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Legal, Ethical, and Social Aspects of Business:     Test 1
General Test Questions & Answers

Chapter    01    02    03    04    05   06    07    08    09    10    11    12    13   14   15   16   17   18     |      Final Exam 01  02


Black's Law Dictionary, as cited in the textbook, defines the term "law" as the following, except
a tool for regulating personal ethics
 
The author generally defines "law" as a body of rules of action or  conduct prescribed by a controlling authority and
having legal binding force.

The definition does not refer to ethics.
 
Law today is crucial to business by creating some degree of reliability to be used in business planning and commercial
transactions and promoting good faith dealing among merchants.

True
 
The US system of law evolves and changes along with the norms of society, technology and the growth and expansion of _____________ in the US and the World
commerce
 
Joshua is a highly accomplished soccer player and a successful coach. He is often hired by other coaches to run soccer clinics and soccer camps for their teams. If Joshua decides to incorporate and sell stock to finance the corporation, the area of law that he would need to be aware of with regard to the stock sales would be
securities law
 
English common law was law developed by judges who issued their opinions when deciding cases
True
 
The Federal Statutes are the supreme law of the land
False
*The Constitution is the Supreme Law of the land
 
Executive orders are passed by the state and federal legislatures
False
Executive orders are passed by the executive branch- governors and the President
 
The doctrine of stare decisis
is based on common law tradition
works with case law decided by judges
creates consistency through the use of precedents
all of the above
 
Valid federal laws take precedence over any conflicting state or local laws
True
 
A statute of limitations determines the maximum and minimum amounts of monetary relief that may be granted in different
types of civil lawsuits.

False
 
US Supreme Court justices are appointed by the president and then affirmed every 4 years by a vote of the general population
False
 
A federal question case arises under the US Constitution, treaties, or federal statutes and regulations
True
 
In order to bring a lawsuit a plaintiff must have a stake in the outcome referred to as the proper venue
False
 
________ refers to a concept that requires lawsuits to be heard by the court with jurisdiction that is nearest the location
in which the incident occurred or where the parties reside.

Venue
 
Equitable remedies are available to compensate injured parties in both civil and criminal
False
 
A presidential veto may be overridden by a two-thirds majority vote of the Senate.
False
 
A single wrongful act may violate civil law or criminal law but cannot violate both simultaneously
False
 
Enumerated powers are specific powers granted to the federal government by the Constitution.
True
 
The state of Floradora has passed a new law banning cell phone use while driving a motor vehicle within the state.
This law would be defined as

a statute
 
Bradley collects historic memorabilia, and one of his prized possessions is the pistol used by Aaron Burr in his duel with Alexander Hamilton. After reading an article in a magazine, Bradley discovers that Sam owns the matching pistol, used by Hamilton in the duel. Bradley contacts Sam and offers him $500,000 for the pistol. Sam e-mails Bradley that he accepts his offer but that the transaction must be for cash and face to face. Bradley responds that he'll be at Sam's home at noon the next day with the money. When he arrives, Sam informs him that he's received an offer of $600,000 for the pistol and states that Bradley must pay that amount or he'll sell to the other buyer. Bradley wants the weapon to complete the set. If he sues Sam, what course of action will best provide him the results he desires?
Sue for breach of contract and seek a decree of specific performance.
 
A state's appellate court has made a decision in a particular case. That decision becomes case precedent in all cases
except the cases heard in

the state's supreme or highest court.
 
The clean hands doctrine is primarily applied to
plaintiffs
 
Under the American legal system, subject to some exceptions, costs of litigation regarding both the plaintiff and the
defendant are paid for by each side, with the plaintiff and defendant paying for

their own legal costs.
 
Your Business Law professor believes that law is "discovered" by humans through the use of reason and choosing between good
and evil. She points to the Magna Carta as an example of her philosophy. Your professor most likely subscribes to which school
of philosophy?

Natural Law School
 
Scholars in which of the following schools of jurisprudence are most likely to look past legal decisions (precedent)
to solve contemporary problems?

Historical School
 
Under English common law, persons who believed that the decision of a law court was unfair could seek relief in ________.
Chancery Court
 
Which statement is true about the forces that shape the evolution of U.S. law?
The norms of United States society, not those of other countries, contribute to the evolution of its laws.
 
Which of the following is NOT true about legal precedent?
It requires courts from different states to follow the same law.
 
In class, your professor asks you to put the desks in a circle. He describes a current U.S. Supreme Court Case where
Coca-Cola may have misled its customers about the contents of one of its juice blends. Your professor asks questions
and prompts debate about the case's ethics. Which method of critical thinking is your professor using in this scenario?

Socratic
 
The Nevada corporations code outlines how to form and operate a Nevada corporation. This law is an example of what?
A state statute
 
The executive branch of the government has the power to ________.
Enforce the law
 
Which of the following laws work primarily to shape moral standards?
Laws that discourage drug and alcohol abuse
 
 
Which of these is NOT a force that shapes the evolution of U.S. law?
Peace keeping
 
________ means to stand by the decision.
Stare Decisis
 
When the Federal Trade Commission decides disputes, it issues ________.
Orders
 
________ showed the flexibility of the law because the U.S. Supreme Court overturned a past decision of the court
concerning integration.

Brown vs Board of Education
 
Which of the following is true about legal precedent?
An Iowa superior court is required to follow an Iowa appeals court decision.
 
The state of Florida has enacted the Lake Okeechobee Protection Act to protect Lake Okeechobee and the northern
Everglades system. This law is an example of what?

State Statute
 
After Coca-Cola advertised a pomegranate blueberry juice with 0.3% pomegranate and 0.2% blueberry juice, POM Wonderful
(a grower of pomegranates and a maker and distributor of pomegranate juice and juice blends) sued Coca-Cola under Section 43
of the federal Lanham Act, which allows one competitor to sue another to recover damages for unfair competition arising from
false and misleading product descriptions. Once the case is decided, the court will issue a ________.

Judicial Decision
 
Which statement is true about law in the information age?
Courts have applied existing laws to the new digital and
 
It's the year 2150, and the human race has established a new country on Mars. After a dispute about water rationing, a war begins, and the president of the United States declares that the United States will no longer be selling goods or services to the new country on Mars.
Executive Order
 
What is a primary function served by the law in this country?
Maintaining Status Quo
 
Stare Decisis
Adherence to precedent
 
Brown v. Board shows
Flexibility of the law by overturning a past court decision concerning integration
 
Branch of government that interprets the law
Judicial
 
a rule of law established in a higher court's decision that lower courts in the same jurisdiction must follow
precedent
 
You and your classmates are discussing your philosophies about how the law developed. One of your classmates dislikes the fact that during World War II and the Vietnam War, the federal government enacted draft laws that required men of a certain age to serve in the military if they met certain requirements. To which school of legal philosophy does your classmate most likely belong?
Command School
 
Treaty
Compact made between 2 or more nations
 
4 steps of IRAC
Issue, rule, application, conclusion
 
________ were established in the Middle ages to administer rules to solve commercial disputes.
Merchant Courts
 
The city of Mackinac Island, in Michigan, wants to preserve its 1800s Victorian houses and buildings, keep the island car-free, and require buildings to adhere to era-specific aesthetic standards. What kind of laws would Mackinac Island enact to preserve its unique character in these ways?
ordinances
 
After the Norman Conquest of England in 1066, William the Conqueror and his successors began to replace various local laws with one uniform system of law. To accomplish this, the king or queen appointed loyal followers as judges in all local areas. These judges were charged with administering the law in a uniform manner in this new court system. What were these courts called?
Law Courts
 
Stare Decisis means to ____
Stand by the decision
 
Where would a person seek relief under English common law if she believed that the law court could not grant an appropriate remedy?
Chancery Court
 
You're considering buying your first home. One of your classmates suggests that the federal government's policy of subsidizing housing provides incentives so that too many homes are built. Your classmate says that, if these laws did not exist, then the free market would determine the exact number of homes that should be built. Your classmate most likely subscribes to which of the following schools of jurisprudential thought?
Law & Economics School
 
Which of the following is NOT a primary function served by the law in
this country?
Facilitating rapid change
 
Which statement is true about law in the information age?
The information age arrived before new laws were written that were
 
Which school of jurisprudential thought believes that promoting market efficiency should be the central goal of legal decision-making?
Law & Economics School
 
Which of the following is NOT a function of​ law?
Changing the status quo
 
 
The principles enumerated in​ _________________ are extremely broad because the founding fathers intended them to be applied to evolving​ social, technological, and economic conditions
The US Constitution
 
Which of the following defines the tort of intentional misrepresentation? The intentional defrauding of a person out of money, property, or
something else of value
 
The attractive nuisance doctrine _________.
imposes liability on a landowner to children who have been attracted onto the landowner's property by an attractive nuisance and who are killed or injured on the property
 
A dentist mistakenly extracts the wrong tooth from a patient's mouth. That dentist is likely liable for which of the following?
Professional malpractice
 
A large pizza chain opens across the street from a well-established mom-n-pop pizza restaurant. To drum up business, the manager of the large pizza chain tells townspeople that the mom-n-pop store is going out of business due to health violations when he knows this to be untrue. The competitor is likely liable for which of the following?
Disparagement
 
Which of the following is NOT an example of an abnormally dangerous activity for which strict liability is imposed?
Harvesting of fields
 
A competitor of Soyage, an organic, vegan sausage company, tells a prospective customer that Soyage uses animal byproducts in its sausage casing, when in fact, they know this is not true.
The competitor has likely committed which tort?
Trade libel
 
________ is a special negligence doctrine under which the presumption of negligence arises because the defendant was in exclusive control of the situation and the plaintiff would not have suffered injury but for someone's negligence.
Res ipsa loquitur
 
negligence per se
a tort in which the violation of a statute or an ordinance constitutes the breach of the duty of care
 
Gross Negligence
a doctrine that says a person is liable for harm that is caused by his or her willful misconduct or reckless behavior
 
Negligent Infliction of Emotional Distress
a tort that permits a person who is not physically injured by thedefendant's negligence to recover for emotional distress caused by the defendant's negligent conduct
 
Contributory negligence ________.
is a doctrine stating that a plaintiff who is partially at fault for his or her own injury cannot recover against the negligent defendant
 
Comparative Negligence
a doctrine under which damages are apportioned according to fault
 
Partial Comparative Negligence
provides that a plaintiff must be less than 50 percent responsible for causing his or her own injuries to recover damages; otherwise, contributory negligence applies
 
Doctrine of unintentional tort (ordinary negligence)
a person is liable for harm that is the foreseeable consequence of his or her actions
 
The doctrine of strict liability holds that ________.
there are certain activities that can place the public at risk of injury even if reasonable care is taken and that the public should have some means of compensation if such injury occurs
 
contributary negligence
a doctrine that says that a plaintiff who is partially at fault for his or her own injury cannot recover against the negligent defendant
 
transfers the perpetrator's intent from the target to the actual victim of the act when the perpetrator acts with the intent to injure
one person but actually injures another

Transferred Intent Doctrine
 
Which doctrine holds that there are certain activities that can place the public at risk of injury even if reasonable care is taken and
that the public should have some means of compensation if such injury occurs?

Strict liability
 
A homeowner builds a pool in their backyard. It is not covered but a fence and locked gate are being installed next week. Before the installation, two neighbor children sneak over the fence to swim in the pool while the homeowner is away. One of the children severely injures themselves diving into the pool's shallow end. The homeowner is liable for the child's injuries under which of the following?
The attractive nuisance doctrine
 
________ negligence is a doctrine stating that a plaintiff who is partially at fault for his or her own injury cannot recover against the negligent defendant.
Contributory
 
a point along a chain of events caused by a negligent party after which this party is no longer legally responsible for the
consequences of his or her actions

proximate cause
 
Intentional infliction of emotional distress a tort that holds a person liable for extreme and outrageous conduct that intentionally or recklessly causes severe emotional distress to
another person
 
The intentional defrauding of a person out of money, property, or something else of value is called ________.
intentional misrepresentation
 
A plaintiff, by filing a lawsuit with a court, gives the court ________ over themselves.
In personam jurisdiction
 
Intermediate Appellate Court
Hear appeals from trial courts
 
 
A means for bringing a lawsuit in federal court that involves a nonfederal question but where the parties are (1) citizens of different
states or (2) a citizen of a state and a citizen or subject of a foreign country, and the amount in controversy is more than $75,000.

Diversity of citizenship
 
 
What allows a plaintiff who obtains a judgment in one state to try to collect the judgment by attaching property of the defendant
located in another
state. In rem jurisdiction refers to the jurisdiction of a court to hear and decide a case because the property
of the lawsuit is located in that state.

quasi in rem jurisdiction
 
What does it mean to have standing to sue in a court case?
That plaintiff has some stake in the outcome of a lawsuit
 
To determine jurisdiction over parties involved in digital commerce, courts use ________ and a sliding scale to measure
contact with the state.

a long-arm statute
 
Which type of subject matter jurisdiction is present, allowing Plaintiff to file this case in district court?
Federal question
 
What is personal jurisdiction?
A court's jurisdiction over a party to a lawsuit
 
A clause in an international contract that designates which nation's court has jurisdiction to hear a case arising out of the contract is called a ________.
forum-selection clause
 
French Corporation, Carrefour S.A., is in contract negotiations with U.S. corporation, Walmart.
One of the provisions they are discussing is which set of laws will govern the contract. What would this contract provision be called?
Choice of law clause
 
Nick, a resident of the state of Connecticut, is driving his automobile in Rhode Island when he negligently hits an automobile driven
by
Yaretsi, a resident of the state of Arizona. Yaretsi's resulting personal injuries and property damages exceed $100,000.
Which of the following terms apply to this scenario?
Diversity of citizenship
 
You're observing a case in a state court system. You watch while they review the trial court record to determine whether there
have been any
errors at trial that would require reversal or modification of the trial court's decision. No new evidence or testimony
is permitted. Which state court system are you observing?

An intermediate appellate court
 
Arleesh, a resident of the state of Georgia, is driving their automobile in Kentucky when they negligently hit an automobile driven by
Clay, a resident of the state of Colorado. As a result of the accident, Clay has his left foot and right leg amputated. Which of the
following terms applies to this scenario?

Diversity of citizenship
 
Sometimes, a plaintiff who obtains a judgment against a defendant in one state will try to collect the judgment by attaching property
of the defendant that is located in another state. This is permitted under which of the following?

quasi in rem jurisdiction
 
An electrician was not paid by a general contractor for $4,975 of work the general contractor hired her to perform. She prepares a complaint against the general contractor to recover her damages. In which state court system should the electrician file her claim
against the general contractor?

Small claims court
 
Plaintiff sues defendant for nonprotected hate speech on a college campus. Defendant claims the suit is a violation of his constitutional right to free speech. Which type of subject matter jurisdiction is present, allowing Plaintiff to file this case in district court?
Federal question
 
Japanese corporation, Sanyo, is in contract negotiations with U.S. corporation, Dell. One of the provisions they are discussing
is which jurisdiction will resolve any contract disputes.
What would this contract provision be called?
A forum-selection clause
 
Petitioners were not satisfied with the appellate ruling issued by a three-judge panel. They wanted the full court to hear their case.
What type of review can petitioners request to acheive this result?
An en banc review
 
en banc review
petition for all judges in a circuit to rule on a case; usually denied
 
Luz's friend Andy is injured in a bicycling accident caused by Mona. Andy refuses to sue. Luz cannot sue Mona on Andy's
behalf because she does not have an interest in the result of the case. This scenario demonstrates the requirement that,
to bring a lawsuit, a plaintiff must have ________.

Standing to sue
 
What is quasi in rem jurisdiction?
A legal theory that allows a plaintiff to use the court system of another state to attach property of the defendant that is located there
 
While you were parked at the supermarket, a van accidently backed into your car. The damage was only $300 but the van's
owner has failed to pay you for the repairs. Which state court would likely handle your case against the van owner?

Small claims court
 
A California resident has traveled to JLR Co. in Idaho four times in the last seven months to buy goods but has failed to pay the corresponding invoices. JLR Co. wants to sue this resident for breach of contract. Which of the following would give the Idaho
courts jurisdiction in such a case?

A long arm statute
 
The "rule of four" is a ________.
rule that requires the votes of four justices to grant an appeal and schedule an oral argument before the U.S.
Supreme Court

 
Which type of state court hears appeals from intermediate appellate state courts and certain trial courts?
A state supreme court
 
The Patent and Trademark Office issued a ruling resolving a trademark infringement case. The losing party does not agree
with the decision. In which federal court would the Patent and Trademark Office's ruling be reviewed?

The U.S. Court of Appeals for the Federal Circuit
 
There are 94 ________ of general jurisdiction; at least one in each state and the District of Columbia.
US District Courts
 
Your 14-year-old sister gets caught stealing several bottles of nail polish and some make-up from a drug store. She is later
charged with a misdemeanor. Which state court system would most likely hear your sister's case?

Limited-jurisdiction trial court
 
You are observing a case in a state court system. You watch while they review only a certain part of the trial court record to determine whether there was a procedural error that requires a modification of the trial court decision. Which state court system are you observing?
An intermediate appellate court
 
A rule that requires the votes of four justices to grant an appeal and schedule an oral argument before the
U.S. Supreme Court is called ________.

The rule of four
 
Korina was driving 40 in a posted 25-mile-per-hour zone. She wassubsequently pulled over by a police officer and written a ticket for speeding.
If Korina contests the ticket, which state court system would most likely hear her case?
Limited-jurisdiction trial court
 
What refers to the federal court system's trial courts of generaljurisdiction that decide cases not within the jurisdiction of specialized federal courts?
US District Courts
 
Which court would hear the software company's second appeal?
A state supreme court
 
What is a "district" within the federal court system?
The geographical area served by a U.S. district court
 
A petition asking the Supreme Court to hear a case
Petition for Certiorari
 
You and your client decide that her case is eligible and should be heard by the U.S. Supreme Court. You receive a writ of certiorari.
What does this document mean?

That the Supreme Court will review your client's case


Chapter    01    02    03    04    05   06    07    08    09    10    11    12    13   14   15   16   17   18     |      Final Exam 01  02


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