Test Bank For The Legal Environment of Business Text and Cases 9th Edition Cross, Miller

Test Bank for The Legal Environment of
Business Text and Cases 9th Edition

Cross, Miller
Complete downloadable file at:
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The-Legal-Environment-of-Business-
Text-and-Cases-9th-Edition-Cross,-
Miller
The Court System
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.

+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
1. Laws would be meaningless without the courts to interpret and apply them.
ANSWER: T PAGES: Section 1 TYPE: +

BUSPROG: Analytic AICPA: BB-Legal
2. The federal courts are superior to the state courts.
ANSWER: F PAGES: Section 1 TYPE: N

1
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accessible website, in whole or in part.
2TEST BANK—UNIT ONE: THE FOUNDATIONS
3. Under the authority ofa long arm statute, a court can exercise personal jurisdic-
tion over certain out-of-state defendants.

4. A court can exercise jurisdiction over property that is located within its
boundaries.
ANSWER: F PAGES: Section 2 TYPE: +

5. Because corporations are not considered legal persons, courts use different
principles to determine whether it is fair to exercise jurisdiction over a
corporation.

6. The minimum-contacts requirement is usually met if a corporation advertises or

sells its products within a state.
ANSWER: T PAGES: Section 2 TYPE: N

BUSPROG: Reflective AICPA: BB-Critical Thinking
7. For purposes of diversity of citizenship, a corporation is a citizen only of the

state in which its principal place of business is located.

8. To have standing to sue, a party must have complaining sufficient stake in a

matter to justify seeking relief through the court system.

9. U.S. district courts have concurrent jurisdiction with state courts in matters
involving federal questions.

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10. Procedural law does not have a significant impact on a person’s ability to
pursue a legal claim.

BUSPROG: Analytic AICPA: BB-Risk Analysis
11. The litigation process has three phases: filing, answering, and appealing.

12. Only a defendant can file a motion to dismiss.

BUSPROG: Analytic AICPA: BB-Critical Thinking
13. The use of additional evidence distinguishes the motion for summary judgment
from the motion for judgment on the pleadings.

14. Interrogatories are written questions for which written answers are prepared by
a judge.

15. Any written material, including information stored electronically, can be the
object of a discovery request.

16. An expert witness is a person who is directly involved in the events concerning
a lawsuit.

17. After both sides have rested their cases, only the plaintiff’s attorney makes a
closing argument.

18. Either party may appeal a jury’s verdict but only the defendant may appeal a
judge’s ruling.

19. A court of appeals does not hear any evidence.

20. It is guaranteed that any judgment will be enforceable.

BUSPROG: Reflective AICPA: BB-Risk Analysis
MULTIPLE-CHOICE QUESTIONS
1. As a judge in a federal court, Christine 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. venue.
d. early neutral case evaluation.
ANSWER: A PAGES: Section 1 TYPE: N

BUSPROG: Reflective AICPA: BB-Legal
2. A Maryland state court can exercise jurisdiction over National Insurance

Corporation, an out-of-state company, if the firm has
a. minimum contacts with the state.
b. maximum contacts with the state.

c. medium contacts with the state.
d. no contacts with the state.

BUSPROG: Reflective AICPA: BB-Decision Modeling
3. Fresh Harvest Company, which is based on Georgia, packages and sells

vegetables. Hayden, who is a resident of Indiana, buys a Fresh Harvest product,
eats it, and suffers severe food poisoning. Haydenwants 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.

4. Lewis wants to file a suit against Mikayla. Before any court can hear the case
a. the parties to the dispute must agree.

b. the court must have jurisdiction.
c. the court must issue a deposition.
d. the parties must own property.
ANSWER: B PAGES: Section 2 TYPE: N

5. Marcus files a suit against Naomi in an Ohio state court. Naomi’s only connec-
tion to Ohio is an ad on the Web originating in Pennsylvania. For Ohio to
exercise jurisdiction, the issue is whether Naomi, through her ad, has
a. a commercial cyber presence in Ohio.

b. conducted substantial business with Ohio residents.
c. claimed to be a resident ofOhio.
d. solicited virtual business in Ohio.
ANSWER: B PAGES: Section 2 TYPE: +

6. Arnold loses his suit against Buffy in a Coloradostate trial court. Arnold appeals
to a state intermediate court of appeals and loses again. Arnold would appeal
next to
a. a U.S. district court.

b. theColoradoSupreme Court.
c. the United States Supreme Court.
d. the U.S. Court of Appeals for the Ninth Circuit.
ANSWER: B PAGES: Section 3 TYPE: =

7. 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 PAGES: Section 3 TYPE: =

8. The Iowa 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 PAGES: Section 3 TYPE: N

9. 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 PAGES: Section 4 TYPE: +

10. 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.

11. Neville files a suit against Olina. If Olina fails to respond,
a. Neville must appeal the case to a different court.

b. Olina’s failure to respond will be considered to be a denial.
c. Neville will not be awarded the remedy sought.
d. Olina will have a default judgment entered against her.
ANSWER: D PAGES: Section 4 TYPE: N

12. 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. counterclaim.
b. motion for judgment on the pleadings.
c. motion for summary judgment.
d. motion to dismiss.

13. 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
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 PAGES: Section 4 TYPE: +

14. To prepare for a trial between SmartPhones, Inc., and TechApps Company,
TechApps’ attorney places SmartPhones’ 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. an interrogatory.

15. During the trial phase of Sof’ Drink Soda Corporation’s suit against TimeOut
Convenience 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.

16. Jenna files a civil suit against Keshia. To succeed, Jenna must prove her case
a. beyond a reasonable doubt.

b. by a preponderance of the evidence.
c. by indisputable proof.
d. to the extent promised in her attorney’s opening statement.

17. 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 PAGES: Section 4 TYPE: =

Fact Pattern 2-1 (Questions 18–20 apply)

Martin files a suit against Nichelle in a state court over payment due on a short-term
employment contract. The case proceeds to trial, after which the court renders a
verdict. The case is appealed to an appellate court.
18. Refer to Fact Pattern 2–1. After its review of Martinv. Nichelle, 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.

19. Refer to Fact Pattern 2–1. After a final determination in the case of Martinv.
Nichelle, any judgment will be satisfied
a. if the losing party pays the judgment.

b. if the winning party has sufficient assets to cover the amount of
damages sought.
c. if the losing party proves that he or she is unable to pay the judgment.
d. all of the choices.

20. Refer to Fact Pattern 2–1. After the state’s highest court’s review of Martinv.
Nichelle, a 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 PAGES: Section 4 TYPE: =

ESSAY QUESTIONS
1. 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 Francineusually receives mail on Drivers
Edge’sbehalf. Drivers Edgedoes 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 Edgeand 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. Francinewas 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 Edgeand Elvin.
PAGES: Section 4 TYPE: N

2. 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’sincompetence and files a complaint in a federal court against the
firm. What are Tech Performance’soptions 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
Performancemay have. (If Tech Performanceadmits to the allegations, a
judgment will be entered in favor of Uno IT. If Tech Performancedenies the
allegations, the matter will proceed.) In the answer, Tech Performancemay
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
Performancecould 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 Performancedamages for the harm done to its reputation.
Uno IT would have to submit an answer to the counterclaim.
Instead of filing an answer, Tech Performancemight 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.)
PAGES: Section 4 TYPE: N


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What are the main components of a legal system?

What are the main components of a legal system?

What are the different types of jurisdiction that courts can exercise?

What are the different types of jurisdiction that courts can exercise?

Test Bank for The Legal Environment of

Business Text and Cases 9th Edition

N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.

N A question new to this edition of the Test Bank.

ANSWER: T PAGES: Section 1 TYPE: +

2. The federal courts are superior to the state courts.

ANSWER: F PAGES: Section 1 TYPE: N

ANSWER: T PAGES: Section 2 TYPE: +

ANSWER: F PAGES: Section 2 TYPE: +

ANSWER: F PAGES: Section 2 TYPE: N

6. The minimum-contacts requirement is usually met if a corporation advertises or

ANSWER: T PAGES: Section 2 TYPE: N

7. For purposes of diversity of citizenship, a corporation is a citizen only of the

ANSWER: F PAGES: Section 2 TYPE: N

8. To have standing to sue, a party must have complaining sufficient stake in a

ANSWER: T PAGES: Section 2 TYPE: +

ANSWER: F PAGES: Section 3 TYPE: +

ANSWER: F PAGES: Section 4 TYPE: N

ANSWER: F PAGES: Section 4 TYPE: +

12. Only a defendant can file a motion to dismiss.

ANSWER: F PAGES: Section 4 TYPE: N

ANSWER: T PAGES: Section 4 TYPE: N

ANSWER: F PAGES: Section 4 TYPE: N

ANSWER: T PAGES: Section 4 TYPE: N

ANSWER: F PAGES: Section 4 TYPE: N

ANSWER: F PAGES: Section 4 TYPE: N

ANSWER: F PAGES: Section 4 TYPE: N

19. A court of appeals does not hear any evidence.

ANSWER: T PAGES: Section 4 TYPE: N

20. It is guaranteed that any judgment will be enforceable.

ANSWER: F PAGES: Section 4 TYPE: N

1. As a judge in a federal court, Christine can decide, among other things,

ANSWER: A PAGES: Section 1 TYPE: N

2. A Maryland state court can exercise jurisdiction over National Insurance

a. minimum contacts with the state.

b. maximum contacts with the state.

ANSWER: A PAGES: Section 2 TYPE: N

3. Fresh Harvest Company, which is based on Georgia, packages and sells

a. federal and state courts have concurrent jurisdiction.

ANSWER: A PAGES: Section 2 TYPE: N

a. the parties to the dispute must agree.

ANSWER: B PAGES: Section 2 TYPE: N

a. a commercial cyber presence in Ohio.

ANSWER: B PAGES: Section 2 TYPE: +

a. a U.S. district court.

ANSWER: B PAGES: Section 3 TYPE: =

a. is a decision on the merits that has value as a precedent.

ANSWER: D PAGES: Section 3 TYPE: =

ANSWER: B PAGES: Section 3 TYPE: N

9. Gilbert wants to initiate a suit against Healthways Insurance Company by filing

a. an explanation of the proof to be offered at trial.

ANSWER: D PAGES: Section 4 TYPE: +

ANSWER: D PAGES: Section 4 TYPE: +

11. Neville files a suit against Olina. If Olina fails to respond,

a. Neville must appeal the case to a different court.