Mixed Question Flashcards
The driver of a truck was involved in an accident with a car driven by a citizen of a foreign country. The truck driver filed suit in a federal district court in the state in which the accident occurred, where the truck driver was domiciled. The driver of the car was a permanent legal resident of the United States and was domiciled in this state as well. The truck driver alleged damages of $35,000 in good faith due to personal injuries and damages of an additional $50,000 due to property losses. As permitted by state law under a direct action statute, the suit named only the insurer of the car as a defendant. The insurer was incorporated in a neighboring state and had its headquarters in a distant state. The insurer timely moved to dismiss the action due to lack of subject-matter jurisdiction. How should the court rule on this motion?
A. Grant the motion, because diversity jurisdiction based on citizenship status does not exist.
B. Grant the motion, because diversity of citizenship does not exist.
C. Deny the motion, because the amount in controversy exceeds $75,000.
D. Deny the motion, because the insurer is not a citizen of the forum state
Answer choice B is correct. In order for subject-matter jurisdiction to exist in an action based on state law, the action must satisfy both the amount-in-controversy requirement and the diversity requirement. Here, the action satisfies the amount-in-controversy requirement, since the plaintiff is permitted to aggregate personal injury and property loss that arises from the incident in question. The aggregated amount, of $85,000 ($35,000 + $50,000), exceeds $75,000. But, the action does not meet the diversity requirement. As a corporation, the insurer is a citizen of the state of its incorporation and also a citizen of the state of its principal place of business. However, an insurer is also deemed to be a citizen of the insured’s state when the insurer is sued in a direct action. Here, the insured’s state is the forum state for purposes of diversity jurisdiction because the insured is a lawful permanent resident of the United States domiciled in the forum state. Consequently, diversity jurisdiction does not exist between the plaintiff-truck driver and the defendant-insurer. Answer choice A is incorrect because this is not an action between the truck driver and the driver of the car, but a direct action against the insurer, a United States corporation. Answer choice C is incorrect because, even though the amount-in-controversy requirement is met, the court does not have subject-matter jurisdiction over the action because the diversity requirement is not. Answer choice D is incorrect because an insurer is treated as a citizen of the state in which its insured is a citizen. Here, the insured is treated as a citizen of the forum state because the insured is a lawful permanent resident of the United States who is domiciled in the forum state. Consequently, diversity jurisdiction does not exist between the plaintiff-truck driver and the defendant-insurer.
An employee brought an action in federal district court based on sexual harassment claims under Title VII. The employer, in his answer, alleged that the employee voluntarily terminated her employment after the termination of a consensual sexual relationship with her supervisor. In the alternative, the employer alleged that the employee’s poor job performance justified her termination. The court, finding that these allegations were mutually exclusive, ruled that the employer could not plead both and ordered the employer to strike one. Are the court’s ruling and order correct?
A. Yes, because, while alternative allegations are permissible, inconsistent ones are not.
B. Yes, because the employer’s allegations were made in an answer rather than a complaint.
C. No, because a court on its own may not strike a defense from a pleading.
D. No, because alternative and inconsistent allegations are permitted.
Answer choice D is correct. Both alternative and inconsistent defenses may be alleged in an answer. Answer choice A is incorrect because, as noted with answer choice D, inconsistent as well alternative defenses may be pled. Answer choice B is incorrect because the rule regarding alternative and inconsistent allegations applies to defenses in an answer as well as claims in a complaint. Answer choice C is incorrect because a court may, on its own motion, order that material, including a defense, be stricken from a pleading.
The president of the United States received reliable information from federal law enforcement authorities that (1) a known terrorist group was planning a terrorist attack on America which would occur within the next two weeks, (2) the terrorists, all of whom were fluent in a particular dialect, were already in America, and (3) the terrorist group’s leaders would provide to these terrorists certain details regarding the attack through coded messages contained in a U.S. newspaper published in the particular dialect. There were four such newspapers—in New York, Washington, Los Angeles, and Detroit. The president immediately ordered all four newspapers to shut down for two weeks and notified the newspapers that they were to be fully compensated for any losses they incurred because of the closure order. The newspapers immediately challenged the order as unconstitutional. Which of the following is the president’s best argument that the order should be upheld?
A. It is not a prior restraint on speech or the press.
B. The federal government can always suppress subversive speech as long as it pays just compensation to the person whose expression has been suppressed.
C. The words that would be published constitute a clear and present danger to national security.
D. Because national security is at issue, the burden is on the newspapers to establish the right to publish the information.
Answer choice C is correct. Although governmental regulation of speech based on its content is generally prohibited, among the limited exceptions permitting such regulation is speech that represents a clear and present danger of imminent lawless action. Moreover, while a prior restraint on speech or the press is typically presumed to be unconstitutional, and has been rejected even where national security was at issue, it is possible that in the face of an immediate threat of grave and irreparable harm, such as a terrorist attack that would be triggered by messages in the newspapers, a prior restraint on their publication would be upheld. Answer choice A is factually incorrect: the president’s order would prevent the four newspapers from publishing for two weeks, and thus constitutes a prior restraint on speech and the press. Answer choice B is incorrect because suppression of subversive speech generally is not permitted unless it presents a clear and present danger, but, if suppression is allowed, there is no requirement, unlike the taking of property under the Takings Clause of the Fifth Amendment, that the government compensate the person whose speech has been suppressed. Answer choice D is incorrect because where a prior restraint, even one based on national security, is imposed on Freedom of Speech, the burden is on the government to justify the restraint.
A hospital placed an order to purchase scalpel blades from a medical supply company. The hospital specified that the blades were to be shipped immediately. Upon receipt of the order, the supply company discovered that it did not have the type of blade ordered by the hospital, and shipped instead a different type of blade, along with a note that these blades were not the type ordered by the hospital but were sent as an accommodation. The hospital rejected and returned the shipped blades, then sued the supply company for breach of contract. Will the hospital be successful in its suit?
A. Yes, because of the perfect tender rule.
B. Yes, because acceptance of the hospital’s order could be made by shipment as well as by a promise.
C. No, because the hospital order could only be accepted by shipment of the type of scalpel blades ordered.
D. No, because the medical supply company did not accept the hospital’s offer.
Answer choice D is correct. Normally a shipment of goods by a seller made in response to an order placed by the buyer constitutes acceptance of the buyer’s offer. Such a shipment does not constitute acceptance, however, if the seller indicates that the shipped goods are made as accommodation. Since the supply company so designated the blades that it sent, the shipment did not constitute acceptance. Consequently, no contract was formed, so there can be no breach. Answer choice A is incorrect because, although the perfect tender rule does apply to a sale of goods, such as scalpel blades, it applies only when a contract exists between the buyer and seller. Answer choice B is incorrect because, although a seller may accept a buyer’s offer by shipment of the goods, as well as by a promise to ship the goods, a shipment of goods as an accommodation does not constitute an acceptance of the buyer’s offer. Answer choice C is incorrect because a seller’s shipment of goods in response to a buyer’s order can constitute acceptance even if the goods do not conform to the contract.
A homebuyer was discussing the purchase of a house with the seller. Of particular concern to the buyer was whether the house had a termite problem. The seller, aware of the buyer’s concern, ordered an inspection from a licensed inspection company. The company issued a report stating that the house was free of termites. In fact, the company’s inspector was negligent, and the house’s foundation had a modest termite problem. Relying on the report, the seller told the buyer that the house was free of termites. The buyer is seeking to avoid the contract. Will he prevail?
A. Yes, because the buyer reasonably relied on the misrepresentation.
B. Yes, because enforcing the contract would be unconscionable.
C. No, because the misrepresentation did not rise to the level of a mutual mistake.
D. No, because the inspector, not the seller, was negligent.
An American helicopter manufacturer contracted with a foreign hospital located in a severely war-torn region to sell five helicopters specially outfitted for medical use. The helicopter manufacturer, in turn, contracted with a subcontractor to provide five flight systems for use in the helicopters. The subcontractor was not informed about the contract between the helicopter manufacturer and the foreign hospital, nor the location where the helicopters would be used. After the two contracts were formed, the country in which the hospital was located descended deeply into civil war. The United Nations imposed an embargo against all shipments to that country. The helicopter manufacturer directed the subcontractor to stop all work on the contract, and to place any completed systems into storage. At that point, the subcontractor had finished three of the five flight systems called for by the subcontract. The systems were custom-built, and could not be used for any other purpose. The subcontractor sued the helicopter manufacturer for breach of contract. Is the subcontractor likely to prevail?
A. Yes, because the subcontractor was a vested third-party beneficiary of the contract between the helicopter manufacturer and the foreign hospital.
B. Yes, because the helicopter manufacturer assumed the risk of the failure of the contract.
C. No, because the contract was rendered impracticable by the United Nations embargo.
D. No, because the failure of the contract between the helicopter manufacturer and the foreign hospital frustrated the purpose of the subcontract.
Answer choice B is correct. The defense of impracticability may be raised if performance has become illegal after the formation of the contract. However, the defense is unavailable to a party who has assumed the risk of an event happening that makes performance impracticable. Here, the helicopter manufacturer entered into a contract with the subcontractor knowing that the helicopters were to be used in a “severely war-torn region.” The subcontractor was not informed of this information, and consequently had no opportunity to assess the risk involved in the contract. Consequently, it can be fairly said that the helicopter manufacturer assumed the risk, and cannot advance the defense of impracticability. For that reason, answer choice C is incorrect. Answer choice A is incorrect because the subcontractor was not a third-party beneficiary of the contract between the manufacturer and the hospital. A third-party beneficiary contract results when the parties to a contract intend that the performance by one of the parties is to benefit a third person who is not a party to the contract. Because the foreign hospital and the helicopter manufacturer did not have this intent when they entered their contract, the subcontractor was not a third-party beneficiary to their contract. Answer choice D is incorrect because, for the defense of frustration of purpose to be invoked, the triggering event, if not completely unforeseeable, must be unexpected and not a realistic prospect. The hospital was in a “severely war-torn region” and consequently an embargo was a realistic prospect at the time of contract formation.
An automotive enthusiast owned a sports car that was the fastest production car available in the United States. The enthusiast was friendly with a neighbor, who was 25 years old and had a clean driving record. The neighbor wanted to borrow the sports car to drive to a social event and impress some clients. The enthusiast allowed the neighbor to borrow the sports car, but told him very clearly and sternly that he was to drive very carefully, that he was not to exceed the speed limit, and that he was to bring the sports car back as soon as the event concluded. After the event concluded, the neighbor drove the car around for an additional two hours, often at very high speeds. Eventually, he slammed into another car while driving over 100 miles per hour. The driver of the other car survived, but sustained serious injuries in the accident. The driver of the other car sued the enthusiast in a jurisdiction without an owner liability statute, claiming that the enthusiast negligently entrusted his neighbor with the vehicle. The foregoing facts are undisputed. If the enthusiast files a motion for a directed verdict, which party is likely to prevail?
A. The enthusiast, because his specific instructions regarding use of the car were ignored.
B. The enthusiast, because the neighbor had no history of negligent behavior.
C. The other driver, because the jurisdiction does not have an owner liability statute.
D. The other driver, because the neighbor’s negligent behavior is imputed to the enthusiast.
Answer choice B is correct. The tort of negligent entrustment allows the owner of a vehicle to be held liable for the negligent acts of a driver to whom the car was entrusted if the owner knows or should know of the driver’s negligent propensities. In the instant case, the neighbor had a clean driving record, and the enthusiast had no reason to believe that the neighbor had negligent propensities. Consequently, a negligent entrustment claim will not lie, and answer choice D is incorrect. Answer choice A is incorrect because specific instructions, no matter how clearly or sternly worded, do not insulate a vicariously liable party from being held accountable. Answer choice C is incorrect because an operative owner liability statute would have vested liability in the enthusiast. In jurisdictions with owner liability statutes, the owner of an automobile may be liable for the tortious acts of anyone driving the car with permission.
A jewelry maker was hired by a man to create a custom-made engagement ring that he planned to use when proposing to his girlfriend. According to the written contract, the man would pay the jewelry maker $20,000 to make a platinum engagement ring with a two carat pink diamond. In addition, the contract stipulated that the man would hire a diamond appraiser who would examine and approve of the quality of the pink diamond before the man would be required to pay for the ring. The man subsequently hired a diamond appraiser, and the appraiser discovered minuscule flaws in the pink diamond and valued the diamond for less than was expected by the man. However, because the man had already made plans for an elaborate marriage proposal, he told the jewelry maker to still make the ring. After the jewelry maker had just started to make the ring, the man and his girlfriend ended their relationship. The man then refused to pay the jewelry maker for the ring, and the jewelry maker subsequently sued the man for breaching their contract.
Which of the following is the strongest argument in support of the jewelry maker’s right to damages for the man’s refusal to pay for the ring?
A. The man’s promise to pay for the ring must be enforced because it reasonably induced the jewelry maker’s reliance upon it.
B. There was no implied condition that the man would only purchase the ring if he used it to propose to his girlfriend.
C. The jewelry maker substantially performed on the contract to make the ring.
D. The man irrevocably waived the condition regarding the appraisal of the pink diamond.
Answer choice D is correct. A party whose duty is subject to a condition can waive the condition, either by words or conduct. In general, a waiver operates to preclude a subsequent assertion of the right waived or any claim based on such right, and will be irrevocable once made, even in the absence of consideration, or of any change in position of the party in whose favor the waiver operates. Here, the man told the jewelry maker to continue making the ring despite the condition that he would only pay for the ring if the diamond appraiser approved of the diamond. For this reason, he waived his contractual right to avoid the contract. Answer choice A is incorrect. Promissory estoppel acts as substitute for consideration when a party relies on a promise that might reasonably induce reliance, and injustice is avoided only by enforcing the promise. It only applies where there is no actual contract to enforce. Here, there was a written contract, and the jewelry maker is suing for breach of that contract. Answer choice B is incorrect. There was no implied condition in the contract that the man would only purchase the ring if he used it to propose to his girlfriend. Instead, the risk that the man and his girlfriend would break up was a risk assumed by the man. Answer choice C is incorrect. The doctrine of substantial performance provides that a party who substantially performs can recover on the contract even though that party has not rendered full performance. Here, the jewelry maker had just started to make the ring, which is not enough to constitute substantial performance.
An independent truck driver often received assignments to transport cargo for a delivery company. The driver was one of the delivery company’s most reliable contractors. When the driver was in need of a new truck, the delivery company contracted with a truck manufacturer to purchase the truck on an installment basis. The manufacturer retained a security interest in the truck until all payments were made. The contract between the delivery company and the manufacturer provided that the delivery company “shall not assign this contract without the prior written consent” of the manufacturer. Nonetheless, the delivery company assigned the contract, in writing, to the truck driver. The truck driver made all payments on the truck for two years until she was involved in a serious collision that destroyed the truck. The insurance proceeds on the destroyed truck were paid to the manufacturer. After the manufacturer used the proceeds to satisfy the contract balance, $20,000 remained. The truck driver delivered a copy of the assignment to the manufacturer, and demanded the remainder of the proceeds. The truck manufacturer stated that the contract was non-assignable, and that it would only pay the proceeds to the delivery company. The truck driver then filed suit to compel the truck manufacturer to pay her the proceeds. Is she likely to succeed?
A. Yes, because the written assignment from the delivery company to the truck driver was a novation.
B. Yes, because the contract was assigned to the truck driver.
C. No, because the contract between the delivery company and the truck manufacturer was non-assignable.
D. No, because the truck driver was merely an incidental beneficiary of the contract between the delivery company and the truck manufacturer
Answer choice B is correct. Most contracts can be assigned. Even if the contract by its terms prohibits assignment, a party retains the power to assign, although an assignment operates as a breach of the contract. Consequently, the truck manufacturer has a claim against the delivery company, but cannot refuse to recognize the assignment to the truck driver. Consequently, it must disburse the remainder of the insurance proceeds to her. For that reason, answer choice C is incorrect. Answer choice A is incorrect because a novation is the substitution of a new contract for an old one; in this case, a novation could only have occurred with the consent of the truck manufacturer, which was not sought, much less given. Answer choice D is incorrect because the truck driver’s status as either an intended or incidental beneficiary of the contract does not bear upon the validity of the assignment of the contract to her.
A plaintiff owns and operates a food truck. The defendant, a construction worker, negligently backed some heavy machinery into the plaintiff’s food truck, damaging it. The impact caused the plaintiff, who was in the food truck at the time, to fall over and hit his head on the counter, rendering him temporarily unconscious. While the plaintiff was out, the defendant watched as a thief entered the food truck and rifled through the cash register, stole several hundred dollars, and disappeared. Although she could have easily and safely thwarted the theft, the defendant took no action. The plaintiff brought an action against the defendant. In addition to claims for the injury to himself and the damage to his food truck, the plaintiff is seeking to recover the money that was stolen, since the plaintiff has been unable to identify the thief.
Which of the following best describes the likely outcome of the plaintiff’s claim to recover the stolen money from the defendant?
A. Denied, because the money was taken by a thief.
B. Denied, because there is no duty to protect a stranger from criminal activity.
C. Allowed, because the plaintiff is unable to recover from the thief.
D. Allowed, because the defendant’s conduct had left the plaintiff vulnerable to the thief.
Answer choice D is correct. While a person is generally not liable for the criminal acts of another, and has no duty to prevent such acts, a person who places another in peril is under a duty to exercise reasonable care to prevent further harm by rendering care or aid. Here, the defendant’s negligent conduct rendered the plaintiff unconscious and placed him at the mercy of the thief. Consequently, the defendant had a duty to exercise reasonable care to prevent the theft. Since she did not, she is liable to the plaintiff for his loss of property (i.e., cash) that occurred as a result. Answer choice A is incorrect because, although the thief is certainly liable to the plaintiff for conversion, since the defendant placed the plaintiff in peril, she was under a duty to exercise reasonable care to prevent further harm by rendering care or aid, which she failed to do. Answer choice B is incorrect because, while generally there is no affirmative duty to act, such as to protect a stranger from criminal activity, since the defendant placed the plaintiff in peril, she was under a duty to exercise reasonable care to prevent further harm by rendering care or aid, which she failed to do. Answer choice C is incorrect because the defendant’s liability to the plaintiff is independent of the thief’s liability to the plaintiff. Even if the plaintiff was aware of the identity of the thief and could bring suit against the thief, the plaintiff can elect to pursue his claim for the stolen cash against the defendant instead.
