The Legal Environment Today Business In Its Ethical Regulatory E-Commerce and Global Setting 7th Edition by Roger LeRoy Miller – Test Bank

Complete Test Bank With Answers

 

 

Sample Questions Posted Below

 

Chapter 5

Torts, Cyber Torts,

and Strict Liability

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. 2. 3. Punitive damages are intended to punish a wrongdoer and deter

others.

ANSWER: T PAGE: 113 TYPE: =

NAT: AACSB Analytic AICPA Legal

The purpose of tort law is to provide remedies when various

protected interests have been invaded.

ANSWER: T PAGE: 113 TYPE: N

NAT: AACSB Analytic AICPA Legal

Tortfeasor is the term for a person who commits a tort.

ANSWER: T PAGE: 117 TYPE: N

NAT: AACSB Analytic AICPA Legal

73

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to a publicly accessible website, in whole or in part.74 UNIT ONE: THE FOUNDATIONS

4. Self-defense is a defense to an allegation of assault or battery.

ANSWER: T PAGE: 117 TYPE: N

NAT: AACSB Analytic AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 75

5. To commit an intentional tort, one person must intend to harm a

certain other person.

ANSWER: F PAGE: 117 TYPE: N

NAT: AACSB Analytic AICPA Legal

6. A party cannot recover damages for severe emotional distress absent

a showing of physical injury.

ANSWER: F PAGE: 118 TYPE: N

NAT: AACSB Analytic AICPA Legal

7. False imprisonment occurs when a person restrains another

intentionally and without justification.

ANSWER: T PAGE: 118 TYPE: N

NAT: AACSB Reflective AICPA Legal

8. Defamation is one person’s use of another’s name without

permission.

ANSWER: F PAGE: 119 TYPE: N

NAT: AACSB Analytic AICPA Legal

9. The public disclosure of private facts about a person is not an

invasion of privacy if it is done without the person’s knowledge or

consent.

ANSWER: F PAGE: 123 TYPE: N

NAT: AACSB Reflective AICPA Legal

10. The use by one person of another paerson’s likelness without

permission and for the benefit of the user constitutes the tort of

appropriation.

ANSWER: T PAGE: 123 TYPE: N

NAT: AACSB Analytic AICPA Legal

11. Fraud occurs only when there is reliance on a statement of opinion.

ANSWER: F PAGE: 124 TYPE: N

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.76 UNIT ONE: THE FOUNDATIONS

12. NAT: AACSB Analytic AICPA Legal

Any lawful contract can form the potential basis for an action based

on wrongful interference with a contractual relationship.

ANSWER: T PAGE: 125 TYPE: N

NAT: AACSB Analytic AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 77

13. If it can be shown that a trespass to land was warranted, a complete

defense exists.

ANSWER: T PAGE: 127 TYPE: N

NAT: AACSB Analytic AICPA Legal

14. If it can be shown that a trespass to personal property was

warranted, a complete defense exists.

15. 16. 17. 18. 19. 20. ANSWER: T PAGE: 127 TYPE: N

NAT: AACSB Analytic AICPA Legal

Good intention is a complete defense to conversion.

ANSWER: F PAGE: 128 TYPE: N

NAT: AACSB Analytic AICPA Legal

A failure to return personal property is conversion even if the rightful

owner consented to the initial taking.

ANSWER: T PAGE: 128 TYPE: N

NAT: AACSB Analytic AICPA Legal

Disparagement of property is another term for slander of quality.

ANSWER: T PAGE: 128 TYPE: N

NAT: AACSB Analytic AICPA Legal

Publishing false information about another’s product is conversion.

ANSWER: F PAGE: 128 TYPE: N

NAT: AACSB Reflective AICPA Legal

If an actor’s conduct creates no risk, there is no negligence.

ANSWER: T PAGE: 129 TYPE: N

NAT: AACSB Analytic AICPA Legal

If no harm results from an allegedly negligent act, there is no liability.

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.78 UNIT ONE: THE FOUNDATIONS

21. 22. 23. 24. 25. 26. ANSWER: T PAGE: 129 TYPE: N

NAT: AACSB Analytic AICPA Legal

To determine whether a duty of care has been breached, a judge

asks how he or she would have acted in the same circumstances.

ANSWER: F PAGE: 130 TYPE: N

NAT: AACSB Analytic AICPA Legal

To avoid liability for negligence, a business owner must protect its

patrons against all risks.

ANSWER: F PAGE: 130 TYPE: N

NAT: AACSB Reflective AICPA Legal

For purposes of establishing negligence, causation in fact exists if an

injury would have occurred even without the defendant’s act.

ANSWER: F PAGE: 131 TYPE: N

NAT: AACSB Analytic AICPA Legal

Proximate cause exists when the connection between an act and an

injury is strong enough to justify imposing liability.

ANSWER: T PAGE: 131 TYPE: N

NAT: AACSB Analytic AICPA Legal

Harm must be foreseeable to be considered the proximate cause of

an injury in negligence.

ANSWER: T PAGE: 131 TYPE: N

NAT: AACSB Analytic AICPA Legal

Self-defense is a defense to negligence.

ANSWER: F PAGE: 132 TYPE: N

NAT: AACSB Analytic AICPA Legal

27. An assumption of risk defense does not require that a risk be

voluntarily assumed.

ANSWER: F PAGE: 133 TYPE: N

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 79

NAT: AACSB Analytic AICPA Legal

28. Only a foreseeable intervening event can break the connection

between a wrongful act and an injury to another.

ANSWER: F PAGE: 135 TYPE: N

NAT: AACSB Reflective AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.80 UNIT ONE: THE FOUNDATIONS

29. 30. 31. 32. 33. Under the doctrine of comparative negligence, both the plaintiff’s and

the defendant’s negligence are taken into consideration.

ANSWER: T PAGE: 135 TYPE: N

NAT: AACSB Analytic AICPA Legal

The doctrine of negligence per se applies if an event causing harm

does not normally occur in the absence of negligence.

ANSWER: T PAGE: 136 TYPE: +

NAT: AACSB Analytic AICPA Legal

Under the “danger invites rescue” doctrine, a person who tries to

rescue another individual from harm is liable for any injuries to the

individual.

ANSWER: F PAGE: 136 TYPE: N

NAT: AACSB Reflective AICPA Legal

Under a dram shop act, liability can be imposed without proof of

negligence.

ANSWER: T PAGE: 137 TYPE: N

NAT: AACSB Analytic AICPA Legal

The extreme risk of an activity is a primary basis for imposing strict

liability.

ANSWER: T PAGE: 137 TYPE: N

NAT: AACSB Analytic AICPA Critical Thinking

34. Under the doctrine of strict liability, liability is imposed strictly

according to fault.

ANSWER: F PAGE: 137 TYPE: N

NAT: AACSB Analytic AICPA Legal

35. An Internet service provider cannot be held liable for disseminating

defamatory remarks under any circumstances.

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 81

ANSWER: F PAGE: 138 TYPE: N

NAT: AACSB Reflective AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.82 UNIT ONE: THE FOUNDATIONS

MULTIPLE-CHOICE QUESTIONS

1. Ike pushes Joan, who falls and breaks her arm. Ike is liable for the

injury

a. b. c. d. 2. 3. if Ike intended to push Joan.

only if Ike did not intend to break Joan’s arm.

only if Ike had a bad motive for pushing Joan.

only if Ike intended to break Joan’s arm.

ANSWER: A PAGE: 117 TYPE: N

NAT: AACSB Reflective AICPA Legal

Louis—larger and stronger than Mica—threatens to hit Mica before

hitting and injuring him. Mica files a suit against Louis for assault and

battery. Mica will most likely recover for

a. assault and battery.

b. assault but not battery.

c. battery but not assault.

d. neither assault nor battery.

ANSWER: A PAGE: 117 TYPE: N

NAT: AACSB Reflective AICPA Legal

Jaqy distributes a handbill among her neighbors accusing one of

them—Ked—of being a convicted sex offender. The statement is

defamatory only if

a. a neighbor repeats it.

b. Ked suffers emotional distress.

c. the statement is true.

d. the statement is false.

ANSWER: D PAGE: 119 TYPE: N

NAT: AACSB Reflective AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.4. 5. 6. 7. CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 83

Dru is an Excel Company employee. He says that Fiona, Excel’s office

manager, is stealing from their employer. The statement—which is

false—is defamatory

a. b. c. if a coworker overhears it.

only if Fiona hears it.

whether or not anyone hears it.

d. under no circumstances.

ANSWER: A PAGE: 121 TYPE: N

NAT: AACSB Reflective AICPA Legal

Glen falsely accuses Hu of stealing from Island Tours, Inc., their

employer. Glen’s statement is defamatory

a. b. c. if Glen makes the statement via the Internet.

if Glen makes the statement in a private note directly to Hu.

if Glen makes the statement orally to Hu when no one else is

around.

d. under no circumstances.

ANSWER: A PAGE: 121 TYPE: N

NAT: AACSB Reflective AICPA Legal

Toni files a suit against Universal Media Corporation for defamation.

Actual malice must be shown for recovery of damages if Toni is

a. a corporate officer.

b. a non-employee.

c. a private individual.

d. a public figure.

ANSWER: D PAGE: 122 TYPE: N

NAT: AACSB Analytic AICPA Legal

Jim is an appliance salesperson. To make a sale, he asserts that a

certain model of a Kitchen Helper refrigerator is the “best one ever

made.” This is

a. fraud if the statement is the truth.

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to a publicly accessible website, in whole or in part.84 UNIT ONE: THE FOUNDATIONS

b. c. fraud if Jim believes that this statement is not true.

fraud if Jim is stating his opinion, not the facts.

d. not fraud.

ANSWER: D PAGE: 124 TYPE: N

NAT: AACSB Reflective AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.8. 9. 10. CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 85

Lew angrily accuses Mandy, a broker with New Financial Services, of

fraudulently inducing him to invest in Open Pit Oil Company, whose

wells are dry. The reliance that gives rise to liability for fraud is

normally based on a statement of

a. emotion.

b. fact.

c. opinion.

d. puffery.

ANSWER: B PAGE: 124 TYPE: N

NAT: AACSB Analytic AICPA Legal

Kai files a suit against Lana based on one of Lana’s statements that

Kai alleges is fraudulent. To give rise to fraud, the statement must be

one of

a. emotion.

b. fact.

c. illusion.

d. opinion.

ANSWER: B PAGE: 124 TYPE: N

NAT: AACSB Reflective AICPA Legal

Dom, an EZ Baked Goods salesperson, follows Flora, a salesperson

for Goody Pastries, Inc., as she attempts to make sales to food

stores. Dom solicits each of Flora’s customers. Dom is most likely

liable for wrongful interference with

a. a bargaining relationship.

b. a business relationship.

c. a contractual relationship.

d. a customer relationship.

ANSWER: B PAGE: 126 TYPE: N

NAT: AACSB Reflective AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.86 UNIT ONE: THE FOUNDATIONS

11. 12. 13. OK Dry-Cleaning advertises so effectively that the regular customers

of its competitor Purity Cleaners patronize OK instead of Purity. This

is

a. appropriation.

b. conversion.

c. wrongful interference with a contractual relationship.

d. none of the choices.

ANSWER: D PAGE: 126 TYPE: N

NAT: AACSB Reflective AICPA Legal

Liz trespasses on Mega Corporation’s property. Through the use of

reasonable force, Mega’s security guard Ned detains Liz until the

police arrive. Mega is liable for

a. assault and battery.

b. false imprisonment.

c. intentional infliction of emotional distress.

d. none of the choices.

ANSWER: D PAGE: 127 TYPE: N

NAT: AACSB Reflective AICPA Legal

Joy invites Ken into her apartment. Ken commits trespass to land if

he

a. b. c. d. 14. enters the apartment with fraudulent intent.

harms the apartment in any way.

makes disparaging remarks about Joy to others.

refuses to leave when Joy asks him to go.

ANSWER: D PAGE: 127 TYPE: +

NAT: AACSB Reflective AICPA Legal

Bella owns a farm in Colorado. Doyle drives his sport utility vehicle

off a highway and onto Bella’s land. Doyle commits trespass if he

a. b. does not have Bella’s permission to drive on the property.

drives onto the property for recreational purposes.

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.15. 16. CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 87

c. d. harms the property in a material way.

harms the property in any way.

ANSWER: A PAGE: 127 TYPE: N

NAT: AACSB Reflective AICPA Legal

As a joke, Jem takes Kyla’s business law textbook and hides it so that

Kyla cannot find it during the week before the exam. Jem may have

committed

a. appropriation.

b. conversion.

c. intentional infliction of emotional distress.

d. trespass to personal property.

ANSWER: D PAGE: 127 TYPE: N

NAT: AACSB Reflective AICPA Legal

Dian, a clerk at an Entertainment Unlimited store, takes a DVD player

from the store without permission. Dian is liable for

a. appropriation.

b. benefiting an employee.

c. conversion.

d. wrongful interference with a business relationship.

ANSWER: C PAGE: 128 TYPE: N

NAT: AACSB Reflective AICPA Legal

17. In newspaper ads, Lo-Price Autos falsely accuses My-T Value

Vehicles, a competitor, of selling stolen cars. My-T’s sales decrease.

Lo-Price has most likely committed

a. slander of quality.

b. slander of title.

c. wrongful interference with a business relationship.

d. none of the choices.

ANSWER: B PAGE: 128 TYPE: N

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.88 UNIT ONE: THE FOUNDATIONS

18. NAT: AACSB Reflective AICPA Legal

Bette backs out of City Parking Garage, colliding with Dill’s car. Dill

may recover $7,500 to cover the cost of the repairs if Bette failed to

act as

a. a blameless person.

b a faultless person.

c. a reliable person.

d. a reasonable person.

ANSWER: D PAGE: 130 TYPE: N

NAT: AACSB Reflective AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.19. 20. 21. CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 89

Kelly is injured when she slips and falls on Layla’s sidewalk. To

determine whether Layla owed a duty of care to Kelly, Layla is

subject to the standard of

a. a realistic person.

b. a reasonable person.

c. a recognizable person.

d. a reliable person.

ANSWER: B PAGE: 130 TYPE: N

NAT: AACSB Reflective AICPA Legal

Cook’s Pantry Appliances, a retail store, must use reasonable care on

its premises to warn its patrons of

a. all risks.

b. hidden risks.

c. obvious risks.

d. no risks.

ANSWER: B PAGE: 130 TYPE: N

NAT: AACSB Reflective AICPA Legal

Reaching for a bottle of soda from a display in a Bargain Mart store,

Cody slips in a puddle of spilled soda and falls, suffering an injury.

Bargain Mart’s employees are not aware of the spilled soda until

Cody falls. In a suit against Bargain Mart, Cody will most likely

a. lose, because Bargain Mart’s employees were not aware of the

b. c. d. spill.

lose, because Cody should have exercised more care.

win, because Bargain Mart can recover from the soda bottler.

win, because the spilled soda was foreseeable.

ANSWER: D PAGE: 130 TYPE: N

NAT: AACSB Reflective AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.90 UNIT ONE: THE FOUNDATIONS

22. 23. 24. 25. Leon files a suit against Moira, a medical doctor, alleging negligence.

As a physician, Moira is held to the standard of

a. a blameless individual.

b a faultless ordinary person.

c. a reliable professional.

d. a reasonable physician.

ANSWER: D PAGE: 131 TYPE: N

NAT: AACSB Reflective AICPA Legal

Sam, an engineer, supervises the construction of a new bridge. When

the bridge collapses due to faulty construction, Sam is sued by those

injured in the collapse. As a professional, Sam is held to the same

standard of care as

a. ordinary persons.

b. other engineers.

c. other professionals, including doctors, dentists, and lawyers.

d. those injured in the collapse of the bridge.

ANSWER: B PAGE: 131 TYPE: N

NAT: AACSB Reflective AICPA Legal

Ralph, a van driver for Speedy Delivery Company, causes a multi-

vehicle accident on a city street. Ralph and Speedy are liable to

a. b. c. all those who were injured.

only those who were uninsured.

only those whose injuries could have been reasonably

foreseen.

d. only those whose vehicles were closest to Ralph’s van.

ANSWER: C PAGE: 131 TYPE: N

NAT: AACSB Reflective AICPA Legal

Caleb is driving a car in which Dotty is a passenger when an accident

occurs. Caleb and Dotty are emotionally rattled, but neither is

physically hurt. Caleb is not liable to Dotty on a negligence theory

because

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 91

a. b. c. both parties were emotionally rattled.

Caleb did not apparently intend to cause an accident.

Dotty must have been comparatively negligent.

d. Dotty was not injured.

ANSWER: D PAGE: 132 TYPE: N

NAT: AACSB Reflective AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.92 UNIT ONE: THE FOUNDATIONS

26. Liu enters Mountain Triathlon, an athletic competition in which Liu

has never competed. Regarding the risk of injury, Liu assumes the

risks

a. b. c. d. attributable to the Triathlon in any way.

different from the risks normally associated with the Triathlon.

greater than the risks normally associated with the Triathlon.

normally associated with the Triathlon.

ANSWER: D PAGE: 133 TYPE: N

NAT: AACSB Reflective AICPA Legal

27. Clyde enters Desert Decathlon, an athletic competition in which

Clyde has often competed. Regarding the risk of injury, Clyde

assumes the risks

28. a. b. c. d. attributable to the Decathlon in any way.

different from the risks normally associated with the Decathlon.

greater than the risks normally associated with the Decathlon.

normally associated with the Decathlon.

ANSWER: D PAGE: 133 TYPE: N

NAT: AACSB Reflective AICPA Legal

Nico is a passenger in a car driven by Owen, whose negligence

causes an accident, injuring himself. Nico, uninjured, accompanies

Owen to Parkside Hospital in an ambulance. The ambulance is hit by

a car driven by Quin, injuring Nico. Nico files a suit against Owen,

whose best defense is

a. assumption of risk.

b. contributory negligence.

c. negligence per se.

d. superseding cause.

ANSWER: D PAGE: 135 TYPE: N

NAT: AACSB Reflective AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.29. 30. 31. CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 93

Frank slips and falls on Guy’s Harbor Tour Boat and is injured. Frank

files a suit against Guy’s for $500,000. If Frank is 20 percent at fault

and Guy’s is 80 percent, under the “50 percent rule” comparative

negligence principles, Frank would recover

a. $0.

b. $250,000.

c. $400,000.

d. $500,000.

ANSWER: C PAGE: 135 TYPE: N

NAT: AACSB Reflective AICPA Legal

George has a badly infected right foot. Herb, George’s physician,

prescribes amputation. George agrees. During the operation, Herb

amputates the left foot. In George’s suit against Herb, George’s best

theory for recovery is

a. assumption of risk.

b. negligence per se.

c. res ipsa loquitur.

d. strict liability.

ANSWER: C PAGE: 135 TYPE: N

NAT: AACSB Reflective AICPA Critical Thinking

A state statute requires machinery in industrial plants to include

automatic shut-off switches accessible to each employee working on

the machine. Steel Company’s (SC’s) equipment does not have the

switches. Trudy, an SC employee, suffers an injury that an accessible

shut-off switch would have prevented. Trudy’s best theory for

recovery against SC is

a. assumption of risk.

b. negligence per se.

c. res ipsa loquitur.

d. strict liability.

ANSWER: B PAGE: 136 TYPE: N

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.94 UNIT ONE: THE FOUNDATIONS

NAT: AACSB Reflective AICPA Legal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 95

32. An Iowa state statute requires amusement parks to maintain

equipment in specific condition for the protection of patrons. Jack’s

Fun Park fails to maintain its equipment. Key, a patron, is injured.

Jack’s has committed

33. 34. a. a dram shop act.

b. contributory negligence.

c. negligence per se.

d. res ipsa loquitur.

ANSWER: C PAGE: 136 TYPE: N

NAT: AACSB Reflective AICPA Legal

Drake pushes Evon into the path of an oncoming car driven by Flip.

Gina tries to rescue Evon. Drake is liable for any injuries to

a. Evon and Flip but not Gina.

b. Evon and Gina but not Flip.

c. Evon, Flip, and Gina.

d. none of the parties.

ANSWER: C PAGE: 136 TYPE: N

NAT: AACSB Reflective AICPA Legal

Jean is playing a computer game on a bad disk that melts in her

drive, starting a fire that injures her hands. Jean files a suit against K-

Tech, Inc., the game’s manufacturer. K-Tech is held liable under the

doctrine of strict liability. A significant application of this doctrine is in

the area of

a. cyber torts.

b. intentional torts.

c. product liability.

d. unintentional torts.

ANSWER: C PAGE: 137 TYPE: N

NAT: AACSB Analytic AICPA Critical Thinking

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.96 UNIT ONE: THE FOUNDATIONS

35. Oakley posts a defamatory remark about Pierre in “Roominate,” an

online social network maintained by SocNet, Inc., an Internet service

provider. Most likely to be held liable for the remark is

a. Oakley.

b. Pierre.

c. Roominate.

d. SocNet.

ANSWER: A PAGE: 138 TYPE: N

NAT: AACSB Technology AICPA Legal

ESSAY QUESTIONS

1. Precise Engineering Corporation has a contract with Quik Mart Stores

to provide customized software for Quik’s inventory control system.

Retail Outlets, Inc, Quik’s competitor, induces Sam, a Precise subcon-

tractor who is writing code for the Quik software, to delay delivery of

the code for one week. As a result, Precise’s delivery of the software

is delayed, and Quik sustains $500,000 in lost profits. On what

ground could Quik recover damages from Retail Outlets?

ANSWER: Quik could file an action against Retail Outlets based on

wrongful interference with a contractual relationship. The elements

that Quik must prove are (1) a valid, enforceable contract between

two parties; (2) the knowledge of a third party that this contract

exists; and (3) the third party’s intentionally causing the breach of

the contract for the purpose of advancing the interest of the third

party. For a successful tort action, there must also be damages

caused by the third party’s act. Facts that satisfy all of these

elements are set out in the problem. There was a valid, enforceable

contract between Precise and Quik. Retail Outlets knew of this

contract, Retail Outlets intentionally interfered with this contract,

causing its breach, for the purpose of advancing its own interest

(undercutting the profit of its competitor). Quik suffered lost profits

as a result of Retail Outlets’ act.

PAGES: 125–126 TYPE: N

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.2. CHAPTER 5: TORTS, CYBER TORTS, AND STRICT LIABIITY 97

NAT: AACSB Reflective AICPA Decision Modeling

After two years of research and an investment of a substantial

amount of money, Coast-to-Coast Company (CC) develops a new

product that it hopes will produce substantial profits. CC learns that a

competitor, National Sales, Inc., has made and begun to sell a nearly

identical product. CC learns from a reliable source that National paid

a CC employee to obtain the plans for CC’s product when it was in

development. What legal recourse does CC have against National?

ANSWER: In terms of legal recourse against National, CC might

base a civil suit on charges of conversion and trespass to personal

property. Conversion is any act depriving an owner of personal

property without that owner’s permission and without just cause.

Conversion is the civil side of crimes related to theft. When

conversion occurs, trespass to personal property usually occurs as

well. If the initial taking of the property was unlawful, there is

trespass; retention of that property is conversion. CC might have a

claim for wrongful interference with a contractual relationship for

inducing the CC employee to break his or her employment contract

with CC by selling company secrets.

PAGES: 125–126 & 128 NAT: AACSB Reflective TYPE: N

AICPA Decision Modeling

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted

to a publicly accessible website, in whole or in part.