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Business Law Midterm Guide

The stability and predictability of the law is essential to business activities.
Law is a body of enforceable rules governing relationships among individuals and between individuals and their society.
A breach of a contract is a failure to perform it.
Constitutional law includes only the U.S. Constitution
A state constitution is supreme within the state’s borders.
Whether a law is constitutional depends on its source.
Uniform laws apply in all states, including those in which the laws have not been adopted.
A state law that conflicts with the U.S. Constitution will be deemed unconstitutional.
Statutory law does not include county ordinances.
No state has adopted the Uniform Commercial Code in its entirety.
Common law is a term for law that is common throughout the world
Damages is a remedy at law.
Remedies in equity include injunctions and decrees of specific performance
In most states, the courts no longer grant “equitable” remedies.
A defendant is a person against whom a lawsuit is brought
Courts do not depart from precedents
A judge’s function is to make the law
Criminal law focuses on duties that exist between persons
A reference to “28 U.S.C. Section 1332” means that a statute can be found in section 1332 of title 28 of the United States Code
Most state trial court decisions are not published
The legislature of the state of Mississippi enacts a new statute that sets stan-dards for the liability of businesses selling defective products. This statute applies
only in Mississippi
Lewis is a state court judge. Like other judges, Lewis often refers to secondary sources of law for guidance. These sources include
official comments to statute
Hawaii enacts a state law that violates the U.S. Constitution. This law can be enforced by
no one
The Federal Trade Commission is a government agency that issues rules, orders, and decisions. The Georgia state legislature enacts stat¬utes. The Jackson County Board and the Peach City Council enacts or¬dinances. Administrative law includes
the rules, orders, and decisions of the Federal Trade Commission
The Securities Exchange Commission is an administrative agency. The chief purpose of such agencies is to
perform specific government functions.
In a suit against Corbin, Donatella obtains damages. This is
a payment of money or property as compensation
In an action against Elin, Frank obtains a remedy. This is
the legal means to recover a right or to redress a wrong.
In a suit against Evan, Floyd obtains an injunction. This is
an order to do or to refrain from doing a particular act
In a suit against Vladimir over the performance of a contract, Wyler obtains rescission. This is
the cancellation of a contract
In a suit against Sandy, Tippy obtains damages. In the U.S. legal system, this remedy at law is
Maggie and Nate enter into a contract for the sale of car, but Nate later refuses to deliver the goods. Maggie asks a court to order Nate to perform as promised. Ordering a party to perform what was promised is
an equitable remedy
As a judge, Diane applies common law rules. These rules develop from
decisions of the courts in legal disputes
Craig is a state court judge. In his court, as in most state courts, legal and equitable remedies have merged. But it is important to distinguish between equitable and legal remedies
to request a proper remedy
In Ben v. City Car Dealership, a state supreme court held that a minor could cancel a con¬tract for the sale of a car. Now a trial court in the same state is decid¬ing Daphne v. Even Steven Auto Deals, Inc.,, a case with similar facts. Under the doctrine of stare de¬cisis, the trial court is likely to
allow the minor to cancel the contract
In Export Co. v. Imports, Inc., there is no precedent on which the court can base a decision. The court can consider, among other things,
public policy or social values
A federal statute regulates an employment practice. To resolve a dispute concerning the practice, Paula, a judge, will most likely apply
the statute
The Texas Supreme Court decides the case of Livewire Entertainment Co. v. Power Play Corp. Of nine justices, six believe the judgment should be in Livewire’s fa¬vor. Justice Bellamy, one of the six, writes a separate opinion. The four justices who be¬lieve the judgment should be in Power’s favor join in a third separate opinion
Refer to Fact Pattern 1-A1. These opinions are collected and published in volumes called
The Texas Supreme Court decides the case of Livewire Entertainment Co. v. Power Play Corp. Of nine justices, six believe the judgment should be in Livewire’s fa¬vor. Justice Bellamy, one of the six, writes a separate opinion. The four justices who be¬lieve the judgment should be in Power’s favor join in a third separate opinion
Refer to Fact Pattern 1-A1. Bellamy’s opin¬ion is known as
a concurring opinion
The Texas Supreme Court decides the case of Livewire Entertainment Co. v. Power Play Corp. Of nine justices, six believe the judgment should be in Livewire’s fa¬vor. Justice Bellamy, one of the six, writes a separate opinion. The four justices who be¬lieve the judgment should be in Power’s favor join in a third separate opinion
Refer to Fact Pattern 1-A1. The opin¬ion joined by the four justices who favor Power is known as
a dissenting opinion
At a prison in Ohio, inmate Steve recruits other inmates to play Towers & Trolls, a potentially violent, fantasy, role-playing game. Ryan, the prison’s warden, confiscates the game materials and bans its play at the prison. Under the principles discussed in “A Sample Court Case,” Singer v. Raemisch, Ryan most likely acted
reasonably in the circumstances and under the law.
Congress can only pass legislation that falls within the limits set up by the U.S. Constitution
The U.S. Constitution is the supreme law of the United States
Each state has its own constitution
Every state has adopted some or all of the Uniform Commercial Code
State agency regulations take precedence over conflicting federal agency regulations
Common law is a term for the laws that are familiar to most of us
A decision on a given issue by a court is not binding on an inferior court
Stare decisis is a doctrine obligating judges to help persons who have failed to protect their own rights
A court may depart from a precedent if the precedent is no longer valid.
There is one right answer to every legal question
To reason by analogy is syllogistic reasoning because it employs a syllogism
Linear reasoning proceeds from one point to another with the focal point being the conclusion
Deductive reasoning involves a main premise, a minor premise, and a conclusion
Common law is the best and only source of legal authority
Courts often rely on the common law as a guide to interpreting legislation
A jury’s good sense and careful consideration of consequences is known as jurisprudence
How judges apply the law to specific disputes may depend in part on their personal philosophical views
A judge’s view of the law is of little importance in a common law legal system.
A substantive law creates or defines legal rights and obligations
Rules and regulations adopted by federal administrative agencies are compiled in the Code of Federal Regulations
The River City Council, the Santa Clara County Board, the Texas state legislature, and the U.S. Congress enact laws. These laws constitute
statutory law
The U.S. Congress enacts a new federal statute that imposes liability on businesses emitting significant amounts of a certain pollutant into the environment. This statute applies
to all of the states
Krystal is a federal judge. Krystal’s judicial decisions are part of case law. This law includes interpretations of primary sources of law. These sources include
administrative regulations
If a provision in the Florida state constitution conflicts with a provision in the U.S. Constitution
the U.S. Constitution takes precedence
As a judge, Nina decides cases that involve principles of various sources of law. Common law is
case law
The federal government and the state governments constitute the U.S. legal system. This system is based on the legal system of
In a suit against Owen over the performance of their contract, Phil ob¬tains specific performance. This is
an order to perform what was promised
MaxiMart, Inc., is a discount retailer. MaxiMart’s customer service em-ployees are on strike. Sixty of the workers block the entrances to one of MaxiMart’s stores. To get them away from the doors, MaxiMart should seek
an injunction
Leona enters into a contract with Munchie Bakery to cater a sales con-ference. When the conference is postponed indefinitely, Leona asks a court to cancel the contract. This request involves
an equitable remedy
Eliza is a state court judge. Flora appears in a case in Eliza’s court, claim¬ing that Glover breached a contract. As in most state courts, Eliza may
award damages or cancel the contract
Diana is a state court judge. In her court, as in most state courts, she may grant in a particular case
equitable and legal remedies
Jill is an appellate court judge. In this capacity, Jill establishes a rule of law. Under the doctrine of stare decisis, the principle must be adhered to by
that court and courts of lower rank
In Sales Distribution Corp. v. Consumer Products Co., the court decides that a precedent is incorrect or in¬ap¬plicable. The court
may rule contrary to the precedent
Brian’s pick-up truck collides with Miranda’s semi-trailer on a county highway. Weighing Brian’s liability for the collision, Rachel, a judge, reasons by analogy. To reason by analogy is to
compare the facts in previous cases and apply the same rule of law.
Quinn is a state court judge. In the case of Royal Banners, Inc. v. Superior Flags Co., Quinn establishes a logical relationship by compar-ing the facts in the case to the facts in other cases and, to the ex¬tent the facts are similar, applies the same rule. This is
reasoning by analogy
Julius is a judge. How the Julius and the judges in other courts interpret a particular statute determines
how that statute will be applied
To Serena, the written law of a particular society at a particular time is most signifi¬cant. Serena is
a legal positivist
Standard Business Company appeals a decision against it, in favor of Fast Delivery Corporation, from a lower court to a higher court. Standard is
the appellant
The title of a case appears as “Duck Down Corp. v. Egret Feathers Co.” The party in whose favor the case was decided
could be either party
The South Carolina Supreme Court decides the case of Toy Co. v. Umbrella Corp. The court issues an opinion that does not indicate which justice authored it. This opinion is
a per curiam opinion.
Federal courts are superior to state courts
The courts can decide whether the other branches of government have acted within the scope of their constitutional authority.
Minimum contacts with a jurisdiction can be sufficient to support jurisdiction over a nonresident defendant
Federal courts have jurisdiction over any case involving citizens of different states regardless of the amount in controversy
Concurrent jurisdiction exists when neither federal nor state courts have the power to hear a particular case
A court cannot exercise jurisdiction over an out-of-state defendant who has only done business in the state over the Internet
Venue is the term for the subject matter of a case.
A justiciable controversy is a case in which the court’s decision—the “jus¬tice” that will be served—will be controversial
Generally, lawyers are required to represent people in small claims courts
Federal cases typically originate in appellate courts
The United States Supreme Court has original jurisdiction in rare instances
There is one set of procedural rules for federal courts and various sets for state courts
A default judgment is entered against a party who fails to respond to the allegations in a complaint
At every stage of a trial, either party can file a motion to dismiss the case
A summary judgment is granted only if there is no genuine question of law
If a discovery request involves confidential business information, the scope of the request can be limited
Hearsay evidence is testimony about a statement made by someone who was not under oath at the time
A motion for a directed verdict is also known as a motion for judgment as a matter of law
A trial commences with the plaintiff’s attorney’s direct examination of the first witness
An appellate court can affirm or reverse the decision of a trial court in part
The Ohio state legislature passes a law to regulate local delivery serv¬ices. The final authority regarding the constitutionality of this law is
the judicial system
Ginger wants to file a suit against Fred. For a court to hear the case
the court must have jurisdiction
The case of Max v. National Credit Co. is heard in a trial court. The case of O! Boy! Ice Cream Co. v. Pickled Peppers, Inc., is heard in an appellate court. The difference between a trial and an appellate court is whether
a trial is being held
Tyler, a citizen of Utah, files a suit in a Utah state court against Veritas Sales Corporation, a Washington state company that does business in Utah. The court has original jurisdiction, which means that
the case is being heard for the first time
Rolf, a citizen of New Mexico, wants to file a suit against Sandy, a citizen of Texas, relating to a motorcycle accident in which Rolf’s injuries resulted in medical costs of more than $75,000. Their diversity of citizenship may be a basis for
a federal court to exercise original jurisdiction
Liu files a suit against Macro Sales, Inc., in a New Jersey state court based on a Web site through which New Jersey residents can do busi¬ness with Macro. The court will most likely exercise jurisdiction over Macro if the interactivity of the site is seen as
a “substantial enough” connection with the state
3D HD TV Company, a firm in Minnesota, advertises on the Web. A court in North Dakota would be most likely to exercise jurisdiction over 3D HD if the firm
conducted substantial business with North Dakota residents through its Web site
Gaudy Ornaments, Inc., sells decorative ware. Hank, who has never bought a Gaudy product, files a suit against the firm, alleging that its products are defective. The firm’s best ground for dis¬missal of the suit is that Hank does not have
Mariah wins her suit against Natural Products Company. Natural’s best ground for appeal is the trial court’s interpretation of
the law that applied to the issues in the case
Drummond wants to make a federal case out of his dispute with Elena. Federal cases originate in
federal district courts
Boyd files a suit in a federal district court against Cathy. Cathy loses the suit, appeals to the U.S. Court of Appeals for the Second Circuit, and loses again. Cathy asks the United States Supreme Court to hear the case. The Court is
not required to hear the case
Ulrica wants to initiate a suit against Valley Farms by filing a complaint. The complaint should include
the facts establishing Ulrica’s basis for relief
Beyond-the-Sea Imports, Inc., disputes the use of “beyond-the-sea.com” as a domain name by Beyond-the-Sea Overseas Exports, Ltd., and files a suit to re¬solve the dispute. Service of process must be
according to the rules of the court in which the suit is brought
Loren files a suit against Mabel, alleging a failure to pay for the harvest of Mabel’s orchards. Mabel denies Loren’s charge and claims that Loren breached their contract to harvest a certain number of acres and owes Mabel money for the breach. Mabel’s claim is
a counterclaim
To prepare for a trial between Condo Development Corporation and Demo Construction Company, Condo’s attorney places Demo’s president under oath. An authorized court official makes a record of the attorney’s questions and the officer’s answers. This is
a deposition
In Dawg Stop’s suit against Condiment Vendor, Inc., Dawg serves a written request for Condiment to admit the truth of matters relating to the trial. Condiment’s admission in response is the equivalent of
an admission in court
During a trial in Gene’s suit against Homer over the use of Gene’s lakeside cabin, Gene’s attorney asks questions of the plaintiff’s witness Illya. This is
a direct examination
During a trial, the attorney for Gloria the plaintiff questions her witness Heidi. Heidi, who is not an expert in the matter about which she is being asked, can
testify about only what she personally observed
After a trial between OptiGames, Inc., and Play Video Corporation, the jury renders a verdict in OptiGames’s favor. Play Video’s attorney can file a motion
for a new trial
In Recycle Cafe’s suit against Sanitary Services, Inc., the court issues a judgment in Recycle’s favor. The judgment can be appealed to an appropriate court of appeals by
Recycle or Sanitary
The function of the courts is to interpret and apply the law
State courts are inferior to federal courts
The political branch of government is the final authority concerning the constitutionality of a law
Under a long arm statute, a court cannot exercise jurisdiction over a defendant who has minimum out-of-state contacts
state court can exercise jurisdiction over property located within the state’s boundaries regardless of the property owners’ location
For purposes of diversity of citizenship, a corporation is a citizen only of the state in which its principal place of business is located
A business firm may have to comply with the laws of any jurisdiction in which it actively targets customers for its products
To have standing to sue, a party must have been injured or have been threatened with injury by the action about which he or she is complaining
Small claims courts are inferior trial courts
Courts of appeals conduct new trials in which evidence is submitted to the court but witnesses are not examined
U.S. district courts have original jurisdiction in matters involving federal questions
The United States Supreme Court can review any case decided by any of the federal courts of appeals
Before a lawsuit begins, the court must have proof that the defendant was notified
Discovery is the process of obtaining information from an apposing party before trial
deposition is sworn testimony by a party to a lawsuit or any witness
Information stored electronically cannot be the object of a discovery request
A closing argument is a statement by a party that results in a summary judgment in that party’s favor
A court of appeals hears all of the same evidence that the trial court heard
A petitioner is the party against whom an appeal is taken
The expenses associated with an appeal are minor
Harvey, a resident of Indiana, has an accident with Janette, a resident of Kentucky, while driving through that state. Janette files a suit against Harvey in Kentucky. Regarding Harvey, Kentucky has
in personam jurisdiction
Inferior Company, which is based on South Carolina, makes and sells products that are poorly made. Jack, who is a resident of North Carolina, buys an Inferior product and suffers harm through its use. The diversity of citizenship between these parties means that
federal and state courts have concurrent jurisdiction
Lora is a resident of Illinois. Ned is a resident of Wisconsin. They dispute the ownership of a boat docked in a Michigan harbor. This diversity of citizenship could serve as a basis for
federal jurisdiction
Jo files a suit against Kara in a Missouri state court. Kara’s only connection to Missouri is an ad on the Web originating in Nebraska. For Missouri to exercise jurisdiction, the issue is whether Kara, through her ad, has
conducted substantial business with Missouri residents
Child’s Play, Inc., sells a toy with a dangerous defect. Drew buys the toy for his son but discovers the defect before the child is injured. Drew files a suit against Child’s Play. The firm’s best ground for dismissal of the suit is that Drew does not have
standing to sue
Lacey files a suit in Michigan against Ned over the ownership of a boat docked in a Michigan harbor. Lacey and Ned are residents of Ohio. Ned could ask for a change of venue on the ground that Ohio
is a more convenient location to hold the trial
Kit loses her suit against Lou in a Minnesota state trial court. Kit appeals to the state court of appeals and loses again. Kit would appeal next to
the Minnesota Supreme Court
The Idaho Supreme Court rules against Jiffy Mart in a case against Kwik Stop Stores, Inc. Jiffy Mart files an appeal with the United States Supreme Court. The Court does not hear the case. This
means that the Idaho court’s decision is the law in Idaho.
Jason files a suit against Maybelline. If Maybelline fails to respond, Jason
will be awarded the remedy sought.
Liv wants to initiate a suit against Mortgage Mart Corporation by filing a complaint. The complaint should include
the facts showing that the court has jurisdiction
Solar Power, Inc., files a suit against Thunder Bay Utility Company and seeks to examine certain documents in Thunder’s possession. A legitimate reason for this examination is that the documents contain
evidence about the case
During the trial phase of Fuel Corporation’s suit against Gas Stations, Inc., their attorneys engage in voir dire. This is
the jury selection process
During a trial between Laramie and Mikayla over a sale of allegedly diseased livestock, Mikayla’s attorney asks questions of the plaintiff’s witness Nilson. This is
a cross-examination
Toppers, Inc., files a suit against Sports Cap Company. Toppers’s attorney calls Renalda, the first witness, and questions her. This questioning is
direct examination
Irma files a civil suit against Jim. To succeed, Irma must prove her case
by a preponderance of the evidence
In Brick ‘n Mortar Corporation’s suit against Online Mall, Inc. (OMI), the jury re¬turns a verdict in Brick ‘n Mortar’s favor. OMI files a motion asking the judge to set aside the verdict and begin new proceedings. This is a mo-tion for
a new trial
In Chickenpot Cafe’s suit against Dawg Carts, Inc., the jury returns a verdict in Chickenpot’s favor. Chickenpot will most likely ask the court to enter
a judgment in accordance with the verdict
In Midnight Motel’s suit against Natural Mattress Company, the jury returns a verdict in Midnight’s favor. Natural files a motion stating that even if the evi¬dence is viewed in the light most favorable to Midnight, a reasonable jury should not have found in its favor. This is a motion for
judgment n.o.v
Stefani files a suit against Thomasina. The document that informs Thomasina that she is required to answer the complaint is
the summons.
In Phil’s suit against Riley, the court issues a judgment in Riley’s favor. If the case is appealed to an appropriate court of appeals, the appellate court will hear
none of the evidence
Like statutory law, administrative law is created by legislatures
State regulation, when not preempted, may cover many of the same ac-tivities as federal regulation
Federal administrative agencies can regulate beyond the powers granted by enabling legislation
Federal executive agencies are outside the federal executive departments
Administrative agencies can not make legislative rules, or substantive rules, that are as legally binding as laws that the Congress passes.
A court will not review an administrative agency’s decision until the case is “ripe for review”
A party can challenge an administrative regulation as so irrational as to be arbitrary and capricious
Rulemaking—the formulation of new administrative regulations—is a major function of Congress, not administrative agencies
Final administrative rules have binding legal effect unless the courts later overturn them
The period for persons to comment on a proposed administrative rule must be at least thirty days
If the meaning of a statute’s language is unclear and an agency inter¬prets it, a court must overturn the interpretation
Informal agency actions are exempt from the Administrative Procedure Act’s requirements
Many agency rules require compliance reporting from regulated entities, and such a report can not trigger an enforcement investigation
There are no limits to the information that an administrative agency can demand from an individual or organization
In most instances, an agency is not required to obtain a search warrant before a physical search for evidence is conducted
If an investigation reveals a suspected violation of an administrative rule, the agency can not issue a formal complaint against the suspected violator
Frequently, disputes over violations of administrative rules are resolved through informal adjudication proceedings
The federal government must disclose certain records to any person or entity on written request only if there is a rational reason for the request
Every portion of every meeting of a federal administrative agency does not have to be open to public observation.
An agency must conduct a regulatory flexibility analysis whenever a new regulation will have an impact on a “small number of substantial entities.”
Boxy’s Packaging Materials Company is subject to regulations issued by the Occupational Safety and Health Administration (OSHA). Like other federal administrative agencies, the OSHA was created by
Congress, through enabling legislation
Independent regulatory agencies such as the Federal Trade Commission are
outside the major departments of the government’s executive branch
Executive control over the Federal Communications Commission, and other agencies, may be exercised through a pres¬iden¬tial veto of
Congress’s modifications of the agency’s authority
Pure Water Company is subject to a decision by the Environmental Protection Agency. Pure Water appeals the decision, arguing that it is arbitrary and capricious. This could mean that the decision
changed the agency’s prior policy without justification
The Federal Aviation Administration uses notice-and-comment rulemak¬ing. The final rule in such a proceeding has binding legal effect
unless a court overturns it
To notify the public of a proposed rule, the Food Safety and Inspection Service, like other federal agencies, publishes the proposal in
the Federal Register
The Securities and Exchange Commission decides to create a new rule relating to the dissemination of material nonpublic information through corporate blogs, tweets, and Web sites. The first step is to
publish a notice of the proposed rulemaking
Before adopting new regulations to govern Internet-based phone serv¬ices, the Federal Communications Commission may not
ignore the Administrative Procedure Act to streamline proceedings
The Federal Aviation Administration uses notice-and-comment rulemak¬ing. The final rule in such a proceeding is sometimes referred to as
a legislative rule
The Merit Systems Protection Board issues a rule. Like other adminis¬tra¬tive agencies’ “legislative rules,” this rule is as
binding as a law passed by Congress
The U.S. Fish and Wildlife Service uses notice-and-comment rulemak¬ing. This involves a period during which
the public is asked to comment on a proposed rule.
After notice-and-comment rulemaking, the U.S. Bureau of Land Management (BLM) issues a new rule and applies it to Clearcut Timber Company. Clearcut appeals the application to a federal court. The court will most likely defer to the BLM’s interpretation of
the facts and the law
The Federal Trade Commission (FTC) orders GR8 Steaks Company to re-veal certain information. GR8 Steaks complains to a court, arguing that the order is an abuse of the FTC’s discretion. Like other agencies, the FTC can use a subpoena to
reveal violations of the law
The Consumer Product Safety Commission (CPSC) wants Monster Toy Company to produce certain records for review. To obtain the records, the CPSC will issue
a subpoena
The Internal Revenue Service (IRS) wants to seize certain documents of Mortgage Bank, Inc. Deciding whether it is permissible for the IRS to request or seize the documents depends on whether the docu¬ments are
The Food and Drug Administration (FDA) is investigating reports that Caplets Pharmaceutical Corporation is putting potentially harmful ad¬di-tives in Doze, a new pain-relief medication. The FDA’s demands for particular documents from Caplets
must be general so as to force an uncooperative party’s compliance
The Nuclear Regulatory Commission (NRC) files a complaint against General Construction Corporation (GCC). GCC may want to set¬tle the dispute, before formal adjudicatory proceedings be¬gin, to avoid
appearing uncooperative
Guard Personnel Company is charged hiring practices that do not meet requirements set by the Transportation Safety Administration (TSA). The administra¬tive law judge or¬ders Guard to comply with the TSA’s regulations. Guard may
appeal to the commission that governs the TSA.
With some exceptions, every portion of every meeting of the Federal Reserve System Board of Governors and other federal administrative agencies must be open to public observation under
the Government-in-the-Sunshine Act
The Regulatory Flexibility Act has helped reduce record-keeping bur¬dens for Hometown Gas Company and other small business firms in the area of
hazardous waste management
Administrative law is created by administrative agencies, not by legislatures.
State regulation, when not preempted, may regulate independently the activities that federal regulation does not cover
By delegating some of its authority to make and implement laws, Congress violates the U.S. Constitution
Independent regulatory agencies include the cabinet departments of the executive branch
Interpretive rules simply declare policy and do not affect legal rights or obligations
A party seeking court review of an administrative action must first exhaust all of his or her administrative remedies before seeking court review
There is a precise definition of what makes an administrative rule arbitrary and capricious
Unlike those who violate statutes, violators of agency rules are not punished
Final administrative rules do not have binding legal effect unless the courts later declare them to be binding.
Only experts can submit comments on a proposed administrative rule
If the meaning of a statute’s language is unclear and an agency interprets it, a court must follow the interpretation as long as it is reasonable
An administrative agency can issue a guidance document to advise the public on the agency’s legal and policy position
Often, an administrative agency enforces it own rules
If a business firm refuses to comply with an agency’s request to inspect facilities or business records, the agency must defer to the refusal
Administrative agencies can conduct warrantless searches in some situations
Administrative agencies generally exercise substantial discretion over the type of hearing procedures that they use
An administrative adjudicatory hearing does not have to meet the constitutional standards of due process
All federal government agencies must make their records available electronically on the Internet
The public must be provided with adequate advance notice of scheduled federal administrative agency meetings and agendas
Federal agencies must consider ways to reduce the economic impact of new regulations on small businesses
Seafood Restaurant Company pays income and other taxes collected by the Internal Revenue Service (IRS). Like other federal administrative agencies, the IRS was created by
Congress, through enabling legislation
Persons who favor the creation of a federal biotech agency to regu¬late the production of genetically altered agricultural products should con¬cen¬trate their lobbying ef¬forts on
The Office of Postsecondary Education, like other federal administra¬tive agencies, is part of the government’s
executive branch
Congress leaves it to the Bureau of Prisons to oversee the promulgation of detailed regulations in areas under the agency’s juris¬diction. This is
the delegation of legislative powers
Plastix Produx Company is subject to a decision by the Consumer Product Safety Commission. Opposed to the decision, Plastix Produx wants a court to review it. First, however, the firm must use all of the potential administrative remedies. This is
the exhaustion doctrine
Truck Transport Company is subject to a decision by the National Labor Relations Board. Truck Transport appeals the decision, arguing that it is arbitrary and capricious. This could mean that the decision
was plainly contrary to the evidence
The Federal Highway Administration uses notice-and-comment rulemaking. This process begins with
the publication of a notice of proposed rulemaking.
The U.S. Department of Homeland Security issues a rule. Like the rules of other federal administrative agencies, this rule is compiled in
the Code of Federal Regulations
In reviewing the actions of the U.S. Office of Nuclear Energy and other agencies, the courts
are usually reluctant to review questions of fact
The Equal Employment Opportunity Commission (EEOC) orders First Financial Company to reveal certain information. First Financial complains to a court, arguing that the order is an abuse of the EEOC’s discretion. Like other agencies, the EEOC can use a subpoena to
obtain assurances that the law is not being violated
The U.S. Patent and Trademark Office (USPTO) wants to review certain records of Verity Corporation. The USPTO can legitimately gain access to the records through
Verity’s consent.
Caleb is a witness in a contro¬versy involving the U.S. Drug Enforcement Administration. Caleb can be compelled to appear before an adminis¬trative law judge if he is served with
a subpoena
Nursing Home Care Company is charged with violating a rule of the Social Security Administration. Most likely, Nursing Home Care will be required to appear at a hearing presided over by
an administrative law judge
The U.S. Mine Safety Administration conducts searches of certain businesses. This agency and other administrative agencies can conduct warrantless searches in
highly regulated industries
The Federal Emergency Management Agency (FEMA) discovers that Goodnuff Trailers, Inc., is violating a FEMA regulation. If this situation is resolved like most such disputes, the outcome will be
a negotiated settlement
The functions of the Social Security Administration, like those of other adminis¬trative agencies, include
Labor Recruiters, Inc., has been ordered to appear at a hearing be¬fore an administrative law judge of the National Labor Relations Board. A significant difference between a trial and an administrative hearing is that
hearsay can be introduced as evidence in an administrative hearing
Jay seeks information about Kim and other well-known businesspersons under the Freedom of Information Act. To obtain the informa¬tion, Jay must
describe the information
A failure of the Federal Bureau of Investigation to comply with a request under the Freedom of Information Act (FOIA) may be challenged in
a federal district court
Closed meetings of the Office of Community Planning and Development and other federal administrative agencies are permitted when
all of the choices
A misdemeanor is a crime punishable only by a fine
Thinking about killing someone constitutes the crime of attempted murder
A wrongful mental state is typically required for criminal liability
Picking pockets is not robbery
A person who commits larceny can be sued under tort law
It may be a crime to take another’s property, but it is not a crime to receive stolen goods
Changing a trademark is forgery
A person’s intent to return embezzled property is a defense to the crime of embezzlement
A kickback for a special favor or service is not considered a bribe
A defendant may be relieved of liability by showing that a criminal act was necessary to prevent an even greater harm
Ordinarily, “ignorance of the law is an excuse,” or a valid defense to criminal liability
A suspect cannot be tried twice in the same court for the same crime
The purpose of the exclusionary rule is to encourage criminals to provide exclusive evidence of their crimes
Any crime that requires knowledge of computer technology for its investigation is a computer crime
Most cyber crimes are “new” crimes
It is not identity theft to use a fabricated identity to access financial resources online
Vishing is phishing that involves voice communication
A stolen credit card is more likely to hurt a consumer than a merchant
A hacker is someone who uses one computer to break into another
A cyberterrorist might target a government agency, but not a business
Gail is a “payday” lender charged with filing false claims in bankruptcy proceedings against her debtors. The standard of proof to find a defendant who has been charged with a crime guilty is
beyond a reasonable doubt
Domino causes a disturbance at El Nino Cafe. He is arrested and charged with disorderly conduct, a misdemeanor. A misdemeanor is a crime punish-able by
imprisonment up to one year
Plato works for Quirky Squirters, Inc. During work hours, Plato “steals” his employer’s computer time to start up his own business, Rowdy Drenchers. This is
Rock pushes Sylvia to the ground, grabbing her purse as she falls. The use of force or fear is required for this act to constitute
Ivan signs Jeb’s name, without his authorization, to the back of a check. This is
Sven receives an MP3 player stolen from Tomas. To be criminally liable, Sven must know
the player is stolen
Riley, a Sterling Bank employee, deposits into his account checks that are given to him by bank customers to deposit into their accounts. This is
Mona offers Ned, a building inspector, money to overlook the violations in her new warehouse. Ned accepts the money and overlooks the viola¬tions. Mona is charged with the crime of bribery. The crime occurred when
Mona offered the bribe
Cameron manages an illegal gambling operation in his BBQ Bar & Grill. Cameron reports the profits of the gambling operation as income from BBQ’s legitimate activities on its tax returns. This is
money laundering
Davis points a gun at Eton, threatening to shoot him if he does not steal from his employer, Freddy’s Convenience Store, and give the stolen funds to Davis. Charged with theft, Eton can successfully claim, as a defense
Vance points a gun at Workman, threatening to shoot him. Workman hits Vance, causing his death. Charged with homicide, Workman can successfully claim as a defense
Ollie, an employee of Payroll Management Corporation, is arrested at work. A grand jury issues a formal charge against Ollie for larceny. This charge is
an indictment
Jean sends e-mail to Irwin promising a percentage of the amount in an African bank account for assistance in transferring the funds to a U.S. bank account. Irwin forwards his account number, but the funds are never sent. Instead, Jean quickly withdraws the funds in Irwin’s account. This is
online fraud
Harvey puts up a guitar for bids on eWay, a Web auction site. Faith makes the highest bid and sends the payment, which Harvey receives, but he does not send the guitar to her. This is online
auction fraud
Posing as Platinum Bank, Oswald e-mails Nadia, asking her to update her personal banking information through a link in the e-mail. She clicks on the link and types in the data, which Oswald promptly sells to Moe. This is
Posing as a representative of Global Games Company, Ferris e-mails Evan, a job seeker, asking him to forward personal banking information so that if he is hired, payroll checks can be deposited directly into his account. Evan supplies the data, which Ferris promptly sells to Dixie. This is
employment fraud
Minka uses her computer to secretly install software on hundreds of personal computers without their owners’ knowledge.
Minka’s secretly installed software allows her to forward transmissions from her unauthorized network to even more systems. This network is
a botnet
Minka uses her computer to secretly install software on hundreds of personal computers without their owners’ knowledge.
Minka’s software is harmful to the computers on which she installed it. This program is
Via the Internet, Rocky sabotages the computer system of Quik Chik’n Company, a food manufacturer, with the purpose of altering the levels of ingredients of the company’s products so that consumers of the food become ill. Rocky is
a cyberterrorist
Rashad accesses Quant Company’s computer system without authority to obtain protected financial data. Under federal law, this is
a felony if it is committed for a commercial purpose
Most criminal liability depends on the performance of a prohibited act
The crime of theft does not require that the perpetrator know whatever is taken belonged to another
Stealing software is not a crime
The crime of bribery occurs when the bribe is offered even if it is not accepted
The only defense to criminal liability that justifies the use of force is self-defense.
Most crimes must be prosecuted within a certain number of years
There is at least one circumstance in which a person cannot refuse to testify
Under the exclusionary rule, all evidence must be included in a criminal prosecution
Any crime that requires knowledge of computer technology for its perpe-tration is a computer crime
Any crime committed with a computer is a cyber crime
Because embezzlement is considered a white-collar crime, it cannot be considered a computer crime
Fraud has occurred online only by e-mail
In cyberspace, thieves are as subject to physical limits as they are in the “real” world
Many Web sites use “cookies” to collect data on those who visit their sites
Phishing occurs when a criminal poses as a member of the rock group Phish
Identity theft occurs when a wrongdoer steals another’s form of identification
A business takes a risk by electronically storing its customers’ credit ac¬count numbers
Hackers sometimes rent their “crimeware” as a service
Jurisdiction can be a key issue in a case involving a cyber crime
Computer fraud is a state, not a federal, crime.
Smitty, driving while intoxicated, causes a car accident that results in the death of Tiffany. Smitty is arrested and charged with a felony. A fel¬ony is a crime punishable by death or imprisonment for
more than one year
Biff wrongfully takes an unopened carton from a Cold Storage Warehouse loading dock, puts the carton in his car, and drives away. This is
Desi reaches into Edna’s pocket and takes her money, without her consent and without her immediate awareness. Unlike robbery, picking pockets does not involve
force or fear
On the orders of their corporate employer, Della and Efron, employees of Fabulous Fashionista, a clothing store, switch trademarks on clothing that comes into the store to be sold to consumers. This is most likely
Ludwig receives from Milo a marimba stolen from Nadine. To be crimi¬nally liable, Ludwig must know
the marimba is stolen
Val, the owner of Wild Wheels, a bicycle store, trusts Xavier to manage the store’s daily cash flow. One night, without Val’s knowledge or con¬sent, Xavier takes and keeps $500 from the receipts. This is most likely
In relation to Edie’s solicitation of investors in a nonexistent business, she is charged with “mail fraud.” This requires, among other things,
mailing or causing someone else to mail a writing
Ilise, an employee of Pyro Displays, Inc., pays Gavin, an employee of Pyro’s competi¬tor Fire Worx Company, for a secret Fire Worx pricing schedule. This may be
commercial bribery
Page points a knife at Ray’s daughter, threatening to hold her hostage and “cut” her unless Ray takes a certain file from Skelter Supplies Corporation, his employer. Charged with theft, Ray can successfully claim as a defense
Ethan, the president of Financial Investments, Inc. (FII), and Gina, FII’s account¬ant, are charged with a crime, after the police search FII’s of¬fices. Under the exclusionary rule
illegally obtained evidence must be excluded from a trial
Jesse arrests Imelda on suspicion of embezzlement. According to the United States Supreme Court in Case 9.3, Miranda v. Arizona, Imelda must be apprised of certain of her rights
prior to any questioning
Mike is arrested at a warehouse in North Industrial Park. A government prosecutor issues a formal charge against Mike for receiving stolen property. This charge is
an information
Swinborn sells “Tyger” steroids over the Internet. He is arrested and charged with the sale of a controlled substance. This is cyber crime, which is
a crime that occurs in the virtual community of the Internet
Travis sends Ursula a link to a purported e-birthday card that when clicked on downloads software to her computer to record her keystrokes and send the data to Travis. He uses the data to obtain her personal in¬formation and access her financial resources. This is
identity theft
Posing as Sterling Bank, Roxanne e-mails Quentin, asking him to update his personal banking information by calling a certain phone number. He makes the call and supplies the data, which Roxanne promptly sells to Porcio. This is
Omar sends Nell an e-mail ad touting software that will cloak its user in “the anonymity of the Internet.” Nell pays Omar for the software, which is never delivered to her. This is online
retail fraud
Jared uses his computer to secretly install software on thousands of per¬sonal computers without their owners’ knowledge. The program can re¬produce itself and spread from one computer to another via any USB port. This program is
a worm
Iggy uses his computer to break into Hye Technology Company’s com¬puter. Iggy is
a hacker
Patricia commits an act via e-mail against Othman Finance Company, a business in California, where the act is a cyber crime. Patricia resides in New York where the act is not a crime. Prosecution of Patricia in California involves questions of
Boris programs software to prompt a computer to continually crash and reboot. Boris’s goal is to install this program on various companies’ com¬puter systems without the companies’ knowledge. The program can re¬produce itself, but must be attached to a host file to travel from one com¬puter network to another. This program is
a virus
The rules of contract law are often followed to avoid potential disputes
If a contractual promise is not fulfilled, the person who made it is not subject to the sanctions of a court
The only requirement of a valid contract is that it be voluntarily entered into.
A unilateral is a promise for an act
No offer may be revoked before it is accepted
An agreement is evidenced by a single event: an offer
A statement of future intent—”I plan to sell my 700-pound sow”—is an offer
To be effective, an offer must be communicated to the offeree
An acceptance subject to new conditions implicitly rejects the offer
Under the mailbox rule, an acceptance takes effect at the time it is sent
In contract law, “consideration” refers to the courtesy that one party shows another in negotiating a deal
Parties are not usually free to bargain as they wish
A contract is void if one of the parties was intoxicated at the time of its formation
A contract to do something that is prohibited by statutory law is void
A contract is always enforceable even if one party is aware that the other party made a mistake of fact
Misrepresentation of a material fact can occur through conduct alone
Forcing someone to enter into a contract through fear created by threats is duress
A contract involving property of any kind must be in writing to be enforceable
As a general rule, contract duties can be delegated.
An incidental third party beneficiary can sue to enforce the contract
Phil agrees to work for Vacation Resorts, Inc., as a chef. In determining whether a contract has been formed, an element of prime importance is
the parties’ intent
On behalf of the jazz group Synco-Passion, their manager Raul agrees to a performance in the Quay Club on May 1. Portia, acting for Quay Club, sends a written copy of the agreement to Raul to be signed. Typically, businesspersons put their contracts in writing to
ensure proof of the contracts’ existence
When Jeff’s car breaks down, he asks Kwik Tow, Inc., to tow it from its location to Lou’s Repair Shop. There is no discussion of a price, and Jeff and Kwik do not sign any documents. After the tow, Kwik sends Jeff a bill. With respect to Jeff’s obligation to pay the bill, this is
an implied contract
Scot enters into a contract with Tiffany that later proves voidable at Tiffany’s option. If she elects to avoid the contract
both parties are released from it
Yvon asks Zach, “Do you want to buy one of my fishing rods?” This is
not a valid offer because the terms are not definite
Grant offers to sell his Honda Civic for $10,000 to Ivy. Referring to the prices for similar Hondas, Ivy says, “I’ll pay no more than $5,000.” Grant says, “Forget it.” Grant’s offer was terminated by
Deepwater Mining Corporation offers to sell East China Refining, Inc., a certain quantity of unrefined oil. If East China sends an acceptance via Deepwater’s authorized mode of communication, it will be effective when it is
Tomato Farms (TF) offers to sell Unified Grocers, Inc., a boxcar load of tomatoes. The offer is sent via overnight delivery because an acceptance is re¬quired urgently. It would be most reasonable for Unified to accept via
a fax sent to TF as soon as the offer is received.
Kelsey promises to pay Jon, her son, $5,000 if he obtains his degree at Ivy University, where he is currently in his second year. Jon graduates. Kelsey is
required to pay, because Jon obtained a degree at Ivy.
Under a contract with Bucolic Farms, Agro Excavation, Inc., begins digging an agricultural pond. In mid-project, Agro asks for $15,000 over the contract price, claiming an increase in the “cost of doing business.” Bucolic agrees but later refuses to pay. Their agreement is
unenforceable because Agro’s performance was a preexisting duty.
Panini Vittles, Inc., contracts with Qino to deliver its sandwiches. Later, the parties decide to cancel their contract. They can
rescind their contract to the extent that it is executory
Jenna, a minor acting on her own, signs a contract to buy a horse and its tack from Field Equine Ranch. Later, after taking possession of the horse and tack, Jenna disaffirms the deal. She
must return both the horse and the tack
Jolie signs a contract with Keaton, an unlicensed physician, to perform plastic surgery—a medical procedure. This contract is enforceable by
no one
Danton, a popular performer, dies. His spouse Caitlin sells their house to Buck. Un¬known to Caitlin or Buck, in one of the closets is the mas¬ter recording of an unreleased album. With respect to this recording, Buck can
not keep it because there was no voluntary consent to its sale.
Sylvia creates a profile for Today’s Date, Inc., an online dating service. She exaggerates her appealing features and posts a photo of her friend Uva, whom Sylvia thinks is prettier. Enticed by the profile, Van subscribes to the service so that he can contact Sylvia. Van is most likely a victim of
Maya is a stockbroker. Nora believes that the price of OK Goods, Inc. (OKGI), a widely traded stock, is going to in¬crease sub¬stantially. Through Maya, Nora buys 500 shares of OKGI at $10 per share, but the price soon drops to $2. Nora can successfully recover from Maya
Lyra induces Moe to enter into a contract for the sale of an apartment about which Lyra fraudulently misrepresents a number of material facts. Lyra tells Moe that her commission is 6 percent, but their signed, written contract states “12 percent.” The Statute of Frauds governs
contracts that must be in writing to be enforceable
Loren and Kendra enter into a contract for the distribution of Loren’s produce to local restaurants for which he agrees to pay Kendra. Kendra transfers her right to payment under the contract to County Bank. This transfer is
an assignment.
Grande Properties, Inc., and Investment Capital Corporation enter into a con¬tract for a sale of land. To be enforceable, the contract must be in writing if the land is valued at
any price
Vicky contracts with Rashad for the delivery of hospice services to benefit Sigmund. This is
a third party beneficiary contract
One of the elements of a valid contract is a fair price
A party’s intent to enter into a contract is judged by their personal, subjective intent or belief
An executory contract is one that has been fully performed
A contract is void if its purpose is illegal
An advertisement is generally considered an invitation to negotiate
A contract lacking a quantity term, when appropriate, may not be enforceable.
An offer that a statute makes illegal automatically terminates the offer
An unequivocal acceptance operates as a rejection of the original offer
Inadequate consideration may reflect a lack of bargained-for exchange
To be legally sufficient, consideration must include something of economic value
An obligation is enforceable only if it is supported by past consideration
Contractual capacity refers to the size or volume of a contract
A minor may not contract with an adult
A covenant not to compete is enforceable only if it is necessary to restrain trade.
Only a mistake in value will make a contract voidable
An innocent party can rescind a fraudulent contract
A contract entered into under undue influence is voidable
Under the Statute of Frauds, all contracts must be in writ¬ing to be enforceable
If a contract stipulates that a right cannot be assigned, then ordinarily it cannot be assigned
An incidental beneficiary is not entitled to enforce the promise of a promisor
Digital Architecture, Inc., agrees to design robotic software for equipment owned by Chassis Assembly Corporation. Whether or not this agreement meets all of the requirements of a contract, the parties are most likely to follow the rules of contract law because they
want to avoid potential disputes
Paco offers to pay Quik Delivery (QD) $50 if it picks up and delivers to him a package from his accountant Rupert within 30 minutes. QD can ac¬cept the offer only by meeting the deadline. If QD performs as directed, these parties will have
a unilateral contract
Build-Rite Contractors, Inc., asks Cool Electric, a subcontractor, to provide certain services. Nothing is said about payment. Cool provides the services and submits an invoice, which Build-Rite refuses to pay. In Cool’s suit to recover, the chief issue is most likely to be whether these parties had
an implied contract
Debit & Credit Accounting Services and Brickwork Construction Company negotiate a contract. If it has all of the elements necessary for one of the parties to enforce it in court, it is
a valid contract
John says to Kris, “I would like to sell you my sports memorabilia collec¬tion.” This is not an offer because it
only invites Kris to negotiate
Brick Products, Inc., files a suit against City Trucking Service for breach of contract, based on what Brick claims was City’s offer. For a court to de-termine if a contract has been breached, under the common law, the offer must include terms that are
reasonably definite.
c. unequivocally approximate
New Cell Phone Company offers to buy a laser printer, with a case of paper and an extra car¬tridge, from Office Products, Inc. (OPI), for $200. Paul, OPI’s representative, says, “Okay, but no paper and no extra car¬tridge.” Paul has
rejected the offer and made a counteroffer
Eve tells Finlay that she will pay him $50 if he unloads her truck. Finlay’s acceptance is complete
only after Finlay unloads the truck.
Quality Aluminum Corporation files a suit against Rite Tool Company, claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the considera¬tion if
something of value passed between the parties
Rollo promises to perform, for a price, shoe repair services in affiliation with Togs ‘n Things, a clothing store. To support a contract, the consid¬eration ex-changed by the parties must be
legally sufficient
Chip’s Chips Company agrees to supply Delicioso Café with all the corn chips that it re¬quires for a year. A sudden demand for ethanol results in a shortage of corn, and the price rises sharply. Chip’s asks Delicioso to pay a higher price for the chips. This request is
valid due to the unforeseen difficulty of the sudden price increase.
Koko signs a covenant not to compete as part of a sale of her ongoing medical equipment business to Laurel Valley Medico, Inc., in exchange for a bonus payment. The covenant is most likely enforceable by
both parties
U-Can-Own-It Corporation sells appliances to less educated consumers, including Viv, on installment plans. U-Can-Own-It files a suit against Viv when she stops making payments. Viv claims that the deal is unconscionable. The court will most likely consider
the parties’ relative bargaining power
Urban City and Thru-way Construction Company enter into a contract that includes calculations. Urban, whose engineer, Sergei, compiled the figures, discovers later that some numbers were added incorrectly, but Thru-way refuses to make changes. Urban can
rescind the contract on the basis of mistake
Genie.com initiates an online dating service. To attract subscribers and encourage participation, Genie.com creates and posts profiles of fictitious persons and exaggerated profiles of actual users. Fooled by the false profiles, Ham buys a subscription. He is most likely a victim of
Dora, an accountant, uses undue influence to induce her client Emily to invest in Fine Gems, Ltd., a business with little potential. When Emily learns the truth, she can
enforce the contract or rescind it.
Fresh Air Filter & Purification Company and Big Box Commercial Storage Company enter into a contract. To be enforceable, the contract must be in writ¬ing if it involves
an interest in land
Eustace and Durango Oil Company enter into an oral contract under which Eustace agrees to work on a Durango rig for not less than eighteen months. This contract is enforce¬able by
none of the choices
A contract between Drill-Bit Sharpeners, Inc., and East Oil Mining Corporation contains a clause stating that any assignment is “void.” This ordinarily prohibits
any assignment.
George promises to repair Francesca’s boat dock in exchange for Efrem’s promise to plant trees on George’s property. This is
a third party beneficiary contract
A duty to perform under a contract is never absolute
In most contracts, promises of performance are not expressly conditioned
Most contracts are discharged by rescission
A party who substantially performs his or her duties under a con¬tract can enforce the contract against the other party
Most contracts need to be performed to per¬sonally satisfy the party to whom per¬formance is owed
Any breach excuses the nonbreaching party’s duty to perform.
If no time for performance is stated in a contract, any time is acceptable
Anticipatory repudiation discharges a contract
When a contract party alters a written contract, the other party must adapt his or her performance accordingly
A contract will be discharged if foreseeable circumstances make it impossible to attain the contract’s purpose
A breach of contract entitled the nonbreaching party to sue for monetary damages
Damages are designed to punish a breaching party and deter others from similar conduct
Most parties settle their lawsuits for damages or other remedies prior to trial
Compensatory damages are foreseeable damages that arise from a party’s breach of a contract
Special damages are awarded for damage caused by special circumstances beyond a contract
The duty owed under the mitigation of damages doctrine depends on the nature of the contract
Specific performance is the remedy customarily used when one party has breached a contract for the sale of goods
The purpose of the doctrine of election of remedies is to permit a double recovery
A contract may include a clause stating that no damages can be recovered for a certain type of breach
A party who knowingly accepts defective performance of a contract waives the breach
Lark enters into a contract to mine limestone in Milena’s quarry, sell it, and share the profits on its sale with Milena. If the duties under this contract are discharged like those under most contracts, the duties will be
Lake Port Services enters into a contract to load Max’s Great Lakes barges with the cargo that Max designates. Lake Port’s offer to perform, when Lake Port is ready, willing, able to do so, is
Real Cheap Painters, Inc., agrees to paint Quint’s house, using a particular brand of “discount” paint. Real Cheap completes the job but uses a dif¬ferent brand of discounted paint. This is most likely
substantial performance
Safe-T Guard Services enters into a contract to secure Taylor’s Business Park from vandalism and theft between 6 P.M. and 6 A.M. nightly for six months. At the end of the term, if there has been no vandalism or theft in the Park, Safe-T’s performance will have been
Mutual Company enters into a contract to employ Neil as an investment manager for two years. During the first year, Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual’s investments.
Neil’s performance is most likely
a material breach
Mutual Company enters into a contract to employ Neil as an investment manager for two years. During the first year, Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual’s investments.
With respect to Mutual’s duties, Neil’s performance most likely
discharges Mutual from the contract
Jane and Kelly want Lucy to replace Kelly as a party to their con¬tract. They can best accomplish this by
a novation
Clyde contracts with Deephole Excavation, Inc., to dig an agricultural pond on his farm. Deephole is to keep the excavated gravel in payment. Clyde’s neighbor Eden challenges the dig as an illegal gravel pit. A court orders a halt to the dig. Clyde’s contract with Deephole is
Development Associates (DA) agrees to buy five acres of land from Eastside Properties for $15,000. Eastside fails to go through with the deal on the agreed date, when the market price of the land is $17,000. DA may recover
Dondi contracts to buy a custom espresso maker from Caffee Specialties, Inc., for $4,500, but Caffee fails to deliver. Dondi buys the appliance else¬where for $5,500. Dondi’s measure of damages is
$1,000 plus incidental damages
Damon contracts to repair the turf on a soccer field for Carousel Sports Park. Damon knows that without the repair, Carousel will have to cancel an upcoming game. Damon does not perform as promised. As consequential damages, Carousel can recover
the loss of profit from the canceled game
SFX Paintball Games, Inc., and Truck & Trailer Delivery Corporation sign an agree¬ment that provides for the payment of “$1,000 by whichever party commits a material breach of the contract that creates damages difficult to esti¬mate but approximately $1,000.” This is
a liquidated damages clause
Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term. In some states, Sunny would have to
make reasonable efforts to relet the premises to mitigate damages
Rural Power Utility, Inc., enters into a contract with Shovel Excavation Service to dig up, replace, and rebury Rural’s cables in a certain location. Rural advances Shovel 10 percent of its cost. The parties rescind the contract. Shovel’s refund of the payment is
Ira orally agrees to buy a unique collection of sports memorabilia for $1,000 from Janet and sends her $250 as a down payment. When Ira sends her the rest of the price, Janet refuses to ship Ira the collection. Ira should seek
specific performance
Lester and Myrtle want to rescind their contract under which Lester sold an MP3 player for $40. To rescind the contract
Lester must return the $40 and Myrtle must return the player
Grady enters into a contract to buy 440 acres from Hollis to expand Grady’s ranch. If Hollis breaches the contract, Grady’s normal remedy would be
specific performance
Refined Commodities, Inc., agrees to deliver ten tons of sheet metal to Select Builders Corporation. The agreement states that delivery is to be within “3” days, although the parties intend “30” days. Refined cannot convince Select to amend the contract. Refined should seek
Vacation Vistas, Inc., agrees to sell certain acreage to Umiko, who intends to develop a destination resort. Vacation Vistas repudiates the deal. Umiko sues Vacation Vistas and recovers dam¬ages. She can now obtain
nothing more
Clear Creek Corporation enters into a contract with Brightside Management Associates to manage and maintain Clear Creek’s apartment complex. Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach. This is
a limitation-of-liability clause
The most common way to discharge a contract is by breach
In most contracts, promises of performance are expressly qualified.
A buyer’s duty to pay becomes absolute once a contract is formed
Performance can be accomplished by tender
Complete performance occurs when conditions in a contract are fully satisfied
Anything less than complete performance is a material breach of contract
Anticipatory repudiation is a material breach of a contract
A contractual obligation may not be discharged through novation
Performance of an accord discharges an original contractual obligation
A contract is discharged when its specific subject matter is destroyed
If a party breaches a contract, the other party can choose one or more of several remedies
The measurement of compensatory damages for breach of contract is the same for all types of contracts
Punitive damages are almost never available in contract disputes
Nominal damages normally establish that the defendant acted wrongly
Consequential damages are foreseeable damages that arise from a party’s breach of a contract
Liquidated damages provisions are usually not enforceable
Rescission advances the contracting parties to the position they would have been in if the contract had been fully executed
Reformation allows a court to rewrite a contract to reflect the parties’ true intentions
A party who knowingly accepts defective performance of a contract thereby acknowledges the breach and can take later action on it
Whether a contract’s limitation-of-liability clause will be enforced depends on the type of breach that the clause excuses
Dylan enters into a contract to manage the operations of Cash’s accounting office for one year, renewable for subsequent one-year terms. If this contract is discharged like most contracts, it will be
Juana contracts to sell Ignacio her MP3 player for $30. This contract will be fully discharged when Juana and Ignacio
exchange the player for the $30
Candace enters into a contract to pay Parker for a business survey and review of Candace’s competitors, which Parker delivers on June 1. Candace’s offer, on the same date, to pay Parker is
Red’s Plumbing Service substantially performs its contract with Shady Grove Condominiums, Inc. Shady Grove is entitled to
Building Restoration, Inc. (BRI), enters into a contract to refurbish an old train depot for Casual Dining, Inc., to open as Eat Up Restaurant. If BRI completes most of the work promised in the contract, its performance will be
Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1. One month before the term begins, Bell is underbid by a competitor and loses a major client, Delta Hospital Center. Bell now refuses to hire Chris.
Under the circumstances, with respect to damages, Chris can
bring an action immediately
Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1. One month before the term begins, Bell is underbid by a competitor and loses a major client, Delta Hospital Center. Bell now refuses to hire Chris.
Bell’s repudiation is most likely
a material breach
Straitedge Toolmakers, Inc., contracts to sell its assets to Trulevel Hardware Corpo¬ration. Before either party has performed, rescission of this con¬tract requires
a mutual agreement to rescind
3D FX, LLC, and Vivid Star CG, Inc., are parties to a contract. They subse-quently agree that Pixellated Inc. should take 3D’s place and assume all of its rights and duties under the contract. This is
a novation
On April 1, KO Contractors, Inc., contracts to build a store for Lo-Cost Housewares at a specific location in Metro City. On May 1, Metro changes its zoning law to prohibit the construction of a commercial building at that location. Lo-Cost files a suit against KO. In this situation
the contract is discharged
Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week. When Handy cancels the contract, Ilsa spends $100 to obtain a similar job that pays $450 per week for a year. Ilsa is entitled to recover
the difference between the wages at the two jobs plus $100
GroundSwell Pools, Inc., agrees to build a swimming pool for Francis, but fails to complete the job. Francis hires EquiAqua, Inc., to finish the project. Francis may recover from GroundSwell
the costs needed to complete construction
Lava Excavators, Inc., needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company. Lava tells Mining that it must receive the drill by Tuesday or it will lose $10,000. Mining ships the drill late. Lava can recover
Erte holds 1,000 pounds of perishable fruit in storage for Fresh Stuff Corpo-ration. Fresh Stuff does not pay for the storage. Erte sells the fruit to Green Grocers, Inc. This sale represents
a mitigation of damages
Rig Heli-Pads, Inc., enters into a contract to employ Scott as an on-site project manager for two years. If Rig breaches the contract, Scott has a duty to
reduce the damages that Scott might otherwise suffer
Drew contracts to sell a house to Evan. The contract pro¬vides that if Drew does not close the deal by February 10, he must pay Evan one-half of the contract price. This provision is not enforceable be¬cause it is
a penalty clause
Ralph contracts to sell his Double-R Ranch to Samantha on May 1. On April 20, Ralph tells Samantha that he will not go through with the deal. Samantha can recover
the Double-R Ranch
Tristan hires Stefani to perform at Tristan’s Club, but she breaches the agreement to accept a higher-paying job at Rock Star Arena. Tristan files a suit against her. The court will most likely
award damages to Tristan
A contract for a sale of land from Evergreen Properties, Inc., to Longlife Investment Corporation contains an erroneous legal description. The most appropriate remedy for these parties is
A contract between E-Debits, Inc., and First Credit Corporation includes a provision excluding liability as a result of fraud. This provision is
not enforceable
The purpose of tort law is to provide remedies when legally protected interests have been invaded
Tortfeasor is the term for a person who commits a tort
Self-defense is a defense to a charge of assault
An act that causes indignity is sufficient to recover for the infliction of emotional distress
An individual’s right to privacy includes the exclusive use of his or her likeness
An unauthorized scan of a bank account can be an invasion of privacy
Bona fide competitive behavior can constitute wrongful interference with a contractual relationship
An artisan’s lien is a defense to a charge of trespass to personal property
Disparagement of property is another term for appropriation
Under the theory of negligence, the duty of care requires an intentional act
An ordinary person standard determines whether allegedly negligent conduct resulted in a breach of a duty of care
The degree of care to be exercised in a situation can vary with a person’s profession or occupation
Causation in fact can be determined by use of the but-for test
Proximate cause exists when injuries sustained were too remotely connected to an incident to trigger liability
A person assumes all risks associated with any activity in which he or she participates
A defense available in an action based on a negligence theory is that the plaintiff failed to prove one or more of the required elements
A superseding cause is an intervening event that imposes liability on a defendant for injuries caused by the intervening event
The doctrine of res ipsa loquitur applies if an event causing harm does not normally occur in the absence of negligence
Under the “danger invites rescue” doctrine, a person who tries to rescue another individual from harm is liable for any injuries to the individual
An Internet service provider is generally not liable for publishing a defamatory statement that comes from a third party.
At Parkside Bistro, Ogden believes that he was overcharged and shoves Nellie, the waiter. Nellie sues Ogden, alleging that the shove was a battery. Ogden is liable
if the shove was offensive
Jaqy distributes a handbill among her neighbors accusing one of them—Ked—of being a convicted sex offender. The statement is defamatory only if
the statement is false
From a computer in a distant location, Sergio searches Tia’s personal computer without her permission. Sergio is most likely liable for
invasion of privacy
Great Tans, Inc., uses, in its radio ads, a recording by Holly, who owns the rights, without paying for the use. Over time, the song comes to be asso¬ci¬ated with Great Tans. In Holly’s suit against Great Tans, the firm is most likely liable for
Clem, a Delite Dairy salesperson, follows Edna, a salesperson for Festive Foods, a Delite competitor, as Edna visits stores to make sales. Clem solicits each of Edna’s customers. Clem is most likely liable for
wrongful interference with a business relationship
Joy invites Ken into her apartment. Ken commits trespass to land if he
refuses to leave when Joy asks him to go
Ian steals a business law textbook from Jules. Kris, who does not know that the book is stolen, buys it from Ian. Kris has committed
Amber shops in a Breezy Bargains store, whose employee Connor recently mopped the floor. Amber slips, falls, and suffers an injury. Breezy is liable to Amber on a negligence theory if there was a “Wet Floor” warning sign and
Connor did not place the sign near the wet floor
John sees that Kris is about to step into the path of an oncoming bus. If John does not warn Kris of the danger, John is liable
under no circumstances
Leon files a suit against Moira, a medical doctor, alleging negligence. As a physician, Moira is held to the standard of
a reasonable physician
Nick sees Opal, a stranger, in peril, but does not attempt to rescue her. Opal could successfully sue Nick for
Driving his sport utility vehicle negligently, Bart crashes into a streetlight. The streetlight falls, smashing through the roof of a house, killing Chris. But for Bart’s negligence, Chris would not have died. Regarding the death, the crash is the
cause in fact
Nadine is a spectator at the Metro City Softball Tournament, an athletic competition. Regarding the risk of injury, Nadine assumes the risks
normally associated with the tournament
Kay carelessly bumps into Lyle, knocking him to the ground. Kay has committed the tort of negligence
only if Lyle is injured
Clyde enters Desert Decathlon, an athletic competition in which Clyde has often competed. Regarding the risk of injury, Clyde assumes the risks
normally associated with the Decathlon
An Illinois state statute requires commercial vehicle drivers to “fully attend to the operation of the vehicle.” Jerry, a driver for Crosstown Taxi Company, is driving and talking on his cell phone when his cab collides with Kayla’s car, injuring her. Kayla’s best theory for recovery against Jerry and Crosstown is
negligence per se
An anonymous person posts online a defamatory message about Dewitt. Not knowing the poster’s identity, Dewitt files a suit against “John Doe.” Using the authority of the court, Dewitt can obtain from the poster’s Internet service provider
the identity of the poster
In an emergency situation, Milena, an emergency medical technician, renders aid to Lothar, who needs help. Lothar would most likely be prohibited from suing Milena for negligence under
a Good Samaritan statute
Oakley posts a defamatory remark about Pierre in “Roominate,” an online social network maintained by SocNet, Inc., an Internet service provider. Most likely to be held liable for the remark is
From a location in Asia, Basil sends spam to U.S. e-mail addresses touting a variety of deceptive scams in an attempt to dupe unwitting recipients into revealing their bank account and credit card numbers. Under the U.S. Safe Web Act, the Federal Trade Commission can
share information with foreign agencies to investigate and prosecute
The purpose of tort law is to punish criminal wrongdoers
Perpetrator is the term for a person who commits a tort
Defense of others is a defense to an allegation of battery
False imprisonment is a legal term for “privilege to detain.”
Repeated annoyances coupled with threats are sufficient to recover for the infliction of emotional distress
A person may not be liable for a defamatory statement if he or she enjoys a privilege
The use of a person’s likeness for commercial purposes without permis¬sion is not an invasion of privacy
Malicious prosecution can occur if a party initiates a lawsuit out of malice
Competitive behavior is wrongful interference if it results in the break¬ing of a contract
If it can be shown that a trespass to personal property was warranted, a complete defense exists
A failure to return personal property may be conversion even if the rightful owner consented to the initial taking
Under the theory of negligence, a breach of the duty of care requires a careless act
A business that invites persons to come onto its premises is charged with a duty to exercise reasonable care to protect those invitees
Some risks are obvious but, with respect to the duty of care required to establish negligence, a warning is always necessary
Causation in fact exists if an injury would not have occurred without the defendant’s act
The law establishes limits to liability for negligence through the concept of proximate cause
Assumption of risk can be raised as a defense in a negligence suit
Only a foreseeable intervening event can break the connection between a wrongful act and an injury to another
In many states, the plaintiff’s negligence is a defense that may be raised in a negligence suit
Negligence per se may occur on the violation of a statute
Toni files a suit against Universal Media Corporation for defamation. Actual malice must be shown for recovery of damages if Toni is
a public figure
Teresa is a celebrity. Without her permission, Sinclair Enterprises in¬cludes in an ad an image that resembles her. Sinclair does not use Teresa’s name or actual likeness. This is most likely
Nesbit publishes in a newspaper an account of the sex life of Merinda, who is not a public figure. The information is true. This is most likely
an invasion of privacy
Field Trenchers Inc. initiates a lawsuit against its competitor Master Excavators Inc. out of malice and without probable cause. Master suffers a loss of profits due to the litigation, but Field loses the suit. Field is most likely liable for
malicious prosecution
Obie accuses Portia, a broker with QT Financial Services, of fraudulently in-ducing him to invest in Riske Development Company, whose stock price de-clines in value. The reliance that gives rise to liability for fraud requires
misrepresentation of a fact knowing that it is false
Bargain Bytes Computers, a computer store, takes unethical steps to divert the customers of Cyber World, an adjacent competing store. Bargain Bytes may be liable for
wrongful interference with a business relationship
Superior Health Club’s mar¬keting strate¬gies entice many of Tone-Up Exercise Club’s members to change clubs. After less than a year in business, Superior surpasses Tone-Up in numbers of members. Superior is liable for
no tort
Oak Valley Mall contains two video game stores, Pirates Pick and Game Quest. Pirates’s manager Ryan stands in the mall near Game Quest’s en-trance to divert customers to his store. Game Quest’s manager Sara asks Ryan to leave. He refuses. Ryan has committed
wrongful interference with a business relationship
Federico enters Gunther’s property to read an electric meter. Gunther charges Federico with trespass to land. Federico has
a complete defense
Hilliard, a clerk at a Games Unlimited store, takes a video game player from the store without permission. Hilliard is liable for
Levon leaves his truck at MakeRight Vehicle Shop for repair. When Levon re¬fuses to pay for the work, MakeRight refuses to give him possession of the truck. MakeRight has committed
trespass to personal property
Kelly is injured when she slips and falls on Lee’s sidewalk. To determine whether Lee owed a duty of care to Kelly, Lee is subject to the standard of
a reasonable person
Pier shops in a Rowdy Ranch & Farm Store store. Enticed by a display, Pier takes an item to examine it and, when she is done, places it on the floor. Tanner, a consumer enticed by the same display, does not see the item on the floor, trips over it, falls, and suffers an injury. With respect to the danger, Rowdy had
a duty to discover and remove the hazard
Joe sees Karo floundering in Lake Rough Waters. Joe is liable on the ground of negligence
under no circumstances
Dirk is driving a sport utility vehicle in which Elin is a passenger when they are involved in a traffic accident, and Elin is injured. Liability may be imposed on Dirk for Elin’s injury if Dirk’s driving is
the causation in fact and the proximate cause of the injury
Molly shoots Norm with Opal’s pistol. The proximate cause of Norm be¬ing shot is most likely attributable to
Molly only
Leo slips and falls in Mornin’ Breakfast Café and is injured. Leo files a suit against Mornin’ for $50,000. If Leo is 20 percent at fault and Mornin’ is 80 percent, under a contributory negligence doctrine, Leo would recover
Taylor slips and falls in Urban Mall and is injured. She files a suit against the mall for $500,000. Under a “pure” comparative negligence rule, Taylor could recover damages
under any circumstances
A Rhode Island state statute imposes fines on tire repair businesses whose pneumatic equipment does not include automatic shut-off switches to protect employees. Bob’s Brakes & Tires, Inc., does not have the switches on its equipment. Carter, a Bob’s employee, suffers an injury that a shut-off switch would have prevented. Carter’s best theory for recovery is
negligence per se
Drake pushes Evon into the path of an oncoming car driven by Flip. Gina tries to rescue Evon, but the car hits both of them. Drake is liable for the injuries of
Evon and Gina

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