Description

1. Thelegalrulesthatcontrola business’s actions reflect past and current thinking about how similar businesses should and should not act.
2. True
3. False

ANSWER: True

1. Becauselawsmaychange,theabilitytoanalyzeandevaluatethelegalramificationsofsituationsastheyariseisnot

a lasting skill.

1. True
2. False

ANSWER: False

1. Thestudyofbusinesslawdoes notinvolveanethicaldimension.
2. True
3. False

ANSWER: False

1. Compartmentalizingthelawintodiscretetopicsindicatesthateachbusinesstransactionissubjecttoonlyone specific area of thelaw.
2. True
3. False

ANSWER: False

1. A constitution is a primary source of law.
2. True
3. False

ANSWER: True

1. A statute is a secondary source of law.
2. True
3. False

ANSWER: False

1. A secondary source of law establishes the law on a particular issue.
2. True
3. False

ANSWER: False

1. Courtsoftenrefertosecondarysourcesoflawforguidanceininterpretingandapplyinga primary source of law.
2. True
3. False

ANSWER: True

1. EvenifitconflictswiththeU.S.Constitution,a state constitution is supreme within that states’ borders.
2. True
3. False

ANSWER: False

1. TheU.S.ConstitutionisthebasisofalllawintheUnitedStates.
2. True
3. False

ANSWER: True

1. Onlyifa state legislature adopts a uniform law does that law become part of the statutory law of that state.
2. True
3. False

ANSWER: True

1. A citation is a regulation enacted by a city or county legislative body.
2. True
3. False

ANSWER: False

1. A local ordinance commonly has to do with a matter concerning only a local governing unit.
2. True
3. False

ANSWER: True

1. A federal statute applies only to those states that agree to apply it within their borders.
2. True
3. False

ANSWER: False

1. Congressora state legislature establishes an administrative agency to perform a specific function.
2. True
3. False

ANSWER: True

1. Independentregulatoryagenciesare notsubjecttotheauthorityofthepresident.
2. True
3. False

ANSWER: False

1. Rulesissuedbyadministrativeagenciesaffectalmosteveryaspectofa business’s operations.
2. True
3. False

ANSWER: True

1. Federalagencyregulationsdonottakeprecedenceoverconflictingstateregulations.
2. True
3. False

ANSWER: False

1. Anadministrativelegislativeruleisnotlegallybindingonbusinesses.
2. True
3. False

ANSWER: False

1. IfanagencyfailstofollowtherulemakingproceduresimposedbytheAdministrativeAct,theresultingrulemay

not be binding.

1. True
2. False

ANSWER: True

1. Courtsgivesignificantweight—deference—toanagency’sjudgmentandinterpretationofitsrules.
2. True
3. False

ANSWER: True

1. Thecommonlawisa body of law developed from judicial decisions.
2. True
3. False

ANSWER: True

1. Caselawgovernsallareasofbusinessnotcoveredbystatutoryoradministrativelaw.
2. True
3. False

ANSWER: True

1. Controlling precedents are bindingauthorities.
2. True
3. False

ANSWER: True

1. A precedent is any legal authority or source of law that a court may look to for guidance but need not follow when making its decision.
2. True
3. False

ANSWER: False

1. Often,morethanoneruleoflawwillbeapplicabletoa case.
2. True
3. False

ANSWER: True

1. Thereisonerightanswertoeverylegalquestion.
2. True
3. False

ANSWER: False

1. Becausecourtsoflawandequityhavemerged,theprinciplesofequityarenolongerapplied.
2. True
3. False

ANSWER: False

1. Courtswill notgrantanequitableremedyunlesstheremedyatlawisadequate.
2. True
3. False

ANSWER: False

1. Rescission is an equitableremedy.
2. True
3. False

ANSWER: True

1. Ina criminal case, the object is to obtain a remedy.
2. True
3. False

ANSWER: False

1. Civillawhastodowithwrongscommittedagainstsocietyforwhichsocietydemandsredress.
2. True
3. False

ANSWER: False

1. Thebasisofa civil law system is a written code of laws.
2. True
3. False

ANSWER: True

1. Internationallawderivesfroma variety of sources, including the laws of individual nations.
2. True
3. False

ANSWER: True

Multiple Choice

1. Power,Inc.,isa corporation engaged in the business of producing, refining, and distributing energy resources. With respect to the firm’s managers, legal concepts can be useful for Power’s
2. accounting and finance manager.
3. human resources manager.
4. marketing manager.
5. all of the choices.

ANSWER: d

1. Primary sources of lawinclude
2. legal encyclopedias.
3. official comments to statutes.
4. case law.
5. legal treatises.

ANSWER: c

1. Secondary sources of lawinclude
2. state constitutions.
3. legal scholars’ research.
4. laws passed by local governing bodies.
5. regulations created by administrative agencies.

ANSWER: b

1. A constitution sets forth a government’s
2. limits, but not powers.
3. limits and powers.
4. neither limits nor powers.
5. powers, but not limits.

ANSWER: b

1. ThebasisofalllawintheUnitedStatesis
2. the U.S. Constitution.
3. laws passed by Congress.
4. case law.
5. regulations created by administrative agencies.

ANSWER: a

1. Lawsenactedbylegislativebodiesatanylevelofgovernmentmakeupthebodyoflawgenerallyreferredtoas
2. statutory law.
3. the basis of all law in the United States.
4. the supreme law of the land.
5. uniformlaw.

ANSWER: a

1. Ona challenge to a provision in a state constitution that conflicts with a provision in the U.S. Constitution
2. neither provision will be enforced.
3. both provisions will be enforced.
4. the state provision will be enforced only within that state’s borders.
5. the state provision will not be enforced.

ANSWER: d

1. TheMontanalegislatureenactsa state law that violates the U.S. Constitution. This law can be enforced by
2. no one.
3. the federal government only.
4. the state of Montana only.
5. the United States Supreme Court only.

ANSWER: a

1. TheUniformCommercialCodefacilitatescommerce
2. among the states.
3. between the states and the federal government.
4. in countries that were once colonies of Great Britain.
5. in international markets.

ANSWER: a

1. TheUniformCommercialCodeprovidesa set of rules governing
2. commercial transactions.
3. state legislative adoptions.
4. congressional procedures.
5. administrative processes.

ANSWER: a

1. Administrative lawincludes
2. all laws that affect business operations.
3. the rules, orders, and decisions of a government agency.
4. model laws developed by the National Conference of Commissioners on Uniform State Laws.
5. laws enacted by a legislative body.

ANSWER: b

1. Personswhofavorthecreationofa federal agency to regulate the production of genetically modified agricultural products should concentrate their lobbying efforts on
2. Congress.
3. administrative agencies that oversee agricultural products.
4. the United States Supreme Court.
5. the president of the United States.

ANSWER: a

1. TheFoodandDrugAdministration(FDA)isanexecutiveagency.Asanexecutiveagency,theFDAissubjectto the authorityof
2. no government official or entity.
3. the president.
4. state legislatures.
5. the U.S. Attorney General.

ANSWER: b

1. TheSecuritiesandExchangeCommissiondecidestocreatea new rule relating to the dissemination of material nonpublic information through social media. The first step is
2. compile the rule with others in the Federal Register.
3. draft the rule.
4. publish a notice of the proposed rulemaking.
5. solicit public comment.

ANSWER: c

1. TheEnvironmentalProtectionAgency(EPA)discoversthatFishFarmInc.hasviolatedanEPAregulation.Ifno settlementisreached,theEPAcan
2. issue a formal complaint.
3. do nothing.
4. take the matter to the U.S. Supreme Court.
5. immediately impose sanctions.

ANSWER: a

1. HomeCareCompanyischargedwithviolatinga rule of the Social Security Administration. Most likely, Home Care will be required to appear at a hearing presided over by
2. a federal appellate court judge.
3. a federal district court judge.
4. an administrative law judge.
5. a U.S. Marshal.

ANSWER: c

1. Common law rules developfrom
2. principles underlying judges’ decisions in actual controversies.
3. regulations issued by administrative agencies.
4. statutes enacted by Congress and the state legislatures.
5. uniform laws drafted by legal scholars.

ANSWER: a

1. Stare decisis is best definedas
2. a doctrine under which judges follow established precedents.
3. the authority to decide a specific dispute.
4. a judicial proceeding to redress a wrong.
5. a situation giving a person a right to initiate a judicial proceeding.

ANSWER: a

1. A precedent is
2. the chief executive officer of the United States.
3. a court decision that furnishes an example for deciding subsequent cases involving similar or identical facts or principles.
4. a lawsuit in which a number of persons join together.
5. the fundamental procedure by which the government exercises its authority.

ANSWER: b

1. Eachcourthasa jurisdiction. Jurisdiction is best defined as
2. a doctrine that follows established precedents.
3. the geographic area in which a court has the power to apply the law.
4. a judicial proceeding to redress a wrong.
5. a situation giving a person a right to initiate a judicial proceeding.

ANSWER: b

1. Applyingtherelevantruleoflawtothefactsofa case requires a judge to find previously decided cases that, in relation to the case under consideration, are
2. as different as possible.
3. as similar as possible.
4. at odds.
5. exactly identical.

ANSWER: b

1. TherearenoprecedentsonwhichthecourtdecidingthecaseAlgorithm Corp. v. Beta Bytes, Inc., canbaseits decision.Thecourtcanconsider,amongotherthings,
2. the opinions of the friends and relatives of the judge.
3. the results of a poll of those in the courtroom.
4. government policy based on widely held social values.
5. all of the choices.

ANSWER: c

1. In Beto v. Car Dealership, a state supreme court held that a minor could cancel a contract for the sale of a car. Now a trial court in the same state is deciding Dora v. Even Steven Autos, Inc., a case with similar facts. Under the doctrine of stare decisis, the trial court is likely to
2. allow the minor to cancel the contract.
3. disregard the Beto case.
4. order the minor to cancel the contract.
5. require the minor to fulfill the contract.

ANSWER: a

1. InthecaseofSales Corp. v. Transport Co., the court may rule contrary to a precedent if the court decides that the precedent
2. is incorrect or inapplicable.
3. is not in line with the judge’s personal values.
4. would lead to unintended consequences.
5. would not bring about the result the judge prefers.

ANSWER: a

1. Themeanstoenforcea right or compensate for the violation of a right is
2. a cornerstone.
3. a remedy.
4. jurisdiction.
5. stare decisis.

ANSWER: b

1. FedericoandGwenareinvolvedina court proceeding to enforce a right. This is
2. an action.
3. stare decisis.
4. an injunction.
5. a remedy.

ANSWER: a

1. WhenLaraandMickcannotresolvetheirdisputeamicably,Larainitiatesa lawsuit against Mick. Lara is
2. the case of first impression.
3. the persuasive authority.
4. the plaintiff.
5. the defendant.

ANSWER: c

1. JaimeandKayenterintoa contract for the sale of a bicycle, but Kay later refuses to deliver the goods. Jaime asks a court to order Kay to perform as promised. Ordering a party to perform what was promised is
2. an equitable remedy.
3. an unenforceable demand.
4. an action.
5. beyond the court’s authority.

ANSWER: a

1. Ina suit against Karen, Luke obtains an injunction. This is
2. an order to do or to refrain from doing a certain act.
3. a departure from precedent.
4. a payment of money.
5. the cancellation of a contract.

ANSWER: a

1. Ina suit against Guillermo, Hailey obtains an award of damages. This is
2. an order to do or to refrain from doing a certain act.
3. the right to harm another.
4. a payment of money or property.
5. the cancellation of a contract.

ANSWER: c

1. Atonetime,a court of law could grant as a remedy only
2. monetary damages.
3. an order to perform a contract as promised.
4. a judicial proceeding for the resolution of a dispute.
5. an injunction.

ANSWER: a

1. Theclassificationoflawthatconcernstherightsanddutiesthatexistbetweenpersonsandbetweencitizensand their governmentis
2. criminal law.
3. civillaw.
4. natural law.
5. legal positivism.

ANSWER: b

1. Criminal statutesproscribe
2. the prosecution of private individuals by other private individuals.
3. the prosecution of public officials by private individuals.
4. the relief available when a person’s rights are violated.
5. wrongs committed against society for which society demands redress.

ANSWER: d

1. Ina civil case, the object is to
2. resolve a dispute to the satisfaction of all concerned parties.
3. take coercive action against a violating party.
4. punish a wrongdoer to deter others from similar actions.
5. obtain a remedy to compensate the injured party.

ANSWER: d

1. Tobenefitfrominternationaltrade,individualnationsagreetobegovernedby
2. international law.
3. the Uniform Commercial Code.
4. none of the choices.
5. the laws of other nations.

ANSWER: a

Essay

1. TheNationalRightsCouncil,a nonprofit organization, files a suit against the U.S. Department of Justice (DOJ), claiming that a certain federal statute the DOJ is empowered to enforce conflicts with the U.S. Constitution and with a state constitution. In each situation, which source of law has priority?

ANSWER: The U.S. Constitution is the supreme law of the land. A law in violation of the Constitution, no matter what its source, will be declared unconstitutional and will not be enforced. Thus, the federal statute does not have priority over the Constitution. The federal statute would have priority over the state constitution, however, because under the U.S. Constitution, when there is a conflict between a federal law and a state law, the state law is rendered invalid.

1. Whatisthedoctrineof staredecisis?IntheAmericanlegalsystem,howisitapplied,andwhatisitseffect?

ANSWER: In a common law legal system, past judicial decisions are binding in current disputes with similar facts.

This feature of the common law, which is the basis of the American legal system, is unique because, unlike the law in other legal systems, it is judge-made law. Within the common law system, when possible, judges attempt to be consistent and to base their decisions on the principles suggested by earlier cases. The body of principles and doctrines that form the common law emerged over time as judges applied the principles announced in earlier cases to subsequent legal controversies.

The practice of deciding cases with reference to former decisions, or precedents—the cornerstone of the American legal system—is called the doctrine of stare decisis. Under this doctrine, judges are obligated to follow the precedents established within their jurisdictions This helps courts to be more efficient, and makes the law more stable and predictable.