Legal Environment of Business A Managerial Approach Theory To Practice 3rd Edition Melvin Test Bank 1

Test Bank for Legal Environment of Business A Managerial
Approach Theory to Practice 3rd Edition Melvin and Pujol

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Chapter 04 Resolving Disputes: Litigation and Alternative Dispute

Resolution
SHORT ANSWER QUESTIONS
1) When a dispute arises between two parties, one party will typically make an informal on
the other party prior to initiating a lawsuit.
Answer: demand
Explanation:
Diff: 2
Topic: Stages of Litigation
Learning Objective: 04-02 Name the stages of litigation and identify the main features of each stage.
Bloom's: Understand
AACSB: Analytical Thinking
2) In some special types of cases such as divorce, the defendant is instead called a .
Answer: respondent
Explanation:
Diff: 2
Bloom's: Understand
3) A is a document filed by one party that requests court action in a matter pertaining to the
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litigation.
Answer: motion
Explanation:
Diff: 1
Topic: Motions
Bloom's: Remember
4) A trial without a jury is called a trial.

Answer: bench
Explanation:
Diff: 1
Topic: Trial
Bloom's: Remember
5) A jury that cannot agree on a verdict is called a jury.
Answer: hung
Explanation:
Diff: 1
Topic: Trial
Bloom's: Remember
6) The discussions by the jury in a closed room while they attempt to reach a verdict are called
.
Answer: deliberations
Explanation:
Diff: 1
Topic: Trial
Bloom's: Remember
7) A plaintiff must file a lawsuit within a certain time limit called the .
Answer: statute of limitations
Explanation:
Diff: 2
Topic: Statute of Limitations
Bloom's: Understand
AACSB: Analytical Thinking; Ethics
8) Once the defendant is served with the complaint, she must either file a motion to dismiss or
provide a formal to the complaint.
Answer: answer
Explanation:
Diff: 2
Topic: Pleadings Stage
Bloom's: Understand
9) The document served on a defendant along with the complaint that provides actual notice of the
lawsuit is called a .
Answer: summons
Explanation:
Diff: 1
Bloom's: Remember
10) Evidence that proves innocence or nonliability is called evidence.

Answer: exculpatory
Explanation:
Diff: 2
Topic: Discovery Stage
Bloom's: Understand
MULTIPLE CHOICE QUESTIONS
11) Counterclaims are filed by the plaintiff in civil matters.

A) True
B) False
Answer: B
Explanation:
Diff: 2
Bloom's: Understand
AACSB: Reflective Thinking
12) A motion for a judgment as a matter of law is called a motion for a judgment non obstante
veredicto in some states.
A) True
B) False
Answer: A
Explanation:
Diff: 1
Topic: Motions
Bloom's: Remember
13) Judges must be present during depositions to resolve disputes and ensure fairness.
A) True
B) False
Answer: B
Explanation:
Diff: 2
Bloom's: Understand
14) At trial, the judge decides the facts and the jury decides the law.
A) True
B) False
Answer: B
Explanation:
Diff: 3
Topic: Trial
Bloom's: Apply
15) Questions asked by an attorney of witnesses whom he or she has called to testify are called a
cross-examination.
A) True
B) False
Answer: B
Explanation:
Diff: 2
Topic: Trial
Bloom's: Understand
16) When the judge issues the jury instructions, the judge is said to be charging the jury.
A) True
B) False
Answer: A
Explanation:
Diff: 2
Topic: Trial
Bloom's: Understand
17) Albert has sued Tina and received a judgment for $50,000. Tina's assets may be exempt from
collection of the judgment if Tina has filed bankruptcy.
A) True
B) False
Answer: A
Explanation:
Diff: 2
Topic: Trial
Bloom's: Understand
18) Scoop Masters Inc. has been charged by Fab Flavors Corp. with stealing Fab Flavors' patented
process for making ice cream. Fab Flavors' attorney speaks with the company's president and
creates a written memorandum of their discussion. During discovery, Fab Flavors must provide the
written memorandum to Scoop Masters.
A) True
B) False
Answer: B
Explanation:
Diff: 3
Bloom's: Evaluate
AACSB: Analytical Thinking; Ethics
19) Transcripts of ADR proceedings are required to be available to the public.

A) True
B) False
Answer: B
Explanation:
Diff: 2
Topic: Alternative Dispute Resolution
Learning Objective: 04-04 List the methods of alternative dispute resolution (ADR) and the potential advantages of using ADR.
Bloom's: Understand
20) A summons is a court order compelling a person to testify or produce evidence in his or her
possession.
A) True
B) False
Answer: B
Explanation:
Diff: 2
Bloom's: Understand
21) In civil cases the standard of proof used by state trial courts is a preponderance of the evidence,
while in federal trial court the standard of proof is beyond a reasonable doubt.
A) True
B) False
Answer: B
Explanation:
Diff: 2
Topic: Trial; Closing Arguments and Charging the Jury
Bloom's: Understand
22) Generally, everything relevant to a dispute is discoverable in a civil lawsuit unless protected by a
legal privilege.
A) True
B) False
Answer: A
Explanation:
Diff: 2
Bloom's: Understand
23) In National Football League Management Council v. Brady, the appellate court overturned the
arbitrator's ruling because football player Tom Brady had not been provided adequate notice that
suspension was within the League's range of punishments.
A) True
B) False
Answer: B
Explanation:
Diff: 2
Topic: Arbitration
Learning Objective: 04-05 Distinguish between arbitration and mediation and compare and contrast both methods of ADR.
Bloom's: Understand
24) Liana and Sabine had a motor vehicle accident, and Sabine has sued Liana claiming severe back
injuries. If Liana wants to obtain a copy of Sabine's doctor and hospital reports, she should serve a
request for admissions to Sabine.
A) True
B) False
Answer: B
Explanation:
Diff: 3
Bloom's: Apply
25) Actual trade secrets of a company are exempted from discovery and need not ever be disclosed.
A) True
B) False
Answer: B
Explanation:
Diff: 3
Bloom's: Evaluate
26) Legally mandated arbitration is nonbinding arbitration.
A) True
B) False
Answer: A
Explanation:
Diff: 2
Topic: Legally Mandated Arbitration
Bloom's: Understand
27) Arbitration can at times be legally mandated, but mediation is entered into only on a voluntary
basis.
A) True
B) False
Answer: B
Explanation:
Diff: 3
Topic: Mediation
Bloom's: Apply
28) A potential juror who worked with a litigant may likely be disqualified as a juror based on a
challenge for cause.
A) True
B) False
Answer: A
Explanation:
Diff: 3
Topic: Trial
Bloom's: Evaluate
29) The term litigation refers to the trial but does not include pretrial events as well.
A) True
B) False
Answer: B
Explanation:
Diff: 2
Topic: Civil Litigation
Bloom's: Apply
30) The American Arbitration Association provides mediation services as well as arbitration services.
A) True
B) False
Answer: A
Explanation:
Diff: 2
Topic: Mediation
Bloom's: Understand
31) For the courts to allow a lawsuit to proceed, both the plaintiff and the defendant must be able to
prove standing or the suit will be dismissed.
A) True
B) False
Answer: B
Explanation:
Diff: 3
Topic: Standing
Learning Objective: 04-03 Articulate the concept of standing.
Bloom's: Analyze
32) A motion for a summary judgment may be filed by either the plaintiff or the defendant.
A) True
B) False
Answer: A
Explanation:
Diff: 2
Topic: Motions
Bloom's: Understand
33) Congress has endorsed the use of arbitration as the preferred dispute resolution method in matters
governed by federal law.
A) True
B) False
Answer: A
Explanation:
Diff: 2
Topic: Arbitration
Bloom's: Understand
10
34) The primary difference between arbitration and other forms of ADR is that arbitration is quicker.
A) True
B) False
Answer: B
Explanation:
Diff: 2
Bloom's: Understand
35) Each stage of litigation is separate and distinct, and each must be completed before the next stage
may be started.
A) True
B) False
Answer: B
Explanation:
Diff: 2
Bloom's: Understand
36) The Federal Arbitration Act enumerates specific procedures for conducting arbitration hearings.
A) True
B) False
Answer: B
Explanation:
Diff: 2
Topic: Arbitration
Bloom's: Understand
37) In the typical business context, ADR is invoked either via contract or by mutual agreement.
A) True
B) False
Answer: A
Explanation:
Diff: 1
Topic: Formal ADR
Bloom's: Remember
11
38) Med-arb is a form of ADR in which both a mediator and an arbitrator work simultaneously with
the disputing parties to resolve differences.
A) True
B) False
Answer: B
Explanation:
Diff: 3
Topic: Other Forms of ADR
Learning Objective: 04-07 Provide an example of a hybrid form of alternative dispute resolution.
Bloom's: Apply
39) The Federal Arbitration Act provides a means for enforcement of arbitration agreements and
decisions of arbitrators through the use of the state courts in the state in which the arbitration took
place.
A) True
B) False
Answer: B
Explanation:
Diff: 3
Topic: Arbitration
Bloom's: Apply
AACSB: Analytical Thinking; Reflective Thinking
40) LaMonte has sued Jarod and received judgment in the amount of $24,000. LaMonte is a judgment
creditor.
A) True
B) False
Answer: A
Explanation:
Diff: 1
Topic: Collecting the Judgment
Bloom's: Remember
12
41) In the civil system, the term litigation refers to
A) matters that occur prior to the trial. B) the trial itself.
C) both the pretrial and the trial. D) posttrial enforcement of judgments.
Answer: C
Explanation: A) The term litigation refers to both the pretrial and trial periods in civil matters.
B) The term litigation refers to both the pretrial and trial periods in civil matters.
C) The term litigation refers to both the pretrial and trial periods in civil matters.
D) The term litigation refers to both the pretrial and trial periods in civil matters.
Diff: 1
Bloom's: Remember
42) Which of the following is not required in order to show standing to assert a claim?
A) The party must have suffered an injury in fact.
B) The party must be a citizen or taxpayer eligible to use the U.S. court system.
C) The party must suffer harm that is direct, concrete, and individualized.
D) The party must articulate what legal redress exists to compensate for the injury.
Answer: B
Explanation: A) One need not be a citizen or taxpayer to use the U.S. court system if one has been
injured and has legal redress.
B) One need not be a citizen or taxpayer to use the U.S. court system if one has been
C) One need not be a citizen or taxpayer to use the U.S. court system if one has been
D) One need not be a citizen or taxpayer to use the U.S. court system if one has been
Diff: 2
Topic: Standing
Learning Objective: 04-03 Articulate the concept of standing.
Bloom's: Understand
13
43) The filing of the complaint begins which stage of litigation?
A) the pleadings B) discovery C) voir dire D) the trial
Answer: A
Explanation: A) The first paper generally filed, which begins the formal process, is the complaint,
one of the necessary components of the pleadings.
B) The first paper generally filed, which begins the formal process, is the complaint,
C) The first paper generally filed, which begins the formal process, is the complaint,
D) The first paper generally filed, which begins the formal process, is the complaint,
Diff: 1
Bloom's: Remember
44) During the pleadings stage, a third party may be brought into the trial by a defendant by filing
A) a supplementary answer. B) a counterclaim.
C) a cross-claim. D) an additional complaint.
Answer: C
Explanation: A) Cross-claims are filed by a defendant to include a third party in the lawsuit when
the defendant believes that the third party is either partially or totally at fault.
B) Cross-claims are filed by a defendant to include a third party in the lawsuit when
C) Cross-claims are filed by a defendant to include a third party in the lawsuit when
D) Cross-claims are filed by a defendant to include a third party in the lawsuit when
Diff: 2
Bloom's: Understand
14
45) The number of civil cases filed annually in state and federal courts combined exceeds
A) 2 million. B) 10 million. C) 20 thousand. D) 30 million.
Answer: D
Explanation: A) The American Bar Association reported the total number of civil cases filed in
state and federal courts now exceeds 30 million cases annually.
B) The American Bar Association reported the total number of civil cases filed in
C) The American Bar Association reported the total number of civil cases filed in
D) The American Bar Association reported the total number of civil cases filed in
Diff: 1
Learning Objective: 04-01 Identify the ways in which civil litigation and dispute resolution inform business planning.
Bloom's: Remember
46) Alden is stopped at a traffic light when Bianca's automobile crashes into him. He sues her for
negligence. At trial, Alden produces evidence that Bianca had a blood alcohol level of 1.3, that she
was texting at the time of the accident, and that she was not wearing her prescription glasses when
she rear-ended him. This type of evidence produced by Alden is called
A) inculpatory evidence. B) summary evidence.
C) exculpatory evidence. D) direct evidence.
Answer: A
Explanation: A) Inculpatory evidence tends to prove a criminal offense or, as in this case, a civil
wrong.
B) Inculpatory evidence tends to prove a criminal offense or, as in this case, a civil
wrong.
C) Inculpatory evidence tends to prove a criminal offense or, as in this case, a civil
wrong.
D) Inculpatory evidence tends to prove a criminal offense or, as in this case, a civil
wrong.
Diff: 3
Bloom's: Analyze
15
47) Who, among the following, is not present during a pretrial conference?
A) the judge B) the parties
C) the court reporter D) the parties' attorneys
Answer: C
Explanation: A) A court reporter is not present at a pretrial conference as no transcript is necessary
or useful.
B) A court reporter is not present at a pretrial conference as no transcript is necessary
or useful.
C) A court reporter is not present at a pretrial conference as no transcript is necessary
or useful.
D) A court reporter is not present at a pretrial conference as no transcript is necessary
or useful.
Diff: 2
Topic: Pretrial Conference
Bloom's: Understand
48) Fredrich is a student in your class and is frequently disruptive. Your professor has asked him to
stop talking four times and to stop texting three times just in today's class. Finally, your professor
asks him to leave, and when Fredrich says, "Make me," your professor loses it and knocks him out
with a right cross to the jaw. Fredrich is now suing your professor for civil battery. Both sides
believe that you can provide valuable information for their sides. Which discovery method should
they use to get your information?
A) A deposition.
B) An interrogatory.
C) A request that you write down your recollection so that they can file for a request for
production to obtain your statement.
D) A request that you make an admission.
Answer: A
Explanation: A) Only a deposition would apply. Witnesses may be deposed, but only parties are
subject to the other options listed.
B) Only a deposition would apply. Witnesses may be deposed, but only parties are
C) Only a deposition would apply. Witnesses may be deposed, but only parties are
D) Only a deposition would apply. Witnesses may be deposed, but only parties are
Diff: 3
Bloom's: Apply; Evaluate
16
49) A motion for a court to issue a ruling declaring that no trial is necessary because there are no
essential facts in dispute is called a
A) motion for summary judgment. B) motion to dismiss for mistrial.
C) motion for a judgment as a matter of law. D) motion to dismiss.
Answer: A
Explanation: A) A motion for summary judgment asks the judge to rule in one party's favor
without a trial because no issue of fact is evident, so no jury determination is
necessary.
B) A motion for summary judgment asks the judge to rule in one party's favor
necessary.
C) A motion for summary judgment asks the judge to rule in one party's favor
necessary.
D) A motion for summary judgment asks the judge to rule in one party's favor
necessary.
Diff: 3
Topic: Motions
Bloom's: Apply
50) If a civil trial results in a hung jury

A) the plaintiff wins.
B) the defendant wins.
C) the litigants must start the process over and conduct a trial with a new jury.
D) this will be grounds for an automatic appeal, and the appellate court will render a final
decision.
Answer: C
Explanation: A) If a civil trial results in a hung jury, the litigants must start the process over and
conduct a trial with a new jury if the plaintiff chooses to continue.
B) If a civil trial results in a hung jury, the litigants must start the process over and
C) If a civil trial results in a hung jury, the litigants must start the process over and
D) If a civil trial results in a hung jury, the litigants must start the process over and
Diff: 2
Topic: Trial
Bloom's: Understand
17
51) Which of the following statements is true about jury trials?
A) A juror may be disqualified for any reason.
B) A potential juror may be removed if he or she demonstrates an obvious bias against one of
the litigants.
C) Attorneys charge the jury by giving them instructions on how to work through the evidence
and come to a factual decision in the case.
D) The judge is present to assist the jury in deliberations.
Answer: B
Explanation: A) A prospective juror may be disqualified if he or she demonstrates an obvious bias
or circumstance that shows he or she may not be able to fairly judge the evidence.
B) A prospective juror may be disqualified if he or she demonstrates an obvious bias
C) A prospective juror may be disqualified if he or she demonstrates an obvious bias
D) A prospective juror may be disqualified if he or she demonstrates an obvious bias
Diff: 3
Topic: Trial
Bloom's: Evaluate
52) A complaint will contain each of the following except

A) a statement of the plaintiff's version of the facts of the case.
B) a statement of the damages suffered.
C) a statement of why the plaintiff believes the defendant is guilty.
D) a statement of the evidence that the plaintiff will produce and a list of potential witnesses to
be called.
Answer: D
Explanation: A) Evidence and lists of witnesses are not included in the complaint.
B) Evidence and lists of witnesses are not included in the complaint.
C) Evidence and lists of witnesses are not included in the complaint.
D) Evidence and lists of witnesses are not included in the complaint.
Diff: 2
Bloom's: Understand
18
53) Avril hires Corinne to landscape her yard. They agree on a price, agree on the types and colors of
the plantings, and agree on the start date. When Corinne shows up on the agreed date, Avril refuses
to allow her to begin work. Corinne sues Avril for breach of contract. At trial, Avril produces the
contract, which states that the plants were to be a mixture of red, white, and blue and were to be
between 12 inches and 18 inches in height. She then produces pictures to show that Corinne had
arrived with only purple and yellow plants that were 6 to 8 inches high. This type of evidence
produced by Avril would be called
A) inculpatory evidence. B) summary evidence.
C) exculpatory evidence. D) production evidence.
Answer: C
Explanation: A) Exculpatory evidence tends to prove innocence or nonliability.
B) Exculpatory evidence tends to prove innocence or nonliability.
C) Exculpatory evidence tends to prove innocence or nonliability.
D) Exculpatory evidence tends to prove innocence or nonliability.
Diff: 3
Bloom's: Analyze
54) Depositions are

A) oral questions, answered orally, asked of parties and witnesses.
B) oral questions, answered orally, asked only of parties.
C) written questions, answered in writing, asked of parties and witnesses.
D) written questions, answered in writing, asked only of parties.
Answer: A
Explanation: A) Depositions are oral questions, answered orally, asked of parties and witnesses,
while interrogatories are written questions, answered in writing, asked only of
parties.
B) Depositions are oral questions, answered orally, asked of parties and witnesses,
parties.
C) Depositions are oral questions, answered orally, asked of parties and witnesses,
parties.
D) Depositions are oral questions, answered orally, asked of parties and witnesses,
parties.
Diff: 2
Bloom's: Understand
19
55) Myron has sued Kalinka for injuries received in a traffic accident. If Kalinka fails to respond to the
complaint and summons within the proper time limit,
A) Myron wins based on a summary judgment.
B) Myron wins based on a default judgment.
C) Myron wins based on a judgment as a matter of law.
D) Nothing happens—Kalinka is not required to respond to a complaint and summons.
Answer: B
Explanation: A) Ignoring a complaint and failing to file an answer leads to a default judgment and
an automatic loss of the case.
B) Ignoring a complaint and failing to file an answer leads to a default judgment and
C) Ignoring a complaint and failing to file an answer leads to a default judgment and
D) Ignoring a complaint and failing to file an answer leads to a default judgment and
Diff: 3
Bloom's: Apply
56) Which of the following is not true of ADR proceedings?

A) The jury decision in an ADR proceeding is automatically subject to one appeal.
B) The individual conducting the ADR hearing is chosen by the disputing parties themselves in
certain instances.
C) ADR hearings generally result in much less publicity than does litigation.
D) ADR hearings usually arrive at a resolution at a much lower cost than does litigation.
Answer: A
Explanation: A) There are no juries involved in ADR proceedings.
B) There are no juries involved in ADR proceedings.
C) There are no juries involved in ADR proceedings.
D) There are no juries involved in ADR proceedings.
Diff: 3
Bloom's: Evaluate
20
57) Binding arbitration means that
A) the parties had previously agreed that arbitration would be utilized, rather than litigation,
should a dispute arise.
B) the rules of the hearing will be strict in terms of number of witnesses called, duration of the
hearing itself, and whether attorneys can be present.
C) the decision of the arbitrator will be final unless the parties agree to reopen the case.
D) the decision of the arbitrator will be final and the parties are barred from agreeing to reopen
the case.
Answer: C
Explanation: A) Binding arbitration must be agreed to by the parties, and the decision of the
arbitrator will be final unless the parties agree to reopen the case.
B) Binding arbitration must be agreed to by the parties, and the decision of the
C) Binding arbitration must be agreed to by the parties, and the decision of the
D) Binding arbitration must be agreed to by the parties, and the decision of the
Diff: 2
Topic: Arbitration
Bloom's: Understand
58) Each of the following is a pretrial motion except a motion .

A) to dismiss for mistrial. B) to compel discovery.
C) to dismiss. D) for summary judgment.
Answer: A
Explanation: A) A motion to dismiss for mistrial requests that a trial, already in progress, be
stopped due to some occurrence during the trial.
B) A motion to dismiss for mistrial requests that a trial, already in progress, be
C) A motion to dismiss for mistrial requests that a trial, already in progress, be
D) A motion to dismiss for mistrial requests that a trial, already in progress, be
Diff: 2
Topic: Motions
Bloom's: Understand
21
59) In Bridgestone Americas Holding, Inc., v. Mayberry, the court had to determine if Bridgestone's
trade secret for a particular formula was discoverable. The court decided that
A) whenever a tire fails and an accident occurs, any formulas directly applicable to the
construction of the tire are discoverable even if a trade secret is claimed.
B) because Mayberry was able to prove the general relevance of the formula to her case, she met
her burden and the trade secret was discoverable.
C) the trade secret formula was not discoverable because the case could be proved by the tire's
appearance, and disclosure of the trade secret formula was therefore not pertinent.
D) if a company can meet the test to prove that particular information truly represents a trade
secret, that trade secret is never discoverable because allowing trade secrets to be made
public would disrupt business and competition.
Answer: C
Explanation: A) Courts apply a three-part balancing test and will not force disclosure of a trade
secret unless it is absolutely pertinent to a plaintiff's case. In Bridgestone, the
trade secret formula was not discoverable because the case could be proved by the
tire's appearance.
B) Courts apply a three-part balancing test and will not force disclosure of a trade
tire's appearance.
C) Courts apply a three-part balancing test and will not force disclosure of a trade
tire's appearance.
D) Courts apply a three-part balancing test and will not force disclosure of a trade
tire's appearance.
Diff: 3
Bloom's: Analyze
22
60) Voir dire
A) is a form of discovery.
B) is the process of choosing a jury.
C) is a motion made after trial seeking an appeal.
D) is the process of notifying a defendant that he or she has been sued.
Answer: B
Explanation: A) The questioning process during jury selection is called voir dire.
B) The questioning process during jury selection is called voir dire.
C) The questioning process during jury selection is called voir dire.
D) The questioning process during jury selection is called voir dire.
Diff: 2
Topic: Trial
Bloom's: Understand
61) Which of the following does not result in a decision rendered by a third party?
A) arbitration B) mediation
C) summary jury trial D) expert evaluation
Answer: B
Explanation: A) Mediators do not issue decisions but instead work with the parties to have them
arrive at an agreement.
B) Mediators do not issue decisions but instead work with the parties to have them
C) Mediators do not issue decisions but instead work with the parties to have them
D) Mediators do not issue decisions but instead work with the parties to have them
Diff: 3
Topic: Arbitration; Mediation; Other Forms of ADR; Expert Evaluation
Learning Objective: 04-05 Distinguish between arbitration and mediation and compare and contrast both methods of ADR.; 04-07
Provide an example of a hybrid form of alternative dispute resolution.
Bloom's: Evaluate
23
62) When the American Arbitration Association receives an application for appointment of an
arbitrator, it
A) meets with a local trial judge to determine whether litigation or arbitration will be most
efficient and advantageous based on the parties and the nature of the dispute.
B) meets with attorneys from both sides to determine whether litigation or arbitration will be
most efficient and advantageous based on the parties and the nature of the dispute.
C) receives a list of suggested arbitrators from both parties and then selects the arbitrator, who
informs the parties of the procedures and rules of arbitration.
D) appoints a tribunal administrator, who informs the parties of the procedures and rules of
arbitration.
Answer: D
Explanation: A) When the American Arbitration Association receives an application for
appointment of an arbitrator, it appoints a tribunal administrator, who informs the
parties of the procedures and rules of arbitration.
B) When the American Arbitration Association receives an application for
C) When the American Arbitration Association receives an application for
D) When the American Arbitration Association receives an application for
Diff: 2
Topic: Arbitration
Bloom's: Understand
24
63) JR Winery grows grapes and produces wine in the state of Delaware. It purchases its corks from
Cork Masters, a California cork importer. Despite a written contract, Cork Masters has informed
JR Winery that it will immediately be raising the cost of corks 20 percent. JR Winery disputes the
added charges and claims a breach of contract. Both companies agree that they want to resolve the
dispute through binding arbitration. The arbitrator finds in favor of JR Winery. What, if anything,
can Cork Masters do if it wants to dispute the arbitrator's decision?
A) Appeal the arbitrator's decision to a federal or state court.
B) File a court action under the Federal Arbitration Act because arbitration cannot be binding.
C) It can ask JR Winery if it would agree to have the case reopened.
D) Have an expert evaluation conducted.
Answer: C
Explanation: A) If the parties agreed to binding arbitration, the arbitrator's decision is final unless
both parties agree to have the case reopened.
B) If the parties agreed to binding arbitration, the arbitrator's decision is final unless
C) If the parties agreed to binding arbitration, the arbitrator's decision is final unless
D) If the parties agreed to binding arbitration, the arbitrator's decision is final unless
Diff: 3
Learning Objective: 04-06 Apply the legal standards under which an arbitration clause may be found invalid.
Bloom's: Apply
25
64) Wanda has graduated from Community University (CU) and after nine months has failed to find a
job. She graduated with a degree in business, and her college was AACSB accredited. (AACSB
accreditation is a specialized accreditation for business schools that evidences a quality program.)
In her complaint, she alleges that four years of school and tuition should guarantee a job in the
field of study and states that she wants her money back. At no time did CU guarantee job
placement, either through express or implied statements. Wanda does not disagree with this but
still thinks that she was wronged and that it is unfair to graduate and not get a job automatically.
CU will be successful in extinguishing Wanda's lawsuit if its attorney files a
A) motion to dismiss because Wanda does not have standing.
B) motion for summary judgment.
C) motion to dismiss for mistrial.
D) motion for a judgment as a matter of law.
Answer: B
Explanation: A) Wanda has not presented facts that present an issue that needs to be adjudicated.
B) Wanda has not presented facts that present an issue that needs to be adjudicated.
C) Wanda has not presented facts that present an issue that needs to be adjudicated.
D) Wanda has not presented facts that present an issue that needs to be adjudicated.
Diff: 3
Topic: Motions
Bloom's: Evaluate
65) The last time an attorney addresses a jury is during the

A) closing argument.
B) jury instructions.
C) deliberations.
D) making of a motion for a judgment as a matter of law.
Answer: A
Explanation: A) The attorneys address the jury in the closing argument, which concludes the trial
portion of the proceedings.
B) The attorneys address the jury in the closing argument, which concludes the trial
C) The attorneys address the jury in the closing argument, which concludes the trial
D) The attorneys address the jury in the closing argument, which concludes the trial
Diff: 2
Topic: Trial
Bloom's: Understand
26
66) In American Express v. Italian Colors Restaurant, American Express (Amex) entered into
agreements with Italian Colors Restaurant and other merchants that accept American Express
credit cards. The agreement required that all disputes be settled through arbitration and prohibited
class actions. The merchants filed a class action antitrust claim against Amex, arguing that they
should be allowed to bring the claim as a class because the cost of expert analysis to prove the case
exceeded the maximum recovery available to an individual merchant plaintiff. How did the U.S.
Supreme Court decide?
A) The Court ruled for the merchants because not allowing the case would frustrate the purpose
of having antitrust laws.
B) The Court ruled in favor of Amex, holding that the Federal Arbitration Act (FAA) does not
permit courts to invalidate a contract based solely on the grounds that a plaintiff's dispute
resolution costs exceed any potential amounts to be recovered. The Court concluded that the
FAA reflects the overarching principle that arbitration is a matter of contract and that courts
had a responsibility to rigorously enforce arbitration agreements according to their terms.
C) The Court ruled for the merchants because the waiver of class arbitration was not voluntary.
D) The Court ruled for Amex, holding that it did not violate antitrust laws.
Answer: B
Explanation: A) The Court held that the arbitration clause in the Amex-merchants agreements
must be enforced by courts unless the FAA's mandate has been overridden by a
contrary congressional command, and no such command required the Court to
reject the waiver of class arbitration by contract.
B) The Court held that the arbitration clause in the Amex-merchants agreements
C) The Court held that the arbitration clause in the Amex-merchants agreements
D) The Court held that the arbitration clause in the Amex-merchants agreements
Diff: 3
Topic: Arbitration
Bloom's: Evaluate
AACSB: Ethics; Reflective Thinking
27
67) From first to last, which of the following trial stages are in the correct order?
A) pretrial conference; pleadings; discovery; deliberations
B) pleadings; discovery; deliberations; jury selection
C) discovery; jury selection; deliberations; charging the jury
D) pleadings; discovery; pretrial conference; jury selection
Answer: D
Explanation: A) Pleadings, discovery, pretrial conference, and jury selection is the proper order of
the stages mentioned.
B) Pleadings, discovery, pretrial conference, and jury selection is the proper order of
C) Pleadings, discovery, pretrial conference, and jury selection is the proper order of
D) Pleadings, discovery, pretrial conference, and jury selection is the proper order of
Diff: 3
Bloom's: Apply
68) Which of the following is categorized as informal ADR?

A) negotiation B) mediation C) arbitration D) med-arb
Answer: A
Explanation: A) Negotiation involves face-to-face discussions, with or without intermediaries, in
order to resolve a dispute without a formal process or procedure.
B) Negotiation involves face-to-face discussions, with or without intermediaries, in
C) Negotiation involves face-to-face discussions, with or without intermediaries, in
D) Negotiation involves face-to-face discussions, with or without intermediaries, in
Diff: 2
Topic: Informal ADR
Bloom's: Understand
28
69) Bronwyn sues her former employer for discrimination. Which of the following information is
generally not discoverable during litigation?
A) The notes of Bronwyn's attorney.
B) E-mails between Bronwyn and her former supervisor.
C) Bronwyn's personnel file.
D) The employer's rules and policies.
Answer: A
Explanation: A) An attorney's work product, including information gathered in preparation for
trial, is generally not discoverable.
B) An attorney's work product, including information gathered in preparation for
C) An attorney's work product, including information gathered in preparation for
D) An attorney's work product, including information gathered in preparation for
Diff: 3
Bloom's: Apply
70) Which of the following persons would not attend a pretrial conference?
A) The plaintiff. B) The judge.
C) The attorneys for the parties. D) The court reporter.
Answer: D
Explanation: A) A pretrial conference is generally held between the attorneys for the parties and
the judge, and no court reporter is present.
B) A pretrial conference is generally held between the attorneys for the parties and
C) A pretrial conference is generally held between the attorneys for the parties and
D) A pretrial conference is generally held between the attorneys for the parties and
Diff: 2
Bloom's: Understand
29
ESSAY QUESTIONS
71) After a complaint is filed, the complaint and summons are served on the defendant. What is the
summons, and what constitutional mandate does service of the complaint and summons satisfy?
Answer: The summons provides formal notification that a lawsuit has begun and that the defendant
must file an answer to the complaint within a certain period of time or the defendant will
lose the right to defend the case. Constitutionally, service of the complaint and the
summons and the notification they provide meets the procedural due process requirement
that trial be fair and open.
Diff: 3
Bloom's: Apply
72) Discuss the potential advantages of ADR over litigation.

Answer: Normally, ADR has much lower costs than does litigation, primarily in lower attorney costs.
ADR takes much less time than does a typical trial, so a potential resolution to the dispute is
reached much faster. ADR tends to preserve business relationships because litigation, by its
nature, is adversarial while ADR stresses discussion and coming together to reach a
resolution. Lawsuits are part of the public domain, so news of the dispute is available to
everyone and potential bad publicity may occur. Trial transcripts are retained, and the
public has access to them. ADR is generally private and no public record is required, so
your business remains your business in terms of information. Finally, judges, while
intelligent and usually experienced, may not be experts in the particular field in issue, while
mediators and arbitrators are generally experts who often are chosen by the parties.
Litigation also involves juries, which may be difficult to educate, and jury trial outcomes
are often difficult to predict.
Diff: 3
Bloom's: Analyze
73) To successfully pursue a lawsuit, the plaintiff must evidence standing to sue. What must the
plaintiff prove in order to establish standing to sue?
Answer: The party asserting the claim, the plaintiff, must (1) have suffered an injury in fact; (2) have
suffered harm that is direct, concrete, and individualized; and (3) be able to articulate what
legal redress exists to compensate for the injury alleged.
Diff: 2
Topic: Standing
Bloom's: Understand
30
74) When and why would a defendant file a cross-claim, and when would a defendant file a
counterclaim?
Answer: Cross-claims and counterclaims are filed during the pleadings stage of litigation after the
complaint is filed and served. A counterclaim is filed when the defendant believes that the
plaintiff has actually caused damages to the defendant which arise from the very same facts
articulated in the complaint. Some states call this type of pleading a countersuit. The
cross-complaint is filed against a third party by the defendant when the defendant believes
that a third party actually caused the plaintiff's injuries.
Diff: 2
Bloom's: Understand
75) Lois is a reporter for the school newspaper and generally writes satirical articles spoofing students,
faculty, and school policy. Professor Mackey fails to find the humor in Lois's portrayal of her as a
leftover 1960s hippie in one particular article and sues Lois for defamation. In fact, Professor
Mackey is a modern woman with a degree in sociology and has written extensively on American
culture in the 1960s and 70s. She did attend Woodstock, still listens to Led Zeppelin, and still
occasionally wears tie-dyed T-shirts when not professionally dressed. The state trial court finds for
Professor Mackey, and the jury awards her $10 million. Is there anything that Lois can do besides
filing an appeal?
Answer: Lois should file a motion for a judgment as a matter of law, also known as a motion for a
judgment non obstante veredicto, and request that the judge overturn the verdict,
recognizing that true satire is not defamation. The judge would grant this motion if it is
shown that no reasonable jury could have reached this verdict against Lois under these
facts. Lois could also ask that if the verdict stands, the award be reduced to a more
reasonable amount. The judge may make this type of adjustment if it is shown that $10
million is out of line with similar awards granted in similar cases.
Diff: 3
Topic: Motions
Bloom's: Apply
31
76) Name the four grounds identified in the Federal Arbitration Act by which a court may set aside the
award of an arbitrator.
Answer: The four grounds are (1) the arbitration involved some degree of corruption or fraud; (2) the
arbitrator exhibited some inappropriate bias; (3) the arbitrator has committed some gross
procedural error; and (4) the arbitrator exceeded his or her explicit powers or failed to use
them to make an appropriate final award.
Diff: 3
Topic: Arbitration
Bloom's: Apply
77) What is a pretrial conference, when does it occur, and what are its purposes?
Answer: The pretrial conference is a meeting between the parties, their attorneys, and the judge that
is held after discovery is in progress but before the jury is chosen. There are two primary
functions that the conference serves. First, the possibility of a settlement of the dispute can
be explored and encouraged. Second, where settlement cannot be reached, outstanding
pretrial matters such as motions, unresolved discovery disputes, and any other procedural
issues can be addressed.
Diff: 2
Bloom's: Understand
78) Jonah wants to sue his business partner for violating their partnership agreement. Explain the
potential benefits and risks of pursuing negotiation as a dispute resolution method.
Answer: Benefits: The parties agree not to sue each other, and save time and money. The potential
exists to preserve the business relationship.
Risks: Settlement negotiations may drag on.

Diff: 3

Bloom's: Apply; Evaluate
32
79) You have just graduated and have started your own business. You will be providing goods and
services to the general public, and you are concerned about potential legal exposure and resultant
costs of litigation. You'd like to add a mandatory arbitration clause to all of your contracts. Is a
mandatory arbitration clause legal and valid, and if so, what concerns must you consider in
constructing this clause?
Answer: Mandatory arbitration clauses are valid and legal if they are written and enforced properly.
Courts will enforce such agreements when they are essentially fair and do not impose
unreasonable burdens on one party. The FAA requires that arbitration contract clauses shall
be valid, irrevocable, and enforceable except upon such grounds as exist at law for the
revocation of any contract. The terms cannot be unfairly one-sided so that they undermine
the neutrality of the arbitration proceeding. For example, the choice of the arbitrator must
be by a neutral or shared process rather than by an imposition by the company over the
customer.
Diff: 3
Topic: Arbitration
Bloom's: Apply
80) Kortney is stopped at a red light when her car is run into from behind by Melin. This occurred at
noon on a clear and sunny day on a dry road. Kortney claims a serious back injury and is suing for
various forms of damages. There were three witnesses to the accident. With regard to discovery
methods, which form of discovery would be most appropriate in each of the following situations?
Fully explain.
Answer: Kortney would like to avoid calling an expert witness to testify as to road and weather
conditions at the time of the accident.
Kortney would like to determine whether Melin was talking on his cell phone or texting at th
time of the accident.
Melin would like to see the doctor's reports discussing Kortney's back injury.
Both Melin and Kortney would like to get statements from the witnesses.
Kortney should request an admission from Melin stating that the weather was clear and the
road was dry. Melin is not required to make such an admission.
Kortney should make a request for production requiring Melin to provide copies of his cell
phone records for the day of the accident. The courts will likely grant this motion as it is
relevant to the case.
Melin should make a request for production requiring Kortney to provide copies of her
medical records for treatment she received due to the accident. The courts will likely grant th
motion as it is relevant to the case.
33
Melin and Kortney may depose each of the witnesses to obtain their statements. If deposed,
the witnesses can be compelled to testify.
Diff: 3

Bloom's: Apply
34

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Chapter 04 Resolving Disputes: Litigation and Alternative Dispute

4) A trial without a jury is called a trial.

10) Evidence that proves innocence or nonliability is called evidence.

MULTIPLE CHOICE QUESTIONS

11) Counterclaims are filed by the plaintiff in civil matters.

19) Transcripts of ADR proceedings are required to be available to the public.

50) If a civil trial results in a hung jury

52) A complaint will contain each of the following except

54) Depositions are

56) Which of the following is not true of ADR proceedings?

58) Each of the following is a pretrial motion except a motion .

65) The last time an attorney addresses a jury is during the

68) Which of the following is categorized as informal ADR?

72) Discuss the potential advantages of ADR over litigation.

Risks: Settlement negotiations may drag on.

Topic: Alternative Dispute Resolution

Topic: Discovery Stage

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