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TEST BANK QUESTIONS
Essentials of Contract Law, 2nd Edition
CHAPTER 1
Step One: Establishing the Method of Dispute Resolution, Selecting the Venue, and
Determining the Applicable Law in the Event of a Dispute
True/False
Indicate whether the statement is true or false.
An answer must be all True to be True.
1. T F The parties can decide at the time of contracting that in the event of a
dispute, they will arbitrate rather than litigate the dispute.
2. T F Once arbitration is initiated, private mediation becomes unavailable.
3. T F In arbitration, the jury decides the questions of fact and the arbitrator
decides the issues of law.
4. T F Contracting parties can decide to mediate either at the time of contracting
or after a dispute has arisen.
5. T F Litigation is the preferred method of dispute resolution.
6. T F In mediation, the neutral third party resolves the dispute for the parties.
7. T F A mediated agreement is based on the law and not on the needs and
interests of the parties.
8. T F An arbitration award is based on the law and not on the needs and interests
of the parties.
9. T F Mediation is the method of dispute resolution where the parties attempt to
resolve their own disputes.
1
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10. T F Arbitration is the method of dispute resolution where a neutral third party
resolves a dispute for the parties, and the right to appeal this resolution is
generally unavailable.
11. T F Venue may affect choice of law.
12. T F A court may decline to exercise jurisdiction in recognition of the parties’
free and voluntary choice of a different forum.
13. T F If the parties have not included a forum selection clause in their contract,
the forum court will be the court where the plaintiff initiates the lawsuit.
14. T F The location of a negotiation has no bearing on the outcome of the dispute.
15. T F The venue of the litigation has no bearing on the outcome of the dispute.
16. T F A forum selection clause deprives a court from exercising jurisdiction.
17. T F At the time of contracting, the parties may choose that any dispute will be
resolved by a private method of dispute resolution.
18. T F Mediating a dispute may not result in a resolution of a dispute.
19. T F Some disputes are better left unresolved.
20. T F Parties may negotiate or mediate their dispute even after an appellate court
has rendered a final decision.
21. T F Unless the contract provides otherwise, the forum court will apply the
choice of law rules of the forum state.
22. T F At the time of contracting, the parties may choose the courts of one state
as the forum state and direct the forum court to use the laws of another
state.
23. T F If the choice of law rules of the forum state and the non-forum state are
identical, it will make no difference in the outcome of the dispute whether
the choice of law rules of the forum or non-forum state will apply to the
dispute.
24. T F The territorial type choice of law approach is more mechanical and
produces more predictable results than does the consequences-based
approach.
2
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25. T F The consequences-based approach focuses on the issue being litigated
rather than the case as a whole.
26. T F The choice of law approach promoted by the Restatement [Second] of
Conflicts of Law is the most significant contacts (or governmental-interest
approach).
27. T F Another name for the “most significant contact” approach is the center of
gravity approach.
28. T F Some states have moved away from using the consequences-based rule.
29. T F One state may have several choice of law rules or a state may apply its
choice of law rule differently from case to case.
30. T F Under the consequences-based rule, the forum court must first determine
whether the two interested states have different laws as to the issue in
question.
Multiple-Choice
Identify the best correct answer.
1. The parties may include in their contract which of the following?
(a) a clause mandating choice of method of dispute resolution
(b) a clause mandating choice of forum
(c) a clause mandating choice of law
(d) clauses mandating all three
2. A two-party private method for resolving a dispute includes:
(a) do nothing
(b) negotiation
(c) mediation
(d) arbitration
3. A three-party private methods for resolving a dispute includes ________ where the neutral
third party is both the trier of fact and law.
3
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, Answerdone.com
(a) negotiation
(b) mediation
(c) arbitration
(d) litigation
4. If the parties have not stipulated to an exclusive method of dispute resolution in their
contract, the initiation of which public process would provide the most stimulus to encourage
the breaching party to participate in a private process?
(a) negotiation
(b) court-ordered mediation
(c) court-ordered arbitration
(d) public litigation
5. Which method of dispute resolution does not have a jury to decide questions of fact?
(a) negotiation
(b) mediation
(c) arbitration
(d) litigation
6. Which method of private dispute resolution is the most expensive?
(a) do nothing
(b) negotiation
(c) mediation
(d) arbitration
7. Which method of dispute resolution will produce the least predictable result?
(a) negotiation
(b) mediation
(c) arbitration
4
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
TEST BANK QUESTIONS
Essentials of Contract Law, 2nd Edition
CHAPTER 1
Step One: Establishing the Method of Dispute Resolution, Selecting the Venue, and
Determining the Applicable Law in the Event of a Dispute
True/False
Indicate whether the statement is true or false.
An answer must be all True to be True.
1. T F The parties can decide at the time of contracting that in the event of a
dispute, they will arbitrate rather than litigate the dispute.
2. T F Once arbitration is initiated, private mediation becomes unavailable.
3. T F In arbitration, the jury decides the questions of fact and the arbitrator
decides the issues of law.
4. T F Contracting parties can decide to mediate either at the time of contracting
or after a dispute has arisen.
5. T F Litigation is the preferred method of dispute resolution.
6. T F In mediation, the neutral third party resolves the dispute for the parties.
7. T F A mediated agreement is based on the law and not on the needs and
interests of the parties.
8. T F An arbitration award is based on the law and not on the needs and interests
of the parties.
9. T F Mediation is the method of dispute resolution where the parties attempt to
resolve their own disputes.
1
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Answerdone.com
10. T F Arbitration is the method of dispute resolution where a neutral third party
resolves a dispute for the parties, and the right to appeal this resolution is
generally unavailable.
11. T F Venue may affect choice of law.
12. T F A court may decline to exercise jurisdiction in recognition of the parties’
free and voluntary choice of a different forum.
13. T F If the parties have not included a forum selection clause in their contract,
the forum court will be the court where the plaintiff initiates the lawsuit.
14. T F The location of a negotiation has no bearing on the outcome of the dispute.
15. T F The venue of the litigation has no bearing on the outcome of the dispute.
16. T F A forum selection clause deprives a court from exercising jurisdiction.
17. T F At the time of contracting, the parties may choose that any dispute will be
resolved by a private method of dispute resolution.
18. T F Mediating a dispute may not result in a resolution of a dispute.
19. T F Some disputes are better left unresolved.
20. T F Parties may negotiate or mediate their dispute even after an appellate court
has rendered a final decision.
21. T F Unless the contract provides otherwise, the forum court will apply the
choice of law rules of the forum state.
22. T F At the time of contracting, the parties may choose the courts of one state
as the forum state and direct the forum court to use the laws of another
state.
23. T F If the choice of law rules of the forum state and the non-forum state are
identical, it will make no difference in the outcome of the dispute whether
the choice of law rules of the forum or non-forum state will apply to the
dispute.
24. T F The territorial type choice of law approach is more mechanical and
produces more predictable results than does the consequences-based
approach.
2
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Answerdone.com
25. T F The consequences-based approach focuses on the issue being litigated
rather than the case as a whole.
26. T F The choice of law approach promoted by the Restatement [Second] of
Conflicts of Law is the most significant contacts (or governmental-interest
approach).
27. T F Another name for the “most significant contact” approach is the center of
gravity approach.
28. T F Some states have moved away from using the consequences-based rule.
29. T F One state may have several choice of law rules or a state may apply its
choice of law rule differently from case to case.
30. T F Under the consequences-based rule, the forum court must first determine
whether the two interested states have different laws as to the issue in
question.
Multiple-Choice
Identify the best correct answer.
1. The parties may include in their contract which of the following?
(a) a clause mandating choice of method of dispute resolution
(b) a clause mandating choice of forum
(c) a clause mandating choice of law
(d) clauses mandating all three
2. A two-party private method for resolving a dispute includes:
(a) do nothing
(b) negotiation
(c) mediation
(d) arbitration
3. A three-party private methods for resolving a dispute includes ________ where the neutral
third party is both the trier of fact and law.
3
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, Answerdone.com
(a) negotiation
(b) mediation
(c) arbitration
(d) litigation
4. If the parties have not stipulated to an exclusive method of dispute resolution in their
contract, the initiation of which public process would provide the most stimulus to encourage
the breaching party to participate in a private process?
(a) negotiation
(b) court-ordered mediation
(c) court-ordered arbitration
(d) public litigation
5. Which method of dispute resolution does not have a jury to decide questions of fact?
(a) negotiation
(b) mediation
(c) arbitration
(d) litigation
6. Which method of private dispute resolution is the most expensive?
(a) do nothing
(b) negotiation
(c) mediation
(d) arbitration
7. Which method of dispute resolution will produce the least predictable result?
(a) negotiation
(b) mediation
(c) arbitration
4
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
