This Document Contains Chapters 5 to 6 Chapter 5 Administrative Law True/False 1. Like statutory law, administrative law is created by legislatures. A. True B. False Answer: False 2. Federal executive agencies are outside the federal executive departments. A. True B. False Answer: False 3. Independent regulatory agencies include the cabinet departments of the executive branch. A. True B. False Answer: False 4. State regulation, when not preempted, may cover many of the same activities as federal regulation. A. True B. False Answer: True 5. By delegating some of its authority to make and implement laws, Congress violates the U.S. Constitution. A. True B. False Answer: False 6. Federal administrative agencies can regulate beyond the powers granted by enabling legislation. A. True B. False Answer: False 7. Administrative agencies cannot make legislative rules, or substantive rules, that are as legally binding as laws that the Congress passes. A. True B. False Answer: False 8. Interpretive rules simply declare policy and do not affect legal rights or obligations. A. True B. False Answer: True 9. An administrative agency can issue an interpretive rule to indicate how the agency plans to interpret its statutory authority. A. True B. False Answer: True 10. A party seeking court review of an administrative action must first exhaust all of his or her administrative remedies before seeking court review. A. True B. False Answer: True 11. Under the exhaustion doctrine, a party must feel “exhausted” about an administrative action or regulation to challenge it in court. A. True B. False Answer: False 12. There is a precise definition of what makes an administrative rule arbitrary and capricious. A. True B. False Answer: False 13. A party can challenge an administrative regulation as so irrational as to be arbitrary and capricious. A. True B. False Answer: True 14. Rulemaking—the formulation of new administrative regulations—is a major function of Congress, not administrative agencies. A. True B. False Answer: False 15. Unlike those who violate statutes, violators of agency rules are not punished. A. True B. False Answer: False 16. The Administrative Procedure Act does not apply to a particular agency procedure. A. True B. False Answer: False 17. The period for persons to comment on a proposed administrative rule must be at least thirty days. A. True B. False Answer: True 18. Only experts can submit comments on a proposed administrative rule. A. True B. False Answer: False 19. Final administrative rules do not have binding legal effect unless the courts later declare them to be binding. A. True B. False Answer: False 20. Final administrative rules have binding legal effect unless the courts later overturn them. A. True B. False Answer: True 21. Often, an administrative agency itself enforces its rules. A. True B. False Answer: True 22. 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. A. True B. False Answer: False 23. Administrative agencies can conduct warrantless searches in some situations. A. True B. False Answer: True 24. In most instances, an agency is not required to obtain a search warrant before a physical search for evidence is conducted. A. True B. False Answer: False 25. Frequently, disputes over violations of administrative rules are resolved through informal adjudication proceedings. A. True B. False Answer: True 26. Administrative agencies generally exercise substantial discretion over the type of hearing procedures that they use. A. True B. False Answer: True 27. An administrative adjudicatory hearing does not have to meet the constitutional standards of due process. A. True B. False Answer: False 28. If the meaning of a statute’s language is unclear and an agency interprets it, a court must overturn the interpretation. A. True B. False Answer: False 29. 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. A. True B. False Answer: True 30. All federal government agencies must make their records available electronically on the Internet. A. True B. False Answer: True 31. 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. A. True B. False Answer: False 32. Every portion of every meeting of a federal administrative agency does not have to be open to public observation. A. True B. False Answer: False 33. The public must be provided with adequate advance notice of scheduled federal administrative agency meetings and agendas. A. True B. False Answer: True 34. Federal agencies must consider ways to reduce the economic impact of new regulations on small businesses. A. True B. False Answer: True 35. An agency must conduct a regulatory flexibility analysis whenever a new regulation will have an impact on a “small number of substantial entities.” A. True B. False Answer: False Multiple Choice 36. Independent regulatory agencies such as the Federal Trade Commission are A. not part of the government’s executive branch. B. outside the major departments of the government’s executive branch. C. subagencies of executive agencies. D. subject to more executive authority than executive agencies. Answer: B 37. The U.S. Social Security Administration is a federal agency. The Iowa Department of Social Services is a parallel state agency. If these agencies’ regulations conflict A. the federal agency’s regulations take precedence. B. the state agency’s regulations take precedence. C. the two agencies’ regulations take equal precedence. D. the two agencies’ regulations cancel each other. Answer: A 38. Congress leaves it to the Bureau of Prisons to oversee the promulgation of detailed regulations in areas under the agency’s jurisdiction. This is A. divine right. B. the delegation of legislative powers. C. gap-filling power. D. unconstitutional conduct. Answer: B 39. Playground Equipment, Inc., 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. B. the Federal Trade Commission, through the rulemaking process. C. the president, through an executive order. D. the U.S. Department of Labor, through a final order. Answer: A 40. Nemo’s 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 A. Congress, through enabling legislation. B. the courts, through the adjudicatory process. C. the U.S. Constitution, through the tax and spend clause. D. the U.S. Department of the Treasury, through a legislative rule. Answer: A 41. Persons who favor the creation of a National Biotech Agency to regulate the production of genetically altered agricultural products should concentrate their lobbying efforts on A. Congress. B. federal administrative agencies that oversee agricultural products. C. the United States Supreme Court. D. the president of the United States. Answer: A 42. The Federal Aviation Administration uses notice-and-comment rulemaking. The final rule in such a proceeding is sometimes referred to as A. a legislative rule. B. an interpretive rule. C. an adjudicatory order. D. an executive edict. Answer: A 43. The Merit Systems Protection Board issues a rule. Like other administrative agencies’ “legislative rules,” this rule is as A. binding as a law passed by Congress. B. persuasive as an expert’s opinion. C. suggestive as a newspaper’s editorial. D. unenforceable as a salesperson’s puffery. Answer: A 44. 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 A. an actual controversy at issue. B. standing to sue. C. the exhaustion doctrine. D. the ripeness doctrine. Answer: C 45. 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. B. the agency’s final rules. C. the agency’s final orders. D. none of the choices. Answer: A 46. 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. B. followed a consideration of all relevant factors. C. was accompanied by a rational explanation. D. was plainly warranted by the evidence. Answer: A 47. Freight Transport Company is subject to a decision by the National Labor Relations Board. Freight Transport appeals the decision, arguing that it is arbitrary and capricious. This could mean that the decision A. followed a consideration of legally appropriate factors. B. justifiably changed the agency’s prior policy. C. was accompanied by a rational explanation. D. was plainly contrary to the evidence. Answer: D 48. Before adopting new regulations to govern Internet-based phone services, the Federal Communications Commission may not A. hold hearings to acquire facts pertinent to the proposed rules. B. ignore the Administrative Procedure Act to streamline proceedings. C. order manufacturers to provide certain documents. D. solicit testimony from interest groups and consumers. Answer: B 49. The functions of the Social Security Administration, like those of other administrative agencies, include A. adjudication. B. declaration. C. enunciation. D. pronunciation. Answer: A 50. To notify the public of a proposed rule, the Food Safety and Inspection Service, like other federal agencies, publishes the proposal in A. the news media. B. a trade journal available to members of the industry. C. the Federal Register. D. an office memo that employees are free to take home. Answer: C 51. The Securities and Exchange Commission decides to create a new rule relating to the dissemination of material non public information through corporate Web sites. The first step is A. compile the rule with others in the Code of Federal Regulations. B. conduct an on-site inspection. C. publish a notice of the proposed rulemaking. D. solicit public comment. Answer: C 52. The U.S. Fish and Wildlife Service utilizes notice-and-comment rulemaking. This involves a period during which A. judges, legislators, and the president are asked about a proposed rule. B. potential violators of a proposed rule are notified and publicized. C. the administrators “notice” a problem and “comment” on it. D. the public is asked to comment on a proposed rule. Answer: D 53. The U.S. Citizenship and Immigration Service issues a rule. Like the rules of other federal administrative agencies, this rule is compiled in A. the Administrative Register of the Federal Government. B. the Code of Federal Regulations. C. the Federal Rules of Civil Procedure. D. the United States Code. Answer: B 54. 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. an order for specific performance. B. a rule for parol evidence. C. a formal complaint. D. a subpoena. Answer: D 55. The Food and Drug Administration (FDA) is investigating reports that Caplets Pharmaceutical Corporation is putting potentially harmful additives in Doze, a new pain-relief medication. The FDA’s demands for particular documents from Caplets A. must be specific and adequately describe the material being sought. B. must be non-specific so an incriminating item is not overlooked. C. must be general so as to force an uncooperative party’s compliance. D. may, but need not, be specific because the FDA is a federal agency. Answer: A 56. 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 A. agency coercion. B. infiltrating Verity’s computers without the firm’s knowledge. C. public comment. D. Verity’s consent. Answer: D 57. The Internal Revenue Service (IRS) wants to seize certain documents of Monetary Propriety, Inc. Whether it is permissible for the IRS to request or seize the documents depends on whether the documents are A. incriminating. B. relevant. C. technical. D. valuable. Answer: B 58. Caleb is a witness in a controversy involving the U.S. Drug Enforcement Administration. Caleb can be compelled to appear before an administrative law judge if he is served with A. an order for specific performance. B. a rule for parol evidence. C. a subpoena. D. a politely worded request. Answer: C 59. The Nuclear Regulatory Commission (NRC) files a complaint against General Construction Corporation (GCC). GCC may want to settle the dispute, before formal adjudicatory proceedings begin, to avoid A. appearing uncooperative. B. eliminating the need for additional proceedings. C. rectifying the problem to the NRC’s satisfaction. D. saving the expense of formal proceedings and later appeals. Answer: A 60. The U.S. Mine Safety Administration conducts searches of certain businesses. This agency and other administrative agencies can conduct warrantless searches in A. all industries. B. highly regulated industries. C. no industries. D. newly regulated industries only. Answer: B 61. 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. a negotiated settlement. B. a trial and a fine. C. a trial and an appeal to a higher authority. D. a trial and the dissolution of the business. Answer: A 62. 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 A. a federal appellate court judge. B. a federal district court judge. C. an administrative law judge. D. a U.S Marshal. Answer: C 63. Labor Recruiters, Inc., has been ordered to appear at a hearing before an administrative law judge of the National Labor Relations Board. A significant difference between a trial and an administrative hearing is that A. attorneys are not allowed to attend administrative hearings. B. clients are not allowed to communicate with their attorneys during administrative hearings. C. hearsay can be introduced as evidence in an administrative hearing. D. the burden of proof is on the charged party to prove innocence. Answer: C 64. Guard Personnel Company (GPC) is charged with using hiring practices that do not meet requirements set by the Transportation Safety Administration (TSA). The administrative law judge orders GPC to comply with the TSA’s regulations. GPC may A. appeal to the commission that governs the TSA. B. appeal to Congress, which created the TSA. C. appeal to a different, separate agency. D. ignore the order. Answer: A 65. In reviewing the actions of the U.S. Office of Nuclear Energy and other agencies, the courts A. are usually reluctant to review questions of fact. B. rarely defer to the technical expertise of administrative agencies. C. often rule on the merits of policy determinations. D. never defer to an agency’s interpretation of law. Answer: A 66. 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 A. the facts and the law. B. the agency’s authority. C. procedural requirements. D. the Constitution. Answer: A 67. Beck seeks information about Donatello and other well-known businesspersons under the Freedom of Information Act. To obtain the information, Beck must A. agree not to reveal any trade secrets. B. reasonably describe the information. C. get a court order. D. have the businesspersons’ permission. Answer: B 68. 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. a federal district court. B. a hearing before the U.S. Freedom of Information Agency. C. a meeting with Congress’s FOIA subcommittee. D. a special conference with the president of the United States. Answer: A 69. 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 A. no federal or state law. B. the Freedom of Information Act. C. the Government in the Sunshine Act. D. the Public Accountability Act. Answer: C 70. The Regulatory Flexibility Act has helped reduce record-keeping burdens for Hometown Gas Company and other small business firms in the area of A. accounting practices. B. asset acquisition. C. hazardous waste management. D. tax reporting. Answer: C Essay 71. Administrative agencies—like the Securities and Exchange Commission, the Federal Trade Commission, and the Food and Drug Administration—make rules. What are the two basic types of rules called, and how binding are they? What must an administrative rule NOT do? Answer: The rules that are made according to the notice-and-comment rulemaking procedures are sometimes referred to as “legislative rules,” and they are as binding as the laws that Congress makes. Such rules, like laws, must not violate the Constitution. Unlike laws, however, such rules must not exceed the power that Congress conferred on the agency in its enabling legislation. Agencies can adopt rules through less formal actions. These rules may be referred to as “interpretive rules.” Interpretative rules declare an agency’s interpretation of its enabling statute’s meaning, without imposing direct, legally binding obligations or establishing legal rights. They may have practical significance, however, because they provide enforcement guidelines for agency officials and may indicate that more formal rulemaking will occur if these less formal positions are ignored. 72. Grapple Market Share Corporation would like to know what information federal agencies have about Grapple’s operations, so that the firm will know what its competitors may be able to learn about it. Can Grapple require the agencies to disclose whatever information they may have concerning it? If so, how should the firm make its request? What federal law applies? Is any information exempt? Answer: The Freedom of Information Act (FOIA) of 1966 requires the federal government to reveal certain “records” to “any person” on request. The request may be made via e-mail or fax, or more traditional print methods, and needs to contain only a reasonable description of the information sought. An agency has twenty working days to respond to a request. There are exemptions, but the agency must notify the party seeking the information what is being withheld and which exemptions—national security, or the confidential or personal nature of the information, for example—are being asserted. An agency’s refusal to comply with the FOIA can be challenged in court. Generally, all records must be made available electronically on the Internet, on CD-ROMs, and in other electronic formats, and clearly indexed. Documents must be made computer accessible within a year of their creation. Chapter 6 Torts and Cyber Torts True/False 1. The bases of all torts are wrongs and compensation. A. True B. False Answer: True 2. The purpose of tort law is to provide remedies for the violation of various protected interests. A. True B. False Answer: True 3. The most widely used defense in negligence actions is comparative negligence. A. True B. False Answer: True 4. To commit an intentional tort, one person must intend to harm a certain person. A. True B. False Answer: False 5. For a tort to be considered intentional, the tortfeasor must have an evil or harmful motive. A. True B. False Answer: False 6. A common defense to intentional torts against persons is consent. A. True B. False Answer: True 7. Intentional torts result from the breach of a duty to act reasonably (fault without intent). A. True B. False Answer: False 8. False imprisonment occurs when a person restrains another intentionally and without justification. A. True B. False Answer: True 9. A party cannot recover damages for severe emotional distress absent a showing of physical injury. A. True B. False Answer: False 10. One person’s use of another’s name without permission is defamation. A. True B. False Answer: False 11. Statements made by in judicial proceedings are NOT privileged communications and may be the basis for defamation. A. True B. False Answer: False 12. The public disclosure of private facts about a person is an invasion of privacy. A. True B. False Answer: True 13. The use of a person’s likeness for commercial purposes without permission is an invasion of privacy. A. True B. False Answer: True 14. Fraud occurs only when there is reliance on a statement of opinion. A. True B. False Answer: False 15. Any lawful contract can potentially form the basis for an action based on wrongful interference with a contractual relationship. A. True B. False Answer: True 16. The courts do not consider legitimate competitive behavior permissible if it results in the breaking of a contract. A. True B. False Answer: False 17. If it can be shown that a trespass to land was warranted, a complete defense exists. A. True B. False Answer: True 18. Wrongfully taking personal property without the owner’s permission is conversion. A. True B. False Answer: True 19. A failure to return personal property is disparagement of property even if the rightful owner consented to the initial taking. A. True B. False Answer: False 20. Disparagement of property is another term for slander of quality. A. True B. False Answer: True 21. Failure to live up to a standard of care may be an act or an omission. A. True B. False Answer: True 22. To determine whether a duty of care has been breached, a judge asks how a reasonable person would have acted in the same circumstances. A. True B. False Answer: True 23. Under the theory of negligence, the duty of care requires a careless act. A. True B. False Answer: False 24. To avoid liability for negligence, a business owner must protect its patrons against all risks. A. True B. False Answer: False 25. Some risks are obvious but that does not necessarily excuse a business owner from the duty to protect customers from foreseeable harm. A. True B. False Answer: True 26. Proximate cause exists when the connection between an act and an in-jury is strong enough to justify imposing liability. A. True B. False Answer: True 27. Harm must be foreseeable to be considered the proximate cause of an injury in negligence. A. True B. False Answer: True 28. If no harm results from an allegedly negligent act, there is no liability. A. True B. False Answer: True 29. Self-defense is a defense to negligence. A. True B. False Answer: False 30. An assumption of risk defense does not require that a risk be voluntarily assumed. A. True B. False Answer: False 31. Under the doctrine of comparative negligence, only the plaintiff’s negligence is taken into consideration. A. True B. False Answer: False 32. Under the “danger invites rescue” doctrine, a person who tries to rescue another individual from harm is liable for any injuries to that individual. A. True B. False Answer: False 33. Under a dram shop act, liability can be imposed without proof of negligence. A. True B. False Answer: True 34. The extreme risk of an activity is a defense against imposing strict liability. A. True B. False Answer: False 35. Persons who keep wild animals are strictly liable for any harm inflicted by the animals. A. True B. False Answer: True Multiple Choice 36. Logistics Trucking Company operates a fleet of fuel trucks. When one of the trucks is positioned to receive a load of biofuel, it strikes a storage tank owned by Metro Biofuel, Inc. For the cost of repairing the damage to the tank, Metro is most likely to be awarded A. compensatory damages. B. punitive damages. C. contingency fees. D. none of the choices. Answer: A 37. Ike pushes Joan, who falls and breaks her arm. Ike is liable for the injury A. if Ike intended to push Joan. B. only if Ike did not intend to break Joan’s arm. C. only if Ike had a bad motive for pushing Joan. D. only if Ike intended to break Joan’s arm. Answer: A 38. Mary waits outside Julia’s house and hits Julia with a baseball bat as Julia leaves the house. When Julia sues Mary for battery, Mary will be considered A. a victim. B. a tortfeasor. C. a plaintiff. D. a reasonable person. Answer: B 39. Louis—larger and stronger than Mica—threatens to hit Mica before hitting and injuring him. Mica files a suit against Louis for assault and battery. Mica will most likely recover for A. assault and battery. B. assault but not battery. C. battery but not assault. D. neither assault nor battery. Answer: A 40. Liz trespasses on Mega Corporation’s property. Through the use of rea-sonable force, Mega’s security guard Ned detains Liz until the police arrive. Mega is liable for A. assault. B. battery. C. false imprisonment. D. none of the choices. Answer: D 41. Roger wants Andy to work late on a project. He tells Andy that the morally correct thing to do is to stay late at the office and work on the project. Andy feels obligated to stay and work late due to the moral pressure from Roger. Andy stays late at the office, even though he does not want to. Andy can sue Roger for A. false imprisonment. B. battery. C. defamation. D. no tort. Answer: D 42. Jackie distributes a handbill throughout her neighborhood accusing her neighbor Ked of being a convicted sex offender. The statement is defamatory if A. a neighbor repeats it. B. Ked suffers emotional distress. C. the statement is true. D. the statement is false. Answer: D 43. Glen falsely accuses Hu of stealing from Island Tours, Inc., their employer. Glen’s statement is NOT defamatory if A. only Hu hears it. B. a third party hears it. C. the statement is published. D. the statement is a lie. Answer: A 44. Jane develops a new color of lipstick. To market her lipstick, Jane uses a computer design program to show a famous model using Jane’s lipstick. Jane does not ask the model’s permission. The model can sue Jane for A. battery. B. fraudulent misrepresentation. C. defamation. D. invasion of privacy. Answer: D 45. Barbara is selling her car. She knows that the brakes do not work. When a potential buyer asks Barbara if there are any problems with the car, Barbara assures the buyer that there are no problems. The buyer purchases the car based on the assurance that there is nothing wrong with it. Barbara may be liable to the buyer for A. assault. B. defamation. C. fraudulent misrepresentation. D. invasion of privacy. Answer: C 46. Obie accuses Portia, a broker with QT Financial Services, of fraudulently inducing him to invest in Risky Development Company, whose stock price declines in value. The reliance that gives rise to liability for fraud requires A. a subjective statement. B. misrepresentation of a fact knowing that it is false. C. puffery. D. seller’s talk. Answer: B 47. Jim is an appliance salesperson. To make a sale, he asserts that a certain model of a Kitchen Helper refrigerator is the “best one ever made.” This is A. fraud if the statement is the truth. B. fraud if Jim believes that this statement is not true. C. fraud if Jim is stating his opinion, not the facts. D. not fraud. Answer: D 48. Dom, an EZ Baked Goods salesperson, follows Flora, a salesperson for Goody Pastries, Inc., as she attempts to make sales to food stores. Dom solicits each of Flora’s customers. Dom is most likely liable for wrongful interference with a A. bargaining relationship. B. business relationship. C. contractual relationship. D. customer relationship. Answer: B 49. Kai files a suit against Lana based on one of Lana’s statements that Kai alleges is fraudulent. To give rise to fraud, the statement must be one of A. emotion. B. fact. C. illusion. D. opinion. Answer: B 50. OK Dry-Cleaning advertises so effectively that the regular customers of its competitor Purity Cleaners patronize OK instead of Purity. This is A. appropriation. B. conversion. C. wrongful interference with a contractual relationship. D. no tort. Answer: D 51. Bella owns a farm in Colorado. Doyle drives his sport utility vehicle off a highway and onto Bella’s land. Doyle commits trespass if he A. does not have Bella’s permission to drive on the property. B. drives onto the property for recreational purposes. C. harms the property in a material way. D. harms the property in any way. Answer: A 52. Manuel is walking past Thomas’s house when he hears a smoke alarm going off. He also hears a child calling for help and sees smoke coming from a window. Manuel rushes into Thomas’s house, finds the child and brings it outside. If Thomas sues Manuel for trespass to land, Manuel’s defense will probably be A. assisting someone in danger. B. consent. C. self defense. D. the reasonable person defense. Answer: A 53. Susan takes her car to Ken’s repair shop and asks him to fix the car’s brakes. Ken completes the work and sends Susan a bill for $100. Susan refuses to pay so Ken refuses to return Susan’s car. Susan can probably successfully sue Ken for A. battery. B. conversion. C. trespass to property. D. none of the choices. Answer: D 54. As a joke, Jem takes Kyla’s business law textbook and hides it so that Kyla cannot find it during the week before the exam. Jem may have committed A. appropriation. B. conversion. C. disparagement of property. D. trespass to personal property. Answer: D 55. Lizzie, a clerk at a Devices Plus retail store, takes an iPad from the store without permission. Lizzie is liable for A. appropriation. B. benefiting an employee. C. conversion. D. wrongful interference with a business relationship. Answer: C 56. In newspaper ads, Lo-Price Autos falsely accuses Hi-Value Vehicles, a competitor, of selling stolen cars. Hi-Value’s sales decrease. Lo-Price has most likely committed A. slander of quality. B. slander of title. C. wrongful interference with a business relationship. D. none of the choices. Answer: B 57. Bette backs out of City Parking Garage, colliding with Dill’s car. Dill may recover $7,500 to cover the cost of the repairs if Bette failed to act as A. a blameless person. B. a faultless person. C. a realistic person. D. a reasonable person. Answer: D 58. Kelly is injured when she slips and falls on Layla’s sidewalk. To determine whether Layla owed a duty of care to Kelly, Layla is subject to the standard of A. a realistic person. B. a reasonable person. C. a recognizable person. D. a reliable person. Answer: B 59. Pools & Patios, a retail store, must use reasonable care on its premises to warn its patrons of A. all risks. B. hidden risks. C. obvious risks. D. no risks. Answer: B 60. Nico is a passenger in a car driven by Owen, whose reckless driving causes an accident, injuring himself. Nico, uninjured, accompanies Owen to Parkside Hospital in an ambulance. The ambulance is hit by a car driven by Quin, and Nico is injured. Nico files a suit against Owen, alleging negligence. The element most likely to be a question for the court to decide is A. causation in fact. B. proximate cause. C. the duty of care. D. the injury requirement. Answer: B 61. Ralph, a van driver for Speedy Delivery Company, causes a multi-vehicle accident on a city street. Ralph and Speedy are liable to A. all those who were injured. B. only those who were uninsured. C. only those whose injuries could have been reasonably foreseen. D. only those whose vehicles were closest to Ralph’s van. Answer: C 62. Duffy is a passenger in a car that Caleb is driving when an accident occurs. Both Caleb and Duffy are emotionally rattled, but neither is physically hurt. Caleb is not liable to Dufy on a negligence theory because A. both parties were emotionally rattled. B. Caleb apparently did not intend to cause an accident. C. Duffy must have been comparatively negligent. D. Duffy was not injured. Answer: D 63. Richard is an avid baseball fan and attends baseball games whenever he can. Richard considers himself an expert on all things, including risks, related to baseball. One day a ball flies into the stands, hits Richard in the head and seriously injures him. Richard can probably successfully win a case against the sports stadium based on A. negligence. B. breach of duty of care. C. defamation. D. none of the choices. Answer: D 64. Liu enters Mountain Triathlon, an athletic competition in which Liu has never competed. Regarding the risk of injury, Liu assumes the risks A. attributable to the triathlon in any way. B. different from the risks normally associated with the triathlon. C. greater than the risks normally associated with the triathlon. D. normally associated with the triathlon. Answer: D 65. Frank slips and falls on Guy’s Harbor Tour Boat and is injured. Frank files a suit against Guy’s for $500,000. If Frank is 20 percent at fault and Guy’s is 80 percent, under the “50 percent rule” comparative negligence principles, Frank would recover A. $0. B. $250,000. C. $400,000. D. $500,000. Answer: C 66. A Rhode Island state statute requires machinery in industrial plants to include automatic shut-off switches accessible to each employee working on the machine. Steel Company’s equipment does not have the switches. Trudy, a Steel employee, suffers an injury that an accessible shut-off switch would have prevented. Trudy’s best theory for recovery is A. assault. B. assumption of risk. C. invasion of privacy. D. negligence. Answer: D 67. George has a badly infected right foot. Herb, George’s physician, prescribes amputation. George agrees. During the operation, Herb amputates the left foot. In George’s suit against Herb, George’s best theory for recovery is A. assumption of risk. B. negligence per se. C. res ipsa loquitur. D. strict liability. Answer: C 68. An Iowa state statute requires amusement parks to maintain equipment in specific condition for the protection of patrons. Jack’s Fun Park fails to maintain its equipment. Keely, a patron, is injured. Jack’s has committed A. abuse of process. B. battery. C. false imprisonment. D. negligence. Answer: D 69. Ichiro 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 A. even if Ichiro was only slightly at fault. B. only if Ichiro and Heather were equally at fault. C. only if Ichiro was less at fault than Heather. D. only if Ichiro was more at fault than Heather. Answer: A 70. Jean is playing a video game on a defective disk that melts in her game player, starting a fire that injures her hands. Jean files a suit against K-Tech, Inc., the game’s manufacturer. K-Tech is held liable under the doctrine of strict liability. A significant application of this doctrine is in the area of A. cyber torts. B. intentional torts. C. product liability. D. unintentional torts. Answer: C Essay 71. Precise Engineering Corporation has a contract with Quik Mart Stores to provide customized software for Quik’s inventory control system. Retail Outlets, Inc., Quik’s competitor, induces Sam, a Precise subcon-trac-tor who is writing code for the Quik software, to delay delivery of the code for one week. As a result, Precise’s delivery of the software is delayed, and Quik sustains $500,000 in lost profits. On what ground could Quik recover damages from Retail Outlets? Answer: Quik could file an action against Retail Outlets based on wrongful interference with a contractual relationship. The elements that Quik must prove are that (1) a valid, enforceable contract existed between two parties; (2) a third party knew that this contract existed; and (3) the third party intentionally caused the breach of the contract for the purpose of advancing that party’s own interest. For a successful tort action, Quik must also show that the third party’s act caused damages. Facts that satisfy all of these elements are set out in the problem. There was a valid, enforceable contract between Precise and Quik. Retail Outlets knew of this contract. Retail Outlets intentionally interfered with this contract, causing its breach, for the purpose of advancing its own interest (undercutting the profit of its competitor). Quik suffered lost profits as a result of Retail Outlets’ act. 72. After two years of research and the investment of considerable funds, Coast-to-Coast Company (CC) develops a new product that it hopes will produce substantial profits. CC learns that a competitor, National Sales, Inc., has made and begun to sell a nearly identical product. CC learns from a reliable source that National paid a CC employee to obtain the plans for CC’s product while it was in development. What legal re-course does CC have against National? Answer: In terms of legal recourse against National, CC might base a civil suit on charges of conversion and trespass to personal property. Conversion is any act depriving an owner of personal property without that owner’s permission and without just cause. Conversion is the civil side of crimes related to theft. When conversion occurs, trespass to per-sonal property usually occurs as well. If the initial taking of the property was unlawful, there is trespass. Retention of that property is conversion. CC might also have a claim for wrongful interference with a contractual relationship for inducing the CC employee to break his or her employment contract with CC by selling company secrets. Test Bank for Essentials of the Legal Environment Today Roger LeRoy Miller 9781305262676
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