BUS 323, Legal Environment of Business, Spring 2005, Exam Questions

BUS 323, Legal Environment of Business, Spring 2005, Exam Questions
1. X Co. and Y Co. negotiated a written construction contract containing a clause requiring each
party to submit any future disputes arising from or related to their contractual relationship to
legally binding arbitration under the rules and procedures of the American Arbitration Association
(aaa).
a. aaa would assist X and Y in selecting an arbitrator, and the arbitrator?s decision usually would
be binding.
b. Officials of aaa would decide any dispute between X and Y relating to the construction
contract.
c. If an X-Y dispute is arbitrated, either party can get a court to review all aspects of the
arbitrator?s decision.
d. There could be no binding arbitration, because the Federal Arbitration Act does not cover
construction contracts.
2. In an nfl football game between the Cincinnati Bengals and Denver Broncos, a Bengals
player named Clark was frustrated because a pass that been intended for him was intercepted by
a Broncos player. Immediately after the play ended, Clark was a substantial distance from any
active play. In his frustration, he pulled his helmet off and used it to hit a Broncos player,
Hackbart, from behind. None of the game referees saw the incident, but the incident was
captured on film. Several weeks later, doctors found that Hackbart had suffered a fractured
vertebra in his neck as a result of the blow from Clark?s helmet. Hackbart sued Clark for an
intentional tort.
a. Hackbart could not win a claim of battery if, before he was hit, he had not seen Clark in the
process of hitting him.
b. Hackbart could not win a claim of battery because American football necessarily involves
players coming into hard contact with each other.
c. Hackbart could win a claim of battery if he could show that Clark?s conduct was completely
outside the scope of the normal type of physical contact in this sport.
d. Hackbart could win a claim of battery only if he could prove that Clark had intended to cause a
serious injury to Hackbart?s neck.
3. A manager at X, the former employer of Joe, sent a written letter of reference to Y. Joe was
seeking a job with Y, and Y requested the reference from X. When the manager sent the letter,
he was acting within the scope of his employment for X. Among other things, Y had asked X
why Joe?s employment with X had ended. In the letter, the manager at X stated that Joe?s
employment had been terminated because of Joe?s ?insubordination? (that is, not obeying a
supervisor?s lawful order). The manager was mistaken; his records were not very good, and he
had forgotten that Joe had actually been terminated because X had cut the size of its workforce,
and Joe had been laid off. Joe did not get the job with Y, found out about the reference letter,
and sued X for the tort of defamation.
a. Joe could not win because former employers cannot be sued on the basis of the content of a
reference letter.
b. Joe would probably win his defamation lawsuit by summary judgment before a trial.
c. Joe would probably not win his claim even if the statement in the letter was false and
defamatory, because of X?s qualified privilege.
d. Joe?s claim in this case would be for slander, not libel.
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4. A stream passed through the adjoining land of X and Y. Y put a dam on the stream at a point
on his property; this almost completely stopped the stream?s flow of water, resulting in a nice little
lake on Y?s property but almost no water flow across X?s property. In a civil lawsuit between X
and Y, in which X sought only an injunction from the court ordering Y to stop damming the stream
and cutting off the flow of water, X demanded a jury trial.
a. X would be entitled to a jury trial because the Constitution guarantees a right to jury trial.
b. X would not be entitled to a jury trial because there is no right to a jury trial when the only
remedy the plaintiff is seeking is a so-called ?equitable remedy? such as an injunction.
c. X would not be entitled to a jury trial, which means that the parties would have to agree on the
facts, because a trial judge has authority only to determine questions of law and not questions of
fact.
d. X would not be entitled to a jury trial because there is a right to a jury trial only in cases where
the plaintiff is seeking some type of remedy other than money damages.
5. In a contract for the performance of maintenance services between X Co. and Y Co., they
included a clause specifying that, ?in the event of a dispute between the parties arising from or
related to this contract,? they would ?submit the dispute to mediation under the Commercial
Mediation Guidelines of the American Arbitration Association (aaa).? aaa does, in fact, provide
mediation services in addition to arbitration services. A dispute arose when Y refused to pay X
because Y asserted that X had not performed the maintenance services in the way required
under their contract. X disputed this assertion and demanded payment from Y. When they were
unable to resolve their differences through informal negotiation, X sought mediation.
a. The agreement to mediate does not require X and Y to reach a settlement agreement in the
mediation process.
b. The parties are legally bound by the decision of the mediator regarding the outcome of the
dispute.
c. If X and Y had resolved their dispute through informal negotiation, their agreement would still
require them to submit the dispute to mediation.
d. If X and Y use mediation but it is unsuccessful, then they are required to use legally binding
arbitration.
6. Sam and Pat were involved in an automobile crash because Sam ran a red light. Pat sued
Sam for the tort of negligence.
a. Because running a red light violates either a city ordinance or a state law, Sam committed
negligence per se and Pat would not have to prove anything else to win his case.
b. Because running a red light violates either a city ordinance or a state law, Sam could not
assert the defense of comparative negligence against Pat even if Sam could prove that Pat?s own
negligence contributed to the accident.
c. Sam?s violation of a traffic law means that he would only be subject to a fine or other penalty
provided for in the traffic statute, and he could not be sued under tort law.
d. Because running a red light violates either a city ordinance or a state law, Sam committed
negligence per se.
Answers:
1) a 2) c 3) c 4) b 5) a 6) d

BUS 323, Legal Environment of Business, Spring 2005, Exam Questions 9.1 of 10 on the basis of 2349 Review.