Business Law ALL

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abusive or frivolous litigation

the filing of a lawsuit without legitimate grounds and with malice; the use of a legal process in an improper manner

tortfeasor

the one committing the tort

slander of title

the publication of a statement that denies or casts doubt on another's legal ownership of any property, causing financial loss to that property's owner

"Blue laws" usually apply to activities of necessity and charity.

mistake of fact

(1) A mistake that is not caused by the neglect of a legal duty by the person committing the mistake but, rather, consists of unconscious ignorance of a past or present material event or circumstance. (2) An affirmative defense in which the defendant tries to prove that she or he made an honest and reasonable mistake that negates the guilty-mind element of a crime.

fraud

(1) An intentional deception that causes harm to another. (2) A basis for contesting a will if the testator relied on false statements when he or she made the will.

What are the 5 elements of Negligence?

1) Duty of Care 2) Breach of Duty of Care 3) Damage 4) Causation in Fact 5) Proximate Cause

What are the 3 types of torts?

1) Intentional Tort 2) Unintentional Tort (Negligence) 3)Strict Liability

What are the five state laws?

1) Negligence per se 2)Res IPSA Loquitur 3) Dram Shop Act 4) Social Host Liability Statute 5) Guest Statute

B. This is an illegal wagering agreement.

Bill bets his friend $100 that the Patriots will win the next Super Bowl. A. This is an unconscionable contract and therefore illegal. B. This is an illegal wagering agreement. C. This is an agreement to obstruct justice and therefore illegal. D. This is an illegal restraint of trade.

What is the Social Host Liability Statute?

Homeowners who host a social function at the horn of the homeowner

D. refuse to void the restriction.

If a restriction in an employment contract is found to be too harsh, a court may do any of the following EXCEPT: A. change the terms of the contract. B. refuse to enforce the whole contract. C. refuse to enforce that part of the contract. D. refuse to void the restriction.

insider trading

Illegal buying or selling of a corporation's securities by corporate insiders, such as officers and directors, on the basis of material, nonpublic information and in breach of a fiduciary duty or some other relationship of trust and confidence.

In cases where one party to an illegal agreement is less at fault than the other, he will be allowed to recover payments made or property transferred.

actual malice

In defamation, either a person's knowledge that his or her statement or published material is false or the person's reckless disregard for whether it was false.

modified comparative negligence

In some states, a defense whereby the defendant is not liable for the percentage of harm that he or she proves can be attributed to the plaintiff's own negligence if the plaintiff's negligence is responsible for less than 50 percent of the harm. If the defendant establishes that the plaintiff's negligence caused more than 50 percent of the harm, the defendant has no liability.

A famous decision involving mistake as to the meaning of contract terms is Raffles v. Wichelhaus, a case involving two ships with the same name which were confused by the two parties to the contract.

A few states provide by statute that the parties need to provide no new consideration when modifying any contract.

A government action that treats two classes of similarly situated citizens the same is valid under the Equal Protection Clause.

A law is not valid unless it complies with the U.S. Constitution

A modification of a preexisting contract occurs when the parties agree to change one or more of its terms.

A new promise to perform a voidable obligation that has not been avoided previously is enforceable without new consideration.

A noncontractual promise may be enforceable where there has been justifiable reliance on the promise.

A party to a contract may be entitled to relief even if he is contributorily negligent in relying on a fraudulent misrepresentation.

A promise to pay $1,000 a year to a local police officer not to have your store vandalized is legally unenforceable under the rule that makes performance of a pre-existing legal obligation legally insufficient consideration.

A public figure who brings a defamation suit against a newspaper which prints a false story about her must prove actual malice to win the suit.

A seller's promise to service a sewing machine free for the next 90 days when she has no intention of doing so is actionable as a false representation of a fact if the other elements of fraud are present.

A unilateral contract may consist of a promise exchanged for an act or forbearance.

A valid contract is one that meets all of the requirements of a binding contract.

A valid offer may be in the form of an act for a promise, which is an offer to enter into an inverted unilateral contract.

According to Adam Smith, the capitalistic system is composed of economic motivation, private productive property, free enterprise, free markets, competition, and limited government.

According to Milton Friedman, the social obligation of a corporation is to return as much money as possible to its shareholders.

According to one argument in favor of corporate social responsibility, the more responsibly companies act, the less the government must regulate them.

According to the UCC, only a merchant can make a firm offer to a buyer.

Action taken by private citizens may constitute state action if the state has encouraged the challenged private action significantly.

Al owns a farm that he believes is worth $150,000. Betty knows that there is oil under the farm and offers Al $160,000 for it. Al is suspicious and asks her why she wants to buy the place. She says she would like to live in the country. Al then asks her if she thinks there might be valuable minerals under the land. Betty laughs and says she doubts that very much, so Al sells her the farm for $160,000. Al later realizes that the land was worth more than he was paid. Betty's statement to Al was a misrepresentation requisite for fraud.

Albert breaches a contract with Bill in a state where the statute of limitations is six years. Seven years later Bill wants to sue. The contract is unenforceable, but it is neither void nor voidable.

Alice makes a material misrepresentation of fact to Betty, and based upon the misrepresentation, Betty enters into a contract. Betty now realizes she was deceived and wants to get out of the contract. This contract is voidable at Betty's option.

Amendments to Article 2 of the UCC were promulgated in 2003 to reflect developments in the law and business practices and to accommodate electronic commerce.

An act that is contrary to public policy or is morally reprehensible may constitute duress.

An illusory promise has the form of a promise but imposes no real obligation.

An implied contract is as enforceable as is an express contract.

An implied in fact contract is formed by conduct.

An offer can be communicated by words or by conduct.

An offer must be communicated to the offeree in order for the offer to be effective.

An official action by an agency of the city of Oakwood against one of its citizens would be considered "state action."

Andrew Carnegie was a believer in corporate social responsibility.

Article 2 of the Uniform Commercial Code does not apply to the sale of services.

At common law a promise under a seal to authenticate it was effective without anything more.

At the marriage of her daughter, Lorna is given papers to sign which the catering company says are the invoices for the food, service, and decorations. Underneath the invoices are a carbon and a contract of sale for a portion of the failing catering business. Lorna signs the papers; her signature is transferred to the sales contract. This is a void contract because it was entered by fraud in the execution.

Bill would like to propose to the board of directors of Midway Corporation that it distribute five percent of its pre-tax yearly income to feed the poor. To Milton Friedman and others, Bill's proposal might be considered unethical, because it violates the purpose for which the corporation was established

Both the Code and the Restatement provide that an authorized means of accepting an offer is any reasonable means of communication.

Both the Fifth and Fourteenth Amendments contain due process clauses.

Business ethics is a subset of ethics; there is no special set of ethical principles that applies only to the business world.

Charitable subscriptions are one of the most frequently occurring applications of the doctrine of promissory estoppel.

Commercial reasonableness is a standard determined in terms of the business judgment of reasonable persons familiar with the practices customary in the type of transaction involved.

Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.

Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.

Death or insanity of either the offeror or the offeree ordinarily terminates the offer.

Deontologists are sometimes criticized for rigidity and excessive formalism.

Each party to a contract must intentionally exchange a legal benefit or incur a legal detriment as an inducement to the other party to make a return exchange.

Economic duress renders a contract voidable.

Eminent domain" refers to a governmental taking of private property for public use.

Ethical relativism holds that when any two individuals or cultures differ regarding the morality of a particular issue or action, they are both correct because morality is relative.

First Bank would like to place some ads in the local newspaper in support of proposed legislation that it believes would increase its revenues, but there is a local ordinance that prohibits such ads. First Bank consults its attorney because it would like to challenge the ordinance as unconstitutional. In all likelihood, the ordinance is a violation of First Bank's rights of free speech under the First Amendment.

For a misrepresentation to be material, it must be likely to induce a reasonable person to manifest assent or the maker must know that it would be likely to induce the recipient to do so.

From a Kantian perspective, for an action to be moral, it must be possible for it to be made into a universal law and it must respect the autonomy and rationality of all human beings.

General contract law governs all contracts outside the scope of the UCC.

If Sam agrees to sell to Thomas all of the tomatoes he wants at $25 a bushel, there is no contract for lack of consideration.

If a confidential relationship exists between parties to a contract, the law presumes that undue influence exists if it appears that the dominant party has gained at the other party's expense, but the presumption can be rebutted by evidence that it was not exercised.

If a person who has been declared incompetent by the courts enters into an agreement, that agreement is void, because it does not meet all the requirements of a binding contract.

If a promise is illusory, mutuality of obligation is lacking.

If a seller occupies a fiduciary relationship with the buyer and fails to make full disclosure to the buyer, then the latter will be able to avoid the transaction.

If an agreement is not voluntary and knowing, it will be either void or voidable.

If an offeror makes an offer to an offeree by letter and it is lost in the mail, no legally sufficient offer has been made.

If the offer specifies it MUST be accepted by telegram, a letter will not be a valid means of acceptance.

In a bilateral contract, if one party is not bound, neither party is bound.

In a unilateral contract, a promise is exchanged for an act or forbearance to act.

In addition to acting as a broad source of federal power, the Commerce Clause also restricts the power of the states to regulate activities if the result obstructs or unduly burdens interstate commerce.

In employment relationships, ethical issues arise regarding safety and compensation of workers, privacy, and the legitimacy of whistle-blowing

In equal protection cases involving economic regulation, the courts use the rational relationship test.

In general, an acceptance is effective upon dispatch.

In most, if not all, cases where there is a legal detriment to the promisee, there is also a legal benefit to the promisor.

In relation to the Takings Clause, public use has been held to be synonymous with public purpose.

In some states a promise under seal is binding without consideration.

Intuitionism holds that rational persons possess inherent powers to assess the correctness of actions.

Larry says to Jeff, "If you will mow my lawn, I will give you fifteen dollars." Under these facts, no contract is formed until Jeff finishes mowing the lawn.

Marcus has a contract to purchase a new CD player. The law governing this contract is Article 2 of the UCC.

Mike, the owner of a yogurt shop, orders 500 quarts of yogurt from his supplier. Nothing, however, is said by either party about the price or method of payment. The supplier ships the yogurt as ordered. Since this is a contract implied in fact, Mike must pay his supplier for the yogurt.

Most forms of speech are protected by the strict or exacting scrutiny standard.

Nonfraudulent representation is made without scienter.

Not everything that is legal is also morally correct.

On June 1, a civic club made an offer of $500 to a beer distributor to have ten kegs delivered to the city park for a July 4th fund-raising event. On June

On Tuesday morning John sends a letter to Arlene rejecting her offer, but later the same day John changes his mind and sends a letter of acceptance to Arlene. The letter of acceptance will be effective only if it is received by Arlene before she receives the rejection.

Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.

Pablo promises to sell to Candice an automobile for $20,000, for which Candice promises $20,000. A bilateral contract exists.

Physical compulsion and improper threats are the two basic types of duress.

Powers given exclusively to the federal government under the U.S. Constitution include the power to establish laws governing bankruptcy and to coin money.

Rescission is usually permitted where the parties to a contract are both mistaken about a material fact.

Restrictions may be placed on an individual's right to free speech.

Ron says to Matt, "If you design and landscape my front lawn by the time I return from Paris next month, I will pay you $5,000." Matt does not respond but has the landscaping done by the time Ron returns. This is an example of a unilateral contract.

Scienter is the element of fraud that requires that the person who makes the misrepresentation knows that it is false or has reckless indifference as to its truthfulness.

Situational ethics judges a person's ethics, and it does so from the perspective of the actor.

States have powers to enact regulations if Congress has not preempted state regulation by enacting legislation within its constitutional powers.

States may enact legislation even where the federal government has created laws.

The Bill of Rights restricts the power and authority of the federal government.

The Bill of Rights was approved by the first Congress to guarantee that the federal government would not abuse its powers.

The Code has changed the common law rule regarding modification of a preexisting contract by providing that a contract for the sale of goods can be effectively modified by the parties without new consideration, provided they intend to do so and act in good faith.

The Code's firm offer rule applies only to offers in writing that are made by a merchant offeror.

The Commerce Clause limits the power of states to tax.

The Contract Clause of the Constitution applies only to the actions of state governments and not to the federal government.

The First Amendment guarantee of free speech applies not only to individuals but also to corporations

The Fourteenth Amendment restricts the power of states to tax.

The Minnesota Housing Authority plans to begin eminent domain proceedings to acquire 100 homes to rent to low-income persons. The Housing Authority wants to pay as little as possible for the homes so that they can acquire more homes in the future, but the homeowners insist they are entitled to the fair market value of the property. In a court hearing on the matter, the homeowners are likely to prevail.

The Restatement and the UCC are both currently authoritative sources of contract law.

The Restatement provides that a promise following the rendering of emergency services is binding even if not supported by consideration if necessary to prevent injustice.

The Supreme Court has held that, under the Due Process Clause, a driver's license is property which cannot be revoked without procedural due process.

The U.S. Supreme Court can invalidate a law if it conflicts with the U.S. Constitution.

The U.S. Supreme Court upheld a state statute prohibiting corporations from using general treasury funds to make independent expenditures in elections for public office.

The central idea behind consideration is that the parties have intentionally entered into a bargained exchange with one another and have given each other something in exchange for a promise or performance.

The difference between an express contract and an implied in fact contract is the manner in which assent is manifested.

The element of exchange is absent where a promise is given for an act that has already been done.

The federal government's authority to govern economic matters flows from the Commerce Clause

The federal government's power to tax is subject to the limitation that all custom duties and excise taxes must be uniform throughout the United States.

The framers of the Constitution considered it unnecessary to include in the original document liberties that the people were to keep for themselves.

The parties to a contract may modify the agreement with no additional consideration by simply substituting a new contract.

The person to whom an offer is made is an offeree.

The term "past consideration" is not really consideration at all because the law will not find a contract where there is no bargained-for-exchange.

The theory of distributive justice analyzes society through a "veil of ignorance."

There are two distinct types of fraud.

To a libertarian, it is not unjust for some people to accumulate fortunes while others live in poverty.

To obtain relief for negligent or innocent misrepresentation all the remaining elements of fraud must be present and the misrepresentation must be material.

To sustain a case of fraudulent misrepresentation, the injured party must prove that he actually relied upon the false representation.

Under a Kantian approach to ethics, a person should not lie to colleagues unless that person supports the right of all colleagues to lie to one another.

Under a strict utilitarian approach, it is ethical to force an individual to participate in a painful medical experiment if the purpose of the experiment is to develop a cure that will benefit large numbers of people.

Under the UCC, exclusive dealing contracts are binding because sufficient consideration is deemed to be present.

Under the common law, in order to be enforceable, a modification of an existing contract must be supported by mutual consideration.

Under the federalist system, the states retain significant powers; however, the supremacy clause of the Constitution provides that within the areas of regulation that are federal in nature, federal law is supreme.

Undue influence is the taking of unfair advantage of a person by reason of a dominant position based upon a confidential relationship.

Utilitarian notions underlie cost-benefit analysis.

When a bid is made at an auction, it can be revoked if the auctioneer has not yet accepted the bid because the auctioneer has the power of acceptance.

law generally places more importance on the intent of the parties to form a contract than on the inclusion of certain terms in the contract.

intentional infliction of emotional distress

an intentional act that amounts to extreme and outrageous conduct resulting in severe emotional distress to another

superseding cause

an intervening force or event that breaks the connection between a wrongful act and an injury to another -defense to liability

nuisance

anything that interferes with the enjoyment of life or property

defenses to negligence

assumption of risk, superseding cause, contributory negligence, and comparative negligence

Since ____, the U.S. Supreme Court has abandoned its earlier approach in substantive due process cases and no longer overturns economic and social legislation, so long as it is rationally related to legitimate governmental objectives. a. 1812 b. 1937 c. 1954 d. 1980

b, 1937

How many stages are there in Kohlberg's theory of moral development?

b. 3

Which of the following is correct with regard to a contract? a. All contracts must be in writing. b. A person who deposits money in a bank account has entered into a contract with the bank. c. A contract may be for a tortious purpose. d. To be valid, a contract must be bilateral and cannot be unilateral.

b. A person who deposits money in a bank account has entered into a contract with the bank.

Which of the following would most likely be enforceable? a. An agreement supported by past consideration b. A substitute agreement to settle an undisputed debt c. A debt agreed to seven years ago in a state where the statute of limitations is six years d. A promise following the rendering of emergency services that is not supported by new consideration

b. A substitute agreement to settle an undisputed debt

Which of the following is an informal contract? a. A letter of credit. b. A written contract for the sale of a 5-acre tract of land. c. A check. d. A recognizance.

b. A written contract for the sale of a 5-acre tract of land.

Which of the following is a major limitation on the federal government's power to tax? a. Indirect taxes must be apportioned among the states. b. All custom duties and excise taxes must be uniform throughout the United States. c. Progressive tax rates are prohibited. d. All of the above.

b. All custom duties and excise taxes must be uniform throughout the United States.

Bart sends Carla an offer by express mail. Carla receives it at 10 a.m. on Tuesday. At 11 a.m. on Tuesday, Carla delivers an acceptance to Federal Express, but due to an error, the letter is not sent out by the company until Wednesday at 8 a.m. At what time does the law consider the acceptance to be effective? a. At 10 a.m. on Tuesday b. At 11 a.m. on Tuesday c. At 8 a.m. on Wednesday d. At the time Bart receives the letter

b. At 11 a.m. on Tuesday

Which of the following is NOT an element of fraud? a. Material misrepresentation b. Competent parties c. Knowledge of falsity d. Justifiable reliance

b. Competent parties

Nineteen-year-old Martin was raised in a good, Christian home and attended parochial school through eighth grade. Martin is a good student and citizen who conforms to the expectations of his church, family, and peers. He does so because he loves his family and church, is loyal to them, and trusts them. Under Kohlberg's schematic analysis, Martin is most likely at what stage of moral development?

b. Conventional

Gail sent a letter of acceptance to an offer that has expired. Gail has made: a. a contract. b. a rejection. c. a revocation. d. an offer.

d. an offer.

An offer need not take any particular form to have legal validity. To be effective, however, it must: a. be spoken directly to the offeree. b. always contain the price of the product or service offered. c. always contain the place of delivery. d. be communicated to the offeree.

d. be communicated to the offeree.

The type of moral equality espoused by John Rawls is: a. freedom to do what one wishes. b. social and material equality. c. freedom from government regulation. d. equality of opportunity, not of results.

d. equality of opportunity, not of results.

According to the Tenth Amendment, "the powers not delegated to the United States, by the Constitution, nor prohibited by it to the states, are reserved to the states respectively or to the people." This principle is: a. separation of powers. b. supremacy. c. preemption. d. federalism.

d. federalism

One of the changes in contract law between the nineteenth century and the twentieth century is that in more recent times: a. contractual liability, once assumed, can rarely be escaped. b. contract damages are viewed more narrowly and equitable remedies are no longer available. c. privity of contract is required. d. intended third-party beneficiaries may sue in their own right.

d. intended third-party beneficiaries may sue in their own right.

An ad in a newspaper or a circular describing goods and stating prices would generally be considered a(n): a. firm offer if made by a merchant. b. offer if made by a merchant, but not a firm offer. c. offer irrespective of who made the offer. d. invitation to buyers to make an offer to buy goods.

d. invitation to buyers to make an offer to buy goods.

When both parties misunderstand the same set of facts relating to a basic assumption on which a contract is made, it is termed: a. rescissionary mistake. b. unilateral mistake. c. mistake of law. d. mutual mistake.

d. mutual mistake.

An obligation imposed by law where there has been no agreement or expression of assent by word or act on the part of either party involved is a(n): a. implied in fact contract. b. express contract. c. void contract. d. quasi contract.

d. quasi contract.

State X passes legislation that requires that unless a mother of children under the age of 7 is found to be unfit, custody in divorce proceedings should be awarded to the mother and not the father. If this statute is challenged, the court will: a. not defer to the legislature and will independently determine whether such a classification of persons is constitutionally permissible. b. determine that fundamental rights and a suspect classification are involved in this legislation. c. only require that the legislation conceivably bear some rational relationship to a legitimate governmental interest. d. review the legislation to see if it bears a substantial relationship to an important governmental objective.

d. review the legislation to see if it bears a substantial relationship to an important governmental objective.

According to the UCC, an enforceable agreement involving the transfer of title of goods from a seller to a buyer for a price is called a(n): a. commercial contract. b. express contract. c. formal contract. d. sale.

d. sale.

John is a white Haitian who has obtained U.S. citizenship. State X passes a law that all Haitian-born citizens must submit to AIDS testing. The courts will review this law based on: a. deference to the legislature as to whether such a classification of persons is constitutionally permissible. b. whether there is clear and convincing evidence that there is no reasonable basis for the legislation. c. the rational relationship test. d. the strict scrutiny test.

d. the strict scrutiny test.

Which of the following activities is regulated by the federal government through its exercise of the commerce power? a. Federal crimes b. Electronic funds transfers c. Civil rights in employment d. Environmental protection e. All of the above.

e. all above

The definition of business ethics includes which of the following points? a. It is a branch of applied ethics. b. It is fully codified in federal statutes. c. It has a central authority and universal standards. d. It seeks to determine what is good and right in business settings. e. Both (a) and (d).

e. both a and b

trespass

entry to another's property without right or permission

proximate cause

exists when the connection between an act and an injury is strong enough to justify imposing liability

negligence

failure to act as a reasonably prudent person would act under similar circumstances

product disparagement

false statements about a product or business - factually untrue stmt about competitor's product is actionable as injurious falsehoo false statements made about a product or business

disparagement of property

false statements regarding the quality of a business' goods that cause damages to the business

contributory negligance

negligance of the plantiff that contributes to the injury and bars recovery from defendent Which of the following legal phrases defines a circumstance in which both the health care provider's and the patient's actions contributed to an injurious outcome?

malpractice

negligent or improper performence of a legal duty by a professional

libel

written or visual defamation without legal justification

A contract exists when an offer has been accepted.

boycott

A refusal to deal with, purchase goods from, or work for a business.

negligence

Behavior that creates an unreasonable risk of harm to others.

defenses against tort

consent and comparative negligence

A contract for the sale of a copyright is governed by Article 2 of the Uniform Commercial Code.

A contract to sell five acres of land is governed by Article 2 of the UCC.

A contract to sell life insurance is covered by Article 2 of the Uniform Commercial Code.

A leading proponent of the utilitarian approach to ethics was the eighteenth-century philosopher Immanuel Kant.

A liquidated debt is an obligation the existence or amount of which is in dispute.

A modification of a contract for the sale of goods must always be supported by additional consideration.

A negotiable instrument, such as a check, is not a formal contract.

A quasi contract is another name for an oral contract.

A unilateral mistake of fact is ordinarily grounds for avoiding a contract.

T or F A one on one date is considered a social function

False

Family and Medical Leave Act (FMLA)

Federal act requiring that employers provide all eligible employees with up to 12 weeks of leave during any 12-month period for several family-related occurrences (e.g., birth of a child, care of a sick spouse).

Civil Rights Act (CRA) of 1964

Federal law (as amended by the Civil Rights Act of 1991) that protects employees against discrimination based on race, color, religion, national origin, and sex; also prohibits harassment based on the same protected categories.

Federal Unemployment Tax Act (FUTA)

Federal law passed in 1935 that created a state system to provide unemployment compensation to qualified employees who lose their jobs.

Pregnancy Discrimination Act (PDA) of 1987

Federal law that amended Title VII of the Civil Rights Act of 1964 by expanding the definition of sex discrimination to include discrimination based on pregnancy.

Occupational Safety and Health Act (OSHA)

Federal law that established the Occupational Safety and Health Administration, the agency responsible for setting safety standards under the act and for enforcing the act through inspections and the levying of fines against violators.

Electronic Communications Privacy Act (ECPA) of 1986

Federal law that extended employees' privacy rights to electronic forms of communication including e-mail and cell phones; outlaws the intentional interception of electronic communications and the intentional disclosure or use of the information obtained through such interception.

Landrum-Griffin Act

Federal law that primarily governs the internal operations of labor unions. It requires financial disclosures by unions, establishes penalties for financial abuses by union officials, and includes "Labor's Bill of Rights" to protect employees from their own unions.

Equal Pay Act (EPA) of 1963

Federal law that prohibits an employer from paying workers of one gender less than the wages paid to employees of the opposite gender for work that requires equal skill, effort, and responsibility.

Americans with Disabilities Act (ADA)

Federal law that prohibits discrimination against employees and job applicants with disabilities.

Age Discrimination in Employment Act (ADEA) of 1967

Federal law that prohibits employers from refusing to hire, discharging, or discriminating in terms and conditions of employment on the basis of an employee's or applicant's being age 40 or older.

Employee Retirement Income Security Act (ERISA)

Federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Federal law which ensures that when employees lose their jobs or have their hours reduced to a level at which they would not be eligible to receive medical, dental, or optical benefits from their employer, the employees will be able to continue receiving benefits under the employer's policy for up to 18 months by paying the premiums for the policy.

Fair Labor Standards Act (FLSA)

Federal law which requires that a minimum wage of a specified amount be paid to all employees in covered industries; also mandates that employees who work more than 40 hours in a week be paid no less than 1 ½times their regular wage for all hours beyond 40 worked in a given week.

negligence per se

an act (or failure to act) in violation of statutory requirement

transferred intent

when defendant intends to harm one individual but unintentionally harms a second person

fraudulent misrepresentation

(1) The tort that occurs when a misrepresentation is made with intent to facilitate personal gain and with the knowledge that it is false. (2) In contracts, a false representation of a material fact that is consciously false and is intended to mislead the other party. Also called intentional misrepresentation.

Fred is a concert violinist who is scheduled to perform at Carnegie Hall for the first time. He buys what he is told is a Stradivarius violin from a well-known, reputable dealer in quality violins, and he pays the going rate for a Stradivarius. He later learns the violin is an imitation, although it is such a good imitation that even the dealer thought it was authentic. a. Fred has made a unilateral mistake and cannot avoid the contract. b. The dealer has committed fraud in the inducement. c. The sale is voidable by the purchaser for mutual mistake. d. The sale is voidable, because the dealer has made a fraudulent misrepresentation.

=c. The sale is voidable by the purchaser for mutual mistake.

dram shop acts

A regulation under which bartenders can be held liable for injuries caused by individuals who become intoxicated in their bars.

petit jury

A group of 6 to 12 citizens who are summoned to court and sworn in by the court to hear evidence presented by both sides and render a verdict in a trial.

primary boycotts

A boycott against an employer with whom the union is directly engaged in a labor dispute.

disparagement

A business tort that occurs when a statement is intentionally used to defame a business product or service.

trade libel

A business tort that occurs when false printed statements criticize a business product or service and result in a loss of sales.

slander of title

A business tort that occurs when false published statements are related to the ownership of the business property.

slander of quality

A business tort that occurs when false spoken statements criticize a business product or service and result in a loss of sales.

Intentional torts

A civil wrong resulting from an intentional act committed on the person, property, or economic interest of another. Intentional torts include assault, battery, conversion, false imprisonment, intentional infliction of emotional distress, trespass to land, and trespass to chattels.

strict-liability torts

A civil wrong that occurs when a defendant takes an action that is inherently dangerous and cannot ever be undertaken safely, no matter what precautions the defendant takes. The defendant is liable for the plaintiff's damages without any requirement that the plaintiff prove that the defendant was negligent.

battery

A civil wrong that occurs when one person intentionally and voluntarily brings about a nonconsented harmful or offensive contact with a person or something closely associated with him or her. Battery requires an actual contact.

assault

A civil wrong that occurs when one person intentionally and voluntarily places another in fear or apprehension of an immediate, offensive physical harm. Assault does not require actual contact.

negligent torts

A civil wrong that occurs when the defendant acts in a way that subjects other people to an unreasonable risk of harm (i.e., the defendant is careless, to someone else's detriment). Negligence claims are usually used to achieve compensation for accidents and injuries.

D. . an adhesion contract

A contract prepared on a standard form and offering terms on a take-it-or-leave-it basis is called: A. exculpatory. B. a usurious contract. C. an illegal restraint of trade. D. an adhesion contract.

A contract to commit a tort will be enforced by the courts.

bribery

A corrupt and illegal activity in which a person offers, gives, solicits, or receives money, services, or anything of value in order to gain an illicit advantage.

A covenant not to compete is a type of restraint of trade that courts today will enforce under certain circumstances.

burglary

A crime in which someone unlawfully enters a building with intent to commit a felony or theft.

misdemeanor

A crime that is less serious than a felony and is punishable by a fine and/or imprisonment for less than one year.

extortion

A criminal offense in which a person obtains money, property, and/or services from another by wrongfully threatening or inflicting harm to his or her person, property, or reputation. Also called blackmail.

affirmative defense

A defendant's response to a plaintiff's claim in which the defendant attacks the plaintiff's legal right to bring the action. Common affirmative defenses are expiration of the statute of limitations, mistake of fact, intoxication, insanity, duress, and entrapment.

pure comparative negligence

A defense accepted in some states whereby the defendant is not liable for the percentage of harm that he or she can prove can be attributed to the plaintiff's own negligence.

contributory negligence

A defense to negligence whereby the defendant can escape all liability by proving that the plaintiff failed to act in a way that would have protected him or her from an unreasonable risk of harm and that the plaintiff's negligent behavior contributed in some way to the plaintiff's accident.

assumption of the risk

A defense whereby the defendant must prove that the plaintiff voluntarily assumed the risk that the defendant caused.

negligence per se

A doctrine that allows a judge or jury to infer duty and breach of duty from the fact that a defendant violated a statute that was designed to prevent the type of harm that the plaintiff incurred.

res ipsa loquitur

A doctrine that allows a judge or jury to infer that, more likely than not, the defendant's negligence was the cause of the plaintiff's harm even though there is no direct evidence of the defendant's lack of due care.

last-clear-chance doctrine

A doctrine used by a plaintiff when the defendant establishes contributory negligence. If the plaintiff can establish that the defendant had the last opportunity to avoid the accident, the plaintiff may still recover, despite being contributorily negligent.

defamation

A false statement or an action that harms the reputation or character of an individual, business, product, group, government, or nation.

information

A finding by a magistrate that there is enough evidence to charge the defendant and bring her or him to trial.

indictment

A finding by the grand jury that there is evidence to charge the defendant and bring him or her to trial.

disparate impact

A form of discrimination that arises when an employer's policy or practice appears to apply to everyone equally but its actual effect is that it disproportionately limits employment opportunities for a protected class.

disparate treatment

A form of intentional discrimination in which an employee is hired, fired, denied a promotion, or the like, on the basis of membership in a protected class.

cyber terrorist

A hacker whose intention is the exploitation of a target computer or network to create a serious impact, such as the crippling of a communications network or the sabotage of a business or organization, which may have an impact on millions of citizens if the terrorist's attack is successful.

picketing

A labor activity in which individuals place themselves outside an employer's place of business for the purpose of informing passersby of the facts of a labor dispute.

false pretenses

A materially false representation of an existing fact, with knowledge of the falsity of the representation and with the intent to defraud.

reasonable person standard

A measurement of the way members of society expect an individual to act in a given situation.

petty offense

A minor crime that is punishable by a small fine and/or imprisonment for less than six months in a jail.

private nuisance

A nuisance that affects only a single individual or a very limited number of individuals.

tortfeasor

A person who commits an intentional or through-negligence tort that causes a harm or loss for which a civil remedy may be sought.

hacker

A person who illegally accesses, or enters, another person's or company's computer system to obtain information or steal money.

intrusion on an individual's affairs or seclusion

A physical, electronic, or mechanical intrusion that invades someone's solitude, seclusion, or personal affairs when he or she has the right to expect privacy. The tort occurs at the time of the intrusion; no publication is necessary.

nolo contendere

A plea in which the defendant does not admit guilt but agrees not to contest the charges.

public disclosure of private facts

A privacy tort that occurs when a person publishes a highly offensive private fact, such as information about one's sex life or failure to pay debts, about someone who did not waive his or her right to privacy.

false light

A privacy tort that occurs when highly offensive information is published about an individual that is not valid or places the person in a false light.

appropriation for commercial gain

A privacy tort that occurs when someone uses a person's name, likeness, voice, identity, or other identifying characteristics for commercial gain without that person's permission.

entrapment

A relatively common defense under which the defendant claims that he would not have committed the crime or broken the law if he had not been induced or tricked into doing so by law enforcement officials.

felony

A serious crime, such as murder, rape, or robbery, that is punishable by imprisonment for more than one year or death.

public figure privilege

A special right, immunity, or permission that allows people to make any statement about public figures, typically politicians and entertainers, without being held liable for defamation as long as false statements were not made with malice.

absolute privilege

A special right, immunity, permission, or benefit given to certain individuals that allows them to make any statements about someone without being held liable for defamation for any false statement made, regardless of intent or knowledge of the falsity of the claim.

conditional privilege

workers' compensation laws

A state law that provides for financial compensation to employees or their dependents when the covered employee is injured on the job.

good samaritan statutes

A statute that exempts from liability a person, such as a physician passerby, who voluntarily renders aid to an injured person but negligently, but not unreasonably negligently, causes injury while rendering the aid.

strike

A temporary, concerted withdrawal of labor.

bail

A thing of value, such as a money bail bond or any other form of property, that is given to the court to temporarily allow a person's release from jail and to ensure his or her appearance in court.

malicious prosecution

A tort in which one person wrongfully subjects another to criminal or civil litigation for the sole purpose of causing problems for that other person, often in retaliation for previous litigation between the two.

wrongful civil proceedings

A tort in which one person wrongfully subjects another to criminal or civil litigation that has no justifiable basis.

trespass to realty

A tort that occurs when someone goes on another's property without permission or places something on another's property without permission.

food disparagement

A tort that provides ranchers and farmers with a cause of action when someone spreads false information about the safety of a food product.

bench trial

A trial before a judge, with the judgment decided by the judge rather than a jury; occurs when the defendant has waived his or her right to a jury trial.

white-collar crime

A variety of nonviolent illegal acts against society that occur most frequently in the business context.

tort

A violation of another person's rights or a civil wrongdoing that does not arise out of a contract or statute; primary types are intentional, negligent, and strict-liability torts.

embezzlement

A wrongful conversion of another's funds or property by one who is lawfully in possession of those funds or that property.

C. regulatory license

A(n) ____ is a measure designed to protect the public from unqualified practitioners. A. exculpatory clause B. revenue license C. regulatory license D. usury statute

The definition of the doctrine of ethical relativism includes: a. that when any two individuals differ regarding the morality of an issue or action, they are both correct because morality is relative. b. the proposition that a good or moral act is one that results in "the greatest good for the greatest number." c. the notion that cost-benefit analysis is the most relative and therefore the fairest tool of analysis to use in making ethical decisions. d. that without any further evaluation, the ultimate judgment of the correctness of an action rests with a central authority.

A. that when any two individuals differ regarding the morality of an issue or action, they are both correct because morality is relative.

booking

After an individual is arrested, the procedure of recording the name of the defendant and the alleged crime in the investigating agency's or police department's records.

A. Al is in violation of the sales agreement

Al has a tax service and accounting business in Redwood City. He decides to move to Center City, which is 150 miles away and sells his accounting practice to Able and Baker, a CPA firm. In the sales contract, he agrees that he will refrain from practicing accounting anywhere within a 20-mile radius of Redwood City for a period of two years. However, on weekends he returns to his house in Redwood City, and when clients call him, he meets with them in his home. A. Al is in violation of the sales agreement. B. The agreement is invalid, because it is an illegal restraint of trade. C. The agreement is illegal, because it is a violation of public policy. D. The two-year provision is likely to be held invalid, because it is too long a period of time.

Although wagering is generally illegal, some states permit certain kinds of regulated gambling, especially wagering conducted by governmental agencies.

gross negligence

An act committed with extreme reckless disregard for the property or life of another person.

An adhesion contract is offered on a "take-it-or-leave-it" basis.

National Labor Relations Act (NLRA)

An administrative agency created by the Wagner Act to interpret and enforce the National Labor Relations Act (NLRA).

National Labor Relations Board (NLRB)

An administrative agency created by the Wagner Act to interpret and enforce the National Labor Relations Act (NLRA).

necessity

An affirmative defense in which the defendant tries to prove that he or she was acting to prevent imminent harm and that there was no legal alternative to the action the defendant took.

An agreement for sale of an illegal substance will be enforced by the courts if all other elements of the contract are present.

An agreement in connection with the sale of a business that prohibits the seller from engaging in the same or similar business for a period of twenty-five years would be unreasonable.

plea bargain

An agreement in which the prosecutor agrees to reduce charges, drop charges, or recommend a certain sentence if the defendant pleads guilty.

An agreement to refrain from a particular trade, profession, or business is enforceable if two requirements are met: that it protects a property interest of the promisee and that the restraint is no more extensive than is reasonably necessary to protect that interest.

implied covenant of good faith and fair dealing exceptions

An exception to the employment at-will doctrine that imposes a duty on the employer to treat employees fairly with respect to termination.

implied-contract exception

An exception to the employment at-will doctrine that imposes a duty on the employer to treat employees fairly with respect to termination.

public policy exception

An exception to the employment at-will doctrine that prohibits employers from firing employees for doing something that is consistent with furthering public policy.

An exculpatory clause attempts to excuse one from liability for her own tortious conduct.

An exculpatory clause excusing a party from liability for harm caused by reckless conduct will generally make a contract unenforceable as a violation of public policy.

secondary boycotts

An illegal labor action in which unionized employees who have a labor dispute with their employer boycott another company to force it to cease doing business with their employer.

unfortunate accident

An incident that simply could not be avoided, even with reasonable care.

strict-liability offense

An offense for which no mens rea is required.

signal picketing

An unprotected form of picketing in which services and/or deliveries to the employer are cut off.

A. The geographic restraint is reasonable.

Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere in River City for a period of five years. A. The geographic restraint is reasonable. B. This agreement is unreasonable. C. The agreement unduly interferes with the interest of the public. D. Both (b) and (c).

D. Both (b) and (c).

Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere within the state for a period of three years. A. The agreement is reasonable. B. The agreement is unreasonable. C. The agreement unduly interferes with the interests of the public. D. Both (b) and (c).

probable cause

Any essential element and/or standard by which a lawful officer may make a valid arrest, conduct a personal or property search, or obtain a warrant.

duress

Any unlawful act or threat exercised on a person whereby the person is forced to enter into an agreement or to perform some other act against his or her will.

At common law, a valid contract may be entered into on Sunday or on any other day.

Bargains are illegal if they involve a crime or tort but not if they are merely against public policy.

C. necessary to protect the employer's legitimate interest.

Before granting an injunction enjoining a former employee from competing in a described territory, the courts insist that the employer demonstrate that the restriction is: A. exculpatory B. conscionable C. necessary to protect the employer's legitimate interest. D. in compliance with the state's Blue Law.

Bill is currently enrolled in law school. He expects to graduate and take the bar exam in order to be able to practice law. Before Bill becomes a lawyer, he promises to represent his friend, Tom, in a breach of contract action if Tom will pay him 25% of the settlement. Bill negotiates and the case settles for $50,000. Tom refuses to pay Bill. Bill then graduates and attempts to sue Tom. Bill has a legal right to enforce the agreement.

What element of negligence is whether the defendant failed in performing the legal obligation owed to the plaintiff?

Breach of Duty of Care

Title VII

Civil Rights Act (CRA) of 1964—Title VII.

The law applies a subjective standard of intent in determining whether there was the requisite intent to enter into a contract.

What element of negligence is whether the defendant is the sole cause of the plaintiffs damages?

Causation in Fact

The most uncommon type of duress involves the use of economic and social coercion.

The requirement that a classification have a substantial relationship to an important governmental objective is known as the: a. rational relationship test. b. strict scrutiny test. c. intermediate test. d. Contract Clause.

C. intermediate test

C. This is an agreement in violation of public policy that will not be enforced by the courts.

Carl and Rob are both engaged in road construction work. They know that several jobs are going to be up for public bids, and agree between themselves that Carl will bid on one job and Rob will bid on the other, so that they both have work for the summer. When the bids are opened, Carl realizes that Rob has bid on both jobs. Rob is awarded both contracts. Carl now wants to sue Rob for breach of contract. A. Carl would probably win on the basis of promissory estoppel since he has detrimentally relied upon Rob's representation that he would not bid. B. Since Carl is less at fault than Rob, the court will likely award Carl damages. C. This is an agreement in violation of public policy that will not be enforced by the courts. D. This is an agreement obstructing the administration of justice that will not be enforced by the courts.

C. An unenforceable restraint of trade contrary to public policy

Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia agrees never to open a hair salon in the state. Which of the following best describes this contract clause? A. Void as an illegal primary restraint B. Valid as a reasonable restraint on trade C. An unenforceable restraint of trade contrary to public policy D. Binding as fair protection

punitive damages

Compensation awarded to a plaintiff that goes beyond reimbursement for actual losses and is imposed to punish the defendant and deter such conduct in the future. Also called exemplary damages.

Courts require that for a contract to unenforceable based on unconscionability, both substantive and procedural unconscionability must be equally present.

computer crime

Crime that is committed using a computer. concealment The active hiding of the truth about a material fact.

A. procedural unconscionability.

Custom Sales and Rentals uses a four-page contract with important contract terms buried in the fine print. This is an example of: A. procedural unconscionability. B. a reasonable, legal business practice. C. a "Blue law." D. substantive unconscionability.

The study of business ethics has several central authorities.

The test for duress is objective and the act must be classified as a tort or a crime in order to be wrongful.

The trustee of a trust does not owe a fiduciary duty to the beneficiary of that trust.

Deanna, an attorney, has a personal injury case which is set for trial next week. She needs a good doctor to testify on behalf of her client, so she contacts Dr. Dogood who agrees to testify on behalf of Deanna's client at the trial. In return for Dr. Dogood's testimony, Deanna agrees to pay Dr. Dogood $10,000 if they win the case, and $5,000 if they lose. Dr. Dogood agrees. The agreement between Deanna and Dr. Dogood is unenforceable.

D. likely to collect from DP because it is a common carrier.

Divided Parcel (DP) includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through the fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to its manufacturer to be repaired anyway. The watch is destroyed when the DP driver uses the package for a ball and tosses it to his buddy. Mary is: A. out of luck because the clause was communicated to her. B. out of luck because she should have insured the package. C. likely to collect from DP since exculpatory clauses always violate public policy. D. likely to collect from DP because it is a common carrier.

B. Yes, it is likely to be enforceable during employment.

Don has an employment contract with Dunkirk Ice Cream. He sells ice cream and novelty ice cream products. He has nine children and doesn't make enough money, so he decides to see if another dairy will hire him, too. "After all," he reasons, "most stores carry four or five different brands." His employment contract prohibits him from competing. If Don sells for another dairy in addition to Dunkirk, will he be in trouble under his contract? A. No, it is unenforceable as against public policy. B. Yes, it is likely to be enforceable during employment. C. No, the prohibition against competing is enforceable only after he quits Dunkirk. D. A court would have to rule on the enforceability of the covenant not to compete since courts are reluctant to enforce such covenants during a period of employment.

What state law applies to bartenders and tavern owners who serve alcohol to a person who becomes intoxicated?

Dram Shop Act

What element of negligence is whether the defendant owes the plaintiff a legal obligation to perform?

Duty of Care

The two major forms of utilitarianism are situational and a priori.

There are no important criticisms of utilitarianism.

If Thomas seemingly offers to sell to Raquel his Toro lawnmower but he intends to offer and believes he is offering her his Murray mower, and she accepts the offer, reasonably believing it was for the Toro, no contract has been formed because there is no mutual assent.

If a contract is not clearly unilateral or bilateral, the courts presume that the parties intended a unilateral contract.

Edward, an engineer, is working on a new design for some highly technical equipment which XYZ, Inc. hopes to market within the next five years. The employment agreement between Edward and XYZ states that Edward will not go to work for another company in the same business for a period of two years after termination of his employment with XYZ, Inc. This agreement is void and unenforceable, because it would make it difficult for Edward to find other employment.

What is Guest Statute?

Either a compensated or non compensated person depending on your status.

"I promise to pay you $100 if you will promise to fix my car next month." This is an offer for a unilateral contract.

If an offer states that a reply must be received by a certain date, the contract is formed at the time the offeree sends or dispatches the acceptance.

Al owns a farm that he believes is worth $150,000. Betty knows that there is oil under the farm and offers Al $160,000 for it. Al accepts and sells the farm to Betty. Al later realizes that the land was worth more than $160,000. Al can have the contract avoided based upon fraud.

All written contracts are considered to be formal contracts.

Although corporations are not persons but artificial entities created by the state, it is clear that they can and should be held morally accountable.

An advertisement is usually an offer to sell.

An agreement to sell the entire production of a particular plant to a particular purchaser is a requirements contract.

An arm's-length transaction is one in which the parties owe each other special duties.

An auctioneer is free to withdraw the goods from sale if the sale is advertised or announced in explicit terms to be without reserve.

An auctioneer is the offeror and each bid is a counteroffer until a final bid is accepted.

An ethical relativist looks to a central authority, such as the Bible, to guide her in ethical decision making.

An exclusive dealing contract is one type of contract which is illusory because it lacks consideration.

An implied contract is not an enforceable contract.

An offer is an indefinite proposal made by one person to another.

An offer is effective as soon as it is dispatched.

An offer must be in one particular form to have legal effect.

Ann makes a material misrepresentation of fact to Brian, and based upon the misrepresentation, Brian enters into a contract. Ann now thinks that the contract is not fair to her. This contract is voidable at Ann's option.

Arthur says to Bob, "If you will mow my lawn, I will give you ten dollars." Bob says nothing, but he mows the lawn. No contract exists under this fact situation, because Bob did not accept Arthur's offer.

Because there are no universal, clear-cut standards to apply to ethical analysis, it is impossible to make meaningful ethical judgments.

Classifications based on age and sex are examples of "suspect classifications" in the context of the Equal Protection Clause of the Constitution.

Common law relating to the formation of contracts has little relevance in the business world today.

Consideration has only one basic element, which is a bargained-for exchange.

Contracts generally require adequacy of consideration where the consideration given by both parties is of fair value and equitable.

Corporations are generally held to a higher standard of accountability than are public bodies.

D owes C a past-due undisputed debt of $500. D sees C in a bar and pays him $400. C then says to D, "Forget about the other $100 you owe me. I'm glad to get the $400." C's promise to discharge the remainder of the debt is binding.

Dana gives care to Marnie's dog when Dana finds Marnie's dog ill on the side of the road. After Marnie locates her dog, Marnie promises to reimburse Dana for the cost of treating the dog. Marnie's promise is binding, because there is a bargained-for-exchange.

Defamation is a form of speech wholly outside the protection of the First Amendment.

Deontological theories assess good and evil in terms of the consequences of actions rather than by the motives that lead to them.

During the twentieth century it became harder to enter into a contract as well as to get out of one.

Eminent domain is not one of the recognized inherent powers of government.

For a misrepresentation to be actionable as fraud in the inducement, it must be a misrepresentation of opinion.

For a misrepresentation to be fraud in the inducement, it need not be material.

Fraud in the inducement will render an agreement void.

Generally, the legislative branch of government has the power to enforce the law.

Generally, whether or not the parties deal at arm's length does not affect whether silence alone amounts to fraud.

George offered to paint Catherine's barn for $4,000. Catherine said she would accept the offer if George would paint the woodshed, too. At this point, they have made a valid and enforceable contract.

Harvard philosopher John Rawls stressed liberty as the most important obligation owed by a society to its members.

Historically, courts held that representations of law were statements of fact, but the present trend is to recognize that they have only the effect of statements of opinion.

Hugh recently purchased a motorcycle for $4,000 but has had extensive problems starting the motor. In disgust at not being able to start the motorcycle, Hugh shouts to his friends, "Any of you want to buy this thing for $20?" A contract will be formed if a friend gives Hugh a twenty-dollar bill.

If Bill tells Sara that he will give her two days to decide if she wants to buy his car, he cannot sell it to anyone else during that time.

If no time limit is stated, an offer will not terminate until both parties agree.

If the act or threat would affect a person of average strength and intelligence, then and only then will the act constitute duress.

In a sex discrimination case under the equal protection clause, the courts apply the strict scrutiny standard of review.

There is no necessity to distinguish language which constitutes an offer from that which merely solicits or invites offers.

The difference between fraud and misrepresentation is that fraud involves malice while nonfraudulent misrepresentation is always innocent.

In an output contract, the seller can operate a factory on a 24-hour-a-day schedule and insist that the buyer take all of the output when that buyer had operated only eight hours a day at the time the contract was made and the buyer had knowledge of the eight-hour-a-day operating schedule.

In most states, a contract under seal is binding without consideration.

In order for an offer to end by lapse of time, the offeror must specify the time within which the offer is to be accepted.

In settling a liquidated debt, payment of a smaller amount before the due date would constitute consideration, but paying a lesser amount on the due date at an agreed-upon different place of payment would not be legally sufficient consideration.

Jeremy Bentham was not a proponent of utilitarianism.

Jerry received a bill for $300 from Johnson for a tune-up Johnson had performed on Jerry's car. Jerry called Johnson and told him, "The car runs no better now than before the tune-up. I am sending you $100 and no more." Johnson received the $100 check which was marked "paid in full" and cashed it. Jerry is still liable to Johnson for $200.

Judicial review is another phrase for an appeal of a lower court's judgment.

Kant's approach, like that of ethical fundamentalists, asserts that universal laws stem from the direct pronouncements of God.

Legal detriment means the obtaining by the promisor of that which he had no prior legal right to obtain.

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

Maria posted several signs in the neighborhood offering $50 for the return of her lost cat. Dave calls to get a description of the cat and tells Maria, "I'll look for your cat." A contract is formed by Dave's call to Maria.

Marjorie has been cared for by her family physician for 35 years. She decides to assume the mortgage on his new clinic. The contract is automatically invalid because of undue influence.

Matt sells bikes at a local discount store. To encourage Bob to buy a more expensive model than he originally contemplated, Matt tells Bob, "This is the most awesome bike money can buy at this price. You can expect lots of riding pleasure." Based on this statement Bob buys the bike. A week later, before his bike is fully paid for, Bob sees a far superior bike for a lower price at another store. Bob can avoid his contract with Matt because of fraudulent misrepresentation.

Mistake by failure to read a document is grounds to void a contract.

Most philosophers now agree that people can discover fundamental ethical rules by applying careful a priori reasoning.

Past actions unbargained for by the parties in an agreement can become valid consideration for a contract.

Pat told her friends that her car got 35 miles to the gallon in the city when in reality it only got 20 miles per gallon. When Pat decides to sell and one these friends decides to buy the car, Pat is under no duty to tell the correct figure unless asked.

Quasi contract is another name for a contract that is implied in fact.

Ricardo posts a sign in the neighborhood offering $50 for the return of his Saint Bernard. Alicia, who knows nothing of the reward, finds the dog and returns it to Ricardo. Alicia is entitled to the reward.

Ron offers to sell Pete his stamp collection. Pete gives Ron $10 to induce him to keep his offer open for a week. If Ron decides on day four of the week that he really does not want to sell to Pete, he can revoke his offer without fear of a breach of contract lawsuit being filed against him.

Sandy's private secretary promises to keep the contents of a letter she typed secret if Sandy will give her the next day off with pay. If the secretary takes the day off, Sandy has to pay her for the day.

Situational ethics is essentially the same as ethical relativism.

Substantive due process addresses the fairness of the process by which a legal rule is applied.

The Abbot Corporation contracts with the Baker Corporation to sell to Baker its entire production. After signing the agreement, Abbot can increase its production from one shift to two shifts and Baker will have to buy all of the doubled production.

The Bill of Rights applies directly to the states

The Bill of Rights was included in the original U.S. Constitution.

The Bill of Rights was part of the original Constitution which was adopted on September 17, 1787.

The Constitution gives the federal and state governments concurrent powers over patents and copyrights.

The Contract Clause of the Constitution allows states to retroactively modify public charters and private contracts.

The First Amendment allows free speech in any and all circumstances.

The Supreme Court has defined the scope of the Commerce Clause narrowly and, therefore, has restricted the powers of the federal government to regulate business.

The Supreme Court, in Jackson v Metropolitan Edison Co., held that a privately owned electric utility was subject to the Due Process Clause because operating the utility was "state action" since the State had granted the utility a monopoly.

The UCC and the Restatement make no provision for supplying terms omitted by the parties' contract.

The common law "mirror image" rule applies to an offer and the acceptance of that offer in a contract for the sale of goods.

The federal government has no restrictions under the Constitution on its power to impair contracts since the Contract Clause restricts only actions of the states

The federal government's power to tax has no limitations.

Under the Commerce Clause, any state statute that affects interstate commerce is unconstitutional

Under the UCC, an acceptance must always be identical to an offer for a valid contract to be formed.

What is unjust to a social egalitarian will also be unjust to a libertarian.

Silence can never be an acceptance.

Taft-Hartley Act

Federal legislation designed to curtail some of the powers that unions had acquired under the Wagner Act; designates certain union actions as unfair. Also called Labor-Management Relations Act.

Omnibus Crime Control and Safe Streets Act of 1968

Federal statute that prohibits employers from listening to the private telephone conversations of employees or disclosing the contents of these conversations. Employers may ban personal calls and monitor calls for compliance as long as they discontinue listening to any conversation once they determine it is personal.

What is a famous case law showing proximate cause as a prime example?

Palsgraf vs. Long Island Railroad

informational picketing

Picketing designed to truthfully inform the public of a labor dispute between an employer and the employees.

D. The court may view the contract as in (a) or (b).

Patrick agrees to sell two different goods to his friend Ron, a retailer. One item is legal, and one item is illegal. The contract price is $2,000. A. Patrick may not recover payment for either of the goods if delivered. B. Patrick may recover for the legal item, but he may not recover for the illegal item. C. This is an unconscionable contract under the UCC. D. The court may view the contract as in (a) or (b).

nominal damages

Monetary damages awarded to a plaintiff in a very small amount, typically $1 to $5, to signify that the plaintiff has been wronged by the defendant even though the plaintiff suffered no compensable harm.

What is a job/position under Duty of Care?

Job=Duty or task within the organization Position=Status or rank within the organization

C. substantive unconscionability.

John operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of: A. in para delicto. B. partial illegality. C. substantive unconscionability. D. procedural unconscionability.

actus reus

Latin for "guilty act"; a wrongful behavior that is associated with the physical act of a declared crime.

mens rea

Latin for "guilty mind"; the mental state accompanying a wrongful behavior.

What are things used for the reasonable person test?

Laws, Policies, Regulations, Guidelines, Manuals and Instructions

Plaintiffs have a duty to mitigate damages. What does mitigate mean?

Lessen the damage or avoid things to get worse

strict liability

Liability in which responsibility for damages is imposed regardless of the existence of negligence. Also called liability without fault.

Many states impose no limit on the rate of interest which may be charged on loans to corporations.

Maximum rates of interest that are permitted under usury statutes are uniform from state to state.

conversion

Permanent interference with another's use and enjoyment of his or her personal property.

compensatory damages

Money awarded to a plaintiff as reimbursement for her or his losses; based on the amount of actual damage or harm to property, lost wages or profits, pain and suffering, medical expenses, disability, etc.

What are the four elements of damages?

Physical, Mental, Property and Economic.

A state law creates a duty of care upon person (natural or legal). A person violates the state law and damages another person. The state has criminal liability. What special negligence doctorine is this?

Negligence per se

Speed limit is 60 someone is doing 70 and they hit somebody. It is a crime to speed so there is criminal attachment. This is an example of what state law?

Negligence per se

C. Legally, Nell can neither get the money back nor force Al to do as he promised.

Nell gives Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true? A. Nell can get the money back from Al through litigation. B. Nell can get the money back and force Al to do as he promised. C. Legally, Nell can neither get the money back nor force Al to do as he promised. D. Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50.

B. are subject to larger geographic restrictions than for other types of companies

Non-compete agreements drafted for employees of Internet companies: A. are interpreted no differently in terms of standards of reasonableness than are agreements for other types of companies. B. are subject to larger geographic restrictions than for other types of companies. C. are subject to longer periods of reasonable duration. D. are irrelevant.

Noncompete agreements for Internet-related jobs have the same limitations in determining what is reasonable as to time and place restrictions as other types of jobs.

D. All of the above

Numerous states impose no limit on the rate of interest that may be charged on: A. loans to corporations. B. credit card transactions. C. loans made by certain designated types of lenders. D. All of the above.

One type of restraint of trade is a covenant not to compete.

What element cuts off the liability of the defendant?

Proximate Cause

What element of negligence is whether the damage to the plaintiff was foreseeable, should the damage have been reasonably expected?

Proximate Cause

C. Scott will be unable to recover, because this is an illegal contract.

R&R, Inc. entered into a contract with Scott, an agent, under the terms of which Scott would receive $20,000 if he stole trade secrets from the leading competitor of R&R. Scott performed his end of the agreement by delivering the trade secrets. R&R now refuses to pay Scott for his services. A. Scott may recover based upon the express contract of the parties. B. Scott may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of R&R. C. Scott will be unable to recover, because this is an illegal contract. D. Scott will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by R&R.

Regulation of gambling is solely under federal jurisdiction, through Congressional legislation and U.S. court enforcement.

B. This agreement is unenforceable and opposed to public policy.

Sarah is working hard on the mayoral campaign of Timothy. She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 to register and vote. Violet does so, but Timothy loses the election, and Sarah now refuses to pay. A. This agreement is enforceable. B. This agreement is unenforceable and opposed to public policy. C. This is an agreement to obstruct the administration of justice. D. This is an unconscionable contract covered by the UCC.

"Actual malice" in defamation cases against the press requires a showing that a reporter intentionally lied or recklessly disregarded the truth.

"Consideration" does not require an actual benefit to both sides of an agreement.

A basic element of fraud is a false representation or a misrepresentation.

Specific lender usury statutes rather than the general usury statute generally apply to real estate mortgages and small consumer loans

Stuart promises to act as a guide on a fishing trip for a group of visiting dignitaries. The dignitaries agree to pay him $200 for his services. Stu guides them, but when they discover that Stu does not have a fishing license, they refuse to pay him. The agreement between Stu and the dignitaries is an illegal one, which is not enforceable.

A conditional promise is a promise the performance of which depends upon the happening or nonhappening of an event not certain to occur.

forgery

The fraudulent making or altering of a writing in a way that changes the legal rights and liabilities of another and with the intent to deceive or defraud.

The Code and the Restatement both contain definitions of what constitutes "unconscionable" conduct.

Under the Dram Shop Act the bartenders and tavern owners are liable for?

The Intoxicate person, other persons and property.

D. All of the above

The UCC provides that if a court as a matter of law finds a contract for the sale of goods or a clause of such a contract to have been unconscionable at the time it was made, the court may: A. refuse to enforce the contract. B. enforce the part of the contract that is not unconscionable. C. limit the application of any unconscionable clause in order to avoid an unconscionable result. D. All of the above.

unfair competition

The act of competing with another not to make a profit but for the sole purpose of driving that other out of business.

arrest

The action in which the police, or a person acting under the law, seize, hold, or take an individual into custody.

The courts readily enforce a covenant not to compete during the period of employment.

The courts will enforce an agreement declared illegal by statute.

arson

The crime of intentionally setting fire to another's property.

What is contributory negligence?

The defendant proves the plaintiff was negligent

actual cause

The determination that the defendant's breach of duty resulted directly in the plaintiff's injury.

employment-at-will doctrine

The doctrine which provides that either the employer or the employee can terminate the employment relationship at any time

proximate cause

The extent to which, as a matter of policy, a defendant may be held liable for the consequences of his or her actions. In the majority of states, proximate cause requires that the plaintiff and the type of injury suffered by the plaintiff were foreseeable at the time of the accident. In the minority of states, proximate cause exists if the defendant's actions led to the plaintiff's harm.

arraignment

The first appearance in court by the defendant, at which the defendant is advised of the pending charges, the right to counsel, and the right to trial by jury and he or she enters a plea to the charge.

Wagner Act

The first major piece of federal legislation adopted explicitly to encourage the formation of labor unions and provide for collective bargaining between employers and unions as a means of obtaining the peaceful settlement of labor disputes

first appearance

The initial appearance of an arrested individual before a judge, who determines whether there was probable cause for the arrest. If the judge ascertains that probable cause did not exist, the individual is freed.

vicarious liability

The liability or responsibility imposed on a person, a party, or an organization for damages caused by another; most commonly used in relation to employment, with the employer held vicariously liable for the damages caused by its employees.

abuse of process

The malicious and deliberate misuse or perversion of a legal procedure.

When you hire an accountant to do your taxes, they showed you their license. After accountant finished taxes, the person finds out the license was false. What is the defense?

The plaintiff had the assumption of risk because they should have done prior research of accountant before hiring.

What is assumption of risk?

The plaintiff knew or should have known of the risk and the plaintiff voluntarily engaged, used or entered the risk.

collective bargaining

The process whereby workers organize collectively and bargain with employers regarding the conditions of employment.

Miranda rights

The rights that are read to an arrested individual by a law enforcement agent before the individual is questioned about the commission of the crime.

unemployment compensation

The state system, created by the Federal Unemployment Tax Act, that provides unemployment compensation to qualified employees who lose their jobs.

trespass to personalty

The temporary interference with a person's use or enjoyment of his or her personal property.

The term "public policy" is precisely and narrowly defined in the Restatement and by state statutes.

intentional infliction of emotional distress

The tort that occurs when someone intentionally engages in outrageous conduct that is likely to cause extreme emotional distress to another person.

intentional interference with contract

The tort that occurs when someone intentionally takes an action that will cause a person to breach a contract that he or she has with another.

false imprisonment

The unlawful restraint of another against the person's will.

robbery

The unlawful taking or attempted taking of personal property by force or threat of force and/or by putting the victim in fear.

larceny

The unlawful taking, attempting to take, carrying, leading, or riding away of another person's property with intent to permanently deprive the rightful owner of the property.

justifiable use of force

The use of force that is necessary to prevent imminent death or great bodily harm to oneself or another or to prevent the imminent commission of a forcible felony.

The usual means of enforcing an agreement prohibiting an employee from competing in a described territory for a stated period of time is by injunction.

burden of proof

To convict a defendant, prove to the jury or court, beyond any reasonable doubt, that the defendant committed all the essential elements of the crime.

B. if no trade secrets are involved, and she has no dominion over customers, a court would rule the restrictions to be invalid.

Theresa is a travel agent at the Fly Away Travel Agency. She has signed an agreement with her employer which prohibits her from working in any similar business in any town within a 100-mile radius of where she works. If she wants to quit her job and go to work for another travel agency, it is likely that: A. a court would uphold these restrictions. B. if no trade secrets are involved, and she has no dominion over customers, a court would rule the restrictions to be invalid. C. if the period of time of the agreement is under five years, it will be upheld by the court. D. Both (a) and (c).

What is considered the law of compensation?

Torts Law

Ethics can be broadly defined as the study of what is good or right for human beings.

True

T or F What was reasonable in the past may not be reasonable today

True

A. Under certain circumstances in which the aggrieved party was unaware of the illegality

Under which of the following circumstances would a court be likely to enforce an illegal contract? A. Under certain circumstances in which the aggrieved party was unaware of the illegality B. Where, although the contract is unconscionable, there is only procedural unconscionability C. Where the agreement is with an unlicensed attorney D. A court will never enforce an illegal contract.

sexual harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that makes submission a condition of employment or a factor in employment decisions or that creates an intimidating, hostile, or offensive work environment. The two types are hostile environment and quid pro quo.

Where a stipulation in restraint of trade is a part of the contract for the sale of a business, it may be valid if the restraint is within reasonable limitations to protect the business's goodwill.

What is the Reasonable Person Test

Whether the defendant acted as a reasonable person in performing the duty of care.

Under Duty of Care what is the job/position relationship?

Whether the defendants job/position in relation to the plaintiff creates a legal obligation

D. All of the above

Which of the following is correct with regard to an enforceable restraint of trade? A. The restraint should be no more extensive than is required to protect a specified property interest. B. Restraints typically arise in connection with the sale of a business. C. A typical restraint is a covenant not to compete. D. All of the above.

D. All of the above are true.

Which of the following is true with regard to an exculpatory clause? A. An exculpatory clause excuses one party from liability for her own tortious conduct. B. Where one party has a superior bargaining position that has enabled him to impose an exculpatory clause upon the other, the courts are inclined to nullify the provision. C. An exculpatory clause may be unenforceable for unconscionability. D. All of the above are true.

C. An agreement to pay someone to make false, negative statements about a competitor's product

Which of the following would always be considered to be contrary to public policy? A. A contract which contains a covenant not to compete B. A contract offered on a take-it-or-leave-it basis C. An agreement to pay someone to make false, negative statements about a competitor's product D. An agreement which contains an exculpatory clause

D. An agreement by a car salesman not to sell automobiles or automobile parts in Marin County for a period of one year after terminating his employment

Which of the following would be considered a valid and legally enforceable agreement? A. An agreement to pay a legislator to vote for a particular bill B. An agreement under which Arthur agrees to pay Barbara $3,000 to disparage the product of Arthur's competitor C. An agreement by the seller of a service station not to enter the service station business in Ohio for a period of 30 years after the sale of his business D. An agreement by a car salesman not to sell automobiles or automobile parts in Marin County for a period of one year after terminating his employment

B. A statute requiring that salespeople be licensed, but not establishing any educational or training requirements

Which of the following would generally be considered to be a revenue-raising licensing law? A. A statute requiring that doctors be licensed B. A statute requiring that salespeople be licensed, but not establishing any educational or training requirements C. A statute requiring public school teachers to be licensed D. A statute that requires insurance agents to pass a test before selling insurance in a state

E. Either (a) or (d).

William recently sold his successful business to Janice. The contract for the sale contained an unreasonable restriction that did not allow William to open a similar business for fifteen years. The courts would, in this instance, A. reform the contract to make it reasonable and enforceable. B. require the parties to draft a new contract. C. enforce the contract as it is written. D. refuse to enforce the unreasonable restriction. E. Either (a) or (d).

tort

a civil wrong that interferes with ones property or person

fraudulent misrepresentation

a false representation made by one party, through misstatement of facts or through conduct with the intention of deceiving another on which the other reasonably relies to his detriment

contributory negligence

a plaintiff who was also negligent (failed to exercise a reasonable degree of care) could not recover anything from defendant

Chad has offered to take Miles into his accounting firm as a partner upon payment of $5,000 cash. In response, Miles says, "I'll give you $3,000 cash now and I will pay you the remainder in two months after I see whether things are working out as a partnership." a. Miles has made a counteroffer; hence there is no contract. b. Miles has rejected the terms of the original offer, but there is still a contract. c. Chad is a merchant making a firm offer under Article 2 of the UCC. Hence there is a contract. d. Any indefinite provisions in the contract between Chad and Miles will be supplied by Article 2 of the UCC.

a. Miles has made a counteroffer; hence there is no contract.

Sales of personal property are governed by Article ____ of the Uniform Commercial Code (UCC). a. 2 b. 3 c. 6 d. None of the above.

a. 2

Which of the following is enforceable without consideration? a. A new promise to pay a debt barred by the statute of limitations. b. An illusory promise. c. Under the common law, a promise made to satisfy a preexisting moral obligation. d. A promise by a father to pay someone for rendering emergency services to his injured son before the father had arrived at the accident scene.

a. A new promise to pay a debt barred by the statute of limitations.

Which of the following are the two basic elements to consideration? a. Bargained-for exchange and legal sufficiency b. Legal detriment and legal benefit c. Legal sufficiency and legal adequacy d. Promise and forbearance

a. Bargained-for exchange and legal sufficiency

Carlos ordered an aluminum storm door for $249.99. Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door at $179.99. Carlos calls the store and demands the advertised price. They say okay. a. Carlos must pay $179.99. b. Carlos must pay $249.99. c. There is no contract. d. There is a contract for the reasonable value of the door.

a. Carlos must pay $179.99.

Arguments favoring social responsibility of business entities include all but which of the following? a. Corporations are subject to a higher standard of accountability than are public bodies. b. Limited liability granted to corporations carries a responsibility to contribute to society's betterment. c. Corporate involvement in social causes makes good business sense. d. The more responsibly companies act, the less regulation the government must provide. In what way or ways are situational ethics and ethical relativism similar?

a. Corporations are subject to a higher standard of accountability than are public bodies

Leonard offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer." a. Diane cannot accept the offer, because it wasn't made to her. b. This is a valid acceptance. c. The offer has not been communicated to the offeree. d. This is an invitation seeking offers and not an offer.

a. Diane cannot accept the offer, because it wasn't made to her.

Rob repairs a door for Howard. In return, Howard is supposed to pay Rob $75 on November 1 at Howard's house. Which of the following would constitute legally sufficient consideration? a. Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment to Rob's house. b. Rob comes to Howard's house to collect the $75 on November 1, but Howard only has $50. Rob tells Howard to forget the other $25. c. Since this is an unliquidated debt, the only legally sufficient consideration is Howard's payment of $75 to Rob on November 1 at Howard's house. d. Since this is a liquidated debt, the only legally sufficient consideration is Howard's payment of $75 to Rob on November 1 at Howard's house.

a. Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment to Rob's house.

Stan purchased 400 pairs of gloves from Isaac at a contract price of $800. Fifty of the gloves were defective, and a dispute arose as to the amount due and owing under the contract. Stan refuses to pay the $800, and Isaac is threatening to sue. Which of the following is correct with regard to this transaction? a. If Isaac agrees to accept $600 to settle the dispute and Stan agrees to pay that amount, the substitute agreement is enforceable. b. If Isaac agrees to accept $600 to settle the dispute and Stan pays that amount, Isaac can still sue for the balance of $200 and will win the lawsuit. c. Stan is under a pre-existing legal obligation to pay the $800. d. Both (b) and (c).

a. If Isaac agrees to accept $600 to settle the dispute and Stan agrees to pay that amount, the substitute agreement is enforceable.

Jill contracts to purchase Kevin's automobile under the belief that she can sell it at a profit to Linda, but after Jill has bought the car, she finds out that Linda isn't interested in buying it. a. Jill cannot void the contract. b. Jill can rescind the agreement. c. Jill could rescind the agreement if she was mistaken in her estimate of the value of the auto. d. Jill can sue Linda for detrimental reliance.

a. Jill cannot void the contract.

How does Immanuel Kant's approach to ethical decision-making differ from that of an ethical fundamentalist? a. Kant's approach is premised on man's rationality and not on principles handed down from above. b. Kant's approach stresses liberty and not justice. c. Kant's approach judges society in moral terms by how it distributes goods and services. d. Kant's approach assesses each separate act according to whether it maximizes pleasure over pain.

a. Kant's approach is premised on man's rationality and not on principles handed down from above.

When the strict scrutiny test is used, a court is free to substitute its thinking for that of the legislature in deciding if a law violates equal protection. Which of the following would NOT be subject to strict scrutiny? a. Legislative appropriations giving more money to single, poor women with dependent children, than to single, poor men with dependent children. b. Requiring black students to attend one high school and white students to attend another. c. Restricting the right to vote to those who were born within the state. d. Giving free lunches only to school children of Mexican descent.

a. Legislative appropriations giving more money to single, poor women with dependent children, than to single, poor men with dependent children.

Maxine offered to sell her video camera to Tom for $200 and also stated to Tom, "I will give you two weeks to accept my offer." One week later Tom learned that Maxine had sold the video camera to Cindy. a. Maxine has revoked her offer to Tom. b. Maxine's offer is a firm offer and she must sell Tom a video camera for $200. c. Maxine must get the camera back from Cindy if Tom accepts within two weeks. d. Both (b) and (c) are appropriate alternatives in this case.

a. Maxine has revoked her offer to Tom.

In the case of ____, Chief Justice Marshall stated, "This great principle is, that the Constitution and the laws made in pursuance thereof are supreme; that they control the Constitution and laws of the respective states, and cannot be controlled by them." a. McCulloch v. Maryland b. Marbury v. Madison c. Shelley v. Kraemer d. Marsh v. Alabama

a. McCulloch v. Maryland

Which of the following would NOT be included in the powers of the federal government? a. Power to tax a product produced and consumed exclusively in Alaska. b. Power to grant government contracts to minority corporations. c. Power to condemn a building to make way for an interstate highway. d. Power to tax only incomes above $6,000.

a. Power to tax a product produced and consumed exclusively in Alaska.

The Rogers family has always wanted to buy the beautiful house at the top of the hill. The owners of the house, the Thompsons, decided to sell and called Mr. Rogers. Before he could get back in touch with Mr. Thompson, Mr. Rogers suffered a heart attack and died. Mr. Rogers' adult daughter, to whom the Thompsons had not spoken, still wants the house. a. She may not accept since the offer is terminated. b. She may not accept because she does not have the capacity. c. She may accept since the contract offer is assignable. d. She may accept since the offer cannot be revoked without notice.

a. She may not accept since the offer is terminated.

How does the Due Process Clause of the Fourteenth Amendment differ from the Due Process Clause of the Fifth Amendment? a. The Fourteenth Amendment clause protects individuals from violations of their rights by state governments. b. The Fourteenth Amendment clause guarantees both substantive and procedural due process but the Fifth Amendment clause does not. c. The Fourteenth Amendment clause protects individuals against violation of their rights by private individuals as well as the government. d. The Fourteenth Amendment clause requires the application of strict scrutiny in all cases.

a. The Fourteenth Amendment clause protects individuals from violations of their rights by state governments.

Elvis makes an offer to Miguel, but before Miguel can accept, the state supreme court decides a case that makes the offer illegal. What is the effect of the court decision on the offer? a. The court decision automatically terminates the offer. b. The court decision has no effect on the offer. c. The court decision acts as a condition on the offer. d. The court decision acts as a rejection of the offer by the offeree.

a. The court decision automatically terminates the offer.

Destruction of the subject matter has what effect on the offer? a. The offer is terminated. b. The offer is delayed until additional subject matter can be located. c. This creates an impossibility of fact that does not terminate the offer. d. The offer is merely delayed under the "Hardship Rule."

a. The offer is terminated.

For an offer to be valid, which of the following elements must be present? a. The offeree must have knowledge of the offer. b. The offeree must have first-hand knowledge of the offer. c. The offer must be communicated by the offeror. d. The offer must be communicated by words.

a. The offeree must have knowledge of the offer.

William agrees to drill a well up to 200 feet deep for John's rural cabin. The contract price is $3,000. After drilling 100 feet, William strikes solid granite rock. He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract. He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price. Because John is anxious to have the well, he agrees to pay William an additional $1,000 to complete the job. However, once the well is finished, he changes his mind and now says he will pay only the originally agreed-upon amount. a. The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000. b. Under the UCC, the substitute contract is binding, because there is the payment of additional money. c. William is in breach of contract. John need not pay any additional money. d. William is under a pre-existing moral duty to perform at the originally agreed-upon price.

a. The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000.

Jack has been in the business of selling carpeting for 20 years. He calls Bob, who is opening another branch of his furniture stores, and offers to sell him 100 yards of carpet at $20 per yard. Bob agrees and sends back the following letter confirming the deal: Dear Jack: As we discussed on the phone January 3, we accept your offer of 100 yards of Saxony "heather blue" carpeting at the price of $20 per yard. We also reserve the right to purchase any additional yardage we need to carpet our other showroom facilities at the same rate for one year from that date. Very truly yours, Bob Which of the following is true? a. There is a contract for only 100 yards of carpeting. b. There is a contract for 100 yards plus the additional yardage. c. There is no contract since Bob made a counteroffer. d. There is no contract because the additional term is too uncertain to become a contract term.

a. There is a contract for only 100 yards of carpeting.

Assume an offeree mails a rejection to the offeror on November 1. This rejection arrives at the offeror's place of business on November 5. In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November 6. Which of the following statements correctly describes the situation? a. There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one. b. There was a contract since the acceptance was mailed prior to the time the rejection was received. c. There was no contract because the rejection was mailed first. d. There was no contract because the acceptance was mailed more than three days subsequent to the rejection.

a. There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one

Stewart entered into a contract with Will to have Will build a 10-unit apartment complex on Elm Street in Randolph County. Unknown to both parties, this land had recently been rezoned and only single-unit dwellings can be constructed. a. This is a mistake of law. b. This is a mutual mistake of fact. c. Stewart is obligated to buy land elsewhere and have the complex constructed on property zoned for apartments. d. Will is liable to Stewart since Will is a contractor.

a. This is a mistake of law.

Under which ethical system would it be ethical to compel a few citizens to undergo painful or fatal medical tests in order to develop cures for the rest of the world?

a. Utilitarianism

Wes, who is an art collector, offered to buy a print from Le Monde Gallery. Le Monde balked at the price, sending Wes a letter of rejection. That day it discovered that the print was not as highly valued as originally thought. Le Monde immediately telephoned Wes to accept his offer. Is there a contract? a. Yes, since the acceptance was received before the rejection b. No, because the rejection was effective upon dispatch c. No, because the rejection terminated the offer d. Yes, because the acceptance is always effective upon dispatch

a. Yes, since the acceptance was received before the rejection

Alice says to Brian, "If I decide to buy a word processor next year, I will buy it from you." This is an example of: a. an illusory promise. b. past consideration. c. the pre-existing duty rule. d. good consideration.

a. an illusory promise

The way parties usually show mutual assent is by: a. an offer by words or conduct and an acceptance by words or conduct. b. a proposal in words and an acceptance in words. c. an act exchanged for an act. d. an offer and a counteroffer.

a. an offer by words or conduct and an acceptance by words or conduct.

A(n) ____ contract is one in which the parties have manifested their agreement by oral or written language, or both. a. express b. implied c. executory d. formal

a. express

A star basketball player in the NBA: a. is a "public figure" with respect to a defamation action against a newspaper. b. is a "public official" with respect to a defamation action against a newspaper. c. may win a defamation case against the media if he can prove the media acted negligently in reporting an untruth about him. d. is not subject to the "actual malice" test in defamation actions against the press.

a. is a "public figure" with respect to a defamation action against a newspaper.

The requirement of legally sufficient consideration: a. is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor. b. has nothing to do with the value of what is exchanged. c. means the subject matter that the parties agree to exchange has to have the same value. d. is the same as the requirement of adequacy of consideration.

a. is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor.

battery

an assault in which the assailant makes physical contact intentionally performed (actually hurting someone)

Tommy's parents died in a plane crash and he went to live with his guardian, Aunt Rose. Rose had a very small house and did not have a separate bedroom and bath for 12-year-old Tommy. She and Tommy decided to use some of his inheritance to pay for an addition to the house. He had some shares of stock transferred into Rose's name so that she could sell them when the money was due to be paid. The stock transfers are: a. presumed voidable unless Rose can show no unfair advantage was taken. b. presumed valid unless it can be proven that Tommy was taken advantage of. c. null and void because of undue influence. d. presumed void because of duress.

a. presumed voidable unless Rose can show no unfair advantage was taken.

A person who makes a promise is a(n): a. promisor. b. promisee. c. offeror. d. executor.

a. promisor.

If private entities engage in public functions, constitutional guarantees such as free speech and due process may apply to their actions under the ____ doctrine. a. state action b. federal preemption c. interstate commerce d. supremacy

a. state action

Contracts are governed primarily by: a. state common law. b. federal common law. c. statutory law. d. federal case law.

a. state common law.

A state constitutional provision conflicts with a valid federal statute. Under the supremacy clause a. the federal statute is supreme. b. the state constitutional provision is supreme. c. the federal statute is supreme if Congress has expressly so provided. d. the state constitutional provision is supreme if it expressly so states.

a. the federal statue is supreme

Hannah, as a joke, offers to sell her violin to Mike. Her statement would have legal effect if: a. the intended jest is so successful that Mike as a reasonable person under the circumstances believes the joke is an offer and he accepts. b. Hannah's intent, determined subjectively, is to enter a contract. c. Hannah's intent, determined objectively, is not to enter a contract. d. Mike did not, but should have realized that Hannah was not serious. e. Both (c) and (d).

a. the intended jest is so successful that Mike as a reasonable person under the circumstances believes the joke is an offer and he accepts.

Sarah offers to pay Allison $150 if Allison will paint her apartment while she is out of town on vacation for two weeks. Allison makes no promise but tells Sarah that she will think about it. While Sarah is out of town, Allison paints the apartment. This is best described as a(n): a. unilateral contract. b. quasi contract. c. implied in fact contract. d. bilateral contract.

a. unilateral contract.

defamation

act of harming or ruining another's reputation

comparative negligence

both the plaintiff's and defendant's negligence are computed and the liability for damages is distributed accordingly

True cost-benefit analysis as a social theory: a. only measures monetary gains and losses in making business decisions. b. compares direct and indirect costs and benefits of program alternatives for meeting a specific goal. c. is another theory that judges persons' actions by what those persons believe is right for themselves. d. emphasizes justice and a central moral authority.

b. compares direct and indirect costs and benefits of program alternatives for meeting a specific goal.

Elmer wrote a letter to his friend Fred offering to sell Fred an 80-acre farm for $200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000 and changes his mind about selling. a. Elmer has made a firm offer to Fred which cannot be revoked. b. Elmer can revoke his offer at any time before acceptance, because there is no consideration to keep the offer open. c. Elmer must keep the offer open, because this is an option contract. d. Elmer is prohibited from revoking his offer to Fred under the doctrine of promissory estoppel.

b. Elmer can revoke his offer at any time before acceptance, because there is no consideration to keep the offer open.

Which of the following is included in the Fourteenth Amendment? a. Free speech clause. b. Equal protection. c. Both (a) and (b). d. None of the above.

b. Equal Protection

What constitutional principle requires that similarly situated people be treated similarly by government? a. Free speech b. Equal protection c. Due process d. Eminent domain

b. Equal protection

The ____ and ____ Amendments respectively prohibit the federal and state governments from depriving any person of life, liberty, or property without due process of law. a. First, Tenth b. Fifth, Fourteenth c. Fourth, Fourteenth d. Fifth, Ninth

b. Fifth, Fourteenth

Which of the following results in a void, rather than voidable, agreement? a. Duress by improper threat b. Fraud in the execution c. Fraud in the inducement d. Undue influence

b. Fraud in the execution

Which of the following is a common criticism of ethical relativism? a. It promotes open-mindedness and tolerance. b. It assumes that a person's actions are always correct for that person, but if that is true, then all behavior is, by definition, moral. c. It is rigid and excessively formal. d. It is too judgmental.

b. It assumes that a person's actions are always correct for that person, but if that is true, then all behavior is, by definition, moral.

A collection agency threatened to sue Martha for the unpaid hospital bills from her heart operation. She signed a promissory note at a high but not illegal rate of interest. What result? a. It is valid because she signed it. b. It is valid because the threat to bring a civil suit to collect money owed is permissible. c. It is invalid because she signed under duress. d. It is invalid because the agency put her under undue pressure.

b. It is valid because the threat to bring a civil suit to collect money owed is permissible.

James threatens to hit Kenneth on the head with a baseball bat unless Kenneth signs a contract agreeing to pay James $900 for a motor. Because of the threat, Kenneth signs the contract. a. This contract is voidable at Kenneth's option. b. James has committed physical duress against Kenneth. c. This is an example of economic duress. d. All of the above.

b. James has committed physical duress against Kenneth.

Janet promises Eli $4,000 for one of his original paintings on the condition that she receive $1 million from her mother's will. a. Janet has made an illusory promise. b. Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million. c. Janet has made a conditional promise which is not sufficient to form consideration. d. Janet's promise is legally inadequate and the courts will therefore not enforce it.

b. Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million.

Kyle wants to buy a six-passenger car. The salesperson tells him that the two-seat sports car Kyle sees on the car lot would be just perfect for six people. Kyle test drives the car and then buys it. a. Kyle has a valid cause of action for fraud. b. Kyle was not justified in relying upon the salesperson's representation that the car would seat six people. c. The element of scienter is missing in this fact situation. d. The salesperson is a fiduciary.

b. Kyle was not justified in relying upon the salesperson's representation that the car would seat six people.

Which of the following does not describe the libertarian social ethics theory? a. Libertarians stress market outcomes as the basis for distributing society's rewards. b. Libertarians encourage social control over all people in order to design an equitable society. c. Libertarians believe it is an injustice for society to take wealth earned by some citizens and distribute it to those who did not directly earn it. d. The fact that some people end up with fortunes while others are poor proves only that some can play the market effectively while others cannot.

b. Libertarians encourage social control over all people in order to design an equitable society.

Which of the following is not protected by the free speech guarantee found in the Constitution? a. Commercial speech b. Obscenity c. Defamation d. All of the above are protected by the free speech clause.

b. Obscenity

Article 2 of the Uniform Commercial Code deals with what type of property? a. Real b. Personal c. Intangible d. Business

b. Personal

Brian makes a material misrepresentation of fact regarding his horse to Rosalind while out riding one day. Later that day, Rosalind makes an offer to buy the horse. Brain accepts without correcting his earlier misrepresentation of fact. a. Brian may avoid the contract. b. Rosalind may avoid the contract. c. Either or both Brian or Rosalind may avoid the contract. d. Neither Brian nor Rosalind may avoid the contract.

b. Rosalind may avoid the contract.

In 2002, Congress passed what legislation seeking to prevent business scandals by increasing corporate responsibility through imposing additional corporate governance requirements on publicly held corporations?

b. The Sarbanes-Oxley Act

Shirley hears about a reward being offered by the local television station for information leading to the arrest and conviction of a local rapist. She supplies the requested information, and the suspect is then arrested and convicted. a. Shirley cannot collect the money unless the offer was specifically made to her by the station. b. The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Shirley has accepted. c. Because Shirley failed to notify the station of her intention to supply the information before actually doing so, she has not accepted their offer. d. Shirley was just doing her duty as a citizen and has no right to the payment of any money.

b. The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Shirley has accepted.

The State of Florida enters into a contract with Treasure Salvors governing the salvage of a Spanish galleon that sunk in the 1600's. Under the terms of the contract, the salvagers agree to relinquish 25% of the items recovered to the State of Florida in return for the right to salvage on state lands. At the time the parties enter into the contract, they both believe that the seabed where the ship lies is state land. Subsequently, the United States Supreme Court holds that the continental shelf on which the ship rests has never been owned by Florida. The salvagers sue to rescind the contract. a. The contract cannot be rescinded. b. The parties made a mutual mistake for which the contract should be avoided. c. There is a mutual mistake, but because it is not material, the court should enforce the contract. d. The United States government will automatically step into the shoes of the State of Florida to make the contract enforceable.

b. The parties made a mutual mistake for which the contract should be avoided.

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code? a. The sale of a house b. The sale of a new car c. An employment agreement d. A sale of automobile insurance

b. The sale of a new car

Wayne helped Hank study all night for an important exam. After Hank got an A on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it." a. There is no contract because there is no mutual assent. b. There is no contract because there is no valid consideration. c. There is no contract because $10 is reasonably inadequate consideration. d. There is a contract with sufficient consideration.

b. There is no contract because there is no valid consideration.

Alice offers to sell her computer, monitor, and printer to Bradley for $300. Bradley says he will accept provided that Alice includes her word processing software. What is the status of their discussions? a. There is a valid contract for the computer, the monitor, the printer, and the software. b. There is no contract, because Bradley has made a counteroffer. c. There is no contract, because the time for delivery has not been decided. d. There is no contract, because the offer has been revoked by the offeror.

b. There is no contract, because Bradley has made a counteroffer.

Abe is involved in an automobile accident and is injured. While he is unconscious, the police call an ambulance which takes him to a hospital. Abe is treated at the hospital and released a day later. The hospital sends him a bill for $2,400, which Abe refuses to pay, claiming it is too high and he never consented to the treatment because he was unconscious. a. Abe has entered into a unilateral contract with the hospital and therefore will have to pay the bill. b. This is a quasi-contractual agreement. c. Abe has entered into an implied in fact contract with the hospital. d. Abe and the hospital have entered into a bilateral contract, the terms of which require that he pay the bill.

b. This is a quasi-contractual agreement.

Tom tries to sell his classic car to Victoria for $12,000. Tom tells Victoria, "I paid $12,000 for the car in 1978 and it's worth twice that today." Tom really paid $8,000 for the car in 1978. If Victoria buys the car, basing her decision on Tom's statement, which of the following correctly states the situation? a. Tom's statements amount to puffing only. b. Tom's statements provide grounds to set the contract aside. c. Tom's statements are actionable only if intentional. d. Tom's statements amount to fraud in the execution.

b. Tom's statements provide grounds to set the contract aside

Gary mails an offer to Brian on June 15. Brian receives the offer on June 16. Gary mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18 and Gary receives the acceptance on June 20. Brian receives the revocation on June 19. Was a contract formed? a. Yes, on June 16 b. Yes, on June 18 c. Yes, on June 20 d. No, the offer was revoked before acceptance

b. Yes, on June 18

Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable? a. Yes, there is no way for the dealer to get the extra money anyway b. Yes, there is consideration for the modified amount c. No, there is no consideration and the dealer can sue for the extra $300 d. No, there is an implied contract to pay the dealer whatever he billed Jack ANS: B

b. Yes, there is consideration for the modified amount

Lynn offers to sell his house to Dennis for $95,000. Dennis responds, "I will pay you $95,000 if you will paint the second floor." This response could best be described as: a. an acceptance. b. a counteroffer. c. a rejection. d. an invitation.

b. a counteroffer.

Actionable fraud would be likely to be based on falsity of: a. a car owner's statement that, "This car is the best buy you will find." b. a realtor's statement that, "The contractor used 25-year warranted shingles on the roof." c. an art dealer's statement that, "This painting will increase in value." d. a stockbroker's statement that, "This stock should double in price within six months."

b. a realtor's statement that, "The contractor used 25-year warranted shingles on the roof."

An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as: a. an output contract. b. a requirements contract. c. a firm offer. d. promissory estoppel.

b. a requirements contract.

The legislative branch's primary check on both the judicial and executive branches is the power to: a. veto executive or judicial decisions. b. approve appointments to the courts and agencies. c. appoint judges and cabinet officials. d. None of the above.

b. approve appointments to the courts and agencies.

The Supreme Court interprets the Commerce Clause: a. narrowly. b. as granting virtually complete power to Congress to regulate the economy. c. as restricting Congress to the coining of money and taxation. d. as granting Congress the power to take property under eminent domain.

b. as granting virtually complete power to Congress to regulate the economy.

A contract in which both parties exchange promises is a: a. voidable contract. b. bilateral contract. c. unilateral contract. d. quasi contract.

b. bilateral contract.

Contracts induced by threats of ____ are voidable, regardless of whether the coerced party has committed an unlawful act. a. civil prosecution b. criminal prosecution c. tortious conduct d. physical force

b. criminal prosecution

An auto designer chooses to devote his efforts to designing an automobile that is the safest vehicle possible. He does so because he wishes to save lives and prevent disabling injuries. He believes he and his employer have a duty to provide the public with the safest possible vehicle. The designer's approach to ethical decision-making is best characterized as: a. utilitarian. b. deontological. c. ethically relative. d. ethically fundamental.

b. deontological.

A classification based on gender or "legitimacy" for a governmental action: a. does not need to bear a substantial relationship to an important governmental objective. b. eliminates the strong presumption of the constitutionality of legislation that is allowed under the rational relationship test. c. does not allow taking into legislative consideration the natural physical differences of gender. d. requires that men and women be treated exactly the same with regard to governmental action.

b. eliminates the strong presumption of the constitutionality of legislation that is allowed under the rational relationship test.

In the Supreme Court's view, the "necessary and proper" clause: a. authorizes Congress to legislate only in areas mentioned in the list of enumerated powers. b. enables Congress to legislate in areas not mentioned in the list of enumerated powers as long as such legislation reasonably relates to some enumerated power. c. extends "state action" to action taken by private citizens whenever such interpretation is necessary to protect a fundamental right. d. restricts state regulations that obstruct interstate commerce.

b. enables Congress to legislate in areas not mentioned in the list of enumerated powers as long as such legislation reasonably relates to some enumerated power.

An offer under Article 2 of the UCC that is irrevocable even though no consideration is given to keep it open is known as a(n): a. option. b. firm offer. c. requirements contract. d. output contract.

b. firm offer.

A woman claiming sex discrimination because she was passed over for a promotion by her employer, would have her case reviewed under the ____ test of the Equal Protection Clause. a. rational relationship b. intermediate c. strict scrutiny d. None of the above

b. intermediate

In order to form a contract, the parties must: a. manifest their agreement subjectively. b. manifest their agreement objectively. c. indicate solely through written word their intent. d. create a formal document called a contract.

b. manifest their agreement objectively.

To be effective, notice of revocation of an offer: a. must be communicated directly to the offeree before the offeree has accepted. b. may be communicated indirectly to the offeree through a third person. c. must be dispatched before the offeree accepts; when notice actually reaches the offeree is not important. d. is not addressed in the Restatement.

b. may be communicated indirectly to the offeree through a third person.

A fiduciary is a: a. person in a subservient position. b. person who owes a duty of trust, confidence, and loyalty to another. c. form of formal conduct. d. person of equal power and control.

b. person who owes a duty of trust, confidence, and loyalty to another.

Any property other than an interest in real property is: a. goods. b. personal property. c. tangible property. d. intangible property.

b. personal property.

A purchaser's agreement to buy from a particular seller all the materials of a particular kind he needs is a(n) ____ contract. a. illusory b. requirements c. output d. exclusive dealing

b. requirements

To a(n) ____, whether telling a lie in a given instance would produce greater pleasure than telling the truth is less important than deciding if a general practice of lying would maximize society's pleasure.

b. rule utilitarian

Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period of two years. This contract is governed by: a. Article 2 of the UCC. b. state common law. c. federal statute. d. the law of quasi contract.

b. state common law.

The principle of ____ concerns the compatibility of a law or governmental action with fundamental constitutional rights, such as free speech. a. procedural due process b. substantive due process c. the rational relationship test d. equal protection

b. substantive due process

Under the Commerce Clause, Congress has the power to regulate: a. only the channels of interstate commerce. b. the channels and instrumentalities of interstate commerce, as well as those activities having a substantial relation to interstate commerce. c. only the instrumentalities of interstate commerce. d. only the channels and instrumentalities of interstate commerce.

b. the channels and instrumentalities of interstate commerce, as well as those activities having a substantial relation to interstate commerce.

Whatever powers are not specifically assigned to the United States by the Constitution are reserved to: a. the federal government. b. the state governments or the people. c. the Supreme Court. d. the Congress.

b. the state governments or the people.

Which of the following is a common criticism of deontological ethical theories? a. They are excessively pragmatic. b. They are rigid and excessively formal. c. They only consider actions by their motives. d. They fail to consider universal principles.

b. they are rigid and excessively formal

The ethical theory that underlies cost-benefit analysis is: a. libertarianism. b. utilitarianism. c. deontological. d. ethical relativism.

b. utilitarianism.

Steven intentionally makes a material misrepresentation of fact regarding his motorcycle to Thelma who agrees to buy the motorcycle based upon the misrepresentation. This contract is: a. void. b. voidable. c. executed. d. unenforceable.

b. voidable.

To what source did Kant look to find his categorical imperatives? a. God b. The Bible c. Man d. The Ten Commandments

c. Man

Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement? a. A statement of judgment of value, such as "This is the best car in town for the money." b. "This style of jacket is going to be the most popular style next year." c. "This car has a new radiator." d. "In my opinion, this is the best buy for the money."

c. "This car has a new radiator."

If untrue, which of the following would probably be considered a misrepresentation of a material fact? a. "This is the one that I think is the best buy." b. "This is the best computer on the market." c. "This car has new brakes." d. "These tires will wear like iron."

c. "This car has new brakes."

Mary agrees to sew Georgia's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay: a. $50, since that is the original agreement. b. $50, since a modification must be in writing. c. $60, since the modified agreement is supported by additional consideration. d. $60, since any subsequent agreement is enforceable.

c. $60, since the modified agreement is supported by additional consideration.

Promissory estoppel is found in Section ____ of the Restatement (Second) of Contracts. a. 71 b. 81 c. 90 d. None of the above

c. 90

Which of the following would NOT be a merchant under Article 2 of the UCC? a. The owner of a hardware store which sells paint b. A car mechanic who fixes used cars and sells them in his spare time c. A person who inherits three speedboats and wants to sell them to buy a car d. Both (b) and (c).

c. A person who inherits three speedboats and wants to sell them to buy a car

Which of the following is NOT always necessary in order for a valid contract to be formed? a. Mutual assent b. Legality of purpose c. A writing d. Competent parties

c. A writing

In general, which of the following will not terminate an offer? a. The death of the offeree b. The death of the offeror c. An inquiry by the offeree as to size or materials d. An acceptance that adds a material term

c. An inquiry by the offeree as to size or materials

Andrew agrees to paint Betty's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job unless Betty agrees to pay him $100 more. What law applies to this fact situation? a. The acceptance of additional money to settle a disputed claim is supported by consideration. b. A past obligation is sufficient consideration for a new promise. c. Andrew gives no additional consideration in return for modification of a preexisting contract. d. Betty has made a promise in exchange for a forbearance.

c. Andrew gives no additional consideration in return for

Anna by mistake delivers to Bob a plain, unaddressed envelope containing $50 intended for Cora. a. Bob can keep the money. b. Bob is under a contractual obligation to return the money. c. Bob's obligation to return the money is quasi contractual. d. Bob's obligation to return the money is implied in fact.

c. Bob's obligation to return the money is quasi contractual.

A valid contract may be unenforceable for which reason(s)? a. Failure to satisfy the Statute of Frauds b. Running of the Statute of Limitations c. Both (a) and (b) d. A valid contract is always enforceable

c. Both (a) and (b)

Which of the following does not exemplify a relationship that typically leads to scrutiny of a contract for undue influence? a. Wife and husband b. Clergy and parishioner c. Brother and sister d. Parent and child

c. Brother and sister

The ____ Clause protects against impairing the charter of a corporation formed under a state incorporation statute. a. Supremacy b. Commerce c. Contract d. Takings

c. Contract

Since the Supreme Court's abandonment of substantive due process as a critical check on legislation involving individual rights, the ____ Clause is now the most important clause in this regard. a. Procedural Due Process b. State Action c. Equal Protection d. Fundamental Rights

c. Equal Protection

Which of the following is not generally required in order to have a valid contract? a. Mutual assent b. A lawful purpose c. Fairness of the bargain d. Parties who have contractual capacity

c. Fairness of the bargain

Which of the following will support a contract? a. An illusory promise b. Past consideration c. Forbearance to do an act d. A pre-existing public obligation

c. Forbearance to do an act

In which of the following situations will a smaller sum be unable to discharge a larger debt? a. If the smaller sum is paid before the due date of the larger debt. b. If an additional article or service is given together with the payment of the smaller sum. c. If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency. d. A smaller sum is never able to discharge a larger debt.

c. If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency.

Adam Smith, in The Wealth of Nations, said the capitalistic system was composed of institutions which include all but which of the following? a. Economic motivation b. Free enterprise c. Labor d. Limited government

c. Labor

The case in which the court held that a newspaper advertisement was an offer because it contained a promise of performance in definite terms in return for a requested act was: a. Catamount Slate Products, Inc. v. Sheldon. b. Newman v. Schiff. c. Lefkowitz v. Great Minneapolis Surplus Store, Inc. d. Osprey L.L.C. v. Kelly-Moore Paint Co., Inc.

c. Lefkowitz v. Great Minneapolis Surplus Store, Inc.

Which of the following is correct with regard to the powers of government in the United States? a. The federal government is not a government of enumerated powers. b. The federal government is all-powerful except in cases of state criminal law. c. Legislation enacted by Congress does not need to be based on a specific power granted to the federal government by the Constitution. d. Congress may not enact legislation that affects the states.

c. Legislation enacted by Congress does not need to be based on a specific power granted to the federal government by the Constitution.

absolute priviledge

complete defense against the tort of defamation

Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct? a. Marilyn will have to pay $20,000. b. This is a contract under seal which is enforceable. c. This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders. d. This is the settlement of a disputed debt that requires no additional consideration on the part of Bravo Builders.

c. This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders.

The ____ case declared the authority of courts to examine governmental actions to determine whether they conform to the U.S. Constitution. a. Abrams v. United States b. Marsh v. Alabama c. Marbury v. Madison d. McCulloch v. Maryland

c. Marbury v. Madison

Which of the following requires consideration in order to be binding upon the parties? a. A written promise by a merchant to keep an offer to buy goods open for 14 days b. Material modification of a sale of goods contract under Article 2 of the UCC c. Material alteration of a personal service contract d. Settlement of a disputed debt

c. Material alteration of a personal service contract

A contract was made for 125 bales of cotton to arrive on a ship named "Peerless" from Bombay. Unbeknownst to either party to the contract, there were two ships named "Peerless," both of which were sailing from Bombay. One sailed in October and the other in December. The buyer had in mind the ship sailing in October, but the seller had in mind the ship sailing in December. Each party held his belief in good faith. When the goods failed to arrive on time, the buyer sued for breach of contract. a. The seller is in breach and must pay damages. b. The seller is guilty of fraud in the inducement for failing to disclose to the buyer which ship would contain the goods. c. No contract exists due to mutual mistake of fact as to the existence or identity of the subject matter of the contract. d. Two of the above, (a) and (b).

c. No contract exists due to mutual mistake of fact as to the existence or identity of the subject matter of the contract.

Queen Anne table out on the back porch. She asked Grandma about it and was told it was in the way so they were going to store it in the barn. Eliza offered to buy it from her for $200. The next week, Grandma saw it in Eliza's store on sale for $3,000. Which of the following is true? a. She can get it back because of fraudulent concealment of the value. b. She can get the true value, because it would not be fair otherwise. c. She cannot rescind the contract because Eliza did not have a duty to tell her the value of the table. d. She cannot rescind the contract because she did not rely on Eliza to give her a fair price.

c. She cannot rescind the contract because Eliza did not have a duty to tell her the value of the table.

Which of the following need NOT be proved in order to establish the defense of economic duress? a. That one side involuntarily accepted the terms of another. b. That circumstances permitted no other alternative. c. That one party explicitly made an economic threat. d. That the circumstances leading up to the contract were the result of coercive threats or acts of the opposite party.

c. That one party explicitly made an economic threat.

Michelle's Boutique places an ad in the Sunday paper for beautiful, top-of-the-line designer suits for $3.00. Irene sees the ad in the paper and goes to the store to stock up on business suits for her new job. Michelle apologizes for the misprint. Irene has just finished a class in contract law and insists that the store sell her 5 suits for $15.00. Irene threatens to sue Michelle for breach of contract. a. This is a valid contract, and Irene will win if she sues. b. The ad in the newspaper is an offer to sell. c. The ad in the newspaper is a solicitation seeking offers, but is not an offer to sell; therefore, Irene will not be able to successfully sue for breach of contract. d. None of the above.

c. The ad in the newspaper is a solicitation seeking offers, but is not an offer to sell; therefore, Irene will not be able to successfully sue for breach of contract.

Marilyn read an ad in the school newspaper offering a thousand dollar swimming scholarship to anyone who could swim 500 laps in the school pool. Marilyn called the advertiser and began swimming. She has reached lap number 460; she feels great and is sure she can make it all the way. a. The advertiser may revoke the offer since there has not yet been an acceptance. b. The advertiser may not revoke the offer since Marilyn has already accepted it. c. The advertiser must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or pay damages if he interferes with the completion of the laps. d. The advertiser must pay Marilyn $920, because she has performed 92% of the offer.

c. The advertiser must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or pay damages if he interferes with the completion of the laps.

Dr. David Doright is a Professor at a state university. One day he has an argument with the president of the university over which team should win the next Super Bowl. The next day, Dr. Doright is fired for incompetence. He sues, claiming the firing is arbitrary and that he was denied an opportunity to respond to the charges

c. The firing by a state university is state action involving a property right that would entitle Dr. Doright to a hearing and an opportunity to respond to the allegations against him.

Which of the following statements is most accurate concerning charitable subscription promises? a. They are generally not enforceable. b. The courts equate them with gifts. c. They are generally enforceable if there is reliance by the charity. d. The Restatement uses a strict reliance requirement in relation to charitable subscriptions.

c. They are generally enforceable if there is reliance by the charity.

In what way or ways are situational ethics and ethical relativism similar? a. They both look to a central authority or set of rules to guide ethical decision-making. b. They both assess each separate act according to whether it maximizes pleasure over pain. c. They both judge actions from the perspective of the person who actually made the judgment.

c. They both judge actions from the perspective of the person who actually made the judgment.

Albert found a stone in his yard and took it to Bob, a jeweler, for evaluation. Although Bob knew what the stone was, he told Albert that he wasn't sure as to the nature of the stone, but that he thought it was a topaz. Bob then offered to buy the stone for $25 and Albert agreed. Later Albert found out the stone was an uncut diamond worth about $700. a. The sale was a valid contract that should be enforced by the law. b. This contract can be voided based upon fraud in the execution. c. This contract can be voided based upon fraud in the inducement. d. This contract can be voided based upon mistake as to the identity of the subject matter.

c. This contract can be voided based upon fraud in the inducement.

Sue owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. She has been offered a two-year graduate fellowship, but she will not be able to pay the loan back if she accepts the fellowship. The bank manager tells Sue that if she pays $3,000 now, they will forgive the loan. Should Sue accept the offer? a. No, because the bank can still sue for the remaining $2,000 b. No, because the manager's promise is not binding on the bank c. Yes, because the early payment of the loan is consideration that makes the bank's promise binding d. Yes, because the bank must do whatever the manager says

c. Yes, because the early payment of the loan is consideration that makes the bank's promise binding

According to the Restatement, manifesting an intention to act or an intention to refrain from acting in a specified manner is considered to be: a. an implied in fact contract. b. an express contract. c. a promise. d. a quasi contract.

c. a promise.

The State where Laura's father had lived passes a statute which requires that male heirs be preferred over female heirs in selecting an executor of an estate. Laura, a lawyer, would like to be the executor of her father's estate, but so would her eighteen-year-old brother who just flunked out of college. She challenges the provision as being a violation of the equal protection clause of the Fourteenth Amendment. The case is now under consideration by the United States Supreme Court. In deciding the constitutionality of the provision, the Court will: a. apply the rational relationship test. b. apply the strict scrutiny test. c. apply the intermediate standard test. d. create a new test.

c. apply the intermediate standard test.

Because defamation involves a communication, the protection extended to speech by the ____ Amendment applies. a. Fourth b. Fifth c. First d. Fourteenth

c. first

An intentional misrepresentation of a material fact made with knowledge of the falsity and intention to deceive and which a party justifiably relies upon to his detriment is known as: a. duress. b. fraud in the execution. c. fraud in the inducement. d. non-fraudulent misrepresentation.

c. fraud in the inducement

Sam wants to sell his Golden Retriever to Jordan. Sam tells Jordan that the dog is three years old and that he will point, back, and retrieve. Although the dog is three years old and will point at birds, he will not back (honor another dog's point). Jordan relies on these statements and purchases the bird dog. The buyer has most probably been a victim of: a. duress. b. undue influence. c. fraud in the inducement. d. fraud in the execution.

c. fraud in the inducement.

. A promise against public policy: a. can be contractual. b. is enforceable if the parties have capacity and mutual assent and they exchange consideration. c. has no legal remedy available for breach. d. Both (a) and (b).

c. has no legal remedy available for breach.

Cary, a prominent local attorney, was the subject of a newspaper article concerning a trial in which he was involved as counsel. In that article, Cary was reported to have been disbarred in another state ten years before. It is not true of Cary, but of his cousin, Frank. Cary will win a suit for defamation against the newspaper: a. simply by proving the falsity of the statement. b. only if Frank was not disbarred. c. only if he can prove that the paper acted with actual malice. d. only if he can show harm to his character resulted from the statement.

c. only if he can prove that the paper acted with actual malice.

For the purposes of procedural due process, ____ includes certain entitlements conferred by government, such as social security payments and food stamps. a. the right of free speech b. equal protection c. property d. liberty

c. property

The main purpose of the Bill of Rights was to:

c. provide for restrictions on the power of the federal government.

A ____ is an offeree's refusal to accept an offer. a. revocation. b. counteroffer c. rejection d. statutory irrevocability

c. rejection

The ethical decision-making approach that views ethical decisions from the actor's perspective and then judges whether the decisions were ethical is: a. ethical fundamentalism. b. absolutism. c. situational ethics. d. act utilitarianism.

c. situational ethics.

A party to a contract may be able to avoid the contract if: a. there is a mutual mistake, and the party undertook to bear the risk by conscious allocation. b. there is a unilateral mistake, and the party undertook to bear the risk by conscious ignorance. c. there was a mistake and the mistaken party was at fault in not discovering the problem before making the contract. d. None of the above. e. Only (a) and (b).

c. there was a mistake and the mistaken party was at fault in not discovering the problem before

The UCC provides that a merchant is bound to keep a written offer open for a stated period but no longer than: a. ten days. b. two months. c. three months. d. a reasonable time.

c. three months.

Contract law: a. has seen little change during the nineteenth and twentieth centuries. b. has experienced an expansion of the absolute freedom of contract during the twentieth century. c. today usually recognizes contractual obligations whenever the parties manifest an intent to be bound. d. requires privity between parties seeking to enforce contractual rights.

c. today usually recognizes contractual obligations whenever the parties manifest an intent to be bound.

Lee has been declared incompetent by the court and is under the care of his sister. Without his sister's knowledge, Lee rents the 30,000-seat civic center for his birthday party. Lee's contract to rent the civic center is best described as a: a. valid contract. b. voidable contract. c. void contract. d. quasi contract.

c. void contract.

The federal government has exclusive power to establish laws governing: a. bankruptcy. b. patents. c. copyrights. d. All of the above.

d. all above

negligence

carelessness

assault

causing another to have apprehension of an imminent battery, without making physical contact (threatens)

intentional tort

civil wrong that results from intentional conduct

According to Jack Behrman, a professor of business ethics, free enterprise involves a: a. combination of properties. b. capitalistic combination of factors of production. c. group expression of the use of private property. d. All of the above. e. None of the above.

d. All of the above.

Procedural due process pertains to governmental decisions depriving a person of: a. life. b. liberty. c. property. d. All of the above.

d, all above

Which of the following would most probably be considered a valid offer? a. "Would you like to buy this?" b. "I'd give $50 for a cold glass of water." c. "Special sale on VCR's today - $200 each." d. "$100 reward for return of lost white-gold, men's wedding band inscribed with initials 'TEA' to Tony Adams, 350 Main Street, Peoria."

d. "$100 reward for return of lost white-gold, men's wedding band inscribed with initials 'TEA' to Tony Adams, 350 Main Street, Peoria."

In Adam Smith's The Wealth of Nations, how many "institutions" are in the capitalistic system? a. 3 b. 4 c. 5 d. 6

d. 6

The Uniform Commercial Code would be applied in which of the following situations? a. A contract for landscape services b. A contract for sale of patent rights c. A contract for the purchase of farmland d. A contract to buy living room furniture

d. A contract to buy living room furniture

If there is no time specified for the acceptance of an offer, when does the offer terminate? a. After 24 hours b. After 48 hours c. After two weeks d. After a reasonable period of time

d. After a reasonable period of time

Albert read Gem City's ad in the local newspaper advertising a one-quarter carat diamond ring for $89. Albert rushed to the store to buy the ring only to be told by the salesperson that the ad was a misprint and the price should have been $289. Albert gave the salesperson $89 plus sales tax and demanded the ring. a. The ad is a firm offer by the merchant, and the ring must be sold for $89. b. The ad is a contract and the store must abide by terms stated in the contract. c. The store must accept the price stated in the ad, but only if Albert has a copy of the ad with him. d. Albert is merely making an offer to Gem City to buy the ring for $89 plus sales tax.

d. Albert is merely making an offer to Gem City to buy the ring for $89 plus sales tax.

The U.S. Constitution vests power in the branches of government that form a "check and balance" system. Those branches of government are: a. executive. b. legislative c. judicial. d. All of the above.

d. All of the above

Which of the following is correct with regard to counteroffers? a. A counteroffer operates as a rejection of the original offer. b. A conditional acceptance is a common type of counteroffer. c. The receipt of a counteroffer terminates the original offer. d. All of the above are correct.

d. All of the above are correct.

Which of the following is correct with regard to the Bill of Rights? a. It serves as a major restriction on the powers and authority of the federal government. b. It does not apply directly to the states, but the Supreme Court has held that the Fourteenth Amendment makes many of its principles applicable to the states. c. It consists of ten amendments to the U.S. Constitution that were adopted in 1791. d. All of the above are correct.

d. All of the above are correct.

Which of the following gratuitous promises are enforceable by statute? a. A good-faith contract modification in a contract for the sale of goods b. A written offer signed by a merchant to buy or sell goods that assures it will be kept open for one month c. A renunciation of a claim in a written waiver that is signed and delivered by the aggrieved party when the contract involves a sale of goods d. All of the above are enforceable by statute.

d. All of the above are enforceable by statute.

Strict scrutiny is used by the U.S. Supreme Court to carefully scrutinize: a. the First Amendment right of freedom of religion. b. the right to engage in interstate travel. c. the right to vote. d. All of the above are situations where strict scrutiny would be applied.

d. All of the above are situations where strict scrutiny would be applied.

Which of the following can meet the scienter requirement to establish fraud in the inducement? a. Actual knowledge b. Lack of belief in the statement's truthfulness c. Reckless indifference as to a statement's truthfulness d. All of the above meet the requirement.

d. All of the above meet the requirement.

Which of the following would most likely be a merchant with respect to the goods in question under the UCC definition? a. Amy is an authorized IBM computer dealer. b. Brian employs two salesmen to sell his homemade furniture. c. Clarence has a store in which he sells used lawn mowers. d. All of the above would be merchants. e. None of the above would be merchants.

d. All of the above would be merchants.

Contract law is significant in that it is basic to other fields of law such as: a. sales of personal property. b. commercial paper. c. secured transactions. d. All of the above.

d. All of the above.

A classic and important example of strict scrutiny of classifications based upon race is the desegregation case of: a. Board of Curators of the University of Missouri v. Horowitz. b. Silkwood v. Kerr-McGee Corporation. c. New York Times v. Sullivan. d. Brown v. Board of Education of Topeka.

d. Brown v. Board of Education of Topeka.

Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so. a. This is an illusory contract, because Darla doesn't know whether she will receive the money for sure. b. The consideration moving from Darla to Edward is the promise of $6,000 subject to a condition. c. Darla's conditional promise is sufficient consideration unless Darla knows she cannot receive at least $6,000 from her uncle's estate. d. Both (b) and (c).

d. Both (b) and (c).

Under substantive due process, legislation affecting which of the following would be strictly scrutinized as affecting fundamental rights? a. The right to receive federally guaranteed student loans. b. The right to marry someone from a particular ethnic background if both parties wanted to marry. c. The right of free speech. d. Both (b) and (c).

d. Both (b) and (c).

Ken promises not to foreclose on a mortgage that he holds on an office complex that Christopher owns. In reliance on this promise, Christopher expends $200,000 to remodel the complex. Which of the following is correct with regard to Ken's promise? a. Ken's promise not to foreclose is unsupported by consideration. b. Ken's promise is noncontractual. c. Ken's promise will be enforced against him based upon the doctrine of promissory estoppel. d. All of the above.

d. All of the above.

The UCC Battle of the Forms rule: a. changes the mirror image rule. b. may yield different results depending on whether the parties are merchants. c. may result in formation of a contract different from the terms of the offer. d. All of the above.

d. All of the above.

The remedies of damages and rescission are available for: a. fraudulent misrepresentation. b. negligent misrepresentation. c. innocent misrepresentation. d. All of the above.

d. All of the above.

Which arguments oppose business involvement in socially responsible activities? a. Lack of corporate focus on profitability. b. Unfairness to company employees and shareholders. c. Lack of accountability. d. All of the above. e. (a) and (c), but not (b).

d. All of the above.

Which is an irrevocable offer? a. A bid to construct a bridge for the city b. An offer to buy stock in the ABC Corporation once it is formed c. A unilateral offer to pay John $30 to mow your lawn at the point that he has completed half the job and indicates he wishes to finish d. All of the above.

d. All of the above.

Which of the following is included within the term "property" for purposes of procedural due process? a. Real property b. Social Security payments c. Food stamps d. All of the above.

d. All of the above.

The Takings Clause requires just compensation if the government: a. actually takes the property. b. regulates to such an extent that it deprives the owner of all economic use of the property. c. regulates property in such a way that it reduces the value of the property in any way. d. Both (a) and (b) are correct. e. All of the above are correct.

d. Both (a) and (b) are correct.

A misrepresentation is material if: a. it would likely induce a reasonable person to enter into a transaction. b. the maker knows it would likely induce the other party to enter into the transaction. c. it is made knowingly. d. Both (a) and (b).

d. Both (a) and (b).

Doug obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years. a. Acme is obligated to use its best efforts to supply the goods even if no such clause appears in the written franchise agreement. b. According to the UCC, unless otherwise agreed, Doug must use his best efforts to promote the sale of the widgets in his territory. c. Under the UCC, such an agreement lacks consideration. d. Both (a) and (b).

d. Both (a) and (b).

Express contracts and implied contracts are: a. both genuine contracts. b. equally enforceable. c. not really contracts. d. Both (a) and (b).

d. Both (a) and (b).

Promissory estoppel is a contractual doctrine that includes the following considerations: a. The courts use the doctrine of promissory estoppel to enforce noncontractual promises. b. Under this doctrine the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the nature of the promise to take action or refrain from taking action and the promisee does so. c. The courts will not, under any circumstance, enforce promises that do not include all four of the elements of contract. d. Both (a) and (b).

d. Both (a) and (b).

The extent to which state regulation may affect interstate commerce: a. is decided using a case-by-case analysis. b. is ultimately decided by the Supreme Court. c. will be determined without regard to the extent to which the regulation discriminates against interstate commerce in favor of local concerns. d. Both (a) and (b).

d. Both (a) and (b).

Barbara, a wealthy widow, promises the pastor of her church that she will donate $20,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $80,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around-the-world cruise instead. a. The doctrine of promissory estoppel can be applied to this case. b. The promise to pay $20,000 is a promise to give a gift and is therefore not enforceable. c. Under the Restatement, Barbara's promise is enforceable. d. Both (a) and (c).

d. Both (a) and (c).

Ralph sold a motel to Steve by stating that he had paid $250,000 for it and that his net average annual profit from the business has been $40,000. In reality he paid $100,000 for the motel and has earned a net average annual profit of only $30,000. Steve made no attempt to verify the statements until after the transaction was completed. a. Ralph has committed fraudulent misrepresentation. b. Steve is bound by the contract, because he failed to verify the statements which were made to him. c. The contract is voidable at Steve's option. d. Both (a) and (c).

d. Both (a) and (c).

If an offer requires acceptance by mail and the offeree faxes acceptance: a. there is no contract. b. there is a contract if the acceptance is actually received within the time the authorized means would have arrived. c. under the Restatement, if the acceptance is received within the time the authorized means would have arrived, the acceptance is effective when sent. d. Both (b) and (c) are correct.

d. Both (b) and (c) are correct.

Judicial review is: a. a power of federal, but not state, courts. b. a check by the judicial branch on legislative action. c. a check by the judicial branch on executive action. d. Both (b) and (c) are correct.

d. Both (b) and (c) are correct.

Alex wants to submit a bid on a city sewer project. He computes the cost, but mistakenly omits the cost of one item. Accordingly, he submits a bid of $430,000 to the city. The next highest bid is $675,000, and the rest of the bids are even higher. The city is happy to have such a low bid, so it accepts Alex's bid and awards him the contract for the job, even though the city engineer is of the opinion the job cannot be done for less than $650,000. a. Alex must perform for the agreed upon price because he has made a unilateral mistake. b. The city was aware of or should have been aware of Alex's mistake. When it accepted the bid with knowledge of Alex's mistake, the city sought to take an unconscionable advantage of Alex's error. c. This case is an example of a palpable unilateral mistake. d. Both (b) and (c).

d. Both (b) and (c).

Tate enters into a contract with Smith under the terms of which Smith is to pay Tate $7,000 and Tate is to build a garage, repair a boat, and build a doghouse. If the doghouse has not yet been built, which term describes the type of contract in existence? a. Quasi contract b. Executed contract c. Illusory contract d. Executory contract

d. Executory contract

The Commerce Clause in connection with the ____ limits the power of the states to tax. a. Fifth and Fourteenth Amendments b. Fourteenth Amendment c. principle of separation of powers d. Import-Export Clause

d. Import-Export Clause

Jason's mother would like him to go to college, so in June he enrolls at State University. He also quits his job and tells his mother his plans to continue taking classes. His mother says, "I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485. Which of the following is true regarding his mother's promise? a. It is enforceable, because Jason returned to college. b. It is enforceable, because Jason is giving up the right to do something else. c. It is unenforceable, because it is a unilateral contract. d. It is unenforceable, because Jason had already enrolled in school and there is no consideration.

d. It is unenforceable, because Jason had already enrolled in school and there is no consideration.

Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed, only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement is most accurate? a. McHenry is not liable to Nancy since there is no consideration. b. McHenry is not liable to Nancy since there is past consideration. c. McHenry is liable to Nancy since adequate consideration is given by both parties. d. McHenry is liable to Nancy based on the concept of promissory estoppel.

d. McHenry is liable to Nancy based on the concept of promissory estoppel.

A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of them is eligible? a. The employees of the bank b. An on-duty sheriff's deputy in the county where the arrest occurred c. An off-duty deputy sheriff from a county other than the one where the arrest occurred d. None of the above are eligible.

d. None of the above are eligible

The Contract Clause prevents a state from: a. making contracts with private individuals. b. affecting any agreements between parties. c. contracting with another state. d. None of the above.

d. None of the above.

Jesse makes an offer to Ike, and Ike accepts; then the state legislature passes a law that makes performance of the contract illegal. What is the effect of the new statute on the contract? a. The contract is severed; any portions that are legal must still be performed and any portions that have been made illegal must not be performed. b. The statute has no effect on the contract. c. The statute acts as a condition on the contract. d. The statute discharges the obligations of both parties under the contract.

d. The statute discharges the obligations of both parties under the contract.

James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer pays James $100. Which statement describes the payment of $100? a. An implied in fact contract has been formed. b. A unilateral contract has been formed. c. This is a formal contract. d. This is an option contract.

d. This is an option contract.

When does acceptance of an offer to enter into a unilateral contract generally occur? a. Upon notice of intent to accept by the offeree. b. Upon full performance by the offeror with the intention of accepting. c. Upon commencement of performance by the offeree. d. Upon full performance by the offeree with the intention of accepting.

d. Upon full performance by the offeree with the intention of accepting.

Procedural due process would require the government to establish a set of fair procedures in all but which of the following cases? a. Where Social Security benefits are refused. b. Where a juvenile criminal is sent to a detention home. c. Where a professor is fired from his tenured position. d. Where a college student is denied a private scholarship.

d. Where a college student is denied a private scholarship.

Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract? a. No, because Robbie gave no benefit to Aunt Ellie b. No, because Robbie did not suffer any detriment c. Yes, because stopping smoking will benefit Robbie's health d. Yes, because Robbie gave up a legal right

d. Yes, because Robbie gave up a legal right

Steven has a typed copy of a contract, which he would like to have Thomas sign. Thomas, who needs glasses to read typing, doesn't want to sign until he has read the document, but Steven convinces Thomas to sign it anyway, because it is a "standard" contract for this type of situation. Is the contract which Thomas signed binding upon him? a. No, because he did not read it b. No, because he entered into it based upon fraud in the execution c. Yes, because he has made a unilateral mistake of law d. Yes, because he was negligent in not ascertaining its contents

d. Yes, because he was negligent in not ascertaining its contents

Under the common law, the ____ must be the mirror image of the ____. a. contract, consideration b. contract, offer c. offer, acceptance d. acceptance, offer

d. acceptance, offer

Judicial review extends to: a. legislation. b. acts of the executive branch. c. decisions of inferior courts. d. All of the above.

d.All of the above.

The states may enact legislation concerning a subject in which there is a federal statute if:

d.None of the above.

compensatory damages

damage available in tort actions to compensate or reimburse the plaintiff for actual losses

libel

defamation of another person that is communicated by written word or visual communication

slander

defamation of character by spoken words/gestures

licensee

is one who invited onto the property of another for the licensee's benefit

false imprisonment

is the intentional confinement or restraint of another person's activities without justification

assumption of risk

plantiff voluntarily exposes himself or herself to a known danger

immunity or privilege

protection from legal liability for defamatory statements

invasion of privacy

publishing or otherwise making known or using information relating to a person's private life and affairs, with which the public has no legitimate concern, without that person's permission or approval

good samaritan statues

someone who is aided voluntarily by another cannot turn around and sue the "Good Samaritan" for negligence

conversion

taking property and depriving the owner of that property without the owner's permission

The federal government has been enabled to establish a national banking system and the Federal Reserve System because of: a. the Article I, Section 8, constitutional grants to Congress of the power to borrow money on the credit of the United States and the power to coin money. b. powers derived from the Commerce Clause. c. delegation by the state governments of some of their enumerated powers. d. the Contract Clause contained in Article I, Section 10 of the Constitution. e. Both (a) and (b).

the Article I, Section 8, constitutional grants to Congress of the power to borrow money on the credit of the United States and the power to coin money.

punitive damages

to punish the wrongdoer and deter others from similar wrongdoing

wrongful interference

tort in which a THIRD PARTY interferes with others contract

emotional distress

tort that produces mental anguish caused by conduct that exceeds all bounds of decency

defenses to defamation

truth; also may be privileged if concerns a public figure

dram shop acts

under which a bar's owner or bartender may be held liable for injuries caused by a person who became intoxicated while drinking at the bar

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