Legal & Ethical Applications: Exam #1: Review LAWS 3930 & FoE 1, 3, 4, 9, and 11 & Microecon. & Chapters 5, Page 1 of 8
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1 Review LAWS 3930 & FoE 1, 3, 4, 9, and 11 & Microecon. & Chapters 5, Page 1 of 8 print name on the line above as your signature INSTRUCTIONS: 1. This Exam #1 must be completed within the allocated time (i.e., between 9:00 AM and 10:15 AM). It is a closed book and open mind exam. 2. Recall the material difference between i.e. (that is) versus e.g. (for example). 3. When you finish your exam, collect all of your personal items before approaching the professor since you must promptly exit the exam room upon finishing. As students finish their exams they will receive an answer key in exchange for their completed blue bubble answer sheets. For you to learn your individual exam grade you must use your marked up copy of your exam, so be sure to mark your answers on your copy of the exam. 4. This Exam #1 is worth 150 of the course total of 1,000 points. This objective exam has 16 questions graded as if there are 15. Each correct answer on this Exam #1 is worth 10 course points. Based upon the instructor's statistical analysis of all students' answers, the instructor unilaterally may alter the grading of specific exam questions. Any student may appeal the grading of any other exam questions. However, only if a student successfully appeals the ambiguity of AT LEAST TWO questions on this exam does that student objectively demonstrate non-harmless error due to any ambiguities. Also, a successful appeal only will change that student's exam grade and only will do so by the number of successful appeals in excess of ONE successful appeals. Appeals only affect the exam grades of those students that appeal. 5. All appeals of this exam s questions must be: [5A] typed; [5B] signed by the student in three ways, typed name, handwritten signature, and typed university identification number; [5C] immediately following the signature, list in sequence, solely by number, each of the questions being appealed; [5D] after the [5C] list, argue each question, one at a time; [5E] at the beginning of each question s [5D] appeal, [5F] identify two or more reasonable meanings that the question could have had; argue why one or more of the [5E] identified reasonable meanings is as appropriate or is more appropriate than the meaning used for the answer key answer; and [5G] personally handed to the instructor or to the instructor's suite secretary in MH 228 no later than 10:15 AM, Wednesday, September 15, time is of the essence.
2 Review LAWS 3930 & FoE 1, 3, 4, 9, and 11 & Microecon. & Chapters 5, Page 2 of 8 NOTES: A. Recall the material difference between i.e. (that is) versus e.g. (for example). B. Use bubble A for TRUE and bubble B for FALSE. C. If a question contains a number (e.g., Amendment IX), then the truth or falsity of that question never depends upon that number. This is not a test of trivia recall. It is an objective demonstration of your subjective knowledge. D. For clarity in distinguishing a "principal" from a principal as well as distinguishing from an "agent" from an agent, quote marks will be used for the generic words "principal" and "agent" and no quote marks will be used for the specific words principal and agent. That is, "principal" and "agent" refer to all three relationships (i.e., principal and agent; and principal and independent contractor; and employer and employee). QUESTIONS: 1. With respect to the ethics it is correct to say that: a. what is legal is not necessarily ethical; and, what is ethical is not necessarily legal. b. for a natural person's conduct to be unethical that natural person must act with scienter. c. if a natural person can act, then that natural person confronts an ethical question. 2. The law: a. favors the subjective over the objective. b. seeks to satisfy the People's expectations. c. requires that a person be a natural person if that person is to be either a citizen, a consumer, or a Reasonable Person.
3 Review LAWS 3930 & FoE 1, 3, 4, 9, and 11 & Microecon. & Chapters 5, Page 3 of 8 3. The law: a. can anticipate. b. imposes liability upon a person based, in part, upon degree of knowledge: liability is more likely when a person has reason to know than when a person merely has receipt of notice. c. sometimes requires express (i.e., words: written or oral) proof and other times requires less proof (i.e., implied). 4. The USA Constitution as well as each USA State's Constitution reflects a foundation of a separation of powers. Some of the components of that separation of powers are accurately described as: a. the legislature makes the law, the executive enforces the law, and the judiciary interprets the law. b. an appellate court will affirm a trial court that makes a clear error of procedure. c. judicial review is an express power of the federal judiciary. 5. In the USA, the power of government: a. must be exercised using due process of law. b. at the federal level a grant of power must be express: the Commerce Clause is one of the most significant powers granted to the federal government. c. at the USA State level power must be found within the narrow confines of the residual and weak State power known as the Police Power.
4 Review LAWS 3930 & FoE 1, 3, 4, 9, and 11 & Microecon. & Chapters 5, Page 4 of 8 6. The separation of powers: a. between the Individual and government as well as between the federal and the State governments was altered by the State's grant of powers to the federal government to enforce the Individual's right to equal protection of the State's laws (i.e., Amendment XIV). b. between the Individual and government is expressly recognized in the Bill of Rights, via language that asserts enumeration of some Individual rights does not disparage other Individual rights (i.e., Amendment IX) and via language that powers neither granted to the federal nor denied to either the States or the People are reserved by the States and the People (i.e., Amendment X). c. between the USA States includes an express commitment to grant full faith and credit of each other State's laws. 7. The law of civil wrongs is known as tort law. In tort law: a. the types of torts are: intentional torts, negligence torts, assumption of the risk torts, and strict liability torts. b. the defendant has legally liable for a tort when the plaintiff proves by probable cause evidence that the defendant both owed and breached a duty of care to the plaintiff as well as that that breach was the proximate cause of the plaintiff's damages; as well as the defendant fails to prove a defense. c. the plaintiff has legal liability for a tort when the plaintiff knowing or voluntarily assumes the risk created by the defendant.
5 Review LAWS 3930 & FoE 1, 3, 4, 9, and 11 & Microecon. & Chapters 5, Page 5 of 8 8. Criminal law creates and applies a public penalty for wrongs done to the whole of society. In the criminal law: a. only the legislative branch of government has and exercises the power to create crimes. b. every crime requires a bad deed (i.e., mens rea), a bad thought (i.e., actus rea [i.e., actual knowledge]), and no defenses. c. a crime is void for vagueness if a natural person defendant can not personally understand (e.g., defendant is mentally retarded) the deed and thought prohibited by the crime. 9. A contract contains at least one legally enforceable promise. In contract law: a. all of the elements of a contract are agreement, consideration, capacity, reality of assent, form, and legal subject matter. b. the Mirror Image Rule is an exception to the Mail Box Rule. c. the remedy of unilateral recision routinely is awarded if inflation doubles the market price relative to the contract price (e.g., commercial impossibility). 10. Contract law: a. generically, provides freedom from contract; whereas, equity, generically, provides the freedom of contract.. b. uses the Parole (i.e., oral) Evidence Rule to help enforce the Statute of Frauds (e.g., written material contract terms). c. of some jurisdictions, but not others, requires good faith of the parties; however, all USA States adopting the Uniform Commercial Code, Article 2, Sale of Goods, have imposed an obligation of good faith on those contracts.
6 Review LAWS 3930 & FoE 1, 3, 4, 9, and 11 & Microecon. & Chapters 5, Page 6 of The Uniform Commercial Code, Article 2, Sale of Goods: a. creates the express warranty of merchantability. b. creates the breaching seller's right to cure as well as creates the non-breaching buyer's right to cover. c. creates the seller's identification of the goods; and thus shifts from a law's focus away from the passage of title to identification. 12. Due process of law comes in many forms. a. The federal Administrative Procedures Act (APA) contains congressionally required procedures for rule making by administrative agencies. b. The material terms in contracts help identify the limits of the courts' enforcement of promises in contracts. The following terms of contracts are material terms: parties, time, consideration, and subject matter. c. To establish objective proof of receipt of notice the law often will require a party to sign a document. A signature is any mark with the current intent to authenticate the document. 13. Which of the following is/are true? a. Compensatory damages in tort law are identical to compensatory damages in contract law. b. In USA federal antitrust law covenants not to compete are evaluated under the Rule of Reason. c. In the elements and functions of Capitalism the role of government is to avoid altering in any way private property, prices, markets, and competition.
7 Review LAWS 3930 & FoE 1, 3, 4, 9, and 11 & Microecon. & Chapters 5, Page 7 of Some areas of law apply special rules that alter the generic rules of contract law due to the special circumstances of the parties' relationships. a. All insurance contracts always are adhesion contracts; and, all ambiguities in all insurance contracts always are interpreted against the insurer unless and until the insured has had a reasonable opportunity to discover and object to that ambiguity. b. The trustee is a fiduciary (i.e., owes a duty of utmost good faith) to both the beneficiary and to the grantor. c. A will takes effect upon the death of the testator. Accordingly, typically, wills must be signed writings; but, sometimes an oral will is permissible. 15. Like all other sciences, economics is based on many moral lies. a. Two major proxy variables that economics uses are price and time. Price (i.e., dollar value) is assumed to objectively represent all values. Time (i.e., clock time) is assumed to objectively represent process cycles. b. The supply and demand (S&D) curves are based upon a host of assumptions related to ceterus paribus (i.e., all other things held equal). For example, economics assumes that the most volatile non-price determinate of both S&D (i.e., expectations) does not change as well as assumes that the most dynamic non-price determinate of either S&D (i.e., technology) does not change. c. Any party to an economic transaction that is not willing to trade as well as any party to an economic transaction that is not able to trade is not captured by either a supply curve or by a demand curve (e.g., spillovers).
8 Review LAWS 3930 & FoE 1, 3, 4, 9, and 11 & Microecon. & Chapters 5, Page 8 of The Focus on Ethics (FoE): a. stress that the natural person making decisions within a corporation and for that corporation (i.e., a mere legal person) discharges all ethical duties when satisfying the moral minimum. b. stress that privacy law, more than most forms of law, very closely synchronize ethical duties with legal duties. c. stress that fiduciary duties parallel ethical duties more closely when the parties share a contractual relationship that is a commercial contract rather than when the parties share an insurance contract.
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