Midterm 1 Flashcards
A precedent is
a court decision that furnishes an example for deciding subsequent cases involving similar or identical facts or principles.
Ethics is important because laws may not always be easy to interpret or apply. This is because
laws represent the will of the people and that will is often changing.
Procedural due process focuses on the content of legislation.
False
Criminal statutes proscribe
wrongs committed against society for which society demands redress.
Duty-based ethical standards are most likely to derive from
philosophical reasoning.
When concurrent jurisdiction exists, the decision of whether to litigate in a federal or state court can be affected by the availability of different remedies.
True
Stare decisis is best defined as
a doctrine under which judges follow established precedents.
Questions of what is ethical involve the extent to which a company has
an ethical duty beyond those duties mandated by law.
Business ethics looks at whether business decisions
are right or wrong.
Negotiation requires the use of a neutral third party to facilitate a settlement.
False
The federal courts are an independent system of courts that is superior to the state courts.
False
Global businesses need to be conscious of the impact of different religious principles on ethics.
True
Generally, given the broad language of the Constitution, the line between state and national powers is often determined by
the courts.
An ethical code of conduct is not
law.
Jurisdiction refers to the right of a citizen to bring a case before a court.
False
Controlling precedents are binding authorities.
True
A federal form of government is one in which the national government shares sovereign power with
the states.
Substantive due process requires that a person have an opportunity to object to a proposed action before a fair, neutral decision maker.
False
Compliance with the law is not always sufficient to determine “right” behavior because
the law does not codify all ethical requirements.
If a company strictly complies with existing laws, the firm will
fulfill some business ethics obligations.
One party wants to file a suit against another. For a court to hear the case,
the court must have jurisdiction.
The dormant commerce clause comes into play when state regulations affect interstate commerce.
True
A constitution is a primary source of law.
True
The effect of the minimum-contacts standard is that a business firm has to comply with the laws of any jurisdiction in which it targets customers.
True
Civil law has to do with wrongs committed against society for which society demands redress.
False
reemption occurs when Congress chooses to act exclusively on a subject over which the federal government shares power with the states.
True
The federal government has the power to regulate commercial activities among the states under
the commerce clause.
Under a state long-arm statute, a court can exercise jurisdiction over certain nonresident defendants.
True
The term checks and balances refers to the system under which
the powers of government are divided among its branches, each of which exercises a check on the actions of the others.
Because courts of law and equity have merged, the principles of equity are no longer applied.
False
It is the motive behind the intent—not the intent—that is important in tort law.
False
Posing as eBank, Frank e-mails Grace, asking her to update her credit-card information through a link in the e-mail. She clicks on the link and types in the data, which Frank promptly sells to Hector. This is
phishing.
Traditionally, the hundreds of thousands of acts defined as criminal in federal, state, and local laws have been grouped into broad categories, including
property crime.
The standard of reasonable care for a professional is the same as that of an ordinary person.
False
Sam, driving under the influence, causes a car accident that results in the death of Tanya. Sam is arrested and charged with a crime punishable by imprisonment for more than a year. This crime is
a felony.
Riley commits an act via e-mail against State Bank, a business in Texas, where the act is a cyber crime. Riley resides in Utah where the act is not a crime. The prosecution of Riley in Texas involves questions of
jurisdiction.
In a digital ad, Geo Treks, a retail sports equipment store, falsely accuses its competitor Headwaters of selling stolen kayaks and other gear. Headwaters’ sales decrease. Geo Treks has most likely committed
slander of title.
In a criminal case, the state must prove its case beyond a reasonable doubt.
True
To gain a share of a market, a businessperson can interfere in another’s business, even if the behavior is predatory.
False
A mistake of fact can often excuse criminal responsibility.
True
Publication of false information about another’s property is not a tort.
False
Trespass to land is committed if, without the permission of the property owner, a person
causes water to back up onto the property.
chiro is injured in a two-car accident and sues Heather, the driver of the other vehicle, alleging negligence. Heather claims that Ichiro was driving more carelessly than she was. Comparative negligence may reduce Ichiro’s recovery
even if Ichiro was only slightly at fault.
Franny is charged with a crime. Almost all federal courts and some state courts would not hold Franny liable if, at the time of the offense, as a result of a mental disease or defect, she lacked substantial capacity to obey the law and to appreciate
the wrongfulness of her conduct.
Khan takes a rock from a pile of stones on Lamb’s property and throws it intending to hit Minh, but misses and hits Nasir instead. For the tort of battery, Nasir can sue
Khan.
Taking personal property from its owner, without permission or just cause, is trespass—retaining it is conversion.
True
Larceny involves force or fear, but robbery does not.
False
Zoey is accused of auto theft. She refuses to give information related to her alleged criminal activities because she suspects it will be used to prosecute her. This is
the privilege against self-incrimination.
After a dinner at Rosario’s Diner, Sharon believes that she was overcharged and shoves Tom, the waiter, who is injured when he falls. Tom sues Sharon, alleging that the shove was a battery. Sharon is liable if
the shove was offensive.
Barb, a computer operator for Cloud Corporation, is arrested in her employer’s parking lot on suspicion of larceny. Barb must be informed of her right to
remain silent.
Sid offers Tina, a city inspector, money to overlook health code violations in his restaurant. Tina accepts the money and overlooks the violations. Sid is charged with the crime of bribery. The crime occurred when
Sid offered the bribe.
A specified state of mind, or intent, is not necessary to establish criminal liability.
False
Len, a MedCo Supplies salesperson, follows Nan, a salesperson for Optima Health Products (a MedCo competitor) as she visits locations to make sales. Len solicits each of Nan’s customers. Len is most likely liable for
wrongful interference with a business relationship.
A speedy trial, a trial by jury, a public trial, and the right to confront witnesses are guaranteed by
the Sixth Amendment.
A belief in the possibility that a person committed a crime is sufficient probable cause to support the issuance of an arrest warrant.
False
Ivy slips and falls on the deck of Jet’s Tour Boat and is injured. She incurs medical expenses of $500,000, and files a suit against Jet to recover. Under the “50 percent” rule, if Ivy is more than 50 percent at fault, she will recover
nothing.
Warrants are required for searches of businesses in highly regulated industries.
False
Erol works for Food Packing Company. Erol’s supervisor Gwen writes a negative review of Erol’s performance. Gwen believes the statements are true, and limits their communication to the firm’s management. In a tort action for defamation, Gwen can most likely assert as a successful defense
privilege.
DIY, a retail hardware store, must use reasonable care on its premises to warn its invitees of
hidden dangers.
In an online blog, Oren states that Publicity Corporation invaded the privacy of individuals to collect marketing data for its clients. If the firm can prove all of the elements of defamation and Oren cannot assert a sufficient defense, Oren is most likely liable for
libel.
Alyssa hires Bret to mow Alyssa’s lawn every Friday. Although they do not discuss the terms of payment, after each of the first three Friday mows, Alyssa pays Bret on Saturday. The payment term is
implied.
Only one party entering into a contract must possess characteristics that qualify him or her as competent for a valid contract to exist.
False
An ad for the New Plays Festival asks playwrights to submit their work and “we might produce it for the world.” Oded submits a play with a note that states, “I accept.” Between the Festival and Oded, there is
none of the choices.
n rare circumstances, a price list may be construed as an offer.
True
Rich, an auctioneer, puts a sailboat up for auction. Rich is
the offeree.
Contract law does not distinguish between moral and legal obligations.
False
Shrink-wrap terms are enforceable even if a buyer does not discover them until after the parties have entered into a contract.
False
On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil says that he has changed his mind. These parties had
a unilateral contract as soon as Outdoor began to perform.
A party who confers a benefit on someone else unnecessarily can obtain its fair value by invoking the doctrine of quasi contract.
False
Corner Store posts on its website an offer of a reward for information leading to the apprehension of a certain criminal. This offer could normally be terminated by
a post on the website.
Contests and lotteries are unilateral contracts.
True
Cass, a certified public accountant, agrees to perform an audit for Drone Distribution Inc. These parties are most likely to follow the rules of contract law in order to
avoid potential disputes.
Jana, a nurse practitioner, renders aid to Kurtz, who is injured and unconscious. Jana can recover the cost of the aid from Kurtz
on a quasi-contract theory
Kelly offers to sell a certain used forklift to Lumber Outlet, but Kelly dies before Lumber accepts. Most likely, Kelly’s death
terminates the offer.
An offer must express reasonably definite terms to be effective—no term may be reasonably inferred.
False
A payment of funds or a delivery of goods must take place for a bilateral contract to be formed.
False
The offeror can revoke the offer only be expressly repudiating it.
False
The offeree must accept the offer without adding or changing any terms.
True
Gaia tells Franco that she will pay him $50 to haul lawn debris from her property. Franco’s acceptance is complete
only after he hauls away the debris.
In effect, a counteroffer converts the original offeror into an offeree with the power of acceptance.
True
Omar asserts that a deal he entered into with Pat to sponsor and host a motivational conference for independent sales representatives was formed as the result of a mistake. Omar’s best defense to the enforcement of this contract is
the lack of a party’s voluntary consent.
For a court to determine if a contract has been breached and to give an appropriate remedy, the offer must include terms that are at least
reasonably definite.
Anyone can avoid a contractual obligation by claiming that he or she did not read the contract.
False
Susan enters into a contract with Trey to act as his personal sports trainer. If a dispute later arises, the court will interpret the contract according to
the parties’ intent at the time they entered into the contract.
Megan gives out a business card with an e-mail address on it. It is reasonable to infer that Megan has consented to
transact business electronically.
A promisee has the right to expect or demand that something will or will not happen in the future.
True
Yuri agrees to zed.com’s terms of service and downloads the site’s app. Yuri then reverse-engineers the app to create a competing product. This is
a breach of contract.
Contracting parties are bound only by terms that can be objectively inferred from promises made.
True
Putting up an item for sale on an online auction site is an offer.
False
Lon says to Misty, “I would like to sell you my vinyl records.” This statement is
an invitation to negotiate, not an offer.
Gretchen is adjudged by a court to be mentally incompetent. Gretchen
cannot form a legally binding contract with another party.
In the context of fraudulent misrepresentation, an opinion is objective and verifiable, whereas a fact is subject to debate.
False
Because of the potential for punitive damages, plaintiffs often include a claim for fraudulent misrepresentation in their contract disputes.
True
At Mattress Store, Nate signs a contract to buy bedroom furniture. The contract sets a schedule of $500 monthly payments, subject to a late fee of 15 percent. Nate finds the language of the contract difficult to understand. This is most likely
procedural unconscionability.
When the doctrine of promissory estoppel is applied, the promisor is estopped, or barred, from performing the promise.
False
A contract to do something that is prohibited by statute is
unenforceable.
Two parties can mutually agree to rescind a contract only to the extent that it has been executed—otherwise, there is nothing to rescind.
True
Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Agency, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is
liable to Niki under the doctrine of promissory estoppel.
Dim threatens physical harm to force Ed to sell his Flower Shop to Dim for a below-market price. This is
duress.
A contract that calls for an action contrary to public policy is illegal but not unenforceable.
False
If contracting parties attach materially different meanings to a contract word or term subject to more than one reasonable interpretation, the contract is void.
False
A misunderstanding concerning a basic assumption on which a contract is made will support the rescission of the deal if the mistake is
bilateral.
Situations in which agreements lack consideration include those involving a preexisting duty.
True
If intoxication is purely voluntary, the intoxicated person’s contracts are not voidable.
False
A lender who makes a loan at an interest rate above the lawful maximum commits usury.
True
County Title Company processes information furnished by others to transfer title to real estate from Dale to Ezra. The furnished information is mistaken. The contract between Dale and Ezra may be rescinded
because the mistake is about a material fact.
Sean promises to pay his personal assistant Terry $50,000 in consideration of the services she provided over the years. Sean never makes the payment. Sean’s promise is
not enforceable because the consideration is in the past.
A fact that is important and central to the subject matter of a contract is a material fact.
True
To constitute consideration, there must be
a bargained-for exchange.
A party who can show that he or she did not genuinely agree to the terms of a contract has a defense against its enforcement.
True
With respect to consideration, a bargained-for exchange distinguishes a contract from a gift.
True
A lease between Mia and Niles for residential property contains an exculpatory clause. This clause is most likely
unenforceable.
Blanche, a minor, enters into a contract to buy two all-season passes from Chalet Mountain Resort. The contract will be made enforceable if Blanche
ratifies it.
The purpose of the right to disaffirm a contract is to
protect minors.
Parties are not usually free to bargain as they wish.
False
Normally, a court will evaluate the adequacy of consideration based solely on the comparative value of the things exchanged as part of agreement.
False
Gary owns two all-terrain vehicles (ATVs), worth $1,000 and $500, respectively. Helen enters into a contract to buy “Gary’s ATV” for $750. Gary believes, in good faith, that he is selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this situation
the contract is not enforceable.
An innocent party who does not suffer harm as a result of a misrepresentation can nevertheless collect damages.
False
A minor can disaffirm a contract at any time but remains legally obligated to perform it.
False
Eugene, an accountant, convinces his client Faye to enter into a contract to invest her savings in Gathering, a non-existent social media site. There is clear and convincing evidence that Faye did not act out of her free will. This is
undue influence.
Berry Farm hires Chun to repair its irrigation system on site by a certain date for $2,500, but Chun fails to perform. Berry Farm hires Diego to do the job for $2,000. In a suit for breach, Berry Farm may recover from Chun
nominal damages.
The most common way to terminate contractual duties is by repudiation.
False
Physicians Clinic orders by phone seven cases of disposable nitrile gloves from Quality Medical Supplies, Inc. After three cases are delivered and accepted, the clinic repudiates the contract. Quality Medical can enforce the contract to
the extent of the three accepted boxes.
A promise to pay another’s debt only if that party fails to pay does not need to be in writing to be enforceable.
False
For a price, Rose agrees to unload the catch from fishing boats that dock at Seafood Shipping. Rose delegates this duty to Tina, who then owes performance of the duty to the warehouse. Tina is
the delegatee.
A breach of contract occurs when a party fails to perform part or all of the required duties under a contract.
True
Restitution may be available in situations when damages cannot be proved or are difficult to prove.
True
Armand orally agrees to pay Borges to seed and harvest a quarter of Armand’s farm acreage for four planting seasons. After Borges prepares the land and plants the first crop, Armand says that the deal is off. Borges can most likely recover on a theory of
quasi contract.
Tender is an unconditional offer to perform by a person who is ready, willing, and able to do so.
True
There is a remedy available for nearly every breach of contract.
True
Farah makes and sells camping gear. Farah and Gobi enter into a contract for a delivery of the gear to Gobi’s Outfitters retail locations for an invoiced price. Farah transfers the right to payment under the contract to Haulers Distribution Inc. This transfer is
an assignment.
A liquidated damages provision specifies an amount to be paid in the event of a future default or breach of contract.
True
A contract must be in writing to be enforceable if it cannot by its terms be performed within one year from the day after the contract’s formation.
True
Fern, who owns and operates Garden Farm, agrees to sell Harvest Grocery a minimum quantity of fresh fruits and vegetables every week for three months. If bad weather destroys Fern’s crops, the obligation to deliver produce to Harvest is
discharged.
Reliance on a certain type of oral contract can be enough to remove it from the Statute of Frauds.
True
According to most states’ laws, to be enforceable as a contract under the Statute of Frauds, a writing must
name the parties.
For a price, Ray agrees to unload trucks that make deliveries to Shoppers Warehouse. Ray delegates this duty to Tim, who then owes performance of the duty to the warehouse. Ray is
the obligor.
A contract for a sale of land from Beachfront Properties Inc. to City Development Corporation contains an erroneous legal description. The appropriate remedy for these parties is most likely
reformation.
Rene contracts with Scot to pay him $5,000 for repairs to Rene’s lake cabin. After Scot performs, Rene tells him that she cannot pay him in full immediately. They sign an agreement in which Rene promises to pay $2,500 now instead of $5,000 later. This is
an accord and satisfaction.
As a general rule, most any duty can be delegated.
True
Any beneficiary to a contract who is not deemed an intended beneficiary is an incidental beneficiary.
True
Ben makes an appointment for a $50 haircut, buys a bike for $250, and agrees to work for Coding Associates for one year for $5,000 per month, starting at the beginning of next month. To be enforceable, a writing is required for
the purchase.
Apps LLC enters into a contract with Birk, the chief executive officer of Corporate Sales Inc., to create an app for the firm. To fulfill the contract, Apps hires Dave as a student intern. With respect to the app contract, Dave is
an incidental beneficiary.
Special damages that compensate for a loss caused by circumstances beyond the contract itself are incidental damages.
False
Maya and Nick enter into a contract. To be enforceable, the contract must include
the signature of the party against whom enforcement is sought.
Adrian operates a recycled metals business and contracts to provide ten tons of scrap steel at $500 per ton to be delivered to Build-It-Rite Materials, Inc., in seven months. An unforeseen shortage of scrap steel suddenly develops, making it impossible for Adrian to fulfill the contract for less than $5,000 per ton. Adrian’s best defense against performing the contract would be that
performance of the contract is commercially impracticable.
Builders Corporation files a suit against Concrete Company to enforce a written contract. If the court finds that the parties intended the contract to be the final statement of their agreement, parol evidence can be admitted to prove
an orally agreed-on condition.
A novation requires
the existence of a previous, valid obligation.
Lance enters into a contract to mow Mary’s yard every week for the summer. Mary sells her house and yard to Nora, and assigns the right to receive Lance’s services to Nora. Mary is
the assignor.
Ivy orally agrees to buy a unique collection of sports memorabilia for $10,000 from Jess and sends $2,500 as an initial payment. When Ivy pays the rest of the price, Jess refuses to ship the collection. In a suit for breach, Ivy should seek
specific performance.
