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This Document Contains Chapters 1 to 2 Chapter 1 Business and Its Legal Environment True/False 1. There is really no reason to be acquainted with business laws and government regulations, except to pass this test. A. True B. False Answer: False 2. Law consists of enforceable rules governing relationships among individuals and between individuals and their society. A. True B. False Answer: True 3. Laws and government regulations affect almost all business activities. A. True B. False Answer: True 4. Many different laws may apply to a single business transaction. A. True B. False Answer: True 5. Businesspersons are expected to make decisions that are ethically sound. A. True B. False Answer: True 6. Being a small-business owner means that you will never have to take on the role of finance manager, marketing manager or accountant. A. True B. False Answer: False 7. State laws are the supreme law of the United States. A. True B. False Answer: False 8. The federal government and the states have the same constitution. A. True B. False Answer: False 9. A state law that conflicts with the U.S. Constitution will be deemed unconstitutional. A. True B. False Answer: True 10. State constitutions are supreme within their respective borders. A. True B. False Answer: True 11. Statutory law includes state statutes and ordinances passed by cities and counties. A. True B. False Answer: True 12. Whether financial statements created by an accountant need to be verified for accuracy is not a legal question. A. True B. False Answer: False 13. There are legal questions involved when considering ways to raise capital so a business can grow. A. True B. False Answer: True 14. There are legal questions involved when choosing an appropriate business organizational form. A. True B. False Answer: True 15. A small business owner is likely to face legal questions when determining ways to reduce his small business’s taxes. A. True B. False Answer: True 16. Statutes are laws enacted by Congress and the state legislatures and comprise one of the sources of American law. A. True B. False Answer: True 17. Administrative law is a source of American law that is comprised of statutes. A. True B. False Answer: False 18. Uniform laws apply in all states, including those in which the laws have not been adopted. A. True B. False Answer: False 19. The American Law Institute was the only organization involved in developing the Uniform Commercial Code. A. True B. False Answer: False 20. No state has adopted the Uniform Commercial Code. A. True B. False Answer: False 21. Administrative law consists of the rules, orders, and decisions of administrative agencies. A. True B. False Answer: True 22. Administrative law includes only state regulations. A. True B. False Answer: False 23. Common law is the same as statutory law. A. True B. False Answer: False 24. Stare decisis is a doctrine obligating judges to help persons who have failed to protect their own rights. A. True B. False Answer: False 25. Stare decisis is a doctrine obligating judges to follow the precedents established within their jurisdictions. A. True B. False Answer: True 26. Common law is a term for the laws that are familiar to most of us. A. True B. False Answer: False 27. In order to truly understand our legal system, it is important to understand the origins of the common law tradition. A. True B. False Answer: True 28. A court may depart from a precedent if the precedent is no longer valid. A. True B. False Answer: True 29. Money or property, including land, remedies at law. A. True B. False Answer: True 30. Equity is a branch of law founded in justice and fair dealing that seeks to supply a remedy when no adequate remedy at law is available. A. True B. False Answer: True 31. The basis for the U.S. legal system is the natural law school. A. True B. False Answer: True 32. Criminal law focuses on duties that exist between persons. A. True B. False Answer: False 33. Criminal acts are prohibited only by federal government statutes. A. True B. False Answer: False 34. Government authorities cannot enforce national law. A. True B. False Answer: False 35. International law is the law of a foreign nation and varies from country to country. A. True B. False Answer: False Multiple Choice 36. Data Analytics, Inc., is a corporation engaged in the business of compiling, analyzing, and marketing data. To accomplish its purposes, Data Analytics obtains financing, and hires and fires employees. Laws and government regulations affect such business activities as A. hiring and firing decisions. B. the manufacturing and marketing of products. C. business financing. D. all of the choices. Answer: D 37. Congress enacts a statute, the Federal Deposit Insurance Corporation (an administrative agency) issues rules, the Southeast Financial Institutions Association (a private organizations) issues instructions, South Valley Bank posts a memo with orders for its employees, and Tina tells her co-worker about a recent news story. Sources of law include A. the instructions issued by private associations. B. the orders posted by employers. C. the rules issued by federal administrative agencies. D. the stories released by news agencies. Answer: C 38. Under Ohio’s state constitution, the Ohio Environmental Protection Agency issues a new rule, the Polk County Commission approves a new property tax measure, and the professors and students at Ohio Law School publish the results of their most recent legal research. Sources of law do not include A. the measures approved by local governing bodies. B. the results of legal scholars’ research. C. the rules issued by state administrative agencies. D. the states’ constitutions. Answer: B 39. A provision in the California state constitution conflicts with a provision in the U.S. Constitution. If challenged A. neither provision will be enforced. B. the provisions will be balanced to reach a compromise. C. the state provision, not the U.S. Constitution, will be enforced. D. the U.S. Constitution, not the state provision, will be enforced. Answer: D 40. The Tenth Amendment to the U.S. Constitution A. reserves to the states all powers not granted to the federal government. B. reserves to the federal government all powers not granted to the states. C. requires each state in the union to have its own constitution. D. does not exist. Answer: A 41. The Pennsylvania legislature enacts a state law that violates the U.S. Constitution. This law can be enforced by A. no one. B. the federal government only. C. the state of Pennsylvania only. D. the United States Supreme Court only. Answer: A 42. Smith Saddlery is a saddle shop subject to the laws of New York. In New York, the highest-ranking (superior) law is A. a case decided by the New York Court of Appeals. B. a rule created by a New York state administrative agency. C. a provision in the New York constitution. D. a statute enacted by the New York legislature. Answer: C 43. The Uniform Commercial Code has been adopted, at least in part, in A. all states. B. forty-five states. C. thirty-five states. D. no state. Answer: A 44. The Bay City Planning Department, the Coastal County Zoning Commission, the Delaware Environmental Quality Agency, and the U.S. Bureau of Land Management issue regulations. These rules constitute A. administrative law. B. case law. C. stare decisis. D. statutory law. Answer: A 45. Much of American law is based on A. the English legal system. B. the Spanish legal system. C. the civil law of the Greeks. D. Ancient Chinese law. Answer: A 46. The best definition of a precedent is A. a law developed from custom. B. a judicial proceeding for the determination of a dispute between parties in which rights are enforced or protected. C. a proceeding by one person against another in court. D. a court decision that furnishes an example or authority for deciding subsequent cases involving identical or similar facts. Answer: D 47. As a judge, Bonnie applies common law rules. These rules develop from A. administrative regulations. B. court decisions. C. federal and state statutes. D. proposed uniform laws. Answer: B 48. Owen is a federal judge whose judicial decisions are part of case law, which does not include interpretations of A. other case law. B. constitutional provisions. C. statutes. D. sound bites in the media. Answer: D 49. Karen is a judge hearing the case of Local Dispatch Co. v. National Transport Corp. Applying the relevant rule of law to the facts of the case requires Karen to find previously decided cases that, in relation to the case under consideration, are A. as different as possible. B. as similar as possible. C. at odds. D. exactly identical. Answer: B 50. In the case of Retail Sales Corp. v. Trucking Delivery Co., the court may rule contrary to a precedent if the court decides that the precedent A. is incorrect or inapplicable. B. is not in line with the judge’s personal values. C. would lead to unintended consequences. D. would not bring about the result the judge prefers. Answer: A 51. There are no precedents on which the court deciding the case Financial Investment Co. v. Good hands Insurance, Inc., can base its decision. The court may consider A. issuing an order according to the judge’s personal values. B. refusing to decide the case. C. postponing a decision until a precedent is available. D. basing a decision on public policy or social customs and values. Answer: D 52. In Benny v. City Car Dealership, a state supreme court held that a minor could cancel a con-tract for the sale of a car. Now a trial court in the same state is deciding Daphne v. Even Steven Auto Deals, Inc.,, a case with similar facts. Under the doctrine of stare decisis, the trial court is likely to A. allow the minor to cancel the contract. B. disregard the Benny case. C. order the minor to cancel the contract. D. require the minor to fulfill the contract. Answer: A 53. Judge Julia decides that the precedent for the case she is hearing is no longer correct due to technological changes. She overturns the precedent when she decides the case. It is most likely that her case will A. go unnoticed by the public. B. be thrown out of court. C. receive a great deal of publicity. D. be ignored by the media. Answer: C 54. In an action against the sate of Idaho, Jaime obtains a remedy. This is A. the relief given to an innocent party to enforce a right or to prevent or compensate for the violation of a right. B. medication paid for by the government. C. a right guaranteed by the Bill of Rights. D. a situation or state of facts that gives a person a right to initiate a judicial proceeding. Answer: A 55. Starlight Café brings a suit, seeking a remedy at law. A remedy at law is A. the payment of money or property as compensation for damages. B. a decree of specific performance. C. a judicial proceeding for the resolution of a dispute. D. an injunction. Answer: A 56. In a suit against Knut, Leon obtains an injunction. This is A. an order to do or to refrain from doing a particular act. B. an order to perform what was promised. C. a payment of money or property as compensation. D. the cancellation of a contract. Answer: A 57. Eliza is a state court judge. Flora appears in a case in Eliza’s court, claiming that Glover breached a contract. Which of the following actions may Eliza take? A. Award damages or issue a decree of specific performance B. Imprison Glover, but not Flora C. Imprison Flora, but not Glover D. Order the parties to pay Eliza to render a favorable ruling Answer: A 58. Leona enters into a contract with Munchie Bakery to cater a sales conference. When the conference is postponed indefinitely, Leona asks a court to cancel the contract and return the parties to the positions that they held before its formation. This request involves A. specific performance. B. an injunction. C. rescission. D. an action that the court cannot order. Answer: C 59. Maggie and Nate enter into a contract for the sale of a car, but Nate later refuses to deliver the car. Maggie asks a court to order Nate to perform as promised. Ordering a party to perform what was promised is A. specific performance. B. damages. C. rescission. D. beyond the court’s authority. Answer: A 60. Chelsea is a state court judge. Like judges in most state courts, in a particular case, she may grant A. a remedy at law only. B. a remedy in equity or a remedy at law, but not both. C. a remedy in equity and a remedy at law. D. a remedy in equity only. Answer: C 61. Jane enters into a contract with Jill to provide 100 roses for a dinner party. Jane fails to deliver the roses. Jill initiates a suit against Jane, asking the court to order Jane to deliver the roses. Jill is A. the plaintiff. B. the defendant. C. the binding authority. D. the persuasive authority. Answer: A 62. To Cody, the written law of a particular society at a particular time is most significant. Cody is a A. legal positivist. B. legal rationalist. C. legal realist. D. person who adheres to the natural law school. Answer: A 63. Beth is a victim of Carl’s violation of a criminal law. Criminal law is concerned with A. the prosecution of private individuals by other private individuals. B. the prosecution of public officials by private individuals. C. the relief available when a person’s rights are violated. D. wrongs committed against the public as a whole. Answer: D 64. Civil law A. defines, describes, regulates, and creates legal etiquette. B. spells out the rights and duties that exist between persons and between persons and their governments. C. establishes the methods of enforcing the rights established by criminal law. D. has to do with the wrongs committed against society for which society demands redress. Answer: B 65. Japan violates an international law. Other countries may take coercive actions, which include A. violating the same law in the same way with impunity. B. confiscating Japanese businesses. C. boycotting Japanese goods. D. taxing Japanese citizens. Answer: C The Texas Supreme Court decides the case of Livewire Co. v. Power Corp. Of nine justices, five believe the judgment should be in Livewire’s favor. Justice Bellamy, one of the five, writes a separate opinion. The four justices who believe the judgment should be in Power’s favor join in a third separate opinion. 66. Refer to Fact Pattern 1-1. These opinions are collected and published in volumes called A. citations. B. codes. C. regulations. D. reporters. Answer: D 67. Refer to Fact Pattern 1-1. Bellamy’s opinion is A. a concurring opinion. B. a dissenting opinion. C. a majority opinion. D. a per curiam opinion. Answer: A 68. Refer to Fact Pattern 1-1. The opinion joined by the four justices who favor Power is known as A. a concurring opinion. B. a dissenting opinion. C. a majority opinion. D. a per curiam opinion. Answer: B 69. Standard Business Company appeals a decision against it, in favor of Top Flight Corporation, from a lower court to a higher court. Standard is A. the appellant. B. the appellee. C. the defendant. D. the plaintiff. Answer: A 70. Mikkala is a well-known professional athlete. Mikkala Co. owns trademarks, including “mikkala,” that it uses to sell merchandise. Norm owns photos of Mikkala that he markets through his Web site, mikkalapics.com. Under the principles discussed in “A Sample Court Case,” Experience Hendrix, L.L.C. v. Hendrixlicensing.com Ltd., Norm’s domain name most likely A. constitutes nominative fair use of the “mikkala” mark. B. infringes the “mikkala” mark. C. is a legitimate description of Mikkala Co.’s products. D. is a legitimate reference to Mikkala Co.’s products. Answer: B Essay 71. Americans with a Better Cause (ABC), a nonprofit organization, files a suit against the U.S. Department of Justice (DOJ), claiming that a certain federal statute the DOJ is empowered to enforce conflicts with the U.S. Constitution and with a state constitution. In each situation, which source of law has priority? Answer: The U.S. Constitution is the supreme law of the land. A law in violation of the Constitution, no matter what its source, will be declared unconstitutional and will not be enforced. Thus, the federal statute does not have priority over the Constitution. The federal statute would have priority over the state constitution, however, because under the U.S. Constitution, when there is a conflict between a federal law and a state law, the state law is rendered invalid. 72. In a dispute between Cosmic Games Corporation and Mythic Engineering Associates, Inc., the court applies the doctrine of stare decisis. What is this doctrine? What does this doctrine have to do with the American le-gal system? Answer: In a common law legal system, past judicial decisions are binding in current disputes with similar facts. This feature of the common law, which is the basis of the American legal system, is unique be-cause, unlike the law in other legal systems, it is judge-made law. Within the common law system, when possible, judges attempt to be consistent and to base their decisions on the principles suggested by earlier cases. The body of principles and doctrines that form the common law emerged over time as judges applied the principles announced in earlier cases to subsequent legal controversies. The practice of deciding cases with reference to former decisions, or precedents—the cornerstone of the American legal system—is called the doctrine of stare decisis. Under this doctrine, judges are obligated to follow the precedents established within their jurisdictions. This helps courts to be more efficient, and makes the law more stable and predictable. Chapter 2 Courts and Alternative Dispute Resolution True/False 1. A state long arm statute allows a court to exercise jurisdiction over out-of-state defendants based on activities that took place within the state. A. True B. False Answer: True 2. Generally, a state court’s power is limited to the territorial boundaries of the state in which it is located and the immediately adjacent states. A. True B. False Answer: False 3. Cases involving diversity of citizenship arise only between citizens of different states. A. True B. False Answer: False 4. The amount in controversy in a diversity of citizenship case must be more than $1 million before a federal court can take jurisdiction. A. True B. False Answer: False 5. Concurrent jurisdiction exists when both federal and state courts have the power to hear a particular case. A. True B. False Answer: True 6. State courts cannot have exclusive jurisdiction. A. True B. False Answer: False 7. A state court can exercise jurisdiction over an out-of-state defendant who does business in the state only over the Internet. A. True B. False Answer: True 8. A business firm may have to comply with the laws of any jurisdiction in which it actively targets customers. A. True B. False Answer: True 9. Federal courts are superior to state courts. A. True B. False Answer: False 10. Lawyers are not allowed to represent people in small claims courts in any of the states. A. True B. False Answer: False 11. Small claims courts hear both civil and criminal cases. A. True B. False Answer: False 12. All states have intermediate appellate courts. A. True B. False Answer: False 13. There is at least one federal district court in every state. A. True B. False Answer: True 14. U.S. district courts have original jurisdiction in federal matters. A. True B. False Answer: True 15. There are twelve justices on the United States Supreme Court. A. True B. False Answer: False 16. The United States Supreme Court has original jurisdiction in some situations. A. True B. False Answer: True 17. There is one set of procedural rules for federal courts and one set for state courts. A. True B. False Answer: False 18. A default judgment is a judgment entered against the party who brought the claim before the court. A. True B. False Answer: False 19. An answer never admits to the allegations made in a complaint. A. True B. False Answer: False 20. On a motion for judgment on the pleadings, a court may consider evidence outside the pleadings. A. True B. False Answer: False 21. A summary judgment is granted only if there is no genuine question of law. A. True B. False Answer: False 22. A deposition is sworn testimony by a party to a lawsuit or any witness. A. True B. False Answer: True 23. Interrogatories are written questions for which written answers are prepared and signed under oath. A. True B. False Answer: True 24. Any relevant material, except information stored electronically, can be the object of a discovery request. A. True B. False Answer: False 25. A closing argument is a statement by a party that results in a summary judgment in that party’s favor. A. True B. False Answer: False 26. A motion for a new trial will be granted only if a constitutional issue is involved. A. True B. False Answer: False 27. A motion for a directed verdict is also known as a motion for judgment as a matter of law. A. True B. False Answer: True 28. Any judgment is enforceable. A. True B. False Answer: False 29. Arbitration is always legally binding. A. True B. False Answer: False 30. In mediation, the mediator proposes a solution that includes what com-pro-mises are necessary to reach an agreement. A. True B. False Answer: True 31. Negotiation is the most complex form of alternative dispute resolution. A. True B. False Answer: False 32. ADR proceedings are always strictly regulated by federal statutes. A. True B. False Answer: False 33. A court’s review of an arbitrator’s award may be restricted. A. True B. False Answer: False 34. The verdict in a summary jury trial is binding. A. True B. False Answer: False 35. Most online dispute resolution services apply general, universal legal principles to resolve disputes. A. True B. False Answer: True Multiple Choice 36. Justin wants to file a suit against Kemel. For a court to hear the case A. Kemel must agree. B. the court must have jurisdiction. C. the court must issue a deposition. D. the parties must own property. Answer: B 37. Hua, a resident of Illinois, owns a warehouse in Indiana. A dispute arises over the ownership of the warehouse with Jac, a resident of Kentucky. Jac files a suit against Hua in Indiana. Regarding this suit, Indiana has A. federal jurisdiction. B. in personam jurisdiction. C. in rem jurisdiction. D. no jurisdiction. Answer: C 38. Megan, a resident of Ohio, runs a red light in Texas and hits Sarah, a Texas resident. Sarah files suit against Megan. The statute that allows the Texas court to exercise jurisdiction over Megan is called A. a long arm statute. B. an in personam statute. C. an in rem statute. D. an out-of-state jurisdiction statute. Answer: A 39. A Montana state court can exercise jurisdiction over Endurance Insurance Corporation, an out-of-state defendant, if the defendant has A. minimum contacts with the state. B. optimum contacts with the state. C. any contacts with the state. D. no contacts with the state. Answer: A 40. Fresh Harvest Company, which is based on Georgia, packages and sells vegetables. Jack, who is a resident of North Carolina, buys a Fresh Harvest product, eats it, and suffers severe food poisoning. Jack wants to file a suit against Fresh Harvest. The diversity of citizenship between these parties means that A. federal and state courts have concurrent jurisdiction. B. federal courts have exclusive jurisdiction. C. no court has jurisdiction. D. state courts have exclusive jurisdiction. Answer: A 41. The case of Max v. National Credit Co. is heard in a trial court. The case of O! Boy! Ice Cream Co. v. Refrigerated Transport, Inc. is heard in an appellate court. The difference be-tween a trial and an appellate court is whether A. the proceedings focus on the presentation of evidence and the examination of witnesses. B. the court is appealing. C. the parties question how the law applies to their dispute. D. the subject matter of the case involves complex facts. Answer: A 42. Laney is a resident of Maine. Delacorte is a Canadian. They dispute the ownership of Petite Isle, an island in North Rapids River on the border between Canada and the United States. The diversity of the parties’ citizenship could serve as a basis for A. federal jurisdiction. B. general jurisdiction. C. limited jurisdiction. D. universal jurisdiction. Answer: A 43. Sandy, a resident of Illinois, wants to file suit against Carl, a resident of Kansas, over Carl’s failure to pay Sandy for work on his house. The amount in dispute is $15,000. Under diversity of citizenship requirements, a federal cannot exercise jurisdiction in this case because A. the dispute concerns property, not persons. B. a state court has not yet ruled in the suit. C. the parties are citizens of different states. D. the amount in controversy is less than $75,000. Answer: D 44. Tyler, a citizen of West Virginia, files a suit in a West Virginia state court against Louisville Sales Corporation, a Kentucky state company that does business in West Virginia. The court has original jurisdiction, which means that A. the case is being heard for the first time. B. the court has a unique method of deciding whether to hear a case. C. the court has unusual procedural rules. D. the subject matter of the suit is interesting and new. Answer: A 45. Jack and Jill, citizens of Vermont, are involved in a case related to the adoption of their child. Over this case, the Vermont state courts have A. concurrent jurisdiction with federal courts. B. concurrent jurisdiction with other state courts. C. exclusive jurisdiction. D. no jurisdiction. Answer: C 46. David, an Alabama resident, files a suit in an Alabama court against QuickAds, an Internet company based in Georgia that provides advertising services. QuickAds’s only contact with persons in Alabama has been through QuickAds’s passive advertising. In this case, the Alabama court most likely A. has jurisdiction. B. does not have jurisdiction. C. has concurrent jurisdiction with a Georgia state court. D. has concurrent jurisdiction with a federal court. Answer: B 47. Milo files a suit against Nick in an Ohio state court, noting that Nick operates a Web site through which Ohio residents have done substantial business with him. The court is most likely to have jurisdiction over Nick if Milo’s claim arises from A. anything an Ohio resident has done. B. Nick’s Web site activities. C. nothing an Ohio resident has done. D. something other than Nick’s Web site. Answer: B 48. Jo files a suit against Lara in a Missouri state court. Lara’s only connection to Missouri is an ad on the Web originating in Nebraska. For Missouri to exercise jurisdiction, the issue is whether Lara, through her ad, has A. a commercial cyber presence in Missouri. B. conducted substantial business with Missouri residents. C. general maximum contact with Missouri. D. solicited virtual business in Missouri. Answer: B 49. Lora files a suit in Michigan against Ned over the ownership of a boat docked in a Michigan harbor. Lora and Ned are residents of Ohio. Ned could ask for a change of venue on the ground that Ohio A. has a sufficient stake in the matter. B. has jurisdiction. C. has sufficient minimum contacts with the parties. D. is a more convenient location to hold the trial. Answer: D 50. Elinor sells Cathy a horse for $2,000. When Elinor goes to the bank to deposit Cathy’s check, the check bounces. Elinor is furious and files suit against Cathy. Elinor probably filed her suit in A. a small claims court. B. a domestic relations court. C. a municipal court. D. a probate court. Answer: A 51. Carol files a suit against Andy in a state trial court and loses. Carol A. cannot take her case any higher in the court system. B. can insist that the United States Supreme Court hear her case. C. can plead her case before an appellate court. D. can plead her case before a small claims court. Answer: C 52. Kit loses her suit against Lou in a Minnesota state trial court. Kit appeals to the state court of appeals and loses again. Kit would appeal next to A. a U.S. district court. B. the Minnesota Supreme Court. C. the United States Supreme Court. D. the U.S. Court of Appeals for the Eighth Circuit. Answer: B 53. Martha brings a suit against SafeCars, Inc. claiming that she was injured during a car crash due to defects in the car she had purchased from SafeCars. There is no evidence that Martha was injured in the accident, but the trial court awards her $1 million in damages. SafeCars appeals the decision. The appellate court will most likely A. not modify the trial court’s finding of fact because appellate courts are forbidden to look at questions of fact. B. modify the trial court’s finding of fact because the finding was clearly erroneous. C. modify the trial court’s finding of fact because the award amount was more than $25,000. D. modify the trial court’s finding of fact because the award amount was less than $5 million. Answer: B 54. Drummond wants to make a federal case out of his dispute with Elena. Federal cases originate in A. federal courts of appeals. B. federal district courts. C. state trial courts. D. the United States Supreme Court. Answer: B 55. The Arizona Supreme Court rules against Jennifer in a case against Kut Rate Stores, Inc. Jennifer wants to appeal her case to the United States Supreme Court. She must ask the Court to issue a writ of A. appeal. B. certiorari. C. jurisdiction. D. summons. Answer: B 56. Ben files a suit in a federal district court against Cathy. Cathy loses the suit, appeals to the U.S. Court of Appeals for the Second Circuit, and loses again. Cathy asks the United States Supreme Court to hear the case. The Court agrees to hear the case. This means that A. at least four justices approve of hearing the case. B. Cathy’s petition does not raise a possibility of an important constitutional question. C. the amount in controversy in Cathy’s suit is greater than $100,000. D. the Court feels that the lower courts’ judgments were erroneous. Answer: A 57. Wade wants to initiate a suit against Valley Vacation Tours by filing a complaint. The complaint should include A. an explanation to refute any defense the defendant might assert. B. a motion for summary judgment. C. a motion to dismiss. D. a statement of the facts necessary to show Wade is entitled to relief. Answer: D 58. To initiate a lawsuit, Darla files a complaint against E-Sales Company, which responds with an answer. Together, the complaint and answer are A. a motion to dismiss. B. a summons. C. a writ of certiorari. D. the pleadings. Answer: D 59. Jason files a suit against Maybelline. If Maybelline fails to respond, Jason A. must appeal the case to a different court. B. must refile the suit in the same court. C. will be awarded the remedy sought. D. will have a default judgment entered against him. Answer: C 60. Lyn files a suit against Karl. Karl denies Lyn’s charges and sets forth his own claim that Lyn breached their contract and owes Karl money for the breach. Karl’s claim is A. a contrary charge. B. a counterclaim. C. a counterpoint. D. a cross complaint. Answer: B 61. iTablets, Inc., files a suit against Andromeda Pads Corporation. Suri is a witness for iTablets. Kevin is a witness for Andromeda. iTablets may direct interrogatories to A. Andromeda. B. Suri. C. Kevin. D. the judge. Answer: A 62. Solar Power, Inc., files a suit against Thunder Bay Utility Company and seeks to examine electronic documents in Thunder’s possession. A legitimate reason for this examination is that the documents contain A. evidence about the case. B. private information about Thunder’s operations. C. public information about energy generation. D. irrelevant data that can be eliminated from consideration. Answer: A 63. During the trial phase of Fuel Corporation’s suit against Gas Stations, Inc., their attorneys engage in voir dire. This is A. an assessment of the validity of the arguments for both parties. B. a determination of the issues to be argued before the court. C. the trial. D. the selection of jurors. Answer: D 64. Kelly files a suit against Lewis in a state court. The case proceeds to trial, after which the court renders a verdict. The case is appealed to an appellate court. After its review of Kelly v. Lewis, the appellate court upholds the lower court’s verdict. The appellate court has A. affirmed the case. B. reversed the case. C. remanded the case. D. reversed and remanded the case. Answer: A 65. In Kettle Cafe’s suit against Food Services, Inc., the court issues a judgment in Kettle’s favor. The judgment can be appealed to an appropriate court of appeals by A. either party. B. Kettle only. C. Food Service only. D. neither party. Answer: A Fact Pattern 2-1 (Questions 31-33 apply) Bean Vendors, Inc., and Java Bistros Corporation dispute a term in their contract. 66. Refer to Fact Pattern 2-1. The least expensive method of resolving the dispute between Bean and Java may be A. arbitration because the case will be heard by a mini-jury. B. litigation because each party will pay its own legal fees. C. mediation because the dispute will be resolved by a non-expert. D. negotiation because no third parties are needed. Answer: D 67. Refer to Fact Pattern 2-1. If Bean and Java have a long-standing business relationship that they would like to continue, they may prefer to settle their dispute through mediation because A. the case will be heard by a mini-jury. B. the dispute will eventually go to trial. C. the process is not adversarial. D. the resolution of the dispute will be decided an expert. Answer: C 68. Refer to Fact Pattern 2-1. If Bean and Java resolve their dispute by having a neutral third party render a binding decision, they will have used the method of A. arbitration. B. conciliation. C. intervention. D. mediation. Answer: A 69. Transnational Corporation and United Shipping, Inc., agree to a contract that includes an arbitration clause. If a dispute arises, a court having jurisdiction may A. monitor any arbitration until it concludes. B. order an arbitrator to rule in a particular way. C. order a party to bring the dispute to court. D. order a party to submit to arbitration. Answer: D 70. To resolve a dispute, Amy in Boston and Chris in Denver utilize E-Solution, an online dispute resolution (ODR) service. This limits these parties’ recourse to the courts A. not at all. B. until the ODR service has issued a decision. C. with respect to any dispute arising between them. D. with respect to this dispute only. Answer: A Essay 71. Norwest Trucking Corporation files a suit in a state court against Bob’s Service Company (BSC), and wins. BSC appeals the court’s decision, asserting that the evidence presented at trial to support Norwest’s claim was so scanty that no reasonable jury could have found for the plaintiff. There-fore, argues BSC, the appellate court should reverse the trial court’s decision. Is the appellate court likely to reverse the trial court’s findings with respect to the facts? If not, why not? What are an appellate court’s options after re-viewing a case? Answer: An appellate court will reverse a lower court’s decision on the basis of the facts if the evidence does not support the findings or if it contradicts them. Appellate courts normally defer to a trial court’s decision with regard to the facts of a case, however, for several reasons. First, trial judges and juries have the opportunity to observe witnesses and tangible evidence first hand. The appellate court sees only a cold record of the trial court proceedings and therefore cannot make the kind of judgments about the credibility of witnesses and the per-suasiveness of evidence that can be gleaned only from first‑hand experience. Second, as occurs when there is no jury and the case is heard by a judge, trial judges routinely sit as fact finders. As a result, they develop a particular expertise in determining what kind of evidence and testimony is reliable and what kind is not. (There are also constitutional reasons for an appellate court to de-fer to a jury verdict. If, based on the evidence presented to a jury, a rea-sonable person could have come to the same decision that the jury came to, an appellate court cannot reverse the jury’s decision with regard to the facts be-cause this would, in essence, take away a person’s right to a jury trial.) An appellate court’s options after re-viewing a case are to affirm the trial court’s judgment, to reverse it in whole, to reverse it in part, to modify the decision, or to remand the case for further proceedings. 72. Discount Mart, Inc., files a suit in a state court against Elements Computer Corporation, alleging that Elements breached a contract to sell 500 notebook computers to Discount. During the course of the suit, Discount files a motion for judgment on the pleadings, Elements files a motion for a directed verdict, and both parties file motions for summary judgment. When and for what purpose are each of these motions made? Answer: After the pleadings have been filed, either party can file a motion for judgment on the pleadings. This motion may be used when no facts are disputed and, thus, only questions of law are at issue. The difference between this motion and a motion for summary judgment is that the party re-questing the motion may support a motion for summary judgment with sworn statements and other materials; on a motion for a judgment on the pleadings, a court may consider only those facts pleaded. At the conclusion of the plain-tiff’s case, the defendant can file a motion for a directed verdict (federal courts use the term motion for a judgment as a matter of law), asking the court to direct a verdict for the defendant on the ground that the plaintiff has presented no evidence to justify the granting of the plaintiff’s remedy. In considering the motion, the judge looks at the evidence in the light most favorable to the plaintiff and grants the motion only if there is insufficient evidence to raise an is-sue of fact. At the end of the defendant’s case, either party can move for a directed verdict. If the only question is which laws apply to the facts in a case, either party can move for summary judgment before or during a trial. When a court considers a motion for summary judgment, it can take into account evidence outside the pleadings. The evidence may con-sist of sworn statements by parties or witnesses, as well as documents. A motion for summary judgement will be granted only when there are no genuine questions of fact, and the only question is a question of law. Test Bank for Essentials of the Legal Environment Today Roger LeRoy Miller 9781305262676

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