the hospital. On the drive into the hospital, the ambulance gets into a car accident. The driver was driving at a normal speed and going through a red light as it should, but unfortunately another driver did not see the ambulance and ran into the ambulance. As a result of that accident, the injured person who earlier had just injured her left leg, now suffered a head injury. Was the intervening act an intentional tort or crime? True False

B. False The subsequent accident with the ambulance was not an intentional tort or crime. It was due to negligence of the other car driver. Therefore, you would be liable because the intervening cause still was foreseeable. It was foreseeable that there could be an accident with ambulance on the way to the hospital.

Securities of nonprofit, educational, and charitable organizations are not exempt from the registration requirement of the 1933 Securities Act. a. True b. False

B. False Under the 1933 Securities Act, Securities of nonprofit, educational, and charitable organizations are exempt of registration.

Generally, a state court's power is limited to the territorial boundaries of the state in which it is located and the immediately adjacent states. a. True b. False

B. False Under the authority of a state long arm statute, a court can exercise personal jurisdiction over certain out-of-state defendants based on activities that took place within the state.

Under the doctrine of comparative negligence, only the plaintiff's negligence is taken into consideration. True False

B. False Under the doctrine of comparative negligence, both the plaintiff's and the defendant's negligence are computed, and the liability for damages is distributed accordingly

Two campers negligently set fire on a dry and windy day. Both fires start burning uncontrollably toward a farmhouse. Either fire would have destroyed the farmhouse separately. Is either fire a but-for cause? True False

B. False We have to ask first if either fire was a but-for cause of the destruction of the farmhouse. F1 and F2 were not a but-for cause because either fire would have destroyed the farmhouse on its own.

Pete (Wisconsin resident) and Dave (Iowa resident) are both driving down Green Street in Champaign. Dave becomes distracted and slams into Pete, totaling the car. Pete sues Dave for $83,000. If Pete files his case in Iowa state court, Dave has the right to remove the case to the Iowa federal district court. True False

B. False Ordinarily, the defendant has a right to remove if the case could have been brought in a federal court. However, because this is a diversity case and it was brought in the defendant's home state, the defendant has no right to remove.

Lu was driving down Main Street in Urbana when he failed to see a stop sign because he was searching for the address of the client he was visiting. Melanie, who was standing on the sidewalk, realizes that Lu is about to hit a pedestrian and runs into the street to push the pedestrian out of the way. As a result, the pedestrian gets injured. Melanie will be liable for the injuries the pedestrian sustained. Yes No

B. No According with the "danger invites rescue" doctrine, Lu will be liable for the injuries the pedestrian sustained. Whether Melanie, the rescuer, injured herself, the person rescued, or even a stranger, the original wrongdoer, that is Lu, will still be liable.

Imagine that a hotel fails to provide any security in the hotel's parking lot where a robbery is highly likely and such robbery in fact happens. Is the robbery a supervening cause? Yes No

B. No The robbery is an intervening cause, but it was part of the foreseeable risk effected by the lack of security. These intervening causes are not supervening and the defendant (e.g. the owner of the hotel) would be considered liable for negligence because his/her act or omission was proximate cause of the injuries or damage.

Which of the following statements accurately describes the law of foreseeability provided by §435 Restatement 2nd Torts? A. There is no liability for negligence to the unforeseen plaintiff. B. Foreseeability requires proof that the defendant's negligent conduct in fact caused the plaintiff's injury. C. The fact that the negligent defendant neither foresaw nor should have foreseen the extent of the harm or the manner in which it occurred does not prevent him from being liable. D. The law of foreseeability established in §435 Restatement 2nd Torts was announced by the majority opinion in Palsgraf v. Long Island Railroad Company. E. None of the above.

C. A is incorrect because that is the Palsgraf rule of foreseeability. Notably, this means that D is also wrong. B is not the right answer because this is the other question of the proximate cause test ("did the conduct in fact cause the injuries?"). Here, we are dealing with the second question of the proximate cause test which is about foreseeability ("was the conduct foreseeable?").

A person who enters or remains on another's property without a privilege to do so is considered a: Licensee Public Invitee Trespasser Business Invitee Criminal

C. A person who enters or remains on another's property without a privilege to do so is considered a trespasser. Note that a person who causes anything to enter onto land owned by another, or remains on land owned by another, or permits anything to remain on it, also is a trespasser.

Imagine that you are Tidal's attorney. Your client is unpleased with the outcome of the action at the New York Federal District Court. Where would you most likely appeal? To the state trial court because it has concurrent jurisdiction in diversity jurisdiction cases? To the New York state Supreme Court because there is no other alternative? To the US Court of Appeals?

C. You would most likely appeal to the US Court of Appeals. The US Court of Appeals is an intermediate court with appellate jurisdiction at the federal level. US Courts of Appeals, also known as U.S. Circuit Courts of Appeals, hear appeals from federal district courts located within their respective judicial circuit. Here, New York happens to be one of the states where a US Court of Appeals is located.

Smith and Jones went hunting. Smith saw a deer in close proximity to Jones, but he tried to shoot the deer anyway. Smith's shot hit Jones in the arm. While Jones was being transported to a hospital, the ambulance was involved in a car accident, which resulted in further injuries to Jones's head. Jone's injury in the arm was foreseeable under: The Palsgraf foreseeability rule; The new Restatement 2nd foreseeability rule; All of the above; None of the above

C. All of the above Under Palsgraf, the question is: Was it foreseeable that when Smith was shooting he might hit Jones, who was standing nearby? The answer is clearly yes. Under the Restatement 2nd approach, you need to ask whether the injury was so extraordinary that it was highly unforeseeable. Clearly this is not the case. Where the Palsgraf and the Restatement 2nd standards diverge is where a plaintiff is outside the "zone of danger", but it is not highly extraordinary that the plaintiff might suffer an injury. Ex: if Smith's shot injured Jones, who was standing 100 feet away (i.e. outside the zone of danger), under Palsgraf, this injury would not be foreseeable. However, under the Restatement 2nd, it would be foreseeable because the damage was not highly extraordinary.

Exclusive State Jurisdiction

Cases involving all matters not subject to federal jurisdiction.

Exclusive Federal Jurisdiction

Cases involving federal crimes, bankruptcy, patents, copyrights, trademarks, and suits against the United States.,

Concurrent Jurisdiction

Cases involving federal questions and diversity-of-citizenship cases.

Standing to sue has three elements. What are they?

Causation, Remedy, and Harm

Appellate or Reviewing Courts

Deal with questions of law.

Which of the following torts is not classified as an intentional tort? 1. Battery 2. Trespass 3. Wrongful interference with business relationships 4. Fraudulent misrepresentation 5. All of the above torts are classified as intentional torts

E. All of the above torts are classified as intentional torts.

The principle of strict liability is applied in the following situations: A. Damages proximately caused by an abnormally dangerous or exceptional activity; B. Persons who keep wild animals; C. An individual who owns a cat and knows that her cat has a propensity to bite and scratch; D. Damages caused by a harmful or defective product; E. All of the above; F. None of the above.

E. All of the above The principle of strict liability is applied in situations where damages are proximately caused by abnormally dangerous or exceptional activity, wild animals or domestic animals whose owners know or should know that such animals are dangerous or have a propensity to harm others. The principle of strict liability is also applicable in the area of products liability, in particular if a merchant manufactures or sells a harmful or defective product.

After two years of research and the investment of considerable funds, Coast-to-Coast Company (CC) develops a new product that it hopes will produce substantial profits. CC learns that a competitor, National Sales, Inc., has made and begun to sell a nearly identical product. CC learns from a reliable source that National paid a CC employee to obtain the plans for CC's product while it was in development. What legal resource does CC have against National?

In terms of legal resource against National, CC might base a civil suit on charges of conversion and trespass to personal property. Conversion is any act depriving an owner of personal property without that owner's permission and without just cause. Conversion is the civil side of crimes related to theft. When conversion occurs, trespass to personal property usually occurs as well. If the initial taking of the property was unlawful, there is trespass. Retention of that property is conversion. CC might also have a claim for wrongful interference with a contractual relationship for inducing the CC employee to break his or her employment contract with CC by selling company secrets.

General Damages

Intended to compensate individuals (but not companies) for the nonmonetary aspects of the harm suffered from a tort, such as pain and suffering.,

Compensatory Damages

Intended to compensate or reimburse a plaintiff for actual losses.

Special Damages

Intended to compensate the plaintiff for quantifiable monetary losses, such as medical expenses.,

A long arm statute allows one state's court to exercise jurisdiction over a defendant from another state who has _______ with the state in which the court is located.

Minimum Contacts

Trial Courts

Often deal with questions of fact.,

conversion

The wrongful taking, using, or retaining possession of personal property that belongs to another.

A bilateral contract comes into existence at the moment promises are exchanged. a. True b. False

True A bilateral contract is often called a "promise for a promise". This means that no performance, such as payment of funds or delivery of goods, need take place for a bilateral contract to be formed. The contract comes into existence the moment promises are exchanged.

A contract to do something that is prohibited by statutory law is void. a. True b. False

True A contract to do something illegal, that is, prohibited by federal or statutory law is illegal and, as such, void from the outset and thus unenforceable

A counteroffer is a rejection of the original offer and the simultaneous making of a new offer. a. True b. False

True A counteroffer is the rejection of the original offer and the simultaneous making of a new offer.

A deposition is a sworn testimony by a party to a lawsuit or any witness. a. True b. False

True A deposition is a sworn testimony by a party to the lawsuit or any witness. The person being deposed gives testimony and answers questions asked by the attorneys from both sides. Questions and answers are recorded, sworn to, and signed.

A free-writing prospectus may be used before the Securities and Exchange Commission completes its review of a related registration statement. True False

True A free-writing prospectus is any type of written, electronic, or graphic offer that describes the issuer or its securities and includes a legend indicating that the investor may obtain the prospectus at the SEC's Web site. Issuers may use a free-writing prospectus before the Securities and Exchange Commission completes its review of a related registration statement. Typically, this happens during the waiting period for registration.

Statements of fact made during the bargaining process are express warranties. a. True b. False

True A seller or lessor can create an express warranty by making representations concerning the quality, condition, description, or performance potential of the goods. Under the UCC 2-313 and 2A-210, express warranties arise when a seller or lessor indicate, for example, that the goods conform to any statement or affirmation of fact or promise that the seller or lessor makes to the buyer or lessee of the goods.

If a voidable contract is ratified, the parties must fully perform their respective legal obligations. a. True b. False

True A voidable contract is a valid contract but one that can be avoided at the option of one or both of the parties. The party having the option can elect either to avoid any duty to perform or to ratify. To ratify means to make the contract valid. If the contract is made valid, then the parties must fully perform their respective legal obligations.

An acceptance sent by means not expressly or impliedly authorized is not effective until it is received. True False

True Acceptance takes effect, thus completing formation of the contract, at the time the offeree sends or delivers the communication via the mode expressly or impliedly authorized by the offeror.

Assume that Paul authorizes Angela to sell his car for him at an auction. Angela also takes along Paul's stereo, which she wrongly believes Paul would like to sell. Angela is not able to sell the car, but she does sell the stereo for less than it is worth. Paul is disappointed when he learns of the sale, but accepts the money. Did Paul ratify the sale? True False

True Accepting the money is an act of ratification that relates back to the unauthorized sale and, for purposes of determining the liabilities of all the parties, authorizes it. If Paul wanted to, he could have refused the money and asked Angela for the full fair value of the stereo.

An Internet service provider cannot be held strictly liable for disseminating others' defamatory remarks. True False

True An Internet service provider cannot be held strictly liable for disseminating other's defamatory remarks because its Internet service does not constitute an abnormally dangerous or exceptional activity.

Imagine that you decide to open a sandwich shop. As part of the sandwich shop, you are going to deliver sandwiches to the areas around the sandwich shop. You hire several drivers to do shifts and efficiently deliver some of these sandwiches to your customers. One day, one of your drivers is driving and texting at the same time. He causes an accident while delivering the sandwiches. Generally, the driver would be considered liable toward the person he caused the injuries for the accident. Would the agent be liable in this situation, even though he was delivering sandwiches on behalf of the owner of the shop? True False

True An agent is always liable for his or her own torts. Understanding the liability of the principal, the owner of the sandwich shop, would be a different issue.

An executed contract is one that has been fully performed. a. True b. False

True An executed contract is one that has been fully performed.

Public officials prosecute criminal defendants. True False

True Because crimes are offenses against society as a whole, criminals are prosecuted by a public official, such as a district attorney, rather than by the crime victims.

Private parties can sue violators of the Securities Act of 1933. a. True b. False

True Besides SEC, private parties who purchase securities and suffer harm as a result of false or omitted statements may also bring suits in a federal court to recover their losses and other damages.

Through agents, a principal can conduct multiple business operations simultaneously. a. True b. False

True By using agents, a principal can conduct multiple business operations, such as entering contracts, at the same time, in different locations.

Callme.com, Inc. sold, installed, and maintained pay-phone systems. As part of its pay-phone program, Callme.com, Inc. guaranteed buyers a 20 % return on their investment. However, Callme.com, Inc. was operating at a net loss, and continually borrowed funds to pay investors the fixed rate of return it had promised. At a certain point, the company filed for bankruptcy, and the SEC brought an action alleging that Callme.com, Inc. had violated the Securities Act of 1933. Was Callme.com's pay-phone program a security? True False

True Callme.com's pay-phone program is a security pursuant to the Securities Act of 1933 because it involves an investment contract. In other words, the concept of "security" under federal law includes an investment scheme offering contractual entitlement to a fixed rate of return.

Imagine that you own a small local hardware store. You hire a general manager to run the store for you. You never show up at the property. You give the manager complete control of the property. However, you tell her that she does not have the authority to make any purchases of supplies for over $10,000. You never tell anyone that there is this limitation on her power. Thus, for everyone else, she owns and runs the business by herself. One day, a supplier comes in and sells some tools to her. The tools total $15,000. Would your general manager have apparent authority? True False

True In that situation, your general manager did not have actual authority to buy the tools totaling $15,000. Also, there was no communication from you, the principal and owner of the hardware store, to the supplier. So, one may think that, in that situation, there was no apparent authority at all. However, because of the position in which you placed your general manager (i.e. you gave the power to enter into supply contracts to her and that was apparent to everyone else) apparent authority was created in your agent. This is true, even though there was no communication from you, the principal, to the third party (i.e. supplier).

Let us assume that 5 days after Sarah's management company enters into a contract without her authorization to sell her property to a renter for a higher price than its market value, she decides to ratify that decision. In other words, she decides to accept the benefits of that transaction. In these circumstances, the ratification will automatically relate back to the date the unauthorized contract was entered into. True False

True In these circumstances, the ratification will automatically relate back to the date the unauthorized contract was entered into. The original transaction is treated as if it had been authorized by the principal at that time.

Let us assume that there is a management company that I hire to rent my property. The management company indicates to one of the individuals who is renting my property that it would be available to sell this property for $500,000. The renter wants to purchase the property, but he knows that I own the property. So, he calls me. On the phone, I tell the renter: "sure, you can buy my property. I have no problem with that!". Based on my conduct, was apparent authority created? True False

True In this situation, apparent authority was created because I communicated to a 3rd party that my agent, the management company, was authorized to go ahead and enter into the sale contract of the property. My words lead a 3rd party to believe that the management company was an agent vested with certain authority to bind me, the principal.

Your delivery driver has delivered the sandwiches to houses 1, 2, and 3. After dropping off the sandwiches in house 3, instead of returning to the sandwich shop to wait for the next order, he decides to drive across town to pick up tickets for a local sporting event. Then, he drives back to the sandwich shop to continue working. This is when he causes an accident with a third party. Was this a significant deviation from the scope of employment? A. True B. False

True In this situation, driving across town, completely out of the way, would most likely be considered a deviation from the scope of employment. The driver was not hired to drive across town to do something completely unrelated to delivering sandwiches. His conduct was certainly not motivated, in that situation, by serving the employer. The driver was on a "frolic of his own". A frolic is a significant deviation from the scope of employment. It relieves the employer from liability. Thus, here, the master or employer would not be liable.

I hire a student from my class to act as my agent. I ask him or her to sell my used computer. I tell him or her that I want to sell it for $250 and I am not willing to accept a lower price. In this situation, does the agent have an express authority to sell my computer for $250? True False

True In this situation, the agent has express authority to sell my computer for $250 because I explicitly asked him or her to sell my computer for $250.

Let us assume that a car has a bad tire. The buyer, who does not know about it, purchases the vehicle and gets into the highway and is driving her way home. She is going at a normal speed. Let us assume now that the driver is going at a speed of 100 m.p.h. The tire would be perfectly fine if it was not put incorrectly. But at that speed, it does come off and the injuries are much more grievous due to the speed of the vehicle when the tire came out. Could the manufacturer invoke comparative negligence? a. True b. False

True In this situation, the manufacturer would assume its negligence, but the manufacturer might have said that if the driver was driving within the speed limit the injuries would have been lighter. There would have been damages to the vehicle, but it would not have rolled over the way it did, and caused those grievous injuries to the plaintiff. Therefore, the manufacturer could argue that at least one portion of the damages should be reduced based on comparative negligence of the driver by speeding.

Let us think again about your sandwich shop. Unfortunately, you are being beaten out heavily by a competitor who is delivering sandwiches more effectively than you. So, you instruct your driver to slash the tires of the other company's delivery cars. In this situation, would you be liable in tort for directing your agent's tortious actions? True False

True In this situation, the principal would be just as liable as the agent who caused the injuries.

Interrogatories are written questions for which written answers are prepared and signed under oath. a. True b. False

True Interrogatories are written questions for which written answers are prepared and then signed under oath. The main difference between interrogatories and written depositions is that interrogatories are directed to a party to the lawsuit (the plaintiff or the defendant) not a witness, and the party can prepare answers with the help of an attorney.

Merchants are held to a higher standard of performance or duty than are nonmerchants. a. True b. False

True It is true that merchants are held to a higher standard of performance or duty than are nonmerchants. This is illustrated by the principle or standard of good faith for a merchant provided by UCC 2-103(1) (b). This rule states that, for a merchant, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.

One of the most common forms of securities are bonds issued by corporations. True False

True The most common forms of securities are stocks and bonds issued by corporations. Stocks are equity. Bonds are debt. An investor who buys stock becomes an owner in a corporation. An investor who buys bonds becomes a creditor to the corporation.

A Delaware statute states that anyone "who operates a motor vehicle and who fails to give full time and attention to the operation of the vehicle" is guilty of inattentive driving. Michelle was cited for inattentive driving after she collided with John's car when she backed her car out of a parking space. John began having back pain, the day after the accident. Eventually, he had to go to the hospital and undergo surgery. In this case, could John sue Michelle for the injuries he sustained based on negligence per se? True False

True John could sue Michelle based on negligence per se because the inattentive driving statute set forth a sufficiently specific standard of conduct to allow the application of the negligence per se doctrine.

Laws and government regulations affect almost all business activities. a. True b. False

True Laws and government regulations affect all business activities - hiring and firing decisions, workplace safety, corporations, securities transactions, the manufacturing and marketing of products, accountancy, supply chains, and business financing are some of the examples that can be mentioned.

If it can be shown that a trespass to land was warranted, a complete defense exists. True False

True One defense to a claim of trespass to land is to show that the trespass was warranted such as when the trespasser entered a building to save someone out of danger.

Imagine that the management company tells the buyer that it is selling or agrees to sell Sarah's property on her behalf. If this is the case, the principal, Sarah, can subsequently ratify the contract because it is clear that the management company has an agency relationship with her. However, assume instead that some random person agrees or tries to sell Sarah's property on her behalf despite not being in an agency relationship with her. Can Sarah, the principal, still ratify it? True B. False

True One of the prerequisites of ratification is that the agent acts on behalf of the principal. Additionally, a person entering into a contract must purport to be acting on behalf of the person who subsequently ratifies that contract. So, in these circumstances, Sarah can still ratify the contract. The key is that that person who is not my agent must represent to the third party (buyer) that he or she is selling on my behalf. There is no need for preexisting agency relationships for ratification to occur.

While riding his bike, Paul negligently hits Claire, who is walking in the sidewalk. As a result of the impact, Claire falls and fractures her hip. While she is waiting for help to arrive, a small plane crashes nearby and explodes, and some of the fiery debris hits her, causing her to sustain severe burns. Will Paul be liable for Claire's fractured hip? True False

True Paul will be liable for Claire's fractured hip because the risk of hitting her with a bike and causing her to sustain injuries is foreseeable. In other words, the injuries she sustained as a result of the accident are not highly extraordinary.

Under the mailbox rule, an acceptance takes effect at the time it is sent. a. True b. False

True Pursuant to the mailbox rule acceptance takes effect at the time the offeree sends or delivers the communication via the mode expressly or impliedly authorized by the offeror.

Real estate brokers are independent contractors. a. True b. False

True Real estate brokers are independent contractors because, typically, they contract with another person to do something for him or her, but are not controlled by the other nor subject to the other's right to control with respect to his or her physical conduct in the performance of the undertaking (see section 2 of the Restatement (Third) of Agency defining independent contractor).

Generally, stock offerings that are made in a limited manner during any twelve-month period are exempt from the registration requirement. a. True b. False

True Regulation A Offerings, and Small Offerings - Regulation D, particularly rules 504 and 505, determine that stock offerings that are made in a limited manner during any twelve-month period are exempt from the registration requirement.

Private offerings of securities in unlimited amounts can be exempt from the registration requirement of the Securities Act of 1933. a. True b. False

True Rule 506 exempts from registration private, noninvestment company offerings in unlimited amounts that are not generally solicited or advertised.

If the parties to a contract for a sale of goods have not agreed on a price, a court will determine a reasonable price at the time for delivery. True False

True The UCC provides numerous default rules or provisions that can be used to fill the gaps in a contract. For instance, if the parties have not agreed on a price, the court will determine a "reasonable price at the time of delivery" (UCC 2-305(1)).

The United States Supreme Court has original jurisdiction in some situations. a. True b. False

True The United States Supreme Court has original, or trial, jurisdiction in the cases specified in Article III, Section 2 of the Constitution. For example, the United States Supreme Court has original jurisdiction in all cases arising under the constitution, the Laws of the United States (i.e. federal laws), and Treaties entered into under the Laws of the United States.

Let us assume that Sarah owns 10 homes and she hires a management company to be her agent and to rent all of those properties. The management company would operate her rental company business. One day, one of the renters of the 10 locations offered a substantial sum for one of the homes. The management company thought this would be a great deal because Sarah was being offered a substantial higher sum than what she thought the home's market value was. Therefore, the management company enters into a contract to sell the home. In this situation, Sarah never gave the agent authorization to sell any of those properties. She just authorized the company to rent them out. Put differently, the agent had no actual authority to sell Sarah's property. What if she is very happy that the agent sold the property because it was a great deal for her? Can she ratify the contract? True False

True The act of the management company was unauthorized, but it was done for the purpose of advancing the principal's business. This made Sarah, the principal, happy because she would benefit from that act, even though the act had not been originally authorized. So, here, the principal can ratify the contract.

The crime of bribery occurs when the bribe is offered. a. True b. False

True The crime of bribery involves offering something of value to someone in an attempt to influence that person, who is usually, but not always, a public official, to act in a way that serves a private interest. Note that the crime of bribery occurs when the bribery is offered. It is not required that the bribery be accepted.

Brian, who owns a small chain of restaurants, is interested in opening a new restaurant in a very popular part of town. One of the available buildings is owned by the neighboring restaurant owner, James. James purchased the building as an investment and would like to rent it out to a reliable tenant. James prefers to rent the building to a business that will not directly compete with his restaurant. Brian hires Rebecca, a real estate agent, to enter into negotiations to rent the available building from James. Brian informs Rebecca that she has the authority to enter into a five-year lease on his behalf for any amount below $5,000 per month. Assume that when Rebecca is negotiating the deal with James, she informs James that she is entering into the lease on Brian's behalf. They agree to a five-year lease for $4,000. Brian changes his mind before moving in. Brian will be liable for the rental contract. True False

True The principal is always going to be liable for the contract if the agent was authorized and the principal was fully disclosed. Here, Brian will be liable for the rental contract because he authorized Rebecca, the agent, to act on his behalf, and Rebecca not only revealed this, but also disclosed Brian's identity.

The public disclosure of private facts about a person is an invasion of privacy. a. True b. False

True The public disclosure of private facts is an invasion of private. Typically, it happens when a person discloses private facts about an individual that an ordinary person would find objectionable or embarrassing. Invasion of privacy may happen regardless of whether the facts disclosed are true or not.

A registration statement must include a financial statement certified by an independent public accounting firm. a. True b. False

True The registration statement must include, among other things, the corporation's properties and business (including a financial statement certified by an independent public accounting firm).

Once the time for performance under a contract has expired, the seller or lessor no longer has a right to cure. a. True b. False

True The right to cure is not specifically defined in the UCC. However, it refers to the right of the seller or lessor to repair, adjust, or replace defective nonconforming goods (see UCC 2-508 and 2A-513). Among other criteria, the seller or lessor has a right to cure if the time for performance has not yet expired.

Failure to live up to a standard of care may be an act or an omission. True False

True The tort of negligence occurs when someone suffers injury because of another's failure to live up to a required duty of care. The breach of duty of care may be the result of an act or omission.

Some promises are not legally binding. a. True b. False

True There are four requirements that must be met before a promise is legally binding or a valid contract exists: 1. Agreement; 2. Consideration; 3. Contractual Capacity; 4. Legality.

A business firm may have to comply with the laws of any jurisdiction in which it actively targets customers. a. True b. False

True This is actually, the takeaway from International Shoe v. Washington. In this case, the US Supreme Court held that International Shoe, a Delaware corporation with its registered office in St. Louis Missouri, would be amenable to proceedings in the courts of Washington because it conducted continuous and systematic activities in that state.

A registration statement must state how a corporation plans to use the proceeds from the sale of the securities. a. True b. False

True This question is about the scope of the Securities Act of 1933, which governs initial public offerings (IPOs). This act was enacted to prohibit several types of fraud and stabilize the securities market. To this end, it requires that all essential information concerning the issuance of securities be made available to the public. The registration statement required by Section 5 of the Securities Act is in line with this general purpose of public disclosure. Among other info, the registration statement must explain how the corporation intends to use the proceeds of the sale.

Any lawful contract can potentially form the basis for an action based on wrongful interference with a contractual relationship. True False

True Three elements are necessary for wrongful interference with a contractual relationship to occur: A valid, enforceable contract must exist between two parties. A third party must know that this contract exists. The third party must intentionally induce a party to breach the contract. Generally, any lawful contract can be the basis for an action based on wrongful interference with a contractual relationship.

Employees who deal with third parties are agents of their employers. a. True b. False

True Typically, all employees who deal with third parties are deemed to be agents.

U.S. district courts have original jurisdiction in federal matters. a. True b. False

True U.S. district courts have original jurisdiction in federal matters or federal questions as well as in disputes involving diversity jurisdiction.

Under the UCC, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade. a. True b. False

True Under the UCC, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade (see UCC 1-304 and UCC 2-103 (b).

A unilateral contract is formed when the party receiving the offer completes the requested act or performance. a. True b. False

True Unilateral contracts are also labelled a "promise for an act". Put differently, a unilateral contract is formed not at the moment when promises are exchanged but at the moment when the contract is performed.

A criminal case must be proved beyond a reasonable doubt. a. True b. False

True Unlike civil cases, in criminal cases, the state must prove its case beyond reasonable doubt.

There is at least one circumstance in which a person cannot refuse to testify on Fifth Amendment grounds. a. True b. False

True When the state wishes to obtain information from a person accused of a crime, the state can grant immunity from prosecution or agree to prosecute for a less serious offense in exchange for the information. Once immunity is given, the person can no longer refuse to testify on Fifth Amendment grounds because he or she now has an absolute privilege against self-incrimination.

A farmer needs to purchase a replacement part for a tractor. The tractor parts dealer listens to the farmer's request and describes the replacement part that will fix the tractor. The farmer relies on the dealer's advice and buys the replacement part. If the replacement part purchased by the farmer was not compatible with the tractor and destroyed the tractor's engine, the farmer would be able to recover for the full cost of the tractor from the tractor parts dealer in a breach of warranty action. True False

True With a breach of warranty claim, the plaintiff can recover consequential damages. These include two types of damages: commercial consequential damages (e.g. lost profits) and property or personal injury. Here, the damage to the tractor would be a property damage, and it would be recoverable whether or not foreseeable.

Most crimes must be prosecuted within a certain number of years after the crimes occur. a. True b. False

True With some exceptions, such as for the crime of murder, statutes of limitations apply to crimes just as they do to civil wrongs. This means that the state must initiate criminal prosecution within a certain number of years. If a criminal action is brought after the statutory time period has expired, the accused person can raise the statute of limitations as a defense.

A warranty of good title means that a seller warrants that he or she has valid title to the goods and that transfer of the title is rightful. a. True b. False

True Yes, this is true. If a merchant gives a warranty of good title, it means that he or she has a good and valid title to the goods sold and that the transfer of the title is rightful (see UCC 2-312(1) (a).

Imagine that Apple is a corporation with its registered office in California and Tidal is a corporation with its registered office in New York. Apple could file a $20 M action with the Federal District Court of New York based on diversity jurisdiction. True False

True Federal District Courts can decide cases based on diversity citizenship or diversity jurisdiction, provided two requirements are met: The plaintiffs and defendants must be residents of different states; The dollar amount in controversy must exceed $75,000. In this case, Apple is a citizen of the state of California. Tidal is a citizen of the state of New York. Furthermore, the dollar amount in controversy is more than $75,000. Hence, Apple could file an action against Tidal in the Federal District Court of New York based on diversity of jurisdiction

Through tort law, society compensates those who suffer injuries as a result of others' wrongful conduct. a. True b. False

True Tort law is a field of law by which society is able to compensate those who have suffered injuries as a result of the wrongful conduct of others.

Competing via aggressive marketing and advertising strategies is________ interference with a business relationship.

Usually Permissible

Imagine that I purchase a car from a local dealership and there is a problem with that car. I have entered into a contract with the dealership. I go home and let my husband drive the car. He takes the car out and the problem with the car resents itself and the wheels fall off. As a consequence, my husband gets into an accident and is injured. Could he recover under the strict liability theory? True False

a. True A merchant who sells a product is liable for personal injuries and property damages caused by the product if sold in a defective condition unreasonably dangerous to the user, consumer, or his property. This protection is extended to any reasonably foreseeable plaintiff. Hence, lack of privity of contract is not a defense. This means that the injured plaintiff may sue any seller of the defective product who is engaged in the business of selling such products for use or consumption. Anyone (e.g. manufacturer, wholesaler, retailer, dealer, etc.) in the chain of distribution that enables the product to reach the marketplace is a potential defendant. NOTE: occasional or casual sellers (e.g. Craiglist / garage sells) are excluded from this rule. Here, my husband would be a reasonably foreseeable plaintiff. In his quality of husband, he is likely to drive the car on a regular basis. The fact that he was not in a contractual relation with the dealer or the manufacturer is not a defense for a strict liability lawsuit. He could sue either or both.

Ike pushes Joan, who falls and breaks her arm. Ike is liable for the injury a. if Ike intended to push Joan. b. only if Ike did not intend to break Joan's arm. c. only if Ike had a bad motive for pushing Joan. d. only if Ike intended to break Joan's arm.

a. if Ike intended to push Joan.

The Illinois state legislature passes a law raising the speed limit on certain state roads. This law becomes part of a body of law known as a. statutory law. b. administrative law. c. case law. d. uniform law.

a. statutory law.

All of the cases that have been decided by U.S. judges, as well as by English judges prior to the American Revolution, constitute a body of law known as a. the common law. b. equity. c. civil law. d. statutory law.

a. the common law.

Who is a potential defendant under the negligence theory of product liability? A. All members of the supply chain. B. Only members of the supply chain that are personally negligent.

b. Only members of the supply chain that are personally negligent can be defendants under the negligence theory of product liability. For example, sellers other than the manufacturer acting as mere conduit of the product ordinarily have no duty to inspect or test a product made by a reputable manufacturer. This is a significant limitation that makes the negligence theory of product liability less commonly used by plaintiffs.

Cook's Pantry Appliances, a retail store, must use reasonable care on its premises to warn its patrons of a. all risks. b. hidden risks. c. obvious risks. d. no risks.

b. Retailers and other firms that explicitly or implicitly invite persons to come onto their premises are usually charged with a duty to exercise reasonable care to protect those persons - business invitees. Retailers have a duty to remove any hidden dangers that might injure a customer or other invitee.

Mona offers Ned, a building inspector, $5,000 to overlook the violations in her new warehouse. Ned accepts the cash and overlooks the violations. Mona is charged with the crime of bribery. The crime occurred when a. Mona decided to offer the bribe. b. Mona offered the bribe. c. Ned accepted the bribe. d. Ned overlooked the violations.

b. The crime of bribery involves offering something of value to someone in an attempt to influence that person, who is usually, but not always, a public official, to act in a way that serves a private interest. The crime of bribery occurs when the bribe is offered. It is not required that the bribe be accepted.

Nico is a passenger in a car driven by Owen, whose reckless driving causes an accident, injuring himself. Nico, uninjured, accompanies Owen to Parkside Hospital in an ambulance. The ambulance is hit by a car driven by Quin, and Nico is injured. Nico files a suit against Owen, alleging negligence. The element most likely to be a question for the court to decide is a. causation in fact. b. proximate cause. c. the duty of care. d. the injury requirement.

b. The element most likely to be a question for the court to decide is proximate cause.

Maya, a police officer, wants to search the offices of Niles Corporation. Maya asks Judge Orion to issue a warrant. Under the Fourth Amendment, no warrants for a search or an arrest can be issued without a. double jeopardy. b. probable cause. c. reasonable doubt. d. immunity.

b. To obtain a search warrant, law enforcement officers must convince a judge that they have reasonable grounds, or probable cause, to believe a search will reveal a specific illegality. Note that probable cause, reasonable grounds, beyond reasonable doubt are different expressions and they do not mean the same. However, these standards limit the powers of the state, and set a common standpoint by which criminal procedures protecting the constitutional rights of individuals must be read and abide by.

Kelly is injured when she slips and falls on Layla's sidewalk. To determine whether Layla owed a duty of care to Kelly, Layla is subject to the standard of a. a realistic person. b. a reasonable person. c. a recognizable person. d. a reliable person.

b. Tort law measures duty by the reasonable person standard. In determining whether a duty of care has been breached, the courts ask how a reasonable person would have acted in the same circumstances.

Which of the following does the U.S. Supreme Court have to issue before it hears a case? a. An exact date and time of when a case will be reviewed. b. A writ of certiorari. c. A statement to the press indicating that it will hear a case.

b. A writ of certiorari.

A contract entered into by an intoxicated person is never valid. a. True b. False

b. False A contract entered into by an intoxicated person can be either voidable or valid (and thus enforceable).

Andrew purchases a welding machine for his business. The purchase contract for the welding machine contains a clause prohibiting Andrew from recovering for any personal injuries caused by the welding machine. The first time Andrew uses the welding machine in his business, it misfires and causes burns to Andrew's hands. Andrew will not be able to recover for his personal injuries because of the clause in the purchase contract limiting recovery for personal injuries. True False

b. False A contractual limitation or disclaimer of warranty protection is generally permissible, unless it is unconscionable, that is, unenforceable. Any limitation or restriction on the right to recover for personal injuries is always unconscionable. So, here, that clause prohibiting Andrew's recovery is unenforceable. Therefore, Andrew can recover for his personal injuries.

A crime can be committed only against persons. a. True b. False

b. False A crime can be defined as a wrong against society proclaimed in a statute and, if committed, punishable by society through fines and / or imprisonment - and, in some cases, death.

A default judgment is a judgment entered against the party who brought the claim before the court. a. True b. False

b. False A default judgement is a judgement entered against the defendant because the defendant failed to file an answer to complaint within the time period specified in the summons.

A request or invitation to negotiate is an offer. a. True b. False

b. False A request or invitation to negotiate is not an offer. It merely expresses a willingness to discuss the possibility of entering into a contract.

A statement of future intent—"I plan to sell my car"—is an offer. a. True b. False

b. False A statement of an intention to do something in the future is not a an offer. This is different from a "futures contract', for example. These contracts are contracts traded at a futures exchange, by which the parties agree to sell a commodity or financial instrument in the future. Typically, the parties will pre-determine the price of the respective commodity or financial instrument.

An employer has no control over an employee's work. a. True b. False

b. False An employer, who hires the employee, has control over the details of the employee's work and physical performance.

An acceptance can impose new conditions or change the terms of the original offer without rejecting it. a. True b. False

b. False Imposing new conditions or changing the terms of the original offer is the same as rejecting the original offer. In fact, the party would be simultaneously making a new offer. Put differently, the party would be making a counteroffer.

Any relevant material, except information stored electronically, can be the object of a discovery request. a. True b. False

b. False Any relevant material, including information stored electronically, can be the object of a discovery request. Electronic evidence includes all types of computer-generated or electronically recorded information, such as e-mail, voice mail, tweets, blogs, social media posts, and spreadsheets, as well as documents and other data stored on computers.

A contract for a sale of real property or services is a contract for a sale of goods. a. True b. False

b. False Article 2 of the UCC, which regulates sales contracts, or contracts for the sale of goods, does not deal with real property (real estate), services, or intangible property such as stocks or bonds.

Cases involving diversity of citizenship arise only between citizens of different states. a. True b. False

b. False Cases involving diversity of citizenship also arise between citizens of different countries.

Cases involving diversity of citizenship arise only between citizens of different states. a. True b. False

b. False Cases involving diversity of citizenship arise not only between citizens of different states but also countries.

A restriction on commercial speech is valid as long as it forbids only the expression of views on controversial issues. a. True b. False

b. False Commercial speech if protected by the First Amendment. This Amendment generally provides for freedom of speech and freedom of religion. Typically, commercial speech (e.g. marketing and advertising communications) is protected by courts. However, the protection given by the First Amendment to commercial speech is not as extensive as the one afforded to non-commercial speech. States may restrict certain kinds of advertising to avoid costumers from being misled.

Conflict of Laws is a set of procedural rules which help the judge decide whether he/she will hear the case. True False

b. False Conflict of Laws (COLs) is a set of rules that help the judge determine the legal system and the law of the jurisdiction that should be applied to the legal dispute. For example, in Erie R.R. v Tompkins, the COLs rules of the state of NYC provided that the federal court for the Southern district of New York apply Pennsylvania law because the accident happened in Pennsylvania.

To be legally sufficient, consideration must be evidenced by something tangible. a. True b. False

b. False Consideration is normally defined as the value (e.g. money) given in return for a promise (bilateral contract) or in return for a performance (unilateral contract). This value may be received or promised. It does not necessarily have to be tangible.

Defamation is one person's use of another's name without permission. a. True b. False

b. False Defamation of character involves wrongfully hurting a person's good reputation. It consists of making false statements of fact about others.

The amount in controversy in a diversity of citizenship case must be more than $1 million before a federal court can take jurisdiction. a. True b. False

b. False Diversity of citizenship arising from disputes between citizens of different states implies that the two following requirements are met: The plaintiff and defendant must be residents of different states. The dollar amount in controversy must exceed $75,000.

An e-contract must meet basic requirements that are different from those required of a paper contract. a. True b. False

b. False E-contracts are contracts that are formed online as opposed to paper contracts. However, they must meet the same basic requirements (agreement, consideration, contractual capacity, and legality) as paper contracts.

On a motion for judgment on the pleadings, a court may consider evidence outside the pleadings. a. True b. False

b. False Either party may make a motion for judgement on the pleadings, or on the merits of the case. The judge only grants the motion when there is no dispute over the facts of the case and the sole issue to be resolved is a question of law. When the judge is deciding the motion, the judge may consider only the evidence contained in the pleadings.

Federal courts are superior to state courts. a. True b. False

b. False Federal courts are not superior to state courts. They are simply an independent system of courts, which derives its authority from Article III, Sections 1 and 2, of the U.S. Constitution.

Under the UCC, a sales or lease contract will fail for indefiniteness if one or more terms are left open. a. True b. False

b. False General contract law provides that an offer must be definite enough for the parties (and the courts) to ascertain its essential terms when it is accepted. In contrast, the UCC states that a sales or lease contract will not fail for indefiniteness even if one or more terms are left open as long as the following requirements are met: The parties intended to make a contract; There is a reasonably certain basis for the court to grant an appropriate remedy (UCC 2-204(3), 2A-204(3)

A person who has been determined by a court to be mentally competent cannot form a legally binding contract with another party. a. True b. False

b. False If a person has been determined by a court to be mentally competent, that person can form a legally binding contract with another party. Another scenario would be that one in which a person is determined by a court to be mentally incompetent. If this is the case, any contract entered into by that person is void. Only that person's guardian can enter into legally binding obligations on that person's behalf.

If, before the time for contract performance, one party clearly communicates to the other the intention not to perform, such an action is not a breach of the contract. a. True b. False

b. False If before the time for contract performance, one party clearly communicates to the other the intention not to perform, such an action is a breach of contract by anticipatory repudiation.

Let us assume there is a 16-year old or someone who is considered a minor, pursuant to the law in force in a certain state. He wants to own a car. Thus, he asks a 45-year old woman to be his agent and go buy that car for him. Would the sales contract be binding on the 16-year old? True False

b. False If we have a 16-year old boy who does not have the contractual capacity to buy a car and asks a 45- year old woman to be his agent and go buy that car, then, the sales contract would not be binding on the 16- year old boy. This 16-year old boy would be considered a minor. Minors do not have contractual capacity. If minors do not have contractual capacity, they do not have the power to act as a principals.

Does a 10-year old have the capacity to enter into a contract with a car dealership and purchase a car? True False

b. False In almost all states, the age of majority is 18 years old. In addition, some states provide for the termination of minority on marriage. The minority status may also be terminated by a minor's emancipation, which occurs when a child's parent or legal guardian relinquishes the legal right to exercise the control over the child. Also, minors who leave home to take care of themselves are considered emancipated.

In contract law, the term consideration refers to the serious thought that underlies a party's intent to enter into a contract. a. True b. False

b. False In contract law, consideration is something of value received or promised such as money, to convince a person to make a deal.

In contract law, intent is determined by the personal or subjective intent, or belief, of a party. a. True b. False

b. False In contract law, intent is not determined by the subjective intentions, beliefs, and assumptions of the offeror. Rather, it is determined by what a reasonable person in the offeree's position would conclude that the offeror's words and actions meant.

A contract entered into by a minor is voidable at the option of either of the contracting parties. a. True b. False

b. False In general, a minor can enter into any contract that an adult can, except contracts prohibited by law for minors. Nevertheless, in general, a contract entered into by a minor is voidable at the option of that minor.

A party cannot recover damages for severe emotional distress absent a showing of physical injury. a. True b. False

b. False Intentional infliction of emotional distress can be defined as an extreme and outrageous act, intentionally committed, that results in severe emotional distress to another. To be actionable, that is, to serve as a basis for a lawsuit, the conduct must be extreme and outrageous. That does not imply a showing of physical injury.

To commit an intentional tort, one person must intend to harm a certain person. a. True b. False

b. False Intentional torts require intent. The tortfeasor (the one who commits the tort) must intend to commit an act that will interfere with the personal or business interests of another in a way that is forbidden by law. An evil or harmful motive is not required. In tort law, intent means only that the actor (the person committing the action) intended the consequences of his or her act or knew with substantial certainty that certain consequences would result from the act.

It is not a crime to defraud the public through the use of ads on television. a. True b. False

b. False It is a crime to defraud the public through the use of ads on television. In fact, it is a federal crime to devise any scheme that uses the U.S. mail, commercial carriers, or wire, including telegraph, telephone, television, e-mail, or online social media, with the intent to defraud the public.

A contract involving property of any kind must be in writing to be enforceable. a. True b. False

b. False It is not true that contracts involving property of any kind must be in writing to be enforceable. A lot of contracts are informal contracts (or simple contracts). No special form is required (except for certain types of contracts that must be in writing) as the contracts are usually based on their substance rather than their form. Typically, business people write their contracts to ensure that there is some proof of a contract's existence should disputes arise.

Larceny relies on fear and force. a. True b. False

b. False Larceny involves the unlawful taking and carrying away of someone else's personal property with the intent to permanently deprive the owner of possession. In other words, larceny is the same as stealing or theft. Unlike robbery, larceny does not involve force or fear.

International law is a body of law that governs relations between and among citizens, not countries. a. True b. False

b. False Laws affecting the legal environment of business include not only national laws, but also international laws. International law is a body of law comprised of international customs, treaties, and organizations. This body of law governs the relations among or between nations or countries. However, international law can also have an (indirect) impact on the lives of citizens in these nations or countries.

All states have intermediate appellate courts. a. True b. False

b. False Not all states have intermediate appellate courts.

No offer may be revoked before it is accepted. a. True b. False

b. False Offers may be terminated by action of the parties, by revocation. Typically, the offeror can revoke the offer provided the revocation is communicated to the offeree before the offeree accepts it.

Sales of securities must occur within five days of registration. a. True b. False

b. False Once the SEC has reviewed and approved the registration statement and the waiting period is over, the registration is effective. From then on, the issuer can offer and sell the securities without restrictions.

The sellers statement that " this ice-cream on Green Street is better than the ice-cream sold in Badiani - the best ice-cream shop in Florence, Italy" is an express warranty. True False

b. False Only statements of fact create express warranties. The ice-cream on Green Street may be better. However, a seller or lessor who makes a statement that merely relates to the value or worth of the goods, or states an opinion about or recommends the goods, does not create an express warranty (see UCC 2-313(2) and 2A-210(2).

If a contractual promise is not fulfilled, the person who made it is not subject to the sanctions of a court. a. True b. False

b. False Pursuant to the Restatement (Second) of contracts, a contract is "a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty". This means that a contract is an agreement that can be enforced in court. As consequence, it is very important to understand what legal concepts such as validity and enforceability of a contract stand for, particularly if one wants to take advantage of the remedies provided by law for the breach of contract.

In a principal-agent relationship, the parties agree that the principal will act on behalf and instead of the agent in negotiating and transacting business with third persons. a. True b. False

b. False Section 1(1) of the Restatement (Third) of Agency defines agency as "the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act in his (or her) behalf and subject to his (or her) control, and consent by the other so to act". Put differently, in a principal-agent relationship, the parties have agreed that the agent will act on behalf and instead of the principal in negotiating and transacting business with third parties.

Lawyers are not allowed to represent people in small claims courts in any of the states. a. True b. False

b. False Small claims courts are inferior trial courts that hear only cases involving small claims of less than a certain amount, such as $5,000 (the amount varies from state to state). Suits brought in small claims courts are generally conducted informally, and lawyers are not required (in a few states, lawyers are not even allowed). Therefore, it is not true that lawyers are not allowed to represent people in small claims courts in any of the states.

There are 12 justices on the United States Supreme Court. a. True b. False

b. False The United States Supreme Court has 9 justices.

The amount in controversy in a diversity of citizenship case must be more than $1 million before a federal court can take jurisdiction. True False

b. False The amount in controversy in a diversity of citizenship case must exceed $75,000.

A contract involving property of any kind must be in writing to be enforceable. a. True b. False

b. False The following contracts are generally required to be in writing or evidenced by a written memorandum or electronic record: 1. Contracts involving interests in land; 2. Contracts that cannot by their terms be performed within one year from the day after the date of formation; 3. Collateral, or secondary, contracts such as promises to answer for the debt of another and promises by the administrator or executor of an estate to pay a debt of the estate personally; 4. Promises made in consideration of marriage; 5.Under the Uniform Commercial Code, contracts for the sale of goods priced $500 or more.

The only requirement for a valid contract is that the parties voluntarily entered into it. a. True b. False

b. False The following requirements must be met before a valid contract exists. 1. Agreement 2. Consideration 3. Contractual Capacity 4. Legality If any of these elements is lacking, no contract will have been formed.

The relationship between a principal and an independent contractor always involves an agency relationship. a. True b. False

b. False The relationship between a person or firm and an independent contractor may or may not involve an agency relationship. For example, an owner of real estate who hires a real estate broker to negotiate the sale of her property will only have established an agency relationship if she contracted with the independent contractor (broker) for the specific purpose of selling that property.

The crime of theft requires the taking of property, without regard to whether the perpetrator knew it belonged to another. True False

b. False Two elements normally exist simultaneously for a person to be convicted of a crime: 1. The performance of a prohibited act; and 2. specified state of mind or intent on the part of the actor. To establish criminal liability, there must be a concurrence between the act and the intent. Put differently, these two elements must occur together.

Under the UCC, a firm offer for a sale or lease of goods made by a merchant can be revoked at any time before acceptance. a. True b. False

b. False Under the UCC, a firm offer arises when a merchant-offeror gives assurance, in a signed writing, that the offer will remain open. The merchant's firm offer is irrevocable without the necessity of consideration.

Andrew purchases a welding machine for his business. The purchase contract for the welding machine contains a clause prohibiting Andrew from recovering for any personal injuries caused by the welding machine. The first time Andrew uses the welding machine in his business it misfires and causes burns to Andrew's hands. Assume that John, Andrew's brother who is visiting the business for the day, is also injured by the welding machine's misfire. John will not be able to recover for his injuries under a strict liability theory because he did not purchase the welding machine. True False

b. False Under the theory of strict liability, protection is extended to any reasonably foreseeable plaintiff. In other words, the lack of contractual privity is not going to be a defense for the defendant. Here, John, who is certainly expected to be at the business visiting his brother, is a reasonably foreseeable plaintiff. Therefore, he will be able to recover under the strict liability theory of product liability.

Embezzlement can be committed only by physically taking property from the possession of another. a. True b. False

b. False When a person who is entrusted with another person's funds or property fraudulently appropriates it, embezzlement occurs. Embezzlement is different from larceny, because the wrongdoer does not physically take the property from another's possession, and it is not robbery because force or fear is not used.

An important rule to keep in mind is that, in an online contract, the offeree (the buyer) controls the acceptance and thus all the terms of the resulting contract. a. True b. False

b. False When it comes to e-contracts, it is important to keep in mind that the offeror (the seller) controls the offer and thus the resulting contract. Consequently, the seller should anticipate the terms he or she wants to include in a contract and provide for them in the offer. At least, an online offer must include the following provisions: Acceptance Payment Return policy Disclaimer Limitation on remedies Privacy policy Dispute resolution

The UCC imposes special business standards on casual and inexperienced sellers and buyers. a. True b. False

b. False Article 2 governs the sale of goods in general. It applies to sales transactions between all buyers and sellers. However, in a limited number of instances, the UCC presumes that special business standards ought to be imposed because of merchants' relatively high degree of commercial expertise. Those standards do not apply to the casual or inexperienced seller or buyer.

If a voidable contract is avoided, the promisee, but not the promisor, is released from it. a. True b. False

b. False If the contract is avoided, both parties, that is the promisee as well as the promisor, are released from it.

Let us assume that I own a Jimmy John's franchise. Given that I own a lot of other businesses, I do not actually get to go to that business very frequently and hire a manager for this reason. This manager is authorized to conduct a series of transactions during the period he works for me. Therefore, the manager is: A special agent; A general agent.

b. General agent Once I hire that manager, he is a general agent because he is going to be authorized to conduct a series of transactions involving a continuity of service working for me.

Anthony bought a car from a local car dealer. That car came from a reliable supplier. Given that this is a reputable supplier, the local car dealer does not inspect or test the product because this has been previously done at the manufacturing stage. After the car dealer sells the car to Anthony, Anthony drives it, but an accident happens due to a loose wheel. Who must Anthony sue? A. The local car dealer. B. The manufacturer.

b. The manufacturer Anthony must sue the manufacturer because, in this situation, the car dealer would have no duty to inspect or test the product made by the manufacturer. Anthony would only be able to sue the person or entity that was actually negligent. This would be the manufacturer who failed to tie in the lugnuts properly.

Tyler believes that some laws passed by his state's legislature are bad, and he refuses to comply with them. He believes that there is a universal law above all others that grants rights to all people and that it is above all other laws. Tyler subscribes to what school of jurisprudential thought? a. The historical school b. The natural law school c. The school of legal realism d. The positivist school

b. The natural law school

The Bill of Rights protects individuals against types of interference by the federal government. a. True b. False

b. True The first ten amendments to the United States Constitution constitute the Bill of Rights. They were adopted in 1791 and embody a series of protections for the individuals against various types of interference by the federal government.

Sarah prevails in her lawsuit against Carl for injuries she sustained in a car accident. As a result, Sarah is entitled to a remedy. In the U.S. legal system, Sarah's remedy will most likely be in the form of a. specific performance. b. damages. c. injunction. d. rescission.

b. damages.

Bribing foreign officials to obtain favorable business contracts is not a crime. a. True b. False

b. false Bribing foreign officials to obtain favorable business contracts is a crime. There are three types of bribery: 1. Bribery of public officials; 2. Commercial bribery; and 3. Bribery of foreign officials.

Richard is a state appeals court judge. In making judicial decisions, Richard issues rulings that are consistent with precedents established in similar cases within his jurisdiction. Richard is following the principle of a. courts of equity. b. stare decisis. c. laches. d. constitutional constructionism.

b. stare decisis.

A case comes before a Wisconsin state trial court on the subject of free speech on the Internet. It is a case of first impression, meaning that no case involving the same issue has been decided by the Wisconsin courts. In deciding such a case, it would not be considered proper for the judge to consider a. social values and customs. b. the judge's personal feelings about the Internet. c. public policy. d. cases from other jurisdictions.

b. the judge's personal feelings about the Internet.

Jean is playing a video game on a defective disk that melts in her game player, starting a fire that injures her hands. Jean files a suit against K-Tech, Inc., the game's manufacturer. K-Tech is held liable under the doctrine of strict liability. A significant application of this doctrine is in the area of a. cyber torts. b. intentional torts. c. product liability. d. unintentional torts.

c. A significant application of the doctrine of strict liability is in the area of product liability - liability of manufacturers and sellers for harmful or defective products.

George has a badly infected right foot. Herb, George's physician, prescribes amputation. George agrees. During the operation, Herb amputates the left foot. In George's suit against Herb, George's best theory for recovery is a. assumption of risk. b. negligence per se. c. res ipsa loquitur. d. strict liability.

c. George's best theory for recovery is res ipsa loquitur. In this case because "the facts speak for themselves", the court may infer that negligence occurred. The burden of proof rests with Herb, George's physician - to prove he was not negligent. Note that this doctrine is applied only when the event creating the damage or injury is one that ordinarily would occur only as a result of negligence.

Ralph, a van driver for Speedy Delivery Company, causes a multi-vehicle accident on a city street. Ralph and Speedy are liable to a. all those who were injured. b. only those who were uninsured. c. only those whose injuries could have been reasonably foreseen. d. only those whose vehicles were closest to Ralph's van.

c. Ralph and Speedy are liable only to those whose injuries could have been reasonably foreseen. Here, a court would be determining whether the conduct of Ralph, who worked for Speedy, was the proximate cause of the injuries sustained by the defendants. Questions of proximate cause are strongly linked to the concept of foreseeability because it would be unfair to impose liability on a defendant unless the defendant's actions created a foreseeable risk of injury.

Justin is charged with a crime. He insists that he should have an opportunity to object to the charges before a "fair, neutral decision maker." No one can be deprived of "life, liberty, or property without due process of law" under the a. Second Amendment. b. Fourth Amendment. c. Fifth Amendment. d. Eighth Amendment.

c. The Fifth Amendment requires that no one be deprived of "life, liberty, or property without due process of law".

Which of the following statements by a car dealer would create an express warranty? This car is the best looking car we have on the lot. This car is exceptional and you will be very happy with it. This car is mechanically sound. This car is one of my favorites. None of the above would create an express warranty.

c. The statement "This car is mechanically sound" is a representation, statement, or affirmation of fact as to the capability or character of the product. Choices a, b, and d are all opinions.

Cellphones & Calltime, Inc., makes an offer to Delores to enter into a contract to work as a salesperson for a certain base salary plus commission for ninety days subject to a one-year renewal based on her performance. Delores accepts the offer. A valid contract requires a. a price and a subject. b. a duration and termination provision. c. an offer and an acceptance. d. specific quality standards.

c. There are certain requirements that must be met before a valid contract exists. One of these requirements is the agreement between the parties. An agreement to form a contract includes an offer and an acceptance.

Frank slips and falls on Guy's Harbor Tour Boat and is injured. Frank files a suit against Guy's for $500,000. If Frank is 20 percent at fault and Guy's is 80 percent, under the "50 percent rule" comparative negligence principles, Frank would recover a. $0. b. $250,000. c. $400,000. d. $500,000.

c. Under the "50 percent" comparative negligence principles, Frank would recover $400,000.

Treadwell Tire Manufacturing Company employs Uri as an agent. To terminate Uri's authority, Treadwell must notify a. only third parties who are aware of the agency relationship. b. the public generally. c. Uri and any third parties who are aware of the agency relationship. d. Uri only.

c. When the parties terminate an agency relationship, it is up to the principal to inform any third parties who know about the agency that it has been terminated. Although an agent's actual authority ends when the agency is terminated, this procedure is especially relevant for cases where the agent has apparent authority. Apparent authority continues until the third party receives notice that such authority has been terminated.

Shane's Auto Parts orders twenty tires from Tough Tires, Inc. The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged. Shane's Auto Parts a. cannot reject the entire shipment. b. must still pay for all twenty tires at the original contract price. c. may inspect the tires and accept the shipment with a reduction in price. d. must reject the entire shipment.

c. If an unexpected event, such as a fire or an accident, partially destroys the goods, the buyer or lessee can inspect them and either treat the contract as void or accept the damaged goods with a reduction in the contract price.

Which of the following is NOT an element of the tort of wrongful interference with a contractual relationship. a. A third party must be aware that the contract exists. b. A valid, enforceable contract must exist between two parties. c. A third party must unintentionally cause one of the parties to break the contract.

c. A third party must unintentionally cause one of the parties to break the contract.

Tim is electrocuted and injured after using his new electric toothbrush for the first time. The cause of the malfunction was a wire that was improperly attached (i.e., a manufacturing defect). Tim purchased the toothbrush from Walgreens. Walgreens purchased the toothbrush from a distributor. The distributor purchased the toothbrush from Clean Ivories, Inc., which manufactures the toothbrush. If Tim filed a product liability lawsuit based on negligence, Tim would be able to recover for his injuries from which of the following? Walgreens The distributor Clean Ivories, Inc. All of the Above Only Walgreens and Clean Ivories, Inc.

c. Clean Ivories, Inc. This is a product liability lawsuit based on negligence. In this case, only members of the supply chain who were personally negligent would be liable for negligence. Here, since there was a manufacturing defect, the only entity who was going to be negligent was the manufacturer Clean Ivories, Inc. All other members of the supply chain, including Walgreens, were not going to be liable because they were mere conduits in delivering that product to the end-consumer, and ordinarily they would not have any duty to inspect the product made by a reputable manufacturer. Here, there were no reasons to believe that Clean Ivories, Inc. was not a reputable manufacturer. So, there would be no duty to inspect or test that product by Walgreens or the distributor.

Mantas Moderno Company, which is based in New York, agrees to sell fifty woven carpets, imported from Mexico and currently stored in New Jersey, to NuDecor, Inc., which is based in Connecticut. If the contract does not indicate where the goods will be delivered, the place of delivery is a. New York. b. Mexico. c. New Jersey. d. Connecticut.

c. New Jersey The buyer and the seller (or lessor and lessee) may agree that the goods will be delivered to a particular destination where the buyer or lessee will take possession. If the contract does not indicate where the goods will be delivered, the place of delivery will be the location of the goods, if both parties know at the time of contracting that the goods are located somewhere other than the seller's business.

Elaine is involved in a car accident where the other driver ran a red light. To determine whether she has a case, her attorney would apply which of the following classifications of law? a. Administrative law. b. Procedural law. c. Substantive law. d. Cyberlaw.

c. Substantive law.

Assume that Congress passes a law establishing a new administrative agency to oversee cyberlaw issues. The agency writes rules to enable it to carry out its duties. The rules written by the agency will be known as a part of: a. constitutional law. b. statutory law. c. administrative law. d. a Restatement of the Law.

c. administrative law.

A person who commits a tort is known as a: a. criminal. b. maladjustor. c. tortfeasor. d. perpetuator. e. instigator.

c. tortfeasor.

You are given permission to use Alvie's land for a one-day four-wheeled drive event. Your own truck breaks down during the event so you leave it on Alvie's property. Most likely you have committed: a. trespass to land, but you have a complete defense. b. trespass to personal property. c. trespass to land.

c. trespass to land.

Tim is electrocuted and injured after using his new electric toothbrush for the first time. The cause of the malfunction was a wire that was improperly attached (i.e., a manufacturing defect). Tim purchased the toothbrush from Walgreens. Walgreens purchased the toothbrush from a distributor. The distributor purchased the toothbrush from Clean Ivories, Inc., which manufactures the toothbrush. If Tim files a product liability lawsuit based on strict liability, Tim would be able to recover for his injuries from which of the following? Walgreens The distributor Clean Ivories, Inc. All of the above Only Walgreens and Clean Ivories, Inc.

d. All of the above This is a product liability lawsuit based on strict liability. The rule is that the injured plaintiff may sue any seller that was priory engaged in selling those goods for user consumption. This includes anyone in the chain of distribution that enables the product to reach the marketplace, that is the manufacturer, Clean Ivories, Inc., the distributor, and Walgreens.

Cyberlaw consists of a. traditional legal principles that have changed because of technology. b. new laws that govern unique problems related to technology. c. only federal statutes. d. Both a. and b. e. Answers a., b., and c. are all correct.

d. Both a. and b.

The National Conference of Commissioners on Uniform State Laws (NCCUSL) passes a new uniform act related to texting while driving. This uniform act a. becomes a part of the United States Code and is therefore the law of the land in every state and territory of the United States. b. becomes the law in every state that has joined the NCCUSL. c. automatically becomes the law in every state. d. becomes the law in every state that adopts the uniform act through legislative action.

d. becomes the law in every state that adopts the uniform act through legislative action.