a.
True
b.
False
ANSWER:
True
41. Parties that agree to submit disputes to a neutral party who will ultimately make a binding decision to resolve the dispute are agreeing to participate in the arbitration process.
a.
True
b.
False
ANSWER:
True
42. Businesses that have been unable to resolve complex contractual disputes may have to turn to litigation as the last resort to, among other things, establish the liability of one business to another.
a.
True
b.
False
ANSWER:
True
43. It is a rule of law that a party who suffers a breach of contract is entitled to be put in the position that he or she would have been in had the contract been fulfilled.
a.
True
b.
False
ANSWER:
True
44. Liability between parties engaged in a contractual business relationship refers specifically to the legal responsibility of one party to the other for any event or loss that may occur due to breach of the contract.
a.
True
b.
False
ANSWER:
True
45. It is a rule of law that a party who suffers a breach of contract is entitled to be put in the position it would have been in had the contract been fulfilled.
a.
True
b.
False
ANSWER:
True
46. In the litigation process, the party initiating a claim for breach of contract is obligated to prove its case, and the judge is obligated to be as objective as possible in determining whether the case of breach has been proven.
a.
True
b.
False
ANSWER:
True
47. A supplier who commits to a contract is free of any legal obligations for direct and foreseeable financial consequences that the other party to the contract may experience should the supplier breach the contract.
a.
True
b.
False
ANSWER:
False
48. A legal risk management plan involves a business strategy that may require legal supervision to reduce the probability and severity of loss.
a.
True
b.
False
ANSWER:
True
49. Ethics may demand that a business do more than comply with the law.
a.
True
b.
False
ANSWER:
True
50. One of the most important functions of law in the business environment is to facilitate planning.
a.
True
b.
False
ANSWER:
True
51. Briefly describe the main reasons one party to a contract might decide to overlook a breach of contract by the other party.
ANSWER:
A party to a contract might decide to overlook a breach of the contract if it is a minor breach and maintaining the business relationship is important and desirable. A minor breach is more likely to be quickly resolved directly between the parties, while litigation is a slow and expensive process for resolving a dispute.
52. Briefly describe the steps that parties must go through to achieve the consensus reflected in a contract. What role does a lawyer play in this process?
ANSWER:
Usually one party has identified a need and will make a proposal to another party for an exchange that will satisfy that need. If the other party sees benefit in making the exchange, the parties will negotiate until they arrive at mutually acceptable terms. Typically, each party will have a lawyer whose role is to provide legal advice throughout the negotiation process and, once consensus is reached, to then accurately document the terms of the agreement in a contract.
53. Why might a business involved in a legal dispute prefer to reach a private settlement instead of litigating the matter in court?
ANSWER:
The time and money saved in avoiding a court battle may more than offset the cost of a private settlement. There are other less tangible benefits to reaching a compromise, including preserving business relationships and reputation.