Terms 1
A common law doctrine under which either party may terminate an employment relationship at any time for any reason, unless a contract specifies otherwise.
employment at will
A salesperson’s exaggerated claims concerning the quality of goods offered for sale. Such claims involve opinions rather than facts and are not considered to be legally binding promises or warranties.
Puffery
Jack enters into a contract with Jill’s Farm to provide water for Jill’s irrigation needs. Jack fails to deliver. Jill initiates a suit against Jack, asking the court to order Jack to perform. Jill is
a. the plaintiff.
b. the defendant.
c. the binding authority.
d. the persuasive authority.
a. the plaintiff.
Darin is a limited partner in Eco Baits, a pest control service organized as a limited partnership, which cannot pay its debts. Darin is liable for the debts
a. in proportion to the number of partners in the firm.
b. to no extent.
c. to the extent of her capital contribution to the firm.
d. to the full extent.
c. to the extent of her capital contribution to the firm.
The executive branch enforces the laws.
The judicial branch _________.
interprets and applies the laws
An employee’s disclosure to government authorities, upper-level managers, or the media that the employer is engaged in unsafe or illegal activities.
whistleblowing
an approach to ethical reasoning in which ethically correct behavior is related to an evaluation of the consequences of a given action on those who will be affected by it. In reasoning, a “good” decision is one that results in the greatest good for the greatest number of people affected by the decision.
utilitarianism
Use of another’s name, likeness, or other identifying characteristic for commercial purposes without the owner’s consent is
a. battery.
b. appropriation.
c. assault.
d. no tort.
b. appropriation.
Objective facts include all of the following EXCEPT:
a. What a party said when entering into the contract.
b. How the party acted or appeared.
c. What a party was internally thinking.
d. The circumstances surrounding the transaction.
c. What a party was internally thinking.
When a state requires a minimum wage that is higher than the federal minimum wage, does a company have to pay the higher wage?
a federal or state statute setting the maximum time period during which a certain action can be brought or certain rights enforced
statute of limitations
Acts of a corporation that are beyond its express and implied powers to undertake (the Latin phrase means “beyond the powers”).
Ultra vires
Hope wants to file a suit against Gerry. For a court to hear the case,
a. Gerry must agree.
b. the court must have jurisdiction.
c. the parties must have no minimum contacts with each other.
d. the parties must own property.
b. the court must have jurisdiction.
Laredo loses his suit against McLain in a North Dakota state trial court. Laredo appeals to a state intermediate court of appeals and loses again. Laredo would appeal next to
a. the American Arbitration Association.
b. the North Dakota Supreme Court.
c. the United States Premier Court.
d. the U.S. Court of Appeals for the Eighth Circuit.
b. the North Dakota Supreme Court.
Name at least 2 of the 4 schools of legal thought.
1. Natural Law School: Assumes a higher, or universal, law exists that applies to all human beings and that written laws should reflect the principles inherent in natural law.
2. Positivist School: States that there is no law higher than the laws created by a national government.
3. Historical School: Concentrates on the history and origins of the legal system.
4. Legal Realism: Based on the idea that law is shaped by social forces and needs.
A corporation formed in another country but doing business in the United States.
Alien corporation
A principal whose identity is unknown by a third party, but the third party knows that the agent is or may be acting for a principal at the time the agent and the third party form a contract.
partially disclosed principle
Mediocrité, Inc., makes and sells goods that are substandard. Naomi, who has never bought or used a Mediocrité item, files a suit against the firm, alleging that its products are defective. The company’s best ground for dismissal of the suit is that Naomi does not have
a. certiorari.
b. jurisdiction.
c. standing.
d. sufficient maximum contacts.
c. standing.
Reynaldo is a delivery driver for Southeast Asian Noodle Company. Reynaldo follows detailed instructions of the company in carrying out his work. Reynaldo is
a. an employee.
b. an employer.
c. an independent contractor.
d. a principal.
a. an employee.
principal’s duties to its agent(s)
• Compensation: Agent must be paid for services rendered.
• Reimbursement and Indemnification: Agent must be reimbursed for expenses and compensated for liabilities incurred from authorized/lawful acts.
• Cooperation: Principal must cooperate with agent and assist the agent in performing his/her duties—and must do nothing to prevent that performance.
• Safe Working Conditions: The principal is required to provide safe working premises, equipment, and conditions for all agents and employees.
A rule under which courts will not hold corporate officers and directors liable for honest mistakes of judgment and bad business decisions that were made in good faith.
Business judgment rule
A fictional contract imposed on parties by a court in the interests of fairness and justice; usually, they are imposed to avoid the unjust enrichment of one party at the expense of another.
Quasi contract
In diversity of citizenship cases the parties in the lawsuit are 1)__________ and 2)______.
a. 1) from the same U.S. states AND 2) the dollar amount in dispute exceeds $75,000.
b. 1) from different U.S. states and/or the United States and a foreign country AND 2) the dollar amount in dispute exceeds $75,000.
c. 1) from different U.S. states and/or the United States and a foreign country AND 2) the dollar amount in dispute exceeds $20,000.
d. 1) from the same country AND 2) the dollar amount in dispute exceeds $20,000.
b. 1) from different U.S. states and/or the United States and a foreign country AND 2) the dollar amount in dispute exceeds $75,000.
Power Trucking Company operates a fleet of fuel trucks. When one of the trucks is positioned to receive a load, it strikes a storage tank owned by Quality Fuel, Inc. For the cost of repairing the damage to the tank, Quality Fuel is most likely to be awarded
a. compensatory damages.
b. punitive damages.
c. contingency fees.
d. general damages.
a. compensatory damages.
o Compensatory: Reimburse plaintiff for actual losses.
o Special: For quantifiable losses, such as medical expenses, lost wages, and benefits.
o General: For nonmonetary aspects, such as pain, suffering, and reputation.
• Punitive: Punish the wrongdoer and deter similar conduct in the future.
duties an agent owes to a principal
• Performance: Implied condition to use reasonable diligence and skill. If agent fails, liability for breach of contract may occur.
• Notification: The agent must notify the principal of all matters concerning subject matter of agency.
• Loyalty: Agent’s loyalty must be undivided and not result in any secret profit for the agent.
• Obedience: Agent has a duty to follow lawful and clearly stated instructions of principal.
• Accounting: Unless agreed otherwise, the agent must keep a separate account of all property and funds received and paid out on the principal’s behalf—including gifts from third parties in connection with the agency.