Legal Test Bank PDF

Name: Class: Date:
Chapter 01: Law and Legal Reasoning
True / False
1. Laws and government regulations affect almost all business activities.

a. True
b. False
ANSWER: True
2. Law consists of enforceable rules governing relationships among individuals and between individuals and their society.
a. True
b. False
ANSWER: True
3. Many different laws may affect a single business transaction.

a. True
b. False
ANSWER: True
4. Business decision makers are expected to make decisions that are ethically sound.
a. True
b. False
ANSWER: True
5. A key to avoiding business disputes is to go ahead without thinking ahead.

a. True
b. False
ANSWER: False
6. Statutory law does not include county ordinances.

a. True
b. False
ANSWER: False
7. The stability and predictability of the law are essential to business activities.
a. True
b. False
ANSWER: True
8. Remedies in equity include decrees of specific performance.

a. True
b. False
ANSWER: True
9. “UCC 2–207(1)” is a citation to Uniform Commercial Code Section 2–207, subsection 1.

a. True
b. False
Copyright Cengage Learning. Powered by Cognero. Page 1
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ANSWER: True
10. The courts, in interpreting statutory law, may rely on sources outside of the statute (such as legislative history in
response to common law precedents) as a guide to what the legislators intended.
a. True
b. False
ANSWER: True
11. Most state trial court decisions are not published.

a. True
b. False
ANSWER: True
12. A jury’s good sense and careful consideration of consequences is known as jurisprudence.
a. True
b. False
ANSWER: False
13. Procedural law consists of all laws that outline the methods of enforcing rights.
a. True
b. False
ANSWER: True
14. Administrative law is a source of American law that is consists of statutes.

a. True
b. False
ANSWER: False
15. 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
16. Courts do not depart from precedents.

a. True
b. False
ANSWER: False
17. Stare decisis is a doctrine obligating judges to help persons who have failed to protect their own rights.
a. True
b. False
ANSWER: False
18. In a common law system, judges generally follow stare decisis unless there is a compelling reason to overturn a
precedent.
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a. True
b. False
ANSWER: True
19. Damages are a remedy at law.

a. True
b. False
ANSWER: True
20. Remedies in equity include injunctions.

a. True
b. False
ANSWER: True
21. In most states, the courts no longer grant “equitable” remedies.

a. True
b. False
ANSWER: False
22. The term common law refers to law that is common throughout the world.
a. True
b. False
ANSWER: False
23. The common law is a term for the laws that are familiar to most of us.
a. True
b. False
ANSWER: False
24. Constitutional law includes only the U.S. Constitution.

a. True
b. False
ANSWER: False
25. Whether a law is constitutional depends on its source.

a. True
b. False
ANSWER: False
26. The U.S. Constitution reserves to the federal government all powers not granted to the states.
a. True
b. False
ANSWER: False
27. Statutory law includes state statutes.

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a. True
b. False
ANSWER: True
28. The courts, in interpreting statutory law, may rely on the common law as a guide to what the legislators intended.
a. True
b. False
ANSWER: True
29. A citation identifies the publication in which a legal authority can be found.
a. True
b. False
ANSWER: True
30. Administrative law consists of the rules, orders, and decisions of administrative agencies.
a. True
b. False
ANSWER: True
31. Administrative law includes only state regulations.

a. True
b. False
ANSWER: False
32. Criminal law focuses on rights and 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. The party against whom a lawsuit is brought is the plaintiff or petitioner.
a. True
b. False
ANSWER: False
35. When all the judges (or justices) agree on a decision, a majority opinion is written for the entire court.
a. True
b. False
ANSWER: False
Multiple Choice
Name: Class: Date:
36. Statistics, Inc., is a corporation engaged in the business of compiling, analyzing, and marketing data. To accomplish
its purposes, Statistics 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. In a suit against Olive, Pimento obtains damages. In the U.S. legal system, this remedy at law is
a. unique.
b. usual.
c. unlikely.
d. unusual.
ANSWER: b
38. 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
39. The Regional Counties Commission approves a new property tax measure, and the professors and students at State
Law School publish the results of their most recent legal research. Sources of law include
a. measures approved by governing bodies.
b. legal scholars’ research.
c. measures approved by governing bodies and legal scholars’ research.
d. neither measures approved by governing bodies nor legal scholars’ research.
ANSWER: a
40. Dave and Ellen enter into a contract via e-mail. When a dispute arises over the performance of the deal, Dave files a
suit against Ellen. The emerging body of law that governs transactions conducted via the Internet is referred to by the term
a. cyberlaw.
b. civil law.
c. equitable maxims.
d. IRAC.
ANSWER: a
41. Kevin 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 Kevin to find previously decided cases that, in relation to the case under consideration, are
a. as different as possible.
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b. as similar as possible.
c. at odds.
d. exactly identical.
ANSWER: b
42. As a judge, Baxter applies common law rules. These rules develop from
a. decisions of the courts in legal disputes.
b. regulations issued by administrative agencies.
c. statutes enacted by Congress and the state legislatures.
d. uniform laws drafted by legal scholars.
ANSWER: a
43. There are no precedents on which the court deciding the case Standard Resource Co. v. Topline Inventory, Inc., can
base its decision. The court can consider, among other things,
a. the opinions of the friends and relatives of the judge.
b. the results of a poll of those in the courtroom.
c. public policy or social values.
d. none of the choices.
ANSWER: c
44. Larry enters into a contract with Motivational Education Services to host a panel discussion at a sales conference.
When the conference is postponed indefinitely, Larry 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
45. Charles is a federal judge whose judicial decisions are part of case law, which does not include interpretations of
a. regulations created by administrative agencies.
b. constitutional provisions.
c. statutes enacted by legislatures.
d. parties’ subjective motives for engaging in litigation.
ANSWER: d
46. 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
47. In Benny v. City Car Dealership, a state supreme court held that a minor could cancel a contract for the sale of a car.
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Now a trial court in the same state is deciding Dora 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
48. Judge Bell 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 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
49. Deb and Earl are involved in a lawsuit. This is

a. an action.
b. a breach.
c. an injunction.
d. a remedy.
ANSWER: a
50. In an action against Gina, Harry obtains a remedy. This is

a. an administrative agency’s enforcement of its rule.
b. a principle of the law derived from earlier court cases.
c. a statute enacted by a state legislature or Congress.
d. the legal means to recover a right or to redress a wrong.
ANSWER: d
51. Rachel is a state court judge. Salina appears in a case in Rachel’s court, claiming that Tomas breached a contract.
Possible remedies include
a. compensation to Rachel for a favorable ruling.
b. Tomas’s imprisonment.
c. a criminal fine levied by Rachel on either party.
d. an award of damages to Salina.
ANSWER: d
52. The legislature of the state of Wyoming enacts a new statute that sets standards for the liability of businesses selling
defective products. This statute applies in
a. Wyoming only.
b. only Wyoming and its bordering states only.
c. all states.
d. all states but only to matters not covered by other states’ laws.

Name: Class: Date:
ANSWER: a
53. James and Kay enter into a contract for the sale of a bicycle, but Kay later refuses to deliver the goods. James asks a
court to order Kay to perform as promised. Ordering a party to perform what was promised is
a. an equitable remedy.
b. an unenforceable demand.
c. a remedy at law.
d. beyond the court’s authority.
ANSWER: a
54. Distinguishing between legal and equitable remedies is:

a. not important because legal remedies cannot be granted today.
b. not important because equitable remedies cannot be granted today.
c. important so that statistical data on the remedies can be compiled.
d. important because the type of remedy available will depend on the type of harm suffered.
ANSWER: d
55. In a suit against Ian, Jenna 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
56. In a suit against Ethan, Francisco obtains an award of damages. 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: c
57. In the early King’s Court of England, a court of law could grant as a remedy only:
a. damages.
b. an order to perform a contract as promised.
c. a judicial proceeding for the resolution of a dispute.
d. an injunction.
ANSWER: a
58. 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
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59. Zoom In, Inc. is engaged in the business of coding, with an emphasis on Internet marketing, business apps, and intra-
corporate networks. In all of Zoom In’s business activities, it is subject to United States laws and regulations. The basis
for all law in the U.S. is
a. the U.S. Constitution.
b. each of the states’ individual constitutions.
c. legislation enacted by Congress.
d. the executive orders of the president.
ANSWER: a
60. The North Carolina state legislature enacts a 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 North Carolina only.
d. the United States Supreme Court only.
ANSWER: a
61. Café Espresso is a coffee shop subject to the laws of Illinois. In Illinois, the highest-ranking (superior) law is
a. a case decided by the Illinois Supreme Court.
b. a rule created by a Illinois state administrative agency.
c. a provision in the Illinois constitution.
d. a statute enacted by the Illinois legislature.
ANSWER: c
62. Creamy Dairy produces award-winning ice cream sold to wholesale distributors, retail sellers, and individual
consumers in all fifty states. The UCC provides a set of rules governing
a. commercial transactions.
b. dairy products and their production.
c. merit standards for nutrition awards.
d. the formation and initiation of a business.
ANSWER: a
63. The Federal Trade Commission (FTC) is a government agency that issues rules, orders, and decisions. The Georgia
state legislature enacts statutes. The Harrison County Board and the Island City Council enact ordinances. Administrative
law includes
a. all of the choices.
b. the rules, orders, and decisions of the FTC.
c. statutes enacted by the Georgia state legislature.
d. ordinances enacted by county boards and city councils.
ANSWER: b
64. The Bay City Planning Department, the Coastal County Zoning Commission, the California Environmental Quality
Agency, and the U.S. Bureau of Land Management issue regulations. These rules constitute
a. administrative law.
b. case law.
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c. constitutional law.
d. statutory law.
ANSWER: a
65. The branch of law dealing with the enforcement of private rights and duties between parties is:
a. administrative law.
b. civil law.
c. constitutional law.
d. federal law.
ANSWER: b
66. 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
67. Erin believes that a higher, or universal, law exists that applies to all human beings. Erin asserts that each written law
should reflect the principles inherent in this higher law. Erin
a. is a legal positivist.
b. adheres to the historical school of legal thought.
c. is a legal realist.
d. adheres to the natural law tradition.
ANSWER: d
68. The Appellate Division of the New York Supreme Court issues an opinion that can be found at 137 A.D.3d 409, 26
N.Y.S.3d 66. “137” is
a. the number of the volume in the official reports of the court’s decisions.
b. the number of the volume in Thomson Reuter’s unofficial publication of the court’s decisions.
c. a page number in the referenced volume.
d. the number of the case in a sequence decided by the court.
ANSWER: a
69. 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.
ANSWER: a
70. Martin Luther King, Jr. played a singular role in the most significant social movement in the history of the United
States—the Civil Rights Movement. King has been chronicled in books and movies, and is featured on mementoes, some
of which are offered for sale by PriceMart Corp. Under the principles discussed in “A Sample Court Case,” Rosa and
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Raymond Parks Institute for Self-Development v. Target Corp., PriceMart’s sale of these items most likely
a. constitutes misappropriation.
b. implies something false about King’s legacy.
c. is a qualified privilege.
d. violates the common-law right of publicity.
ANSWER: c
Essay
71. National Rights Council, 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 lawsuit between Cloud Computing Corporation and Digital Enterprises, Inc., the court applies the doctrine of
stare decisis. What is this doctrine? What does this doctrine have to do with the American legal 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 because, 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.

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Chapter 02: Courts and Alternative Dispute Resolution
True / False
1. The role of the courts is to interpret and apply the laws.

a. True
b. False
ANSWER: True
2. State courts are superior to federal courts.

a. True
b. False
ANSWER: False
3. Minimum contacts with a jurisdiction are never enough to support jurisdiction over a nonresident defendant.
a. True
b. False
ANSWER: False
4. A court can exercise jurisdiction over property located that is located within its boundaries.
a. True
b. False
ANSWER: True
5. 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
6. For jurisdictional purposes, corporations are considered legal persons.

a. True
b. False
ANSWER: True
7. The minimum-contacts requirement is usually met if a corporation advertises or sells its products within a state.
a. True
b. False
ANSWER: True
8. 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
9. States do not have exclusive jurisdiction on any matter.

a. True

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b. False
ANSWER: False
10. Concurrent jurisdiction exists when only state courts have the power to hear a particular case.
a. True
b. False
ANSWER: False
11. Small claims courts are inferior trial courts.

a. True
b. False
ANSWER: True
12. In most states, in suits brought in small claims courts, lawyers are allowed.
a. True
b. False
ANSWER: True
13. In many cases, a court can exercise jurisdiction over an out-of-state defendant who has done business in the state only
over the Internet.
a. True
b. False
ANSWER: True
14. To have standing to sue, a party must be “standing” in the geographical jurisdiction of the court in which a suit is
filed.
a. True
b. False
ANSWER: False
15. The term venue refers to the location of a trial.

a. True
b. False
ANSWER: True
16. A justiciable controversy is a case in which the court’s decision—the “justice” that will be served—will be
controversial.
a. True
b. False
ANSWER: False
17. Cases arising between citizens of different states involve diversity of citizenship.
a. True
b. False
ANSWER: True
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18. A state case typically originates in a federal court.

a. True
b. False
ANSWER: False
19. Trials courts conduct trials.

a. True
b. False
ANSWER: True
20. The United States Supreme Court does not have original jurisdiction in any case.
a. True
b. False
ANSWER: False
21. Some cases decided by federal courts of appeals are not subject to review by the United States Supreme Court.
a. True
b. False
ANSWER: False
22. Litigation is the process of resolving a dispute through the court system.
a. True
b. False
ANSWER: True
23. The term alternative dispute resolution refers to methods for resolving disputes outside the traditional judicial process.
a. True
b. False
ANSWER: True
24. Negotiation can involve the parties to a dispute and their attorneys.
a. True
b. False
ANSWER: True
25. Negotiation is the most complex form of alternative dispute resolution.

a. True
b. False
ANSWER: False
26. No court offers mediation as an option before a case goes to trial.

a. True
b. False
ANSWER: False
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27. In mediation, the mediator proposes a solution and makes a decision resolving the dispute.
a. True
b. False
ANSWER: False
28. Arbitration that is mandated by a court is often binding on the parties.

a. True
b. False
ANSWER: False
29. A court’s review of an arbitrator’s award may be restricted.

a. True
b. False
ANSWER: True
30. Early neutral case evaluation refers to the resolution of a case before the dispute becomes contentious, when the
parties’ positions are said to be “neutral.”
a. True
b. False
ANSWER: False
31. The verdict in a summary jury trial is binding.

a. True
b. False
ANSWER: False
32. International treaties often stipulate arbitration for resolving disputes.

a. True
b. False
ANSWER: True
33. Generally, a foreign court’s decision can be enforced in the United States.
a. True
b. False
ANSWER: True
34. Most online dispute resolution services apply international principles promulgated by the United Nations to resolve
disputes.
a. True
b. False
ANSWER: False
35. A choice-of-law clause is a provision in a contract that excuses a party from liability for nonperformance due to “acts
of God.”

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a. True
b. False
ANSWER: False
Multiple Choice
36. The Maine state legislature passes a law to regulate local delivery services. The final authority regarding the
constitutionality of this law is
a. the judicial system.
b. the president of the United States.
c. the governor of Maine.
d. the U.S. Congress.
ANSWER: a
37. As a judge in a federal court, Elena can decide, among other things, whether the laws or actions of the executive and
legislative branches are constitutional. The process for making this determination is known as
a. judicial review.
b. jurisdiction.
c. jurisprudence.
d. justifiability.
ANSWER: a
38. 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.
ANSWER: b
39. 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
40. An Oklahoma state court can exercise jurisdiction over Petro Resources Inc., an out-of-state company, if the firm has
a. minimum contacts with the state.
b. maximum contacts with the state.
c. median contacts with the state.
d. no contacts with the state.
ANSWER: a
41. Milo files a suit against Nick in an Ohio state court, noting that Nick operates a Web site through which Ohio
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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 relating to conduct in Ohio.
c. nothing an Ohio resident has done.
d. something other than Nick’s Web site.
ANSWER: b
42. David, an Alabama resident, files suit in an Alabama court against QuickAds, an internet company based in Georgia
that provides advertising services. QuickAds only contact with persons in Alabama has been through QuickAds passive
advertising. The Alabama court is:
a. likely to have jurisdiction if the claim David brings is based on QuickAds advertising scheme in Alabama.
b. not likely to have jurisdiction over the case because QuickAds is based in Georgia.
c. likely to refer the case to a higher district court.
d. likely to refer the case to an appellate court.
ANSWER: a
43. McHenry, a New York resident, files a suit in a New York state court against OneWorld Inc., a company based in
California. OneWorld’s only contact with McHenry is the company’s app, which McHenry downloaded while traveling
across the United States. According to the sliding-scale analysis, the factor most likely to confer jurisdiction on the New
York court is
a. the geographical distance between McHenry and OneWorld.
b. the degree of interactivity via the app between McHenry and OneWorld.
c. OneWorld’s location when the app was created.
d. McHenry’s location when the app was downloaded.
ANSWER: b
44. All Bikes, Inc., a firm in Wisconsin, advertises on the Web. A court in Ohio would be most likely to exercise
jurisdiction over All Bikes if the firm
a. did substantial business with Ohio residents over the Internet.
b. interacted with any Ohio resident through its Web site.
c. only engaged in passive advertising on the Web.
d. suddenly removed its ad from the Internet.
ANSWER: a
45. 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 minimum contacts.
ANSWER: c
46. Tyler, a citizen of Utah, files a suit in a Utah state court against Virtual Sales Corporation, a Washington state

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company that does business in Utah. 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
47. Stephan wins his suit against Tidewater Boats, Inc. Tidewater’s best ground for appeal is the trial court’s interpretation
of
a. the demeanor of the witnesses during the trial.
b. what happened to give rise to the dispute.
c. the dealings between the parties before the suit.
d. the law that applied to the issues in the case.
ANSWER: d
48. Delia files a suit against Eduardo in a Florida state court over the ownership of a boat docked in a Florida harbor. Both
Delia and Eduardo are residents of Georgia. Eduardo could ask for a change of venue on the ground that Georgia
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
49. Marty files a suit against Norah in a state court over an employment contract. The case proceeds to trial, after which
the court renders a verdict. The case is appealed to an appellate court. After the highest state court’s review of Marty v.
Norah, a party can appeal the decision to the United States Supreme Court if
a. if a federal question is involved.
b. if a question of state law remains unresolved.
c. if Marty questions the result.
d. under no circumstances.
ANSWER: a
50. Kari and Lillian, who are citizens of Mississippi, are involved in a case related to the adoption of their child. Over this
case, Mississippi state courts have
a. concurrent jurisdiction with federal courts.
b. concurrent jurisdiction with other state courts.
c. exclusive jurisdiction.
d. no jurisdiction.
ANSWER: c
51. Olivia, a citizen of Nebraska, wants to file a suit against Micah, a citizen of Kansas. Their diversity of citizenship may
be a basis for
a. no court to exercise jurisdiction.
b. a federal court to exercise original jurisdiction.
c. a state court to exercise appellate jurisdiction.
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d. the United States Supreme Court to refuse jurisdiction.

ANSWER: b
52. D’Antoni files a suit in a federal district court against Enya. D’Antoni loses the suit, appeals to the U.S. Court of
Appeals for the Ninth Circuit, and loses again. D’Antoni asks the United States Supreme Court to hear the case. The Court
is
a. not required to hear the case.
b. required to hear the case because D’Antoni lost in a federal court.
c. required to hear the case because D’Antoni lost in a lower court.
d. required to hear the case because it is an appeal.
ANSWER: a
53. The case of Max v. National Credit Co. is heard in a trial court. The case of O! Boy! Ice Cream Co. v. Pecan Corp. is
heard in an appellate court. The difference between a trial and an appellate court is whether
a. a trial is being held.
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
54. Carol files a suit against Andy in a state trial court and loses. Carol can
a. not take her case any higher in the court system.
b. insist that the United States Supreme Court hear her case.
c. plead her case before an appellate court.
d. plead her case before a small claims court.
ANSWER: c
55. 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 Supreme Court.
d. the U.S. Court of Appeals for the Eighth Circuit.
ANSWER: b
56. The Montana Supreme Court rules against Natural Grocery Mart in a case against One Stop 2 Shop Stores, Inc.
Natural Grocery files an appeal with the United States Supreme Court. The Court does not hear the case. This
a. is a decision on the merits that has value as a precedent.
b. indicates agreement with the Montana court’s decision.
c. means nothing.
d. means that the Montana court’s decision is the law in Montana.
ANSWER: d
57. The Kentucky Supreme Court rules against Luther in a case against Motor Cars, Inc. Luther wants to appeal the case
to the United States Supreme Court. Luther must ask the Court to issue a writ of
Name: Class: Date:
a. appeal.
b. certiorari.
c. jurisdiction.
d. summons.
ANSWER: b
58. Salina files a suit against Tanner. Before going to trial, the parties, with their attorneys, meet to try to resolve their
dispute. A third party suggests or proposes a resolution, which the parties may or may not adopt. This is
a. arbitration.
b. mediation.
c. negotiation.
d. not a legitimate form of dispute resolution.
ANSWER: b
59. First Community Credit Union and General Hydraulics. Inc., have their dispute resolved in arbitration. Before
determining the award, the arbitrator meets with First Community’s representative to discuss the dispute without General
Hydraulics’ representative being present. If this meeting substantially prejudices General Hydraulics’ rights, a court will
most likely
a. compel arbitration.
b. review the merits of the dispute.
c. review the sufficiency of the evidence.
d. set aside any award.
ANSWER: d
60. Sforza files a suit against Thieu. If this suit is like most cases, it will be
a. dismissed during a trial.
b. settled before a trial.
c. resolved only after a trial.
d. appealed to a higher court.
ANSWER: b
61. Liz and Moss disagree over the amount due under their contract. To avoid involving any third party in the resolution
of their dispute, Liz and Moss might prefer to use the alternative dispute resolution method of
a. arbitration.
b. litigation.
c. mediation.
d. negotiation.
ANSWER: d
62. Farmers Pantry Products Inc. and Market Grocers LLC dispute a term in their contract. If Farmers Pantry and Market
Grocers 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 jury.
b. the dispute will eventually go to trial.
c. the process is not adversarial.
Name: Class: Date:
d. the resolution of the dispute will be decided an expert.

ANSWER: c
63. If Cornel and Deanna 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
64. SPF Sunscreen Corporation and Taylor agree to resolve their dispute through arbitration. The arbitrator’s decision is
called
a. a conclusion of law.
b. a finding of fact.
c. an award.
d. a verdict.
ANSWER: c
65. Sour Dough Inc. and The Bread Company, 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
66. Cullen files a suit against Demi. Cullen and Demi meet, and each party’s attorney argues the party’s case before a
judge and jury. The jury presents an advisory verdict, after which the judge meets with the parties to encourage them to
settle their dispute. This is
a. court-ordered arbitration.
b. early neutral case evaluation.
c. a mini-trial.
d. a summary jury trial.
ANSWER: d
67. Service Employees International Union and Timberline Products, Inc., have their dis-pute resolved in arbitration. The
arbitrator arbitrates issues that the parties did not agree to submit to arbitration. This is a ground for a court to
a. none of the choices.
b. review the merits of the dispute.
c. review the sufficiency of the evidence.
d. set aside the award.
ANSWER: d
68. Millie and Noble dispute the quality of a suite of furniture sold over the Internet. They agree to resolve their dispute in
Name: Class: Date:
OpenTerms.com, an online forum. Like most online forums, OpenTerms.com applies

a. general, universal legal principles.
b. the provisions of the Federal Magistrates Act.
c. international principles provided by the United Nations.
d. the law of the Internet.
ANSWER: a
69. To resolve a dispute in nonbinding arbitration, Alyson in Baltimore and Chuck in Denver utilize E-Resolve, 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
70. Quest Inc., a U.S. firm, and Real Treks, Ltd., a Canadian firm, enter into a contract that does not have a forum-
selection or choice-of-law clause. Litigation between Quest and Real Treks involving this contract may occur in
a. an online forum only.
b. Canada or the United States, but not both.
c. Canada, the United States, or both.
d. an international, United Nations tribunal only.
ANSWER: c
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. Therefore, 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 reviewing 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 judge’s decision with regard
to the facts of a case, however, for a number of reasons. First, 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. Second, 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 persuasiveness of evidence that
can be gleaned only from first hand experience. (There are also constitutional reasons for an appellate court to
defer to a jury verdict. If, based on the evidence presented to a jury, a reasonable 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 because this would, in essence, take away a person’s right to a jury trial.)
An appellate court’s options after reviewing 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. Tech Performance, Inc., completes programming and other tech services for Uno IT Products Corporation. When
Uno’s computer system crashes, it loses $500,000 worth of business and pays $100,000 to have the system
reprogrammed. Uno IT announces to the media that the crash was due to Tech Performance’s incompetence and files a
complaint in a federal court against the firm. What are Tech Performance’s options in response?
Name: Class: Date:
ANSWER: In response to the complaint, Tech Performance (the defendant) may file an answer in which the firm admits
the statements or allegations set out in Uno IT’s complaint or denies them and sets out any defenses that Tech
Performance may have. (If Tech Performance admits to the allegations, a judgment will be entered in favor of
Uno IT. If Tech Performance denies the allegations, the matter will proceed.) In the answer, Tech Performance
may assert an affirmative defense—that is, admit the truth of the complaint but raise new facts to show that the
firm should not be held liable for the damage sustained by Uno IT. Tech Performance could also deny Uno
IT’s allegations and assert a counterclaim alleging that the crash occurred as a result of something Uno IT did.

Name: Class: Date:
Chapter 03: Court Procedures
True / False
1. There is one uniform set of rules of procedure for all courts.

a. True
b. False
ANSWER: False
2. Procedural law is irrelevant with respect to a person’s ability to pursue a legal claim.
a. True
b. False
ANSWER: False
3. Before a lawsuit begins, the court must have proof that the defendant was notified of the lawsuit.
a. True
b. False
ANSWER: True
4. A counterclaim is raised by a plaintiff against a defendant’s answer.

a. True
b. False
ANSWER: False
5. A default judgment is entered against a party only on proof that he or she was at fault in the matter at issue.
a. True
b. False
ANSWER: False
6. Service of process is the process of obtaining information from an opposing party before trial.
a. True
b. False
ANSWER: False
7. An answer can deny the allegations made in a complaint.

a. True
b. False
ANSWER: True
8. Any relevant material, including information stored electronically, can be the object of a discovery request.
a. True
b. False
ANSWER: True
9. In most states, if neither party requests a jury, the court presumes the parties waive this right.
a. True
b. False
Name: Class: Date:
ANSWER: True
10. At the beginning of a trial, only the defendant’s attorney makes an opening statement.
a. True
b. False
ANSWER: False
11. A person directly involved in the events concerning a lawsuit is known as an expert witness.
a. True
b. False
ANSWER: False
12. A jury instructs a judge in the law that applies in a case.

a. True
b. False
ANSWER: False
13. Interrogatories are written questions for which written answers are prepared by a judge.
a. True
b. False
ANSWER: False
14. Discovery is the process of obtaining information from an opposing party before trial.
a. True
b. False
ANSWER: True
15. The use of evidence outside the pleadings distinguishes the motion for summary judgment from the motion for
judgment on the pleadings.
a. True
b. False
ANSWER: True
16. Before a trial, the plaintiff can file a motion to dismiss.

a. True
b. False
ANSWER: True
17. Only a defendant can file a motion to dismiss.

a. True
b. False
ANSWER: False
18. A summary judgment is issued only if there is no genuine question of fact.

a. True
Name: Class: Date:
b. False
ANSWER: True
19. A motion for summary judgment may be made before, during, or after a trial.
a. True
b. False
ANSWER: False
20. Only a defendant may file a motion for summary judgment.

a. True
b. False
ANSWER: False
21. If a discovery request involves confidential business information, the scope of the request can be limited.
a. True
b. False
ANSWER: True
22. Voir dire refers to the seriousness of the controversy in a case.

a. True
b. False
ANSWER: False
23. Hearsay evidence is testimony someone gives in court about a statement made by someone else who was not under
oath at the time.
a. True
b. False
ANSWER: True
24. An appellate court can reverse the decision of a trial court that erred.
a. True
b. False
ANSWER: True
25. A trial begins with the plaintiff’s attorney’s direct examination of the first witness.
a. True
b. False
ANSWER: False
26. When a defendant finishes introducing evidence, the trial is concluded.

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.
Name: Class: Date:
a. True
b. False
ANSWER: True
28. A motion for a new trial will be granted only if the trial judge feels that it is appropriate to grant a judgment for the
other side.
a. True
b. False
ANSWER: False
29. No party can appeal a judge’s ruling on a pretrial motion.

a. True
b. False
ANSWER: False
30. Either party may appeal a jury’s verdict but only the plaintiff may appeal a judge’s ruling.
a. True
b. False
ANSWER: False
31. A case is remanded when it is sent back to a trial court for further proceedings consistent with the opinion of the
appellate court.
a. True
b. False
ANSWER: True
32. The expenses associated with an appeal can be considerable.

a. True
b. False
ANSWER: True
33. A court of appeals re-hears all of the evidence introduced at trial.

a. True
b. False
ANSWER: False
34. A reviewing court may reverse a trial court’s judgment only in a case in which the plaintiff lost.
a. True
b. False
ANSWER: False
35. It is guaranteed that any judgment will be enforceable.

a. True
b. False
ANSWER: False
Name: Class: Date:
Multiple Choice
36. Emily retains Michael, an attorney, on a contingency-fee basis to seek $1 million in damages in a personal-injury suit
against Prescription Pharmaceuticals Inc. Emily wins. She must pay
a. court costs and other expenses, but not Michael’s fee.
b. Michael’s fee, court costs, and other expenses.
c. Michael’s fee only.
d. neither Michael’s fee nor court costs and other expenses.
ANSWER: b
37. Isabel and Josh engage in a business transaction that leads to a dispute. Isabel initiates a lawsuit against Josh by filing
a complaint. The sheriff serves Josh with a summons. If Josh chooses to ignore it,
a. Isabel must file an amended complaint.
b. Isabel will have a judgment entered in her favor.
c. Josh must be served with a second summons.
d. Josh will have a judgment entered in his favor.
ANSWER: b
38. Ballpark Sportsfield, Inc., files a suit against Concessions & Tailgate Services. The document that informs
Concessions & Tailgate that it must file an answer within a specified time period is
a. the answer.
b. the complaint.
c. the writ of certiorari.
d. the summons.
ANSWER: d
39. Pad, Pod & Phone Accessories LLC (3PA) makes “PacBacs,” a famous brand of cases for electronic devices. Without
3PA’s consent, Offshoot Rip-Offs Inc. begins to use “pacbacs” as part of a domain name. 3PA files a suit against ORO.
Service of process for this suit must provide
a. a medium for Offshoot to respond.
b. notice of the lawsuit.
c. instructions about the steps involved in this, or any, lawsuit.
d. a secure means to guaranty privacy between the litigants.
ANSWER: b
40. Sweet Lemonade, Inc., disputes the use of “sweet-lemonade.com” as a domain name by Sweet Citrus Beverages, Ltd.,
and files a suit to resolve the dispute. Service of process must be by
a. e-mail.
b. personal delivery.
c. regular mail.
d. whatever means is reasonably calculated to do the job.
ANSWER: d
41. In a suit by the National Forest Preservation Organization (NFPO) against Old Growth Logging, Inc., NFPO serves a
Name: Class: Date:
written request for Old Growth to admit the truth of matters relating to the trial. Old Growth’s admission in response is the
equivalent of
a. an admission in court.
b. a statement to the media.
c. information to which Old Growth has a right of privacy.
d. irrelevant evidence.
ANSWER: a
42. Gilbert wants to initiate a suit against Healthways Insurance Company by filing a complaint. The complaint should
include
a. an explanation of the proof to be offered at trial.
b. a statement refuting any defense that the defendant might assert.
c. a motion for judgment on the pleadings.
d. a statement alleging the facts showing the court has jurisdiction.
ANSWER: d
43. Gabrielle files a suit against Hard ‘n Fast Adhesives, Inc. Hard ‘n Fast responds that even if Gabrielle’s statement of
the facts is true, according to the law Hard n’ Fast is not liable. This is
a. a counterclaim.
b. a motion for judgment on the pleadings.
c. a motion for summary judgment.
d. a motion to dismiss.
ANSWER: d
44. Sofia files a suit against Turista Airlines, Inc. Turista responds that it appears from the pleadings that the parties do not
dispute the facts and the only question is how the law applies to those facts. Turista supports this response with witnesses’
sworn statements. This is a
a. counterclaim.
b. motion for judgment on the pleadings.
c. motion for summary judgment.
d. motion to dismiss.
ANSWER: c
45. Ballpark Sportsfield, Inc., files a suit against Concessions & Tailgate Services. The document that informs
Concessions & Tailgate that it must file an answer within a specified time period is
a. the answer.
b. the complaint.
c. the respondent.
d. the summons.
ANSWER: d
46. Pietro files a suit against Qiana. If Qiana fails to respond,

a. Pietro will have a default judgment entered against him.
b. Qiana will be considered to be in denial.
c. the suit will be dismissed.
Name: Class: Date:
d. Qiana will have a default judgment entered against her.

ANSWER: d
47. 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 counterclaim.
b. a motion for judgment on the pleadings.
c. a motion for summary judgment.
d. a motion to dismiss.
ANSWER: a
48. Destiny and Enzo engage in a business transaction. When a dispute arises, Destiny initiates a lawsuit against Enzo by
filing a complaint. If Enzo files a motion to dismiss, he is asserting that
a. Destiny did not state a claim for which relief can be granted.
b. Destiny’s statement of the facts is not true.
c. Destiny’s statement of the law is not true.
d. Enzo suffered greater harm than Destiny.
ANSWER: a
49. Mountain States Trucking wants to initiate a suit against Open Pit Mining Corporation by filing a complaint. The
complaint should include a statement alleging the facts establishing
a. an explanation to refute any defense Open Pit might assert.
b. a motion for summary judgment.
c. a motion to dismiss.
d. Mountain’s basis for relief.
ANSWER: d
50. Daniel files a suit against Ava, alleging that she failed to pay him for two months’ labor at her Choice Cheese Factory.
Ava denies the charge and claims that Daniel breached their contract to produce a certain quantity of cheeses and owes
Ava damages for the breach. Ava’s claim is a
a. contra charge.
b. counterclaim.
c. counterpoint.
d. cross-complaint.
ANSWER: b
51. Madison files a complaint in a suit against Christopher, and he files an answer. The case may now be
a. appealed to a higher court.
b. dismissed or settled.
c. resolved but only after a trial.
d. remanded for further proceedings.
ANSWER: b
52. Renewable Resources, Inc., files a suit against Sunrich Utility Company and seeks to examine certain documents in
Sunrich’s possession. A legitimate reason for this examination is that the documents contain
Name: Class: Date:
a. information that is relevant to the case.

b. private information about Sunrich’s operations.
c. public information about energy generation.
d. irrelevant data that can be eliminated from consideration.
ANSWER: a
53. To prepare for a trial between Fones, Inc., and G-Bytes Company, G-Bytes’s attorney places Fones’s chief executive
officer (CEO) under oath. A court official makes a record of the attorney’s questions and the CEO’s answers. This is
a. a cross-examination.
b. a deposition.
c. voir dire.
d. hearsay.
ANSWER: b
54. During the trial phase of Sof’ Drink Corporation’s suit against TimeOut Stores, Inc., their attorneys engage in voir
dire. This is
a. an assessment of the arguments on the issues.
b. the determination of the issues to be argued.
c. the testimony by a party to the lawsuit or by any witness, recorded by an authorized court official.
d. the selection of jurors.
ANSWER: d
55. In Research & Development Company’s suit against Structural Engineers, Inc., Research & Development wants to
introduce evidence that it claims is relevant. Relevant evidence is evidence that
a. establishes the degree of probability of a fact or action.
b. tends to disprove a fact in question.
c. tends to prove a fact in question.
ANSWER: d
56. Bibi brings a lawsuit against Cocteau over an allegedly defective shipment of machine parts. During the trial, Bibi’s
attorney asks questions of Bibi’s witness Drummond. This is
b. a direct examination.
c. voir dire.
d. hearsay.
ANSWER: b
57. Sara brings a lawsuit against Tucci over a sale of 1,500 acres of ranchland. During the trial, Tucci’s attorney asks
questions of the plaintiff’s witness Ulysses. This is
b. a direct examination.
c. voir dire.
d. hearsay.

Name: Class: Date:
ANSWER: a
58. Kent’s witness Lois is not an expert in the matter about which she is being questioned. Lois can
a. testify about any of the facts in the case.
b. testify only about what she personally observed.
c. offer her opinion about any of the evidence.
d. offer her conclusion with regard to the case.
ANSWER: b
59. Lacey files a civil suit against Mischa. To succeed, Lacey must prove her case
a. beyond a reasonable doubt.
b. by a preponderance of the evidence.
c. through a scintilla of evidence.
d. to the extent promised in her attorney’s opening statement.
ANSWER: b
60. In Precise Paving Company’s suit against Ride, Park n’ Go, Inc., the jury returns a verdict in Precise Paving’s favor.
The company will most likely ask the court to
a. enter a judgment in accordance with the verdict.
b. enter a judgment n.o.v.
c. enter a judgment as a matter of law.
d. order a new trial.
ANSWER: a
61. In Fuel Injection Products & Service Corporation’s suit against Gears & Cylinders, Inc., the jury returns a verdict in
Fuel Injection’s favor. Gears & Cylinders files a motion asking the judge to set aside the verdict and begin new
proceedings. This is a motion for
a. a judgment in accordance with the verdict.
b. a judgment on the pleadings.
c. a new trial.
d. judgment n.o.v.
ANSWER: c
62. In Coastal Fishing Company’s suit against Dockside Marina, Inc., the jury returns a verdict in Coastal’s favor.
Dockside files a motion stating that even if the evidence is viewed in the light most favorable to Coastal, a reasonable jury
should not have found in its favor. This is a motion for
b. a judgment as matter of law.
c. a new trial.
d. judgment n.o.v.
ANSWER: d
63. Garvey files a suit in a state court against Hi-Rise Apartments. At the conclusion of Garvey’s case, Hi-Rise files a
motion asking the judge to direct a verdict for the defendant on the ground that Garvey has presented no evidence to
support his claim. This is a motion for
Name: Class: Date:

b. a judgment as matter of law.
c. a new trial.
d. judgment n.o.v.
ANSWER: b
64. Calvert files a suit in a state court against Denny, seeking an amount of allegedly unpaid rent for an office that Denny
leased and later vacated. If Denny losses the suit and decides to appeal, his attorney must file, with the clerk of the trial
court, within a prescribed period of time
a. a formal refusal to abide by the verdict.
b. a notice of appeal.
c. a transcript of the trial and copies of the exhibits.
d. the judgment order from which the appeal is taken.
ANSWER: b
65. Dirt Machines Inc. files a suit in a state court against Earth Movers Inc., claiming that the defendant leased and failed
to return a bulldozer. The case proceeds to trial, after which the court renders a verdict. If Earth Movers to, and files a
brief with, a state appellate court, Dirt Machines’s attorney may file within a prescribed period of time
a. an advisory interrogatory.
b. an answering brief.
c. a request for a deposition.
d. a responding motion for judgment on the brief.
ANSWER: b
66. New Cuisine Café files a suit in a state court against Olive Oil Inc., alleging a breach of contract. The case proceeds to
trial, after which the court renders a verdict. If New Cuisine decides to appeal to a state appellate court, its attorney must
file, with the clerk of the appellate court, within a prescribed period of time
a. a brief including the arguments of both parties.
b. a copy of the record on appeal.
c. an explanation for the verdict.
d. a statement of the grounds for reversal.
ANSWER: b
67. In Hazel’s suit against Ingrid, the court issues a judgment in Ingrid’s favor. If the case is appealed to an appropriate
court of appeals, the appellate court will hear
a. all of the evidence.
b. most of the evidence.
c. none of the evidence.
d. select pieces of evidence.
ANSWER: c
68. Bull files a suit against Clay in a state court over payment due on a short-term lease of grazing land. The case proceeds
to trial, after which the court renders a verdict. The case is appealed to an appellate court. After its review of Bull v. Clay,
the appellate court upholds the lower court’s verdict. The appellate court has
a. affirmed the case.
Name: Class: Date:
b. reversed the case.

c. remanded the case.
d. reversed and remanded the case.
ANSWER: a
69. Dawn files a suit in a state court against Entrée Enterprises Inc., alleging the breach of an employment contract. After
a final determination in the case of Dawn v. Entrée Enterprises Inc. in favor of Dawn, the judgment will be satisfied
a. if Entrée pays the judgment.
b. if Dawn has sufficient assets to cover the amount of damages sought.
c. if Entrée proves that it is unable to pay the judgment.
ANSWER: a
70. Faye files a suit in a state court against Gas Station Stop, claiming employment discrimination. Gas Station loses the
suit and appeals. After the state’s highest court’s review of Faye v. Gas Station Stop, either party can appeal the decision
to the United States Supreme Court if
a. a federal question is involved.
b. a question of state law remains unresolved.
c. the party is unsatisfied with the result.
d. the state trial and appellate court rulings are different.
ANSWER: a
Essay
71. Chase is injured in an accident while driving an off-road vehicle made by Drivers Edge, Inc., an out-of-state
corporation. Chase files a suit against Drivers Edge, alleging negligence, and mails a summons and a copy of the
complaint to the firm by certified mail, return receipt requested. The envelope is addressed in part to “Elvin, President,
Drivers Edge, Inc.” The receipt is returned with the signature of “Francine,” a Drivers Edge employee. A U.S. Postal
employee later testifies that Francine usually receives mail on Drivers Edge’s behalf. Drivers Edge does not respond to the
suit. In a default judgment, Chase is awarded damages of $500,000. Later, Elvin claims that he was not notified of the suit
and asks the court to set aside the judgment. What is the issue in this set of facts? What rule applies? What should be the
result on the application of the rule? Why?
ANSWER: The sufficiency of the service of process is at the center of this dispute. The requirements for sufficient service
of process are that a summons and a copy of the complaint must be delivered to the proper party.
Here, the defendant was a corporation, and the service was addressed to the corporation’s president. The
documents were sent via first-class mail, return receipt requested. Generally, service of process is proper if the
documents are delivered to a person authorized by a corporation to receive the service. The court should not
grant Drivers Edge and Elvin’s motion to set aside the judgment. Chase met the requirements for serving an
out-of-state corporation. Significantly, he addressed the service to Elvin, not to the corporation. Francine was a
Drivers Edge employee who regularly received mail on her employer’s behalf. Francine’s notice of the action
can thus be imputed to Drivers Edge and Elvin.
72. Tech Performance, Inc., completes programming and other tech services for Uno IT Products Corporation. When
Uno’s computer system crashes, it loses $500,000 worth of business and pays $100,000 to have the system
reprogrammed. Uno IT announces to the media that the crash was due to Tech Performance’s incompetence and files a
complaint in a federal court against the firm. What are Tech Performance’s options in response?
ANSWER: In response to the complaint, Tech Performance (the defendant) may file an answer in which the firm admits
the statements or allegations set out in Uno IT’s complaint or denies them and sets out any defenses that Tech
Name: Class: Date:
Performance may have. (If Tech Performance admits to the allegations, a judgment will be entered in favor of
Uno IT. If Tech Performance denies the allegations, the matter will proceed.) In the answer, Tech Performance
may assert an affirmative defense—that is, admit the truth of the complaint but raise new facts to show that the
firm should not be held liable for the damage sustained by Uno IT . (The sorts of facts these might be and the
legal effect they might have are details explained in later chapters in this text.) Tech Performance could also
deny Uno IT’s allegations and assert a counterclaim alleging that the crash occurred as a result of something
Uno IT did and that Uno IT owes Tech Performance damages for the harm done to its reputation. Uno IT
would have to submit an answer to the counterclaim.
Instead of filing an answer, Tech Performance might file a motion to dismiss. This motion might contend that
Uno IT failed to state a claim for which relief can be granted—in other words, even if the facts presented in
the complaint are true, their legal consequences are such that there is no reason to go ahead with the suit.
Other grounds for this motion include improper service of process and the court’s lack of jurisdiction or
venue. (If the motion is denied, Tech Performance will be given time to file an answer. If the motion is
granted, Uno IT will be given time to file an amended complaint.)

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Chapter 01: Law and Legal Reasoning

1. Laws and government regulations affect almost all business activities.

3. Many different laws may affect a single business transaction.

5. A key to avoiding business disputes is to go ahead without thinking ahead.

6. Statutory law does not include county ordinances.

8. Remedies in equity include decrees of specific performance.

9. “UCC 2–207(1)” is a citation to Uniform Commercial Code Section 2–207, subsection 1.

Chapter 01: Law and Legal Reasoning

11. Most state trial court decisions are not published.

14. Administrative law is a source of American law that is consists of statutes.

16. Courts do not depart from precedents.

Chapter 01: Law and Legal Reasoning

19. Damages are a remedy at law.

20. Remedies in equity include injunctions.

21. In most states, the courts no longer grant “equitable” remedies.

24. Constitutional law includes only the U.S. Constitution.

25. Whether a law is constitutional depends on its source.

27. Statutory law includes state statutes.

Chapter 01: Law and Legal Reasoning

31. Administrative law includes only state regulations.

33. Criminal acts are prohibited only by federal government statutes.

Chapter 01: Law and Legal Reasoning

Chapter 01: Law and Legal Reasoning

Chapter 01: Law and Legal Reasoning

49. Deb and Earl are involved in a lawsuit. This is

50. In an action against Gina, Harry obtains a remedy. This is

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Chapter 01: Law and Legal Reasoning

54. Distinguishing between legal and equitable remedies is:

55. In a suit against Ian, Jenna obtains an injunction. This is

56. In a suit against Ethan, Francisco obtains an award of damages. This is

Chapter 01: Law and Legal Reasoning

Chapter 01: Law and Legal Reasoning

66. Criminal law is concerned with

Chapter 01: Law and Legal Reasoning

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Chapter 02: Courts and Alternative Dispute Resolution

1. The role of the courts is to interpret and apply the laws.

2. State courts are superior to federal courts.

6. For jurisdictional purposes, corporations are considered legal persons.

9. States do not have exclusive jurisdiction on any matter.

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Chapter 02: Courts and Alternative Dispute Resolution

11. Small claims courts are inferior trial courts.

15. The term venue refers to the location of a trial.

Chapter 02: Courts and Alternative Dispute Resolution

18. A state case typically originates in a federal court.

19. Trials courts conduct trials.

25. Negotiation is the most complex form of alternative dispute resolution.

26. No court offers mediation as an option before a case goes to trial.

Chapter 02: Courts and Alternative Dispute Resolution

28. Arbitration that is mandated by a court is often binding on the parties.

29. A court’s review of an arbitrator’s award may be restricted.

31. The verdict in a summary jury trial is binding.

32. International treaties often stipulate arbitration for resolving disputes.

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Chapter 02: Courts and Alternative Dispute Resolution

Chapter 02: Courts and Alternative Dispute Resolution

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Chapter 02: Courts and Alternative Dispute Resolution

Chapter 02: Courts and Alternative Dispute Resolution

d. the United States Supreme Court to refuse jurisdiction.