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Exam (elaborations)

­BADM 300­-Business Law Mid Term Exam - Solutions Provided (2025)

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­BADM 300­-Business Law Mid Term Exam - Solutions Provided (2025)

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Module 1 Quiz:

 Question 1

2 out of 2 points


Which of the following statements is true about the pretrial litigation process?

Selected
Answer:
A default judgment establishes the defendant's liability.

Answers:
To initiate a lawsuit, the plaintiff must file an appeal in a court that has
subject matter jurisdiction over the case and that has personal
jurisdiction over the parties.




A default judgment establishes the defendant's liability.



A plaintiff files a cross-complaint against the defendant to seek
damages.



If the plaintiff does not answer a complaint, a default judgment is
entered against him or her.

Response
Feedback: The statement "[a] default judgment establishes the defendant's liability"
is true and, therefore, is the correct answer. A default judgment is a
judgment entered against a defendant if the defendant does not answer a
plaintiff’s complaint and establishes the liability of the defendant to the
plaintiff.

Each of the other answer options are false statements for the following
reasons: (i) to initiate a lawsuit, the plaintiff must first file a complaint,
not an appeal, in the proper court; (ii) a plaintiff does not answer a
complaint - the defendant does, and therefore a default judgment is not

, entered against a plaintiff for failing to answer a complaint; and (iii) a
cross-complaint is filed by the defendant, not the plaintiff.



 Question 2

2 out of 2 points


A jury finds Jeff guilty of a federal crime. Jeff’s case was heard in the United States
District Court for the Southern District of Texas. Jeff wants to file an appeal of his
conviction. Which of the following courts will hear his appeal?

Selected Answer:

The United States Court of Appeals for the Fifth Circuit.

Answers:
The Texas Supreme Court.



The United States Court of Appeals for the Seventh Circuit.




The United States Court of Appeals for the Fifth Circuit.



The United States Supreme Court.



The United States District Court for the Eastern District of Texas.

Response
Feedback: Since Jeff lost in a federal district court, the Southern District of Texas,
he can appeal in the federal appellate court that covers and hears cases
on appeal from the federal district courts in its jurisdiction, including the
Southern District of Texas. The Southern District of Texas is covered by the
United States Court of Appeals for the Fifth Circuit. The Court of
Appeals for the Second Circuit is incorrect because it is the wrong

, federal appellate court. The Texas Supreme Court is incorrect because it
is a state court and appeals from a federal court are never heard in a state
court. The United States Supreme Court is incorrect because Jeff has to
appeal to the appellate court before he could file an appeal to the United
States Supreme Court. The United States District Court for the Eastern
District of Texas is incorrect because a federal district court does not
hear appeals from other district courts.



 Question 3

0 out of 2 points


Henry (a citizen of Illinois) enters into a contract with Sarah (a citizen of Michigan) to
purchase a lake home in Michigan. Henry and Sarah sign the contract at the lake home
in Michigan. A few days prior to the closing of the purchase and after signing the
contract, Sarah gets cold feet and refused to honor the contract.

Assume that Henry files suit in Illinois federal court. What substantive law will the
Illinois federal court apply?

Selected
Answer:
The federal court will only consider the substantive common law of Michigan,
because that is where the contract was signed and where the underlying
property is located.


Answers:
The federal court will only consider the substantive common law of Michigan,
because that is where the contract was signed and where the underlying
property is located.



Federal substantive law.


Federal common law.

, The federal court will apply the substantive common law of Illinois (including
applicable conflicts of law rules).



If the contract between Henry and Sarah included a choice of law
clause, the federal court would only apply such clause if the selected law
was Michigan law.

Response
Feedback: The correct answer is that "[t]he federal court will apply the
substantive common law of Illinois (including applicable conflicts of
law rules)" because the Illinois federal court's jurisdiction is based on
diversity of citizenship. Accordingly, the federal court would apply
Illinois common law. Under conflicts of law principles, the Illinois
common law would likely tell the court to apply Michigan
contract law (since the contract was entered into in Michigan and
related to Michigan real estate).



 Question 4

2 out of 2 points


Which of the following cases could be filed in federal court?

Selected
Answer:
An individual sues his former employer alleging age discrimination, a violation of
the Age Discrimination in Employment Act (a federal statute). The individual and
his former employer are both citizens of Illinois and the individual is seeking only
$1,500 in damages.


Answers:
A citizen of Indiana sues a truck driver (a citizen of Illinois) and the
company the truck driver worked for (a company incorporated in Indiana
that has all of its business operations in Illinois) for $1,500,000 following
a severe accident that occurred in Illinois.


A citizen of New York sues a citizen of Texas for $50,000 for breach of a real
estate contract.

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