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Exam 1 1-51 study guide ID: A Exam 2 52-101 study guide ID: A Exam 3 102-151 study guide ID: B

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


The United States Supreme Court has original jurisdiction in rare instances


A summary judgment is granted only if there is no genuine question of law


An appellate court can affirm or reverse the decision of a trial court in part


All courts require arbitration before a case goes to trial


Assisted negotiation describes proceedings for minors and other parties who lack contractual "capacity."


An arbitrator's error in judgment is sufficient to provide a basis for overturning an award


An action may be legal and ethical


The legality of an action is always clear


The minimal acceptable standard for ethical behavior is compliance with the law


The legislature of state of Mississippi enacts a new statute that sets standards for the liability of businesses selling defective products. This statute applies

a. 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

a. official comments to statute

Hawaii enacts a state law that violates the U.S Constitution. This law can be enforced by

a. no one

In a suit against Corbin, Donatella obtains damages. This is

c. a payment of money or property as compensation

In an action against Elin, Frank obtains a remedy. This is

d. the legal means to recover a right or to redress a wrong

In a suit against Evan, Floyd obtains an injunction. This is

a. 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

d. the cancellation of a contract

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

a. an equitable remedy

As a judge, Diane applies common law rules. These rules develop from

a. 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

d. to request a proper remedy

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,

c. 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

d. the statute

Fact Pattern 1-A1 (Questions A24-A27 apply)
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 favor. Justice Bellamy, one of the six, writes a separate opinion. The four justices who believe the judgment should be in Power's favor join in a third separate opinion.

No answer because it is apart of the question

Refer to Fact Pattern 1-1A. These opinions are collected and published in volumes called

c. reporters

Refer to Fact Pattern 1-1A. Bellamy's opinion is known as

a. a concurring opinion

Refer to Fact Pattern 1-1A. The opinion joined by the four justices who favor Power is known as

b. 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

d. reasonably in the circumstances and under the law

The Ohio state legislature passes a law to regulate local delivery services. The final authority regarding the constitutionality of this law is

a. The judicial system

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

b. 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 business with Macro. The court will most likely exercise jurisdiction over Macro if the interactivity of the site is seen as

a. a "substantial enough" connection with the state.

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 dismissal of the suit is that Hank does not have

c. standing

Mariah wins her suit against Natural Products Company. Natural's best ground for appeal is the trial court's interpretation of

d. the law that applied to the issues in the case.

Ulrica wants to initiate a suit against Valley Farms by filing a complaint. The complaint should include

d. the facts establishing Ulrica's basis for relief.

Beyond-the-Sea Imports, Inc., disputes the use of "" as a domain name by Beyond-the-Sea Overseas Exports, Ltd., and files a suit to resolve the dispute. Service of process must be

d. according to the rules of the court in which the suit is brought.

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

b. a deposition.

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

c. a direct examination

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

a. for a new trial.

Olivia files a suit against Parker. If this suit is like most cases, it will be

b. dismissed or settled before a trial

Shelly and Tom disagree over the amount of money due under their contract. To avoid involving any third party in a resolution of the dispute, Shelly and Tom might prefer to use the alternative dispute resolution method of


Pixie files a suit against Quiver. Before going to trial, the parties meet, with their attorneys to represent them, to present their dispute to a third party who is not a judge but who imposes a resolution on the parties. This is

a. arbitration

Salon Product, Inc., and Trim n' Clip Stylists agree in writing to submit their dispute to arbitration. The Federal Arbitration Act

c. sets out the proper subject matter of the agreement

Chelsea and Dion agree to arbitrate their dispute over the terms for, and the performance of, a delivery of eggs. The arbitrator's decision is called

c. award

All-American Engineering, Inc., disputes the use of "" as a domain name by All-American Export Company. For this dispute, the Internet Corporation for Assigned Names and Numbers (ICANN)

b. an online arbitration system

Rocko Corporation, a U.S. firm, and Siena, S.A., a Columbian firm, enter into a contract providing that any dispute between them will be heard in a specific British court. Litigation between Rocko and Siena over a dispute involving this contract may occur in

d. the specified British court only

Global Enterprises, Inc., uses the services of the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN's purpose is to

d. oversee the distribution of domain names

Faraway Sales Corporation, a U.S. firm, and Globe Transport, a Dutch firm, enter into a contract that includes an arbitration clause. This clause must provide that the arbitrator will be

d. any third party

Halley, a lawyer on the staff of International Group, applies the utilitarian theory of ethics in business contexts. Utilitarianism focuses on

c. the consequences of an action

In making decisions for United Merchandising Company, Vance uses a cost-benefit analysis. This is part of

d. utilitarianism

Fealty Credit Corporation asks its employees to evaluate their actions and get on the ethical business decision-making "bandwagon." Guidelines for judging individual actions include all of the following except

c. loopholes in the law or company policies

Bilt-Well Construction Corporation makes a side payment to a government official in Nigeria to obtain a contract. In the United States, this is

a. illegal and unethical

To assist in detecting illegal bribes, Cut Rite Contractors, Inc., and all U.S. companies, must

b. keep records that "accurately and fairly" reflect financial activities

Congress can regulate interstate and intrastate commerce in the United States.


Whether the federal government has preempted a certain area is always clear.


A law that has any impact on religion is unconstitutional.


The right to due process of law applies to corporations.


Federal administrative agencies can regulate beyond the powers granted by enabling legislation.


If the meaning of a statute's language is unclear and an agency interprets it, a court must overturn the interpretation.


In most instances, an agency is not required to obtain a search warrant before a physical search for evidence is conducted


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.


A hacker is someone who uses one computer to break into another.


Enterprising Markets Coalition (EMC), a political lobbying group, wants a certain policy enacted into law. If EMC's policy conflicts with the U.S. Constitution, a law embodying it can be imposed by

d. none of the choices

The Financial Institutions Association would like a certain law enacted, administered, interpreted, and enforced in the best interest of its members, which include banks. Under the Constitution, Congress

d. makes the laws

Ulrich, a citizen of Virginia, wants to enforce in the state of Washington certain rights that he has under a contract with Xtreme SnoBoards Inc. A Washington state court is most likely to enforce such rights under

c. the full faith and credit clause.

The Constitution sets out the authority and the limits of the branches of the government. The term checks and balances means that

b. each branch has some power to limit the actions of the others.

Tami's Tasty Tacos, a mobile vendor, files a suit against the state of Utah, claiming that a Utah state law violates the commerce clause. The court will agree if the statute imposes a substantial burden on

b. interstate commerce.

Len, a citizen of Maryland, obtains a federal license to operate a commercial fishing boat in Chesapeake Bay. The Maryland state legislature enacts a law that bans all commercial fishing in the bay. The state law most likely violates

d. the supremacy clause.

Congress enacts a law that sets out a medical-device approval process for the Food and Drug Administration to follow. The law includes a preemption provision. A device that goes through the process injures Joe, who files a claim under state law to recover. The court will most likely rule that

d. the federal law preempts Joe's state law claim.

Mike, an advocate of a certain religion, publishes an article in New Times magazine insisting that Congress base all federal law on his religion's principles. The First Amendment guarantees Mike's freedom of

d. the press, speech, and religion.

Beachside City enacts an ordinance that bans the distribu¬tion of all printed materials on city streets. Carl opposes the city's latest "revenue-enhancing" measure and wants to protest by distributing handbills. In his suit against the city, a court would likely hold the printed-materials ban to be

d. unconstitutional under the First Amendment.

Reusable Energy Corporation regularly expresses opinions on political issues. Under the First Amendment, corporate political speech is

c. protected.

Minnesota enacts a statute to ban advertising in "bad taste." This statute would likely be held by a court to be

a. an unconstitutional restriction of speech.

The police obtain a search warrant and search Errol's apartment. After yelling obscenities at the officers, Errol confesses to a crime and implicates his friends. The Constitution protects against

c. unreasonable searches.

Wyoming enacts a statute that limits the liberty of all persons, including corporations, to broadcast "annoying" radio commercials. This may violate

c. substantive due process.

Parker owns and operates Rancho Mirage Corporation, a destination resort in Arizona that features horseback riding and bunkhouse accommodations. The Constitution provides that no person shall be deprived of "life, liberty, or property without due process of law." Included as "legal persons" under this clause are

b. the corporation and Parker.

Myra claims that a Nebraska state statute infringes on her "procedural due process" rights. This claim focuses on

a. procedures used in making decisions to take life, liberty, or property.

A Massachusetts state statute imposes a prison term, without a trial, on all street entertainers who operate in certain areas. A court would likely review this statute under the principles of

c. procedural due process.

Jon, a law enforcement official, monitors Kelsey's Internet activities—e-mail and Web site visits—to gain access to her personal financial data and student information. This may violate Kelsey's right to

b. privacy.

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

a. Congress, through enabling legislation.

Executive control over the Federal Communications Commission, and other agencies, may be exercised through a presidential veto of

a. 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

a. changed the agency's prior policy without justification.

The Federal Aviation Administration uses notice-and-comment rulemaking. The final rule in such a proceeding has binding legal effect

d. 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

c. 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

c. publish a notice of the proposed rulemaking.

The U.S. Fish and Wildlife Service uses notice-and-comment rulemaking. This involves a period during which

d. the public is asked to comment on a proposed rule.

The Consumer Product Safety Commission (CPSC) wants Monster Toy Company to produce certain records for review. To obtain the records, the CPSC will issue

d. a subpoena.

Guard Personnel Company is charged hiring practices that do not meet requirements set by the Transportation Safety Administration (TSA). The administrative law judge orders Guard to comply with the TSA's regulations. Guard may

a. 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

c. The Sunshine Act

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

c. 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 punishable by

b. imprisonment up to one year.

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

d. robbery.

Ivan signs Jeb's name, without his authorization, to the back of a check. This is

b. forgery.

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

b. embezzlement.

Mona offers Ned, a building inspector, money to overlook the violations in her new warehouse. Ned accepts the money and overlooks the violations. Mona is charged with the crime of bribery. The crime occurred when

b. Mona offered the bribe.

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

b. duress.

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

d. self-defense.

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

a. 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

c. phishing.

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

b. employment fraud.

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. a cyberterrorist.

Rashad accesses Quant Company's computer system without authority to obtain protected financial data. Under federal law, this is

a. a felony if it is committed for a commercial purpose.

To be effective, an offer must be communicated to the offeree.


Generally, sellers warrant that they have good and valid title to the goods sold`


No offer may be revoked before it is accepted


A contract may include a clause stating that no damages can be recovered for a certain type of breach


An acceptance subject to new conditions implicitly` rejects the offer


Forcing someone to enter into a contract through fear created by threats is duress


A statement of future intent- "I plan to sell my 700-pound pig"-is an offer


Special damages are awarded for damage caused by special circumstances beyond a contract


No contracts are discharged by rescission


As a general rule, contract duties can be delegated


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 different brand of discounted paint. This is most likely

d. substantial performance

Maya is a stockbroker. Nora believes that the price of OK Goods, Inc. (OKGI), a widely traded stock, is going to increase substantially. Maya makes no representation to Nora regarding the value of the shares. 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

a. nothing

Woodgrain Products Company and Sylvia enter into a contract for a sale of lumber. Woodgrain knows the purpose for which Sylvia will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises

a. If the buyer is relying on the seller to select suitable goods

When Jeff's car breaks down, he asks Kwik Tow, Inc., to tow it form 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

b. an implied contract

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

d. must return both the horse and the tack

Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams Motel, including the land, building, furnishings, shares of stock in Suite Dreams Company, and a contract with Trudy to create an ad campaign. Reba suspects that Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs the sale of

c. the furnishings priced a $500 or more

Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, "This is the best car I've ever seen." This statement is

d. puffery

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 "normal cost of doing business." Bucolic agrees but later refuses to pay. Their agreement is

a. unenforceable because Agro's performance was a preexisting duty

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 contracts to County Bank. This transfer is

b. an assignment

Danton, a popular performer, dies. His spouse Caitlin sells their house to Buck. Unknown to Caitlin or Buck, in one of the closets is the master recording of an unreleased album. With respect to this recording, Buck can

c. not keep it because there was no voluntary consent to its sale

Recycle Packaging, Inc., agrees to sell 50,000 6-ounce yogurt containers to Organic Dairy Company. Recycle can obtain only 20,000 of the 6-ounce containers, but also ships 30,000 more expensive 8-ounce containers for the same price. Organic rejects the 8-ounce containers. With time for performance not yet expired, Recycle can

a. Attempt to cure the defect

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 has increased to $17,000. DA may recover

c. $2,000

Ira 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

d. specific performance

. Howe enters into a contract with Ida over the Internet to buy soybeans as a hedge against falling prices in corn. Neither party prints out a hard copy. Under the federal Electronic Signatures in Global and National Commerce Act (E-SIGN Act), this contract can

d. not be denied effect because it is only in electronic form

Lester and Myrtle want to rescind their contract under which Lester sold an MP3 player for $40. To rescind the contract

a. Lester must return the $40 and Myrtle must return the player

Town Style Stores orders Hidebound-brand leather jackets from Cowhide & Cotton Company (CCC). CC mistakenly ships denim jackets, which Town rejects and returns via Valu Transport, Inc. During the return, the jackets are lost. The loss is suffered by

d. CCC

Dondi contracts to buy a custom espresso maker from Caffee Specialties, Inc., for $4,500, but Caffee fails to deliver. Dondi buy the appliance elsewhere for $5,500. Dondi's measure of damages is

b. $1,000 plus incidental damages

Vicky contracts with Rashad for the delivery of hospice services to benefit Sigmund. This is

c. a third party beneficiary contract

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

c. the loss of profit from the canceled game

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

c. restitution

Scot enters into a contract with Tiffany that later proves voidable at Tiffany's option. If she elects to avoid the contract

a. both parties are released from it

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 Clubs, sends a written copy of the agreement to Raul to be signed. Typically, businesspersons put their contracts in writing to

a. ensure proof of the contracts' existence

Fresh Harvest, Inc., agrees to sell to Gina's Bed & Breakfast Inn a certain amount of locally grown produce each week but no mention is made of where the goods are to be delivered. In general, the UCC requires that the delivery take place at

c. Fresh Harvest's place of business

Over the course of a year, Retail Market, Inc., sells goods from its inventory and once of its warehouses. In exchange, Retail receives checks and other items that substitute for cash, which Retail uses to repay a loan from Savers Bank. Article 2 of the UCC governs

d. the sales of the goods

Panini Vittles, Inc., contracts with Qino to deliver its sandwiches. Later, the parties decide to cancel their contract. They can

b. rescind their contract if it is executory

Mitchell buys 100 bales of hay from New Grain Fields. The parties agree that the hay will be transported "F.O.B. New Grain Fields" via Farm County Trucking Company. Farm County's truck and the hay are lost in a fire following an accident. The loss is suffered by

a. Mitchell

Grande Properties, Inc., and Investment Capital Corporation enter into a contract for a sale of land. To be enforceable, the contract must be in writing if the land is valued at

d. any price

Nature's Foods, Inc., orders "Grade A" oil from Olive Grove Farms to process and sell to Pic 'N Pay Grocers. Olive Grove ships "Grade B" oil, which Nature's Foods accepts. To recover damages for the nonconformity, Nature's Foods must give notice of the breach within a reasonable time to

a. Olive Grove

Pop Culture Clothiers, Inc., sells t-shirts to Trendwell Stores, Inc., under an existing contract. When textile costs increase, Trendwell agrees to a price increase, but later wants to cancel the contract. Under the UCC, Trendwell may

d. no cancel the contract

Cheesy Pizza Company contracts to sell 1,000 cases of frozen pizzas to Roller Rinks, Inc., but refuses to deliver. Due to a spice shortage, Roller Rinks cannot obtain pizza elsewhere. Roller Rinks's right to recover the goods from Cheesy is the right of

c. replevin

SFX Paintball Games, Inc., and Truck & Trailer Delivery Corporation sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to estimate but approximately $1,000." This is

a. a liquidated damages clause

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

b. contracts that must be in writing to be enforceable

Rachel enters into a contract with State University over the Internet to take an online course titled "Online Law." This is an e-contract because

b. The contract was formed online

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

b. fraud

Safe-T Guard Service 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

b. complete

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 determines that the gravel pit is illegal and orders a halt to the dig. Clyde's contract with Deephole is

b. discharged

Concrete Products, Inc., assures Deepwater Construction Company (DCC) that Concrete's cement will not crack within a certain range of pressure. This "assurance" is

b. an express warranty

Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term. Sunny needs to

b. make reasonable efforts to relet the premises to mitigate damages

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