Business Law Multiple Choice

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Ron loses his discrimination claim in federal district court. If he wishes, he can appeal his case to a ________________ court. If he loses there, he can seek to have his case reviewed by ________________.

A U.S. Court of Appeals, the U.S. Supreme Court

Consider the following timeline. June 1—Y receives an offer in the mail from X. June 2—X mails letter of revocation. June 3—Y mails acceptance at 5 p.m. June 4—Y receives the revocation. June 5—X receives Y's acceptance. Do X and Y have a contract? A. Yes, as of June 3. B. Yes, as of June 5 C. No.

A. A contract was formed at 5 p.m. on June 3. Since a revocation is usually not effective until it is received, the letter that X mailed on June 2 had no effect until June 4, when Y received it. And by that time a contract had already been formed, because the acceptance counted as soon as it was sent.

Ann, Bob, and Carol are involved in a pro-life organization. Ann and Bob often carry signs in a picket line in a park near an abortion clinic. Ann's condemns abortions in a general way. Bob's claims that a doctor who works at the clinic across the street does not have a medical license, and the claim is untrue. Carol hands out pro-life leaflets to coworkers at a corporation where she works, but her boss asks her to stop. Which of the three have engaged in protected free speech? A. Ann B. Bob C. Carol D. Ann and Bob E. Ann and Carol

A. Ann has a right to voice her opinion. Bob, by engaging in defamation, is not protected. Carol is not protected in her situation because she is working at a private company, and not for the government.

Vince proposes to hire Donny to mow his lawn once a week over the summer for $40 per week. The two sign an agreement to that effect. Vince is the _____________ in this relationship, and Vince __________ need to have capacity for the arrangement to be valid. A. principal; does B. principal; does not C. agent; does D. agent; does not

A. As the employer, Vince is the principal, and as such he must have capacity. Donny, who will work on Vince's behalf, is the agent.

Bill says, "I hate Steve!" Steve's boss hears the exclamation, and later fires Steve because he no longer trusts him. Steve has to go into business for himself. Tom says, "Steve stole $1000 from me when I hired him to do my taxes!" This is not true. Steve's largest client fires him. Bill has committed __________________, and Tom has committed _______________. A. no type of defamation; slander per se B. no type of defamation; libel C. slander; slander per se D. slander; libel

A. Bill has given his opinion, and has not stated something that is verifiably false, so there is no defamation even though Steve has suffered a negative consequence. Tom has lied to another person about Steve, and because it involves Steve's professional reputation, it amounts to slander per se and not just ordinary slander.

Jack and Jill each own a Chewbacca action figure. Jill's is even still in its original box. Their toys, like most of the figures from the same production run have a problem - the feet fall off at the slightest touch. The few figures in the world that have sturdy feet are worth fifty times what the flawed figures are worth. Carl Collector talks to Jack over the phone. "Does the Chewie you are selling have the 'feet fall off' thing?" he asks. Jack glances at his footless action figure. "Nope," he replies. Carl agrees to buy it. Carl next calls Jill and asks her the same question. Jill doesn't know one way or the other, since her action figure is still in the box. She could find out if she looked, but she is not about to check too closely. "No way," she says. "The feet are sturdy." Carl agrees to buy it. Jack has committed ________________, and Jill has committed __________________. A. fraud; fraud B. fraud; innocent misrepresentation C. innocent misrepresentation; fraud D. innocent misrepresentation; innocent misrepresentation

A. Both have committed fraud. Jill recklessly made a false statement, and Jack did so intentionally.

After a long day of creating online course materials, Prentice and Bredeson have a fender- bender in the faculty parking lot. They briefly consider fighting, but they soon realize that neither is particularly good at fighting, so they decide to sue each other instead. At trial, the evidence shows that at the time of the accident, Prentice was behind the wheel eating a cheeseburger and fiddling with his radio, and that Bredeson was talking on two cell phones. The jury concludes that the wreck was 60% Bredeson's fault and 40% Prentice's fault. Bredeson will recover 40% of his losses in which type of system? A. pure comparative negligence B. modified comparative negligence C. both A and B D. none of the above

A. Bredeson gets nothing in a either type of modified system, because he is over half at fault. Bredeson can recover 40% of his losses in a pure comparative system. He end up with that amount because his award will be reduced by the 60% of the blame that falls on him.

Rick, when he was 16 years old, bought a used car from Car World for $5,000. He drove the car for a year and put 15,000 miles on the odometer. He was also involved in a minor accident. At age 17, Rick wants to disaffirm the contract with Car World and get a full $5,000 refund. Car World objects. Its owner says, "Look, the car has higher miles that it did last year, and even if it wasn't damaged from the wreck, I could only sell it for $4,000. And with the damage on top of the higher miles, I can't sell it for more than $3,000. And besides, I sold this car more than a year ago - I shouldn't have to issue any refund at all." What refund should Rick receive if a court applies the rule that is applicable in most states? A. $5,000 B. $4,000 C. $3,000 D. $0

A. In a most states the minor is entitled to the full amount that he or she paid without any deduction for damage or depreciation, even if a contract is fully executed.

"Well, he does have to prove his case, sure," Angela says. "But this isn't a criminal case. He doesn't have to prove his case beyond a reasonable doubt to win. 51% certainty is good enough. Preponderance of the evidence, or something like that?" "Uh," Roger replies. He sorts receipts in silence for awhile. Then, "you know, I'm worried that this will get in the papers, or maybe make the Channel 6 news. They're always doing reports on 'dirty restaurants.' I mean, I still don't think we did anything wrong, but that could really hurt business, you know?" "I know," Angela replies. "I wonder if we shouldn't offer to settle the case. Or try to work it out without going to court over it." "Maybe." "It's just...the guy's so prickly, you know. The couple of times I've talked to him over the phone, he's just out of control furious. I don't think he really wants to talk. I just really wish we could get this thing behind us once and for all. Even if I have to write a check, I don't want to go through a trial that might generate bad publicity." "Well, you might call Lawyer Dave, and ask about _______________," Angela says. Question 4: What method of alternative dispute resolution might best accomplish Roger's wishes and lead to a binding conclusion to the case outside of a courtroom? A. Arbitration B. Mediation

A. Mediation is not a binding process. If a settlement is not reached, the plaintiff can still file a traditional lawsuit. Arbitration results are normally final and binding.

Ann sues Bill in a negligence lawsuit. What type(s) of damages can she seek? A. compensatory damages B. punitive damages C. both A and B D. none of the above

A. Of the type of cases we have examined so far, only in intentional tort cases can a plaintiff seek punitive damages.

"Companies don't exist in a vacuum, Roger. They're a part of society. Without a strong and stable society, companies can't succeed. We should try to leave things better than we find them. We are in a position to do the right thing here, and we have a moral obligation to do it." "I disagree with that," Roger said. "We have shareholders now, and they expect a good return on their investment. I work for them. They expect me to run the company legally and make as much money as possible. End of story. And if they want to take some of their return and put it toward good causes, then that's fantastic. But I won't do it for them." Question 6: Who takes the view that corporations are "agents of capital"? A. Roger B. Angela

A. Roger

Roger shows up at his friend Fred's house. Fred did not invite him over, but Fred is glad to see him, and the two sit down to watch a baseball game. Later, Roger uses a bathroom at Fred's house, and he receives an electrical shock from a light switch. Fred knew that the switch was badly wired, because his cousin received a shock from the same switch last week. Did Fred have a legal duty to warn Roger about the faulty switch? A. Yes B. No

A. Roger is a licensee. As such, Fred is obligated to warn Roger about hidden dangers on his property if Fred has actual knowledge of them.

In January of 2020, Ron is hired by a television network to write a screenplay as a work for hire for an upcoming episode of one of their popular programs. He delivers the work, and the episode is filmed and airs later in the year. Also in 2020, Ron writes and publishes a science fiction novel. Ron passes away in 2040. Will the copyright on the screenplay or the novel expire first? A. The screenplay B. The novel C. They will expire at the same time.

A. The copyright on the screenplay will expire in 95 years because it is a work for hire, so it expires in 2115. The copyright on the novel will expire 70 years after Ron's death, or in 2110.

Ronny sells his successful seafood restaurant to Ken. Initially, Ronny plans to retire. But in the weeks after handing the restaurant over to the new owner, many of Ronny's customers reach out to him and tell him how much they miss having him around. Ronny decides to open a brand new seafood restaurant a few blocks away from the old one. This infuriates Ken, who points out that Ronny agreed to a noncompete clause in the contract that transferred ownership of the old restaurant to Ken. In it, Ronny promised not to open a competing restaurant for one year in the same town. "It's a free country," Ronny says. "It's a new business under a new name. You only bought the old one. Leave me alone." The noncompete clause _______________ the ancillary requirement. If Ken sues to enforce it, a court probably ____________ issue an injunction ordering Ronny not to open a new restaurant for a year. A. meets; will B. meets; will not C. fails to meet; will D. fails to meet; will not

A. The noncompete is a part of a larger agreement, so it meets the ancillary requirement. It is also limited in geographic area and for a reasonable amount of time, and as such, it is enforceable against Ronny.

Bill says proudly to his friend Dean, "Look! I just got the new iPhone!" Holding it side- by-side with his old iPhone, he says, with great enthusiasm, "It's so much better! Look what it can do! Wow!" Dean thinks that the phones look about the same as Bill rambles on and on. Dean gets really, really bored for a while. But, his attention returns when Bill says, "I need to get rid of this old one. I guess it's not worth much now, not with all these upgrades on the new one!" "Hmm...can you make calls and check baseball scores on the old one?" Dean asks. "Sure, but oh baby, not like you can on the new one! I mean, the pixel count alone..." "How much would you want for it?" Dean asks. "Oh. Ah...I'll sell it to you for $50." "I'll take it," Dean says. "Oh, ah...OK," Bill says. "But, you know, I didn't really want to sell it. I, ah...I really never meant to, you know, make a real contract or anything. I was just, ah, just talking." Has Bill made an offer? A. Yes, because his objective intent was to make an offer. B. No, because his subjective intent was to not make an offer. C. No, because he did not use the word "offer" in the statement underlined above. D. No, because he did not write his offer down.

A. The underlined statement would seem, to a reasonable listener, like a specific proposal to make a specific deal. Bill's secret, "in his own mind" intent may be different, but subjective intent is not relevant. He does not need to use the word offer or (as we shall see later) put the proposal in writing to make an offer.

Walter makes watches. One summer, he invents a new configuration of gears that allows for a watch to keep track of multiple time zones in an entirely new way. He works alone for countless hours, and does not share his work with anyone. The new configuration was very difficult to dream up, and required a significant amount of expertise and imagination. He calls the new watch the "Neptune", and plans to start selling it in his shop. It starts selling very well very quickly. Is Walter's design the kind of thing that can be protected as a trade secret? A. Yes B. No

A. The watch design checks all 4 boxes from the items listed above the example.

A promises on June 1, 2020, to perform for two-hours at a wedding reception on August 12, 2021. Does this contract need to be in writing to satisfy the Statute of Frauds? A. Yes B. No

A. This contract must be in writing to be enforceable. Even though the performance itself will take only two hours, by the contract's terms that performance must occur more than one year after the contract was made.

"I think I'm really onto something with this drink," Roger says. "I'll say," Angela agrees. "We sold about thirty cases of it just yesterday. People like it." "Yeah. I'm thinking about expanding everything. Maybe hiring a few people to just work on the drink. It's getting to the point that I can't keep up by myself." "OK, great." "I want to be smart about it, though. If this thing gets really big, I don't want anyone to, you know, copy my idea. I want to make sure I own everything before I really go for it." "That's a good idea, Roger." "I also need to figure out what to call it, once and for all. I mean, we've been calling it 'Morning Blast,' just for laughs, but wonder if I shouldn't change that. I'd like for people to drink it all day, not just in the morning, you know? Sometimes I think I should just call it 'Smith's Energy Drink'. I Googled that earlier, and there's no such product on the market right now, so maybe that." Question 1: Whichever name Roger selects, what kind of intellectual property protection (trademark, trade secret, patent, copyright) can he use to cover the name of his product? A. Trademark B. Trade Secret C. Patent D. Copyright

A. Trademark

Question 4: Utilitarianism is an example of a consequentialist theory. A. True B. False

A. True

"Look, I hear you," Roger says. "But the board is already bugging me about controlling costs." "OK. But again, this just isn't that much money for a company that does ninety million dollar a year in sales." "Maybe. But let's be realistic. This would be good for a few farmers." "A few dozen farmers. At least." "OK, a few dozen. But it's not good for our shareholders, because they make less money. It's probably not good for our customers, because if our costs increase, then eventually we have to raise our prices. It might not be good for our employees, because there'll be less money around for them. I mean, if I'm going to do something new that costs $200,000 a year, I think I'd rather hand out more raises around here, or make a larger contribution to our workers' health coverage." "I don't think $200,000 split, what, into hundreds of tiny pieces is enough to make anyone's paycheck noticeably larger. And we won't have to increase the price of "Morning Blast," not even by a single penny per can. The money can be impactful for the farmers, though." "Still, I don't know, it seems to me like the benefit doesn't outweigh the downside." Question 3: What type of argument is Roger making? A. utilitarian B. deontological

A. Utilitarian

Carl challenges a statute under his 14th Amendment right to equal protection. He argues that the law makes distinctions based upon race, and that it must be struck down. The court will apply ______________ scrutiny to the claim. If it wishes to keep the law in place, the government will have to convince the court that it is necessary to further a(n) ______________ state interest. A. strict; compelling B. strict; important C. intermediate; compelling D. intermediate; important

A. When a law makes distinctions based on race, courts will apply strict scrutiny. That standard requires that states demonstrate a compelling interest if they wish to seek to have the challenged law remain in place.

Would you like credit for question 50? A. Yes, please. B. No thanks, knucklehead.

A. Yes, please

"Which one? Companies own logos and recipes all the time, right?" "Right, but I think you can only trademark the logo. I think you have to do something else for the recipe. Protect it as a trade secret, or maybe get a patent to cover it." "Hmm..." Roger replies. "Hey, what's the difference between those, anyway? I just want something that can keep someone from stealing my recipe, you know? And I want for it to last a long time. I might be selling this stuff practically forever." "Well, this is another thing to run by Lawyer Dave, but it seems like _____________ would be better for what you want. The other thing expires, eventually." Question 5: For the potentially longest lasting protection against "secret recipe theft", Roger should rely on... A. A patent B. Trade secret protection

B. A trade secret protection

Consider Abner v. Doubleday, a case that will be heard by a U.S. Court of Appeals. Which of the following can you say is definitely true? A. Abner was the plaintiff in the original lawsuit brought to district court. B. Abner is bringing the appeal to the U.S. Court of Appeals. C. Abner was the defendant in the original lawsuit brought to district court. D. Both A and B are definitely true. E. None of the above are definitely true.

B. Abner is bringing the appeal to the U.S. Court of Appeals.

Ted is Jane's boss. Almost every week for the last two years, he has started the Monday morning meeting with a dirty joke. Most of them are about sex. Jane has had enough. Which of the following types of sexual harassment has Ted probably committed? Assume that the company does not have any particular sexual harassment policy. A. quid pro quo B. hostile work environment C. both A and B D. none of the above

B. Although bosses are the usual perpetrators of quid pro quo harassment, no sexual advances or demands for sexual contact were made here. But, persistent dirty jokes likely meet the severe or pervasive requirement, and Ted has very likely created a hostile working environment.

"Seen the latest numbers?" Roger asks, grinning. "I have," Angela answers, smiling right back. "I can't believe I used to make batches of this stuff out in my garage." "I'm glad you did. I was getting tired of managing the restaurant." Roger laughs. "Yeah. Wow, that was a long time ago." "Sure was." "Yeah. So, hey, you wanted to talk to me about..." "Oh, right." Angela takes a seat and flips a page on a notepad. "So our contract to buy 'Ingredient X' from our supplier is up next month." "Ah, the secret ingredient. Have to have that. So, they're raising their prices on us?" "No," Angela replies. "Our current supplier still offers the lowest price." "Well, that's great. Let's lock them up for another five years - they always deliver on time." "Can we consider another option for a minute first?" "Oh," Roger says. Then, spreading his hands, he says, "Sure. Go ahead." "Our other option is to sign a new deal with a group that has a fair trade agreement with the farmers who grow Ingredient X. The farmers get a living wage that keeps them out of poverty. A lot of the farmers who grow Ingredient X for us now barely make enough money to survive." Roger steeples his fingers and rests his chin on them. "Uh huh," he says. "And in return, the farmers adopt sustainable agricultural practices. I've looked into this thoroughly, and I think everyone delivers on their promises." "Uh huh. And...how much more does the fair trade supplier want from us?" "Not much. About 7%." "Uh huh." Roger starts scribbling on a scrap of paper. "And that means we pay them an extra...let's see...an extra...two hundred grand a year?" "Give or take." "That's a lot of money, Angela." 235 "Not for this company - not anymore. It's a rounding error for us. We should take care of the farmers that help to make our product possible. We have an obligation to treat others as we would wish to be treated" Question 1: What type of argument is Angela making? A. utilitarian B. deontological

B. Deontological

Angela considered Roger's proposed names for a moment. "I dunno, boss. I think you might have a problem with one of those names, if you really want to make sure you own everything and no one can copy you." Question 2: What kind of term is "Smith's Energy Drink"? A. Generic B. Descriptive C. Suggestive D. Arbitrary

B. Descriptive

Rex tries to make decisions in such a way as to benefit as many people as possible. Sam tries to treat everyone as he would wish to be treated. Rex takes a _________________ approach to decision making, and Sam follows a ______________ approach. A. utilitarian; utilitarian B. utilitarian; deontological C. deontological; utilitarian D. deontological; deontological

B. Doing the greatest good for the greatest number is the goal of utilitarianism. Following moral rules, such as the Golden Rule, is the hallmark of deontological ethics.

Paul Plaintiff, a resident of Texas, files a lawsuit in Texas against Don Defendant, a resident of California. Don receives notice of the lawsuit, and tells his lawyer, "I don't want to travel to Texas to be sued by this guy." Don's lawyer says, "Maybe you don't have to." The lawyer argues that the Texas court lacks personal jurisdiction over Don. Paul's lawyer asserts that the court does have personal jurisdiction, and that the case should proceed. Six months before, Don travelled to Texas, signed a contract with Paul while he was there, and returned to California. He has made no other trips to Texas, and has had no other interactions with the state. In Paul's lawsuit, he alleges that Don has breached that contract. Which of the following types of personal jurisdiction does the Texas court have over Don? A. General personal jurisdiction B. Specific personal jurisdiction C. Both A and B D. None of the above

B. Don engaged in a specific act (signing the contract) in the forum state (Texas), and the lawsuit arises out of that specific act. Don has no long term presence in Texas or regular Texas activities, and so there is no general personal jurisdiction.

According to an example in the module, in the 1990s, leaders at Sears Auto Centers set aggressive goals that caused many Sears employees to widely overcharge for work and to perform unnecessary repairs. Other similar examples involved Washington Mutual and Wells Fargo. The problem at the heart of the companies' troubles was... A. Failure to adopt a code of ethics B. Improperly structured compensation C. A lack of effective ethics training D. None of the above

B. Each company put compensation structures in place that incentivized wrongful behavior by employees.

Roger and Lawyer Dave try to interest the plaintiff in signing an arbitration agreement, but the plaintiff is not interested. The lawsuit proceeds, and the jury believes the plaintiff's evidence. Luckily, the press does not pick up on the case and make it a big story, but the jury determines that Roger should pay $25,000 in damages. He is talking to Angela in the restaurant's break room and considering whether to appeal the case or just pay the plaintiff, and he is quite irritated at how the case unfolded. "I know I wanted to settle the case, but that was before that guy spent two entire days lying to the jury in court. I mean, some of the stuff he said was ridiculous!" "I know, Roger," Angela said. "He shouldn't get away with it. I know I'm going to have to pay Lawyer Dave a lot more money, but I think I want to appeal the case." "OK. But what will you argue?" "What will I argue? That the guy was lying, and the jury believed the wrong guy - that's what I'll argue!" Question 5: Based on his planned argument, does Roger have a strong chance of winning an appeal? A. Yes B. No.

B. Errors on law often lead to cases being overturned on appeal, but errors of fact usually do not generate a successful appeal.

EXAMPLE Vince goes to a baseball game. The back of his ticket says, "team is not liable for injuries in the stands." Vince has a few beers, and taunts the shortstop throughout the game. Late in the game, Vince says something very unpleasant about the shortstop's mother. The shortstop drops his glove, charges into the stands, and beats Vince senseless. When Vince gets out of the hospital, he sues the team. The team wants to escape liability, and points out that their exculpatory clause on the back of Vince's ticket covers this kind of thing. Will a court likely enforce the exculpatory clause and prevent Vince from seeking damages? A. Yes B. No

B. Even though this is a recreational activity, exculpatory clauses only cover negligence, and not intentional wrongful acts. Vince can go ahead with his lawsuit.

Question 7: According to a large survey cited in the text, a majority of managers in every nation agree with Roger that the only legitimate purpose of a corporation is to make a profit. A. True B. False

B. False

Milton Friedman argued that corporations are agents of _______________. He _______________ argue that corporations should be socially responsive. A. capital; would B. capital; would not C. society; would D. society; would not

B. Friedman was a leading advocate of the idea that companies do not owe duties to society, and that corporate leaders should make decisions in such a way as maximize shareholder wealth.

Picture a Rolex. Oyster Perpetual. Self-winding. Certified Chronometer. Nice. But this Rolex has a problem. Because Seller Sam once dropped it, its second hand and the shaft that turns it is bent ever so slightly. No one would really notice. But every so often, the flaw causes the movement to get stuck, and the watch stops keeping accurate time. To avoid committing fraud, does Seller Sam have an obligation to disclose this defect to Ben Buyer? A. Yes, but only if Sam is a watch expert or in the business of selling watches. B. Yes, whether or not Sam is a watch expert or in the business of selling watches. C. No, because if he does not make a false statement, he can't commit fraud.

B. Generally, sellers (expert or not) have an obligation to disclose latent, or hidden, defects.

Angela considers for a minute. "I don't think so. We don't operate in Florida, and we don't send any orders that way. Our website 'exists' in Florida, I guess, but we don't sell anything online." "Well, all right, then," Roger says. "That's good. I'll run that by Lawyer Dave when I get back, just to be sure, but that sounds good. Let's just sit on this for now. It'll keep until I get back." Question 2: Is it OK for Roger to wait three weeks before acting, or would that create a specific problem that makes you believe he should he call his lawyer now? A. OK to wait. B. He should call his lawyer before leaving.

B. If he does nothing, he risks a default judgment being entered against him.

The general standards that constitute the smallest amount of ethical conduct necessary for the functioning of civilization are referred to as ______________________. These standards ____________ require defense or justification. A. the moral minimum; do B. the moral minimum; do not C. virtue ethics; do D. virtue ethics; do not

B. If people do not comply with these standards, they help diminish the social and economic relationships that cause a society to function effectively. As such, these principles do not require defense or justification.

Which of the following philosophers championed deontological, or rule-based, ethical reasoning? A. John Stuart Mill B. Immanuel Kant C. Jeremy Bentham D. Aristotle

B. Immanuel Kant

Fred is a prospective juror in a case in which Al Attorney will be asking for $10,000,000 in damages. During voir dire questioning, Al gets the feeling that Fred will be unlikely to award such a large sum. He does not have a good argument that Fred will be biased or will fail to be impartial, but he would still like to keep him off the jury. To do so, Al will probably have to use which type of challenge? A. challenge for cause B. peremptory challenge C. neither would be effective for keeping Fred off the jury

B. Judges will grant challenges for cause only if a prospective juror seems likely to biased. But peremptory challenges can be used for most reasons as long as they are not used in a discriminatory way.

B. Judges will grant challenges for cause only if a prospective juror seems likely to biased. But preemptory challenges can be used for most reasons as long as they are not used in a discriminatory way.

Lauren is distracted by a bee in her car, and while paying attention to the bee, she fails to notice Ron's car until it is too late to avoid a collision. Has Lauren been negligent per se? A. Yes B. No

B. Lauren has not violated a law, like a posted speed limit. She may be held liable for causing the accident, but she has not been negligent per se.

Tom discovers a new type of tree while exploring deep in a forest on a remote island. No one appears to have used it for anything before, and Tom would like exclusive rights to sell the wood. Sarah creates a new wood-like product in her lab. It is substantially stronger than any known natural wood. Can Tom and Sarah obtain patents that will cover their respective discoveries? A. Tom can receive a patent B. Sarah can receive a patent C. Both Tom and Sarah can receive a patent D. Neither Tom nor Sarah will receive a patent

B. Newly created substances are patentable, but naturally occurring substances are not.

"That seems like a fairly minor mistake - not really, what do they say...material? I don't think it's enough to cancel the contract." "Yeah. Oh, and then, he started babbling about mistakes. He said that even if I didn't lie to him, that we were both 'mistaken' about the size of the parking lot, and that meant he had the option to cancel the agreement." Question 4: Has there been a mutual mistake that allows Buyer Ben to back out of the deal? A. Yes B. No

B. No

"Well," Angela says, "I don't think that's what courts mean by 'mutual mistake'. Sounds like he's grasping at straws to me." 151 "Yeah." "Has he make any other complaints?" "No, I think that's all of them. Oh, wait, there was one other one. He said I forced him to sign the deal." "Why?" "When we met last week over lunch, I told him that he'd better act fast if he wanted to buy the place, because I was going to talk to another buyer on Thursday if we didn't have a deal by then." "Ah." "He said that made him feel pressure, and that he signed the contract under duress." Question 5: Can Ben Buyer back out of the deal on grounds of duress? A. Yes. B. No.

B. No

Imagine that Peter, who works for Pepsi, puts 200 cans of Pepsi into an empty vending machine on Monday morning. Later that day, Karl Klutz buys a Pepsi from the same machine and takes it out onto a second floor balcony. Karl sees Vince Victim down below, waves to him, and fumbles the Pepsi. The can describes a perfect arc and conks Vince on the head, knocking him unconscious. When he comes to, Vince feels like filing a lawsuit. Whose actions are a proximate cause of this injury? A. Peter B. Karl C. Both A and B D. None of the above

B. Only Karl's action is a proximate cause. Peter is sort of involved in all of this, in the sense that, if he had not restocked the empty machine, this accident might not have happened. But he would not be considered a proximate cause, because a jury would not say, "Ah, you should have known better - you should have foreseen that this kind of thing would happen if you did your job and put cans in the machine." Karl's actions would be a proximate cause, because a jury would say that he should have foreseen that if he dropped the can from a high place he might injure someone, and that he should have been more careful to hold onto it.

Ann Agent works for Pete Principal. Pete tells her, "Drive the company truck up to Dallas, pick up a shipment of widgets from Alpha Co, and bring them back to Austin." As Ann is driving the company truck up to Dallas, it runs low on gas. Ann fills up the tank. Is Pete obligated to pay for the gas? A. Yes, because Ann had express authority to buy the gas. B. Yes, because Ann had implied authority to buy the gas. C. Yes, because Ann had apparent authority to buy the gas. D. No.

B. Pete did not directly say anything about buying gas, but refilling the tank was reasonably necessary to carry out Ann's assigned task.

As Roger fires up his grill, some of his early-to-arrive guests start tossing a Frisbee around his backyard. Roger hears his neighbor Ned yell "catch", and he glances over his shoulder to see the Frisbee gliding toward his head. Roger instinctively raises an arm and manages to catch the Frisbee mere inches from his face. Some of his friends cheer his quick reflexes. Roger smiles and throws the disc back. When Ned puts up a hand to catch it, he just...misses it. The Frisbee smacks him in the mouth and chips a tooth. "Oufh!" he exclaims. Roger makes an "o" mouth. Wincing, he says, "Sorry about that, Ned. You OK?" Ned waives his hand noncommittally. Roger turns to Angela Murray, his restaurant manager. Quietly, he asks, "Say, he can't sue me, can he? Like the Florida guy?" Question 1: Could Ned bring a successful lawsuit against Roger for negligence? A. Probably so. B. Probably not.

B. Probably not

"I still wouldn't worry about it, boss," Angela says. "How could you have known that steak sauce would lead to shrieking that would startle a squirrel into dropping a nut that would startle a cat that would jump on Ned's face? I mean, come on, it's ridiculous. It's the kind of thing that a guy who's a good teacher but mediocre writer would think up while listening to the seventh inning of a spring training baseball game on satellite radio." "That's...really specific," Roger replied. "But I think you're right. I mean, I never would have guessed...anyway, let's get this antiseptic out to poor old Ned." Later, Roger's party is still going strong. As he mingles with some of his guests, Roger notices that several of his friends have started a football game in the large undeveloped field behind Roger's yard. He jogs over to them. "Room for one more?" he asks. His friends enthusiastically welcome him, and he joins the defense. "Touch or tackle?" he asks. "Tackle," reply several of his friends. A few plays later, Roger's neighbor Ned catches a short pass and turns up the field. He runs in Roger's direction. He is all intensity. His chipped tooth, scratched face, and swollen tongue seem to indicate that he means business. Ned jukes left, jukes right, and spins...right into Roger's grasp. Roger drags him to the ground, falls on him awkwardly, and Ned's hand folds up underneath his body at an unusual angle. "Aargh!" Ned yells. "Oh, man, sorry Ned," Roger says. "I think you broke my finger!" Ned says indignantly. "Ah," Roger says, wincing again. "Dang it!" Ned says, tossing the ball aside. He glares at Roger. "Gee, I'm sorry, buddy," Roger says. Ned does not seem eager to accept the apology. "I...am going to get an ice pack," he says. Ned gets up and stomps back to Roger's backyard, cradling his injured hand in the crook of his elbow. Roger follows him several paces behind. He passes Angela, and asks from one side of his mouth, "Can he...?" Question 4: Can Ned win a battery lawsuit against Roger? A. Probably so. B. Probably not.

B. Probably not.

"Well, you did warn him, Angela says. "Yeah," Roger replies. By the time they get to the now-collapsed gate, Ned has emerged without any help. His eyes shine with fury. His face is a mess, and his hair is wildly out of place. Ned picks up a board with a nail sticking out of it. "You!" he yells at Roger as he takes a menacing step forward. "Calm down, Ned," Roger says, hands up and palms facing out. "Let's be reasonable, here." "Reasonable?!" Ned swings the board, and Roger takes a step back. "Reasonable?!" he takes a second swing with more force behind it. Roger retreats further. "Calm down, Ned," he says. Ned responds with a third swing, and the nail whistles by an inch from Roger's face. "Stop it!" Roger yells. Ned ignores him, and winds up for a mighty swing of the board. Scared now, Roger steps forward and delivers a neat punch to Ned's nose. Ned's knees buckle, he drops the board, and he goes down hard. He rolls around in the grass, groggy. Roger looks at Angela. Question 6: Can Ned now win a battery lawsuit against Roger? A. Probably so. B. Probably not.

B. Probably not.

Amanda laughs. "You're just paranoid after that last lawsuit. No worries here. You didn't do anything unreasonable." Roger sighs in relief and resumes prepping his grill. A short time later, the burgers on Roger's grill are sizzling hot. "Burgers are ready!" Roger calls out. Ned is first in line. He separates a hamburger bun into halves and holds out his paper plate. Roger smiles and uses his spatula to take a perfectly cooked patty covered with bubbling cheese from the grill and deposits it neatly on Ned's bun. "There you go, buddy," he says. Ned places the top half of the bun on the steaming patty and immediately takes a huge bite. After a hang time of two seconds, Ned's eyes bug out. "Hot!" he says, opening his mouth wide. "HotHotHot!" Ned grabs a pitcher of iced tea from a nearby picnic table and drinks deeply. "Oh, my tongue, I burned my tongue!" He says. Roger turns to Angela, one eyebrow raised, asking a question without saying anything. Question 2: Now could Ned bring a successful negligence lawsuit against Roger? A. Probably so. B. Probably not.

B. Probably not.

Angela shakes her head. "He agreed to play tackle football. This is the kind of thing that happens in tackle football." Roger breathes yet another sigh of relief and heads back to his house. Inside, he finds a disgruntled Ned. "This isn't helping," Ned says of the ice pack. "I really think it's broken." "Oh, man," Roger says. Ned rises from his chair and says, "I'm going to urgent care. Thanks for a lousy time, Roger." "Sorry, again." "Yeah." Ned heads out the back door, through Roger's yard, and for the side gate. "Oh, hey, Ned, don't go out that side gate, buddy." "Whatever," Ned replies without breaking stride. "No seriously. I have to get the hinges fixed. It's not stable. Go out through the front..." "I said WHATEVER!" Ned pulls the gate open. With a loud creak, it breaks away from its hinges, wobbles, and falls toward Ned. He falls flat on the ground, and several of the gate's boards fall directly on top of him. Roger hears something like "ULL SOO YOO RODER!" from beneath the wood pile. He and Angela hurry over to help, exchanging glances. Question 5: Now, can Ned successfully sue for negligence? A. Probably so. B. Probably not.

B. Probably not.

Angela shakes her head. She whispers to Roger, "I don't think you have any problem. You don't have to warn your guests about things that are obvious. Burgers right off the grill are hot - everybody knows that." Roger relaxes a bit, but he does say to his other guests, "Ah, let's let these cool off for a few minutes, OK?" He makes a pyramid of hamburger patties on a large platter and sets them aside to cool. Minutes later, another of Roger's guests assembles her burger. Nearby, Ned rests in a reclining laws chair and fans his burned tongue. Roger passes by with a bottle of A1 steak sauce. "Add a little A1?" he asks. "Sure, I guess so," his guest replies. Roger pours a circle of brown sauce around her hamburger. His guest smiles, and a few moments later, takes a bite. "Ah!" she exclaims. "Spicy! Spiceeeeeeey!" Her surprisingly loud shriek startles a squirrel in a nearby tree. The squirrel leaps to a higher branch, and in the process, fumbles an acorn that it was carrying. The acorn falls and conks a sleeping cat on the head. Startled, the cat leaps straight up in the air and lands on Ned's face, claws flying. "Aahhh!" Ned yells as he swats at the cat. The cat leaps away, leaving behind several claw marks. "My face!" Ned yells. "Oh, wow!" Roger says. "Hey, lemme get you some antiseptic, buddy." Ned groans. Roger quickly goes inside his house in search of his first aid kit. "I'll help you," Angela says, and follows Roger. Inside, Roger says, "What are the odds? Three injuries in a row. This is a disaster! He's gonna to sue the pants off me for sure." Question 3: Now could Ned successfully sue for negligence? A. Probably so. B. Probably not.

B. Probably not.

Walter makes watches. No smart watches, digital watches, or even battery powered watches for him - he works with tiny gears and makes old fashioned mechanical watches. One summer, he invents a new configuration of gears that allows for a watch to keep track of multiple time zones in an entirely new way. He calls the new watch the "Neptune", and plans to start selling it in his shop. Which of the following can Walter probably trademark? A. The design for his new kind of gear movement B. The name of his new kind of watch: "Neptune" C. Both A and B

B. Product names are often trademarked. Designs and inventions are usually protected as trade secrets or with patents, which are described over the next two modules.

Alice is distracted by her navigation system and strikes Al's car with her car. Brenda is driving 50 miles per hour over the posted speed limit while drunk, blindfolded, and talking on two cell phone when she strikes Bill's car. Which of them has likely committed an intentional tort? A. Alice B. Brenda C. Both A and B D. None of the above

B. Simple carelessness like Alice's lead to negligence lawsuits. Deliberate actions and reckless actions like Brenda's, lead to intentional tort cases

B. Simple carelessness like Alice's leads to negligence lawsuits. Deliberate actions, and reckless actions like Brenda's, lead to intentional tort cases.

Sue rents a Segway scooter. While riding around downtown, she spots her arch enemy Archie, who is standing on a sidewalk facing away from her and looking at his phone. Sue grimaces, sets her shoulders, and accelerates to the Segway's top speed of 5 miles per hour. With a look of pure rage, she zeroes in on Archie, who is still looking at his phone and scrolling through an endless stream of nothing in particular. Eventually, Sue reaches Archie and runs into him from behind, knocking him down to the sidewalk. Archie never saw it coming. In the fall, he breaks his wrist. What torts has Sue committed? A. Assault B. Battery C. Both A and B D. None of the above

B. Since Archie was never afraid, Sue has not committed assault. But, since she deliberately acted and caused a harmful bodily contact, she has committed battery.

Consider the following three businesses and organizations: -A church requires that employees in its youth ministry be Christians. -A large computer manufacturer requires that its employees be Christians. -A small dry cleaners that employs 10 people requires that its employees be Christians. Which of these could be successfully sued under the Civil Rights Act? A. The church B. The computer manufacturer C. The dry cleaners D. B and C E. A, B, and C

B. The church, as a religious organization, can discriminate in favor of members of its own faith. The dry cleaning business is too small - with fewer than 15 employees, it is exempt from Title VII. The computer manufacturer is acting illegally.

A child says, "All my friends are allowed to text as late as they want to!" Her parents reply, "If everybody else jumped off a cliff, would you jump, too?" The child is forming her belief about acceptable conduct through a filter of... A. obedience to authority B. conformity bias C. groupthink D. the false consensus effect

B. The conformity bias tells us that people tend to take their cues as to proper behavior in most social contexts from the actions of others.

Roger Smith owns a restaurant in Texas. It is not part of a chain - Roger only owns one restaurant. He does not ship food or anything else to customers. Everything he sells is sold at his restaurant itself. Angela Murray is Roger's longtime manager. Roger shows up before the restaurant opens on a Tuesday morning wearing shorts, flip flops, and a Hawaiian shirt. He is about to depart for a three week vacation in Mexico. "Morning, Angela!" he says. "Hey, boss," Angela replies from behind the bar. "Just about to head out. Anything we need to talk about before I go?" "Actually, there is." Roger's smile fades a bit. "Okay," he says, sitting down at the bar. "Go ahead." "You remember that guy from Florida last month? The one who claimed he picked up a case of food poisoning here?" "Yeah..." Angela places a folded document in front of Roger and smooths out the crease. "He's suing us." Roger's smile is now completely gone. "You're kidding." "Nope. Worst thing is, he's trying to sue us in Florida." Roger examines the paper more closely, and he becomes aggravated. "He can't do that! I don't know why he got sick, but it wasn't our fault! And he sure can't make us go to Florida. Or...can he?" Question 1: Can the former customer from Florida force Roger to defend the case in Florida? A. Probably so. B. Probably not.

B. The plaintiff likely has selected a court that lacks personal jurisdiction over Roger.

"I know you don't want to think about this right now, but I think you ought to call Lawyer Dave before you leave," Angela says. "If you look at the document, the deadline for replying is a couple of days before you'll be back." Roger squints at the papers. "Uh. I guess you're right. Well, OK." Roger sighs and starts to thumb through the directory on his iPhone. While Roger soaks up the sun on his trip, Lawyer Dave gets the Florida lawsuit dismissed for lack of personal jurisdiction. Roger has had no minimum contacts with the state. Undeterred, the plaintiff files again in a Texas court a month later. After closing time, Roger and Angela are discussing the new lawsuit. "Lawyer Dave told me that he can't do the same magic trick to make the case go away this time," Roger says as he helps Angela go through receipts. "This Florida guy sure is persistent." "That he is," Angela agrees. "I don't know why he thinks he can win. This isn't like a robbery or something where there's a guy on a surveillance tape and a lawyer can show they jury that it's the same guy who's at the defendant's table. I mean, I guess he got really sick, but he can't say for sure that our food made him sick. Maybe it did and maybe it didn't, but he can't prove it, right? Question 3: How good does the plaintiff's evidence need to be for him to have a chance to win the case? A. Excellent, airtight proof is required. B. Reasonably good evidence gives the plaintiff a chance to win.

B. The plaintiff will have to prove his case by a preponderance of the evidence. Proving a case beyond a reasonable doubt is only required in criminal cases.

"Which one?" Roger asks. "I don't think you can trademark 'Smith's Energy Drink', even if no one else has already done it." "Why not? McDonald's is a guy's name. I think." "Well...maybe eventually you can trademark a name, but I think it's only after your product gets to be a really big deal. You should ask Lawyer Dave about that." "Yeah, I will." "And I like Morning Blast anyway. Catchier." "Yeah. Maybe you're right. Either way, I want the old man logo to be on every bottle. I should trademark that. And the recipe. I don't want anybody copying it. I'll trademark that, too. "I, ah, I actually don't think you can trademark both of those things, Roger." Question 4: Which of these things cannot be trademarked? A. The old man logo. B. The recipe for the energy drink. C. Neither of them can be trademarked

B. The recipe for the energy drink

Bredeson teaches at UT and also writes textbooks for different publishers. While at UT, he has regular teaching and committee assignments. He reports to a department chair and a Dean, and he is paid a regular salary. While working for UT, he is an _________________. When writing the books, he is commonly paid a flat rate per project. "We'll pay you X number of dollars to write a 300-page textbook on business ethics by June 1," the publisher might say. The publishers typically do not set specific hours, and he does not typically have the writing managed while it is being done. While writing the books, Bredeson is an __________. A. employee; employee B. employee; independent contractor C. independent contractor; employee D. independent contractor; independent contractor

B. The teaching work meets all three of the main criteria for employees, and the writing meets all three for contract workers.

Jed promises to move his neighbor's furniture to a new apartment next Saturday, and the neighbor agrees to pay $300 for Jed's work. What kind of contract does Jed have with the neighbor? A. unilateral B. bilateral

B. The two parties have exchanged promises, and so like most contracts, this one is bilateral. The parties intend to be bound at the time they exchange the promises.

June does not qualify for a car loan. She calls her aunt from the car dealership, and the aunt decides to help out her favorite niece. Over the phone, the aunt tells the general manager of the finance department, "Go ahead and loan her the money, and if she misses the payments, I'll make them." The aunt's promise ____________ contain the elements of a guaranty contract. If the car dealer makes June the loan, and if June fails to make payments, the aunt's promise ______________ be enforceable. A. does; will B. does; will not C. does not; will D. does not; will not

B. This is a guaranty arrangement, but because it is not put into writing, it will not be enforceable against the aunt under the statute of frauds.

Jack loses a huge sum in a lawsuit with Pat Plaintiff, and he does not pay Pat for a long time. Pat's lawyer goes back to court and seeks the court's help in collecting what is owed. The court issues a document that empowers a sheriff to seize Jack's car and sell it at auction to raise part of the money. The court issues a second document that orders Jack's bank to deliver some of Jack's deposits into the custody of the court. The first document is a writ of ______________, and the second document is a writ of __________________. A. execution; execution B. execution; garnishment C. garnishment; execution D. garnishment; garnishment

B. Writs of execution empower law enforcement officers as described, and writs of garnishment order third parties to turn over assets belonging to another to the court

I say to you, "I'll sell you this pen for one dollar." "How about 50 cents?" you ask. "Well, I don't really know much about rap," I reply. "No," you say, shaking your head. "For the pen. I'll pay you 50 cents for the pen." "Ah," I say. "No, that's not enough." "OK, OK, I'll buy it for $1," you say. Do we have an accepted offer? A. Yes B. No

B. You have rejected my original offer (to sell the pen for $1) and have replaced it with a counteroffer (to pay $0.50), which I have rejected. It is too late for you to accept my original offer, because once terminated, an offer cannot be accepted. No deal.

"Well, it looks like you intended to make an offer. It doesn't read like a joke, and it doesn't sound like a preliminary negotiation. And the deal seems reasonably clear. So that's no problem. Both of you get something out of the deal...why does he say there's no contract?" Roger sighs. "We had a couple of drinks while we finalized the deal. He says he wouldn't have made the deal if he had been sober, and so he's not obligated to live up to it. But he didn't drink that much! I think he had two beers, and there's no way he had more than three. He can't back out of the agreement just because he had a couple of beers, can he?" Question 2: Does the buyer's alcohol consumption create a capacity problem? A. yes B. no

B. no

Tina has a dispute with her next-door neighbor. The neighbor's tree fell over onto her garage roof and caused significant damage. The neighbor has been slow to agree to pay for the damage. Tina says, "I'd like to work this out quickly, and I hope that I can still be friends with my neighbor later - it would be awkward to live next door to someone who is angry with me." Based on Tina's comments, she should start with which of the following? A. A trial B. An arbitration C. A mediation

C. A mediation will help her meet her desires for a faster resolution that is more likely to allow the parties to move past the dispute and coexist peacefully.

Consider the following three employees. -Ann was fired in 1960 because of her religious faith. -Ben was fired in 2018 for objectively poor work performance. -Carl was fired in 2018 because of his religious faith. Which of them would have been in a good position to sue under the Civil Rights Act and win their case? A. Ann only B. Ben only C. Carl only D. A and C E. B and C

C. Ann's firing happened before the Civil Rights Act existed. Ben's firing was not related to anything prohibited by the Civil Rights Act, and so under the employment at will doctrine his firing is acceptable. Carl has a valid claim.

In 1890, Congress passed the Sherman Antitrust Act. In 2008, Congress passed the Genetic Information Nondiscrimination Act. Which of these is/are a statute? A. The Sherman Antitrust Act B. The Genetic Information Nondiscrimination Act C. Both A and B D. None of the above

C. BOTH: Written laws passed by legislative bodies like Congress are statutes

Lenny hires Richard to demolish a small office building on a property that he has acquired. Richard will used controlled explosions to bring the old building down. When he does the job, Richard uses too much dynamite. A chunk of the old building is blasted across the street and destroys Pam's parked car. Can Pam sue Lenny for Richard's action? A. Yes, if Richard is an employee of Lenny's. B. Yes, if Richard is an independent contractor. C. Yes, absolutely, whether Richard is an employee or an independent contractor. D. No, absolutely not.

C. Because Richard is involved in an untrahazardous activity, Lenny is liable whether Richard is an employee or an independent contractor.

Ann lives in a state that has a 2-year statute of limitations and a 10-year statute of repose on negligence cases. Two bad things happen to her in 2018. First, she is involved in a car accident that is entirely the fault of Donny Driver. Immediately after the wreck, she is operated on by Sally Surgeon. Sally does a careless job of reconstructing Ann's elbow, but it is done in a way that causes no initial pain and that Ann does not even notice until 2020. Now it is 2021. Ann is frustrated by her elbow pain, and decides that she wants to sue both Donny and Sally. Can her lawsuit proceed if the defendants raise the defenses described in this section? A. Yes, against Donny and Sally. B. Yes, against Donny only. C. Yes, against Sally only, D. No.

C. Because she was not able to detect the botched surgery until 2020, the 2-year statute of limitations was tolled and did not begin to run until 2020, so the lawsuit against Sally can proceed. It is too late to sue Donny in 2021, because it has been more than 2 years since the accident.

Under the Supreme Court's modern interpretation of the Commerce Clause, the most important factor in determining whether a business' activities count as interstate commerce is whether... A. any customers reside in states other than the business' home state B. any physical items (goods) cross from one state to another C. the activities have any appreciable effect on interstate commerce D. the transactions are substantial in number, or involve a substantial sum of money E. none of the above

C. Before the 1930s, the Court paid more attention to whether items crossed state lines or used interstate rivers or railroads. Today, though, the Court is most concerned with whether the activities have an effect on interstate commerce. Most business activities do, and so most business activities can be regulated by the federal government.

Al contracts to sell land in Montana to Bob for $60,000. Bob later discovers - after signing the contract but before paying for the land, that the actual value of the land is only $30,000. Even though Al did not mislead Bob in any way, Bob refuses to pay, and Al sues. Can Al enforce the contract? A. No, because of the preexisting obligation rule. B. No, because of the peppercorn rule C. Yes

C. Bob is liable on his promise to pay $60,000, even though what he received was worth much less. Al incurred a detriment when he promised to convey the land—the surrender of his right to retain the property. The presence of this detriment constituted a consideration sufficient to support Bob's promise to pay; and Bob's claim of inadequacy is therefore of no relevance.

Imagine that Peter, who works for Pepsi, puts 200 cans of Pepsi into an empty vending machine on Monday morning. Later that day, Karl Klutz buys a Pepsi from the same machine and takes it out onto a second floor balcony. Karl sees Vince Victim down below, waves to him, and fumbles the Pepsi. The can describes a perfect arc and conks Vince on the head, knocking him unconscious. When he comes to, Vince feels like filing a lawsuit. Whose actions are causes in fact of this injury? A. Peter B. Karl C. Both A and B D. None of the above

C. Both Peter's and Karl's actions are causes in fact. If you eliminate either's actions, the accident doesn't happen. But as we will see shortly, it is very unlikely that Peter will be held responsible for Vince's injuries.

Paul owns two properties outside Woodsfield, Ohio. Gary, after viewing both acreages, makes Paul a written offer to purchase one for $18,000. Paul accepts the offer. It later develops that Gary had one property in mind while Paul, after reading the description contained in Gary's offer, honestly and reasonably believed that Gary was referring to the other property. Who can rescind the agreement? A. Paul B. Gary C. Both can rescind the agreement D. Neither can rescind the agreement

C. Either party can rescind the agreement, because there was a mutual mistake about the identity of the contract's subject matter.

Max sues the Houston Police Department after he is arrested during a protest. He claims his free speech rights under the U.S. Constitution have been violated. Jack sues MegaCorp over crop losses after MegaCorp dumps toxic chemicals into a river that eventually runs across his farm. He sues based on the federal Clean Water Act and also under Texas tort law. Which of these two plaintiffs could bring their case to federal court? A. Max B. Jack C. BothAandB D. None of the above

C. Max's case is based on the federal Constitution, so it's in. And although Jack's lawsuit is based on both state and federal law, since one of his claims raises a federal question a federal court would also have subject matter jurisdiction over his case.

Carol and Debby bring separate lawsuits under their 14th Amendment right to Equal Protection. Carol challenges a law that she claims makes distinctions based on gender. Debby challenges a law that she says makes distinctions based on the income level of residents of her state. If the government wishes to keep the challenged laws in place, it will have to convince the court the law is necessary to further a(n) ______________ state interest in Carol's lawsuit and a(n) ______________ state interest in Debby's lawsuit. A. rational; rational B. rational; important C. important; rational D. important; important E. compelling; important

C. Most social and economic regulations are subjected to the rational basis test. Laws or government policies that make distinctions based on gender must be justified as furthering important government interests when challenged in court on 14th Amendment grounds.

"I don't think so. If he had been really out of it, maybe. But two or three beers shouldn't affect anything." "Well, that's a relief. And another thing - he's claiming that I lied to him about the parking lot. He says he measured the lot yesterday, that it only comes to 1.24 acres, and that I committed fraud against him. I mean, come on. I never measured the land exactly. I bought it 10 years ago, and the realtor told me it was one-and-a-quarter acres." Question 3: Based on the incorrect description of the size of the parking lot, can Buyer Ben back out of the deal? A. Yes, because Roger committed fraud. B. Yes, because Roger made an innocent misrepresentation. C. No.

C. No

Zehmer is a farmer who owns the Ferguson farm. Lucy is a neighbor who has attempted to buy that farm before. Lucy sees Zehmer in a restaurant and tells him: "I bet you wouldn't take $50,000 for that farm." Zehmer replies: "Yes, I would, too. You wouldn't give fifty." The parties then talked about a potential deal for 40 minutes, writing up one version and then amending it when it dawned on them that Zehmer's wife needed to agree. The document the Zehmers signed said: "We hereby agree to sell to W.O. Lucy the Ferguson Farm complete for $50,000, title satisfactory to the buyer." The parties were drinking alcohol during this time, but were not so drunk as to not understand what they were doing. Later, when Lucy tried to pay, the Zehmers claimed that they were only kidding—it was all a big joke. Lucy sued to enforce the deal. Does a contract exist? A. No, because Zehmer lacked the required subjective intent to sell. B. No, because the offer was not sufficiently definite. C. Yes.

C. Objective intent is the key to whether an offer exists, not subjective (in your own mind) intent. The court held that a reasonable party in Lucy's shoes would not have known that Zehmer was joking. The price was fair, the parties negotiated for 40 minutes, and they put the deal in writing and signed it. And while the offer could have been more specific (with the farm's address, acreage, etc.) there is enough information in the offer for a court to determine what each side is promising the other. The basic deal is clear - the farm for the $50,000.

Angela is nearly nine months pregnant. She has worked for her current employer on a full time basis for the last 12 months, and her company has 16 employees. She would like to take the next nine weeks off from work. Evaluating only under the Family Medical Leave Act, what problems do you see with her expectations? A. The FMLA allows leaves only for illnesses and not for childbirth. B. Angela has not worked for her employer long enough to demand leave. C. Angela's company is not large enough to be required to comply with the FMLA D. Angela can claim up to six weeks of leave, but not the nine she desires. E. All of the above are true statements.

C. On employment law questions, always pay attention to the size of the company - most statutes in this area have minimum size rules. For the FMLA to apply, a company must have at least 50 employees, so Angela's company is not covered.

Alpha Company would like to give $10,000 to be used to fund ads that will seek to help elect Senator Smith. Alpha also runs many kinds of advertisements on TV and the internet, and hopes to be allowed to continue to do so without restriction. The ___________________ is/are protected as free speech. A. political donation B. advertisements C. political donation and advertisements

C. Political speech by corporations and truthful commercial speech by corporations each receive First Amendment protection

"OK," Roger says. "How do I make something a trade secret? Do I have to apply for that somewhere?" "I don't think so. I think you mostly just have to meet a condition." Question 6: To qualify as a trade secret, a company must take (absolute, comparative, reasonable, minimal) security measures to keep the information secret. A. Absolute B. Comparative C. Reasonable D. Minimal

C. Reasonable

Sidney signs a contract to sell her vacation house. Tom makes an agreement to work as an engineer for a local tech company. Veronica makes a deal in which she will sell her collection of rare books. Which of these contracts would be covered by Article 2 of the Uniform Commercial Code? A. Sidney's only B. Tom's only C. Veronica's only D. A and B E. B and C

C. Sidney is selling non-movable real estate, and Tom is selling his labor, or services. Veronica is selling tangible, movable property, or goods

Cobb purchases a gemstone from Drury for $25 and leaves Drury's house. At the time of contracting, both parties believe the stone is a topaz. In fact, it turns out to be an uncut diamond worth $700. Drury sues. This scenario is an example of a _______________ mistake, and Drury ____________ be able to rescind the contract. A. unilateral; will B. unilateral; will not C. bilateral; will D. bilateral; will not

C. Since both parties were mistaken about the true character of the contract's subject matter, it is a bilateral mistake. Drury can have the contract rescinded, thereby recovering the stone.

Question 3: What kind of term is "Morning Blast"? A. Generic B. Descriptive C. Suggestive D. Arbitrary

C. Suggestive

A wife attacks her husband with an ax, knocking him down. As she is about to decapitate him, a bystander intervenes, catching the ax on its downward flight. The bystander's hand is badly mutilated. The husband jumps up and promises to pay the bystander $1,000 for saving his life. When he later does not pay, the bystander sues the husband. Is consideration present that supports the promise to pay the $1000? A. Yes B. No, because the bystander did not suffer a detriment C. No, because the promise to pay did not induce the detriment D. No, because the wife caused the detriment to the bystander, and she is not a party to the lawsuit.

C. The plaintiff has clearly suffered a detriment in that she did something that she didn't have to do (stick out her hand to save the husband's life), and it is exactly what the husband bargained for. However, the promise did not induce the detriment. That is, because the husband made his promise after the bystander acted, we cannot say that his promise caused the life-saving intervention. Thus, most courts would not enforce this promise.

DuPont was constructing a large refining plant designed to enable the use of its new, secret process for producing methanol. Someone who knows a great deal about such refining processes could figure out how DuPont's new process worked by seeing and studying the facility under construction, and so DuPont put security measures in place as the plant was under construction, including a privacy fence around the construction site, restricted access with locked gates, ID checks, and guards who patrolled the perimeter. But, a competitor rented a small airplane, flew over the construction site, and took aerial photographs. (In more modern times, drones would make this kind of thing much, much easier.) DuPont sued. The defendant competitor claimed that the plant design should not count as a trade secret because DuPont did not take reasonable steps to protect the design. Will the plant design be determined to be a trade secret? A. No, because it is not the kind of thing that can be a trade secret. B. No, because DuPont did not take reasonable measures to protect the design. C. Yes

C. The plant design clearly gives DuPont an advantage and is the kind of thing that can be protected as a trade secret. And, although DuPont did not have perfect security, it took a significant number of measures to keep prying eyes away from the construction site. It could perhaps have built a dome over the sight, but extreme measures are not required to meet the four- part reasonable security standard outlined before the example.

When Congress passes a statute, it exercises ______________ power. If someone challenges the law in court and argues that the new law violates a part of the Constitution, the courts will use their power of ______________ to evaluate the law. A. executive; judicial review B. executive; separation of powers C. legislative; judicial review D. legislative; separation of powers

C. The power to create new laws is legislative power, and the power to assess the Constitutionality of the new laws is judicial review.

A fast food restaurant in a college town would benefit from a contract between a construction firm and the university calling for the construction of a four-level parking facility on campus property just across the street from the restaurant. The builder breaches the contract with the university by refusing to go ahead with the project, and the university looks like it may scrap the plans for the parking garage altogether. Can the owner of the restaurant sue to enforce the construction contract? A. Yes, because it is a creditor beneficiary. B. Yes, because it is a donee beneficiary. C. No, because it is an incidental beneficiary. D. No, because a third party that has not signed an agreement never has rights to enforce the contract.

C. The restaurant owner cannot recover damages from the builder as an unintended, incidental beneficiary. The university and the construction firm did not enter into this contract with a view to benefitting the fast food restaurant. But, intended creditor and donee beneficiaries are third party "outsiders" who do have rights.

Alice buys a copy the game Elf War on CD-Rom. She makes a single backup copy and gives the copy to her sister. Has Alice violated the game's copyright? A. No, because consumers are allowed to make a single backup copy. B. No, because of the fair use defense. C. No, for reasons A and B. D. Yes

D. A backup copy is allowed, but it cannot be given to another person, including a family member. And since she copied the entire game and reduced the market for new copies (now her sister has no further need to buy her own copy), Alice has not made a fair use of the software.

Roger copies 6 of the 7 elements of Barbara's patent, but does not have anything that is the substantial equivalent of the 7th element in the patent. Which of the following is true? A. Roger has literally infringed on Barbara's patent. B. Roger has violated Barbara's patent under the doctrine of equivalents. C. Both A and B. D. None of the above

D. All elements must be copied for literal infringement to have occurred. And, since at least one element is not substituted with a substantial equivalent, Roger has not committed a doctrine of equivalents type infringement.

"I thought you'd be for this, Roger," Angela says. You look out for the little guy all the time." "But the company isn't me. It isn't anybody - it's just a...thing. A paperwork creation. I'm a charitable guy, but that's when I'm on my own time. The company doesn't have to be a, what, a good citizen. It's not a person." Question 5: Who among the following would likely agree with Roger's point of view? A. John Ladd B. former Chief Justice John Marshall C. Milton Friedman D. All of the above

D. All of the above

The idea of a social contract supports the view that corporations are agents of _______________. The concept of group dynamics as it applies in corporate settings supports the view that corporations are agents of ______________. A. capital; capital B. capital; society C. society; capital D. society; society

D. Both ideas support an anti-Friedman view that corporations are moral agents and do owe an obligation to help meet societal needs.

Paul Plaintiff, a resident of Texas, files a lawsuit in Texas against Don Defendant, a resident of California. Don receives notice of the lawsuit, and tells his lawyer, "I don't want to travel to Texas to be sued by this guy." Don's lawyer says, "Maybe you don't have to." The lawyer argues that the Texas court lacks personal jurisdiction over Don. Don's lawyer asserts in a court filing that the court does have personal jurisdiction, and that the case should not proceed. He does not say anything else about the case in the filing. Don's lawyer has filed a(n) _____________________. This action ______________ give the Texas court personal jurisdiction over Don. A. appearance; does B. appearance; does not C. special appearance; does D. special appearance; does not

D. Don's lawyer has limited his claim to a lack of jurisdiction, and so it counts only as a special appearance and is not considered a "formal step to defend a lawsuit".

Gary is 50 years old, and is addicted to opioids. One morning, he takes a massive dose of Oxycontin, and when he arrives at work, he crashes his car into his boss' SUV. "That's it - you're fired!" yells the boss. Which of the following laws can Gary use to get his job back? Assume that Gary's company has 40 employees. A. The ADA B. The ADEA C. The Civil Rights Act D. None of the above

D. Gary has not been fired over a covered disability, so the ADA is out. Addiction can be covered, but the "current use of drugs," by definition, is not covered. Gary is over 40, which is the minimum age for ADEA coverage, but nothing in the question indicates that his age is a reason for his firing. The Civil Rights Act also will not work, because Gary has not been fired due to any factor covered by that statute.

Consider the following people, and whether each has the ability to disaffirm a contract. -Al is insane in fact. He signed an agreement, and he understood its nature and effect. -Bob has consumed five beers. He signed an agreement, and he understood its nature and effect. Which of these people can disaffirm their contract? A. Al B. Bob C. Both Al and Bob D. Neither Al nor Bob

D. It is not enough to be insane in fact or intoxicated. In addition, one must be unable to understand the nature and effect of the agreement made to be able to disaffirm.

"Sounds like regular negotiating to me, Roger. No threats, no wrongful economic pressure. Nothing, so far as I can see." "Just like all the rest of his claims." "Yeah. This will probably hold up, as far as I can tell," Angela says, sliding the paper back across the desk. "But you should call Lawyer Dave and see what he thinks." "Yeah. He's out today, but back tomorrow. I'll call him then. This buyer sure is being irritating." "I can't argue with that." "You know, if this deal does end up happening, I think I'll open up a restaurant across the street from the old place, just out of spite. Make it hard for the guy to make any money. If he doesn't want to play by the rules we drew up, then neither do I." Question 6: If Buyer Ben does go through with the agreement, can Roger open a competing restaurant across the street? A. Yes, because no competes are never legal. B. Yes, because the no compete with Ben fails the ancillary requirement. C. Yes, because the no compete in his agreement with Ben is unreasonable. D. No

D. No

Roger slammed the phone back in its cradle. "I can't believe it!" "What?" Angela asked him. "The buyer for the restaurant. He's trying to back out of the deal!" "Oh. That's no good." "That's absolutely no good!" "So...I thought you had a deal." "We did have a...no, no, we do have a deal. We wrote the whole thing up last week over lunch. Here," he says, sliding a piece of paper across his desk. "Look at this." Angela begins to read the document. "I, Roger Smith, offer," she quotes from the document, "to sell my restaurant, 'Roger's', and the 1.25 acre adjacent parking lot, to Ben Johnson for $775,000. I agree not to open a competing restaurant in town for the next three years. Ben Johnson indicates his acceptance by signing below." "Can't be any clearer than that," Roger says. "He signed it, I signed it, we have a deal. Right?" Question 1: Which of the following elements of a contract is not present in the deal as presented so far? A. offer B. acceptance C. consideration D. none of the above

D. None of the above

Sam sues AlphaCo, his former employer. In his case, he alleges that AlphaCo illegally discriminated against him. During discovery, Sam's lawyer asks AlphaCo for its employment records over the last 10 years. The lawyer also wants to talk to Sam's former supervisor under oath and ask him about Sam's termination. The demand for the employment records is a(n) _______________. The lawyer would like to talk to the former supervisor as part of a(n) ______________. A. interrogatory; interrogatory B. interrogatory; deposition C. request for production of documents; interrogatory D. request for production of documents; deposition

D. The demand for business records is a request for production of documents. The questioning of the supervisor will be a deposition because the lawyer will be talking to him in person, and not by submitting a written request for information, which would be an interrogatory

To repeat the background facts from the last example: Walter makes watches. No smart watches, digital watches, or even battery powered watches for him - he works with tiny gears and makes old fashioned mechanical watches. One summer, he invents a new configuration of gears that allows for a watch to keep track of multiple time zones in an entirely new way. He calls the new watch the "Neptune", and plans to start selling it in his shop. What type of mark is "Neptune"? A. generic B. descriptive C. suggestive D. arbitrary

D. The name "Neptune" as applied to the watch has no relationship to the planet Neptune or the mythical figure Neptune. As such, it is an arbitrary mark like Apple for electronic devices.

Fred places a verbal order at a store for a new Tag Heuer watch. He pays the full price - $1000 - at the time of the order. The clerk says the watch will arrive in about a week. The next morning. Fred changes his mind about the watch. He goes to the store and argues that he should be able to cancel the order and get his money back. The store refuses, and Fred sues, citing the statute of frauds. Does Fred have a valid argument that the statute of frauds should allow him to escape this deal? A. Yes, because the watch costs more than $500. B. Yes, because the watch has not yet been delivered. C. Yes, because he is purchasing the watch from a merchant. D. No.

D. The watch is a "good", and as such, the fact that it costs at least $500 would often be relevant. But, the UCC calls for the enforcement of verbal contracts, even when goods do cost at least $500, in some circumstances, one of which is when the goods have been paid for and the payment accepted.

A recent study found that people who are in the center of social networks, who acts as brokers of information for others in the network, are more likely to believe that these others share their moral judgments than are other members of the networks. This finding indicates that people at the center of social networks are especially susceptible to the phenomenon of: A. obedience to authority B. conformitybias C. groupthink D. the false consensus effect

D. This effect is the tendency to believe that other people think the same way that we do. Because of it, honest people often believe that, if they are honest themselves, then others will be honest as well.

Zena signs an arbitration agreement on her first day at a new job in which she agrees that if she has any disputes with the company in the future, she will not sue and will only pursue a remedy in arbitration. A year later, Zena has a car accident with Barry. Afterwards, they sign an agreement that they will arbitrate the dispute. A month after that, Zena does not get an expected promotion at work, and she thinks it is because her supervisor dislikes her personally and not because of the quality of her work. Now, Zena is upset at both her employer and at Barry, and she would like to "have her day in court" with both of them. That is to say, she wants to sue both, and not go through arbitration. Can she do so? A. She can sue her company only B. She can sue Barry only C. She can sue both her company and Barry D. No, she must arbitrate both disputes.

D. Whether signed before or after an event that leads to a dispute, arbitration is generally binding.

Which of the following tend to increase the chances that employees will act ethically? A. Hiring ethical people B. Treating employees well C. Adopting a code of ethics D. Conducting effective ethics training E. All of the above

E. All four tend to make it more likely that employees will behave ethically.

Adam sues Brenda and claims that Brenda's dog bit his leg. Brenda receives a copy of Adam's complaint, and in her answer, she alleges that her dog bit Adam when he was trespassing in her yard late at night, that he destroyed her fence when he ran away from the dog, and that he should pay $500 to compensate her for the fence repairs. Characterize the components of Brenda's answer. A. It contains a denial B. It contains a defense C. It contains a counterclaim D. A andC E. B and C

E. She does not deny that Adam's claim of a dog bite is true. She asserts instead that there exists a legal justification for the bite. So, she raises a defense and does not make a denial. And, by asking for money to repair the fence, she raises a counterclaim

Sid works at a day care. Most of his coworkers are women. By all accounts, he does a good job caring for the children in his care. One night, the owner of the day care runs into Sid outside a movie theater. Sid is smoking. The owner fires Sid on the spot, citing a strict no smoking policy that is part of Sid's employment contract. "We can't have smokers around the children," she says. The next day, the owner hires a woman to take over Sid's duties. Sid sues. He argues that lots of his coworkers, men and women, smoke when off-duty. He presents evidence that 3 men have been caught smoking in the last few years, and 5 women. The men were all fired, and none of the women were fired. Which of the following is probably true? A. Sid has established a prima facie case of disparate treatment discrimination. B. The employer will be able to rebut the prima facie case by arguing a legitimate business reason for the firing (the violation of the no smoking policy) C. Sid will be able to argue that the rebuttal is a mere pretext for his firing. D. A and B E. A, B, and C.

E. Sid probably has plenty of evidence to survive an attempt to have the case dismissed. And the owner, because Sid violated a term of his employment contract, can probably rebut the initial claim. But if it is true that men who break the rule are fired and women are not, Sid can probably successfully assert that the owner's stated reason for firing him is a mere pretext for intentional discrimination based on gender.

Watkins Fuel Co. sued competitor Carroll Independent Fuel Co. for trademark infringement. Carroll registered the domain names of Watkins-fuel.com, watkinsfuel.net, watkinsfuel.org, and similar marks. Both firms sell heating oil, kerosene, and diesel oil. Watkins has long been the leader in these markets in Washington and Oregon, the states where it operates. Carroll also operates there, selling to the same high-end customers that Watkins targets. Plaintiff's name (Watkins Fuel Co.) is trademarked with the USPTO. Watkin's president found out about all of this when customers began asking him if his company had been purchased by Carroll. They wondered, because when they were on the Internet, the web address watkinsfuel.com (and others) landed them at Carroll's website. Watkins sued. Which of the following is true? A. Watkins will probably win on a trademark infringement theory B. Watkins will probably win on a trademark dilution theory. C. Watkins will probably lose on both theories

It is fairly clear that Carroll has created a strong likelihood of consumer confusion and infringed on Watkins' trademark. However, it is not probable that Watkins' mark meets the required definition of "famous" and therefore it is likely ineligible for protection under anti- dilution statutes.

Billy, age 10, walks into a baseball card shop and tells the owner that he has an Aaron Judge rookie card. The owner offers to pay Billy $25 for the card if he brings it by tomorrow. Billy says, "It's a deal," shakes the owner's hand, and leaves. Select the correct descriptive terms from the pairs below that apply to this deal. unilateral -or- bilateral valid -or- voidable -or- void express -or- implied executed -or- executory governed by common law principles -or- governed by UCC principles

This is a bilateral (promise for a promise), voidable (because Billy is a minor and can back out of it), express (stated), executory (unfinished) contract governed by UCC principles (because a baseball card is a thing or a "good").

Max, a resident of Texas, sues the Houston Police Department after he is arrested during a protest. He claims his free speech rights under the U.S. Constitution have been violated. He seeks $50,000. Can he bring his claim to federal court?

Yes. ANSWER: A. Don't be too distracted by the "above or below $75,000" issue. The number of dollars involved is relevant only in a diversity of citizenship situation. Max can sue no matter how much his is seeking because his case is based on federal law and jurisdiction is based on a federal question. Had Max's suit been a claim based on state law, he could successfully file in federal court only if he and the defendant were citizens of different states and more than $75,000 was at stake.

Paul Plaintiff sues Donna Defendant in a tort case. He accuses her of running a stop sign and hitting his car and seeks damages to compensate him for his losses. Paul's case will be a ___________ lawsuit. In the case, Paul's burden of proof will be to prove his case ____________________.

Business Law Multiple Choice

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