Business Law Chapter 1

Identify and discuss the primary sources of contemporary U.S. law. ANSWER:

The primary sources of U.S. law include: 1. United States Constitution (the supreme law of the land) and state constitutions, which establish state governments; 2. Statutes, which are drafted by the legislatures; 3. Common law, which is the body of cases decided by judges, as they follow earlier cases, known as precedent; 4. Administrative law, the rules and decisions made by federal and state administrative agencies.

Explain the role that power, importance and fascination play in contemporary American law. ANSWER:

The role of "power" in contemporary law is reflected in the fact that the strong reach of the law touches nearly everything we do. The role of "importance" in contemporary law reflects the fact that law is essential. Every society of which we have any historical record has had some system of laws. The law too, is fascinating. For better or worse, we do expect courts to resolve many problems. Not only do Americans litigate, they watch each other do it. Every television season offers at least one new courtroom drama to a national audience. In addition, almost all of the states permit live television coverage of real trials.

Contemporary law's principle of collective responsibility, such as all partners being personally responsible for the debts of the partnership, had its roots in the a. Anglo-Saxon method of ensuring public order through tithing. b. Anglo-Saxon practice of using "oath helpers." c. English use of "shire reeves." d. English system of feudalism.

a. Anglo-Saxon method of ensuring public order through tithing.

Tony raped Jane in the parking lot of Joe's Brew Pub. The District Attorney's office prosecuted Tony on rape charges. Subsequently, Jane filed a lawsuit against Tony for money damages. Classify each legal action. a. The District Attorney's case was a criminal case; Jane's lawsuit was a civil case. b. The District Attorney's case was a civil case. Jane's lawsuit was a criminal case. c. Both cases are criminal. d. Both cases are civil.

a. The District Attorney's case was a criminal case; Jane's lawsuit was a civil case.

The federal judicial branch of the U.S. government a. interprets statutes. b. passes statutes. c. issues executive orders. d. creates administrative agencies.

a. interprets statutes.

Henry David Thoreau felt that war was unjust and therefore refused to pay his taxes when the United States declared war on Mexico. If Henry David Thoreau's neighbor agreed that war was unjust but paid his taxes because the law required him to pay the tax, the neighbor would be applying the jurisprudence theory of a. legal positivism. b. natural law. c. legal realism. d. common law.

a. legal positivism.

In 1992, the North Carolina Supreme Court ruled in a case entitled Goodman v. Wenco Foods, Inc., that when a substance in food causes injury to a consumer of the food, it is not a bar to recovery against the seller that the substance was natural to the food. If, in a 2008 case involving a consumer's injury caused by a fish bone in a bowl of fish chowder, the court followed the decision in Goodman v. Wenco Foods, Inc., the court's action in the second case is an example of a. stare decisis. b. statutory law. c. public law. d. criminal law.

a. stare decisis.

Henry David Thoreau felt that war was unjust and therefore refused to pay his taxes when the United States declared war on Mexico. Thoreau felt that there was a higher law than the law of the land. Which theory of jurisprudence was he applying? a. Legal positivism b. Natural law c. Legal realism d. Common law

b. Natural law

Which of the following played a role in the creation of the U.S. government by solving the problem of federalism? a. The Visigoths b. The Iroquois Native Americans c. Confucius d. Alexis de Tocqueville

b. The Iroquois Native Americans

Hasbro, Inc., the trademark owner of "Candy Land," sought a court injunction to stop Internet Entertainment Group, LTD from using the domain name, "candyland.com." Internet Entertainment Group had established a sexually explicit site at the domain name. This injunction would have to be issued by a. a jury. b. a judge. c. an executive order. d. a lawyer.

b. a judge.

President Nixon issued wage-price controls in an effort to stabilize the economy. This use of executive power was a. an illegal usurption of legislative powers which belong to the Congress. b. a valid use of power based on Article II of the Constitution. c. a valid use of judicial power. d. an illegal usurption of the regulatory powers of administrative agencies.

b. a valid use of power based on Article II of the Constitution.

Congress enacted legislation in 1933 to regulate the securities industry and prohibit various forms of fraud with securities. The Securities Exchange Act of 1934 was passed a year later. This law created the Securities and Exchange Commission (SEC) as an independent regulatory entity whose function is to administer the two laws. The SEC has generated rules and regulations to administer these acts. These rules and regulations are a. statutes. b. administrative law. c. executive orders. d. common law.

b. administrative law.

When the Food and Drug Administration prohibits a certain drug from being marketed in the United States, this is a. private law. b. an agency regulation. c. legal negativism. d. an executive order.

b. an agency regulation.

The President of the United States a. creates federal common law. b. can veto Congressional legislation. c. determines the constitutionality of statutes. d. passes statutes.

b. can veto Congressional legislation.

Common law refers to a. law that is the same or similar in all the states. b. law made when judges decide cases and then follow those decisions in later cases. c. law made by legislatures in the form of statutes. d. the legal systems of France, Germany, and Italy.

b. law made when judges decide cases and then follow those decisions in later cases.

Treaties with foreign nations can only be made by ________ and ratified by ________. a. the Secretary of State; the President b. the President; the Senate by a two-thirds vote c. the Department of Defense; the Senate by a plurality d. the President; the House of Representatives by a three-fourths vote

b. the President; the Senate by a two-thirds vote

The United States Supreme Court has the power to a. appoint judges to serve on the Supreme Court. b. void laws passed by Congress. c. issue executive orders. d. ratify treaties.

b. void laws passed by Congress.

Which of the following would be an example of a civil lawsuit? a. George is being prosecuted for bank fraud. b. The government has initiated an action against Jeff for operating a motor vehicle under the influence of alcohol. c. Gretta hit Rita in a bar during happy hour. Rita is now suing for her injuries. d. The district attorney is bringing Ali to court for violating the city's keg ordinance.

c. Gretta hit Rita in a bar during happy hour. Rita is now suing for her injuries.

Which school of jurisprudence is based on the philosophy that what matters is not what is written as law, but who enforces the law and by what process? a. Legal positivism b. Natural law c. Legal realism d. Sovereign selection

c. Legal realism

The Minnesota legislature passed a law requiring that employers allow each employee adequate time within each four consecutive hours of work to utilize the nearest convenient restroom. This law is a. an executive order. b. an ordinance. c. a statute. d. a stare decisis.

c. a statute.

The doctrine of stare decisis a. makes the legal process more expensive. b. is an equitable remedy. c. makes the law more predictable. d. is unimportant to the common law.

c. makes the law more predictable.

The three branches of government in the United States are a. the executive, legislative, and administrative. b. the administrative, executive, and statutory. c. the executive, legislative, and judicial. d. the administrative, legislative, and international.

c. the executive, legislative, and judicial.

If the title of an appellate court case appears as Jones v. Smith, a. then it is correct to say that Jones is the plaintiff and Smith is the defendant. b. it means that Smith won the trial court decision. c. you cannot determine which party is the plaintiff, because when a defendant loses a trial and files an appeal, some courts (but not all) reverse the names of the parties. d. the trial judge was Jones and the appellate judge is Smith.

c. you cannot determine which party is the plaintiff, because when a defendant loses a trial and files an appeal, some courts (but not all) reverse the names of the parties.

Curtis filed a lawsuit against Ulhoff for failure to repay $1,000 according to the terms of a promissory note. The trial ended before it began, with the trial judge granting a motion for summary judgment in favor of Curtis. Ulhoff has appealed, and the Supreme Court of Iowa has remanded the case. This means a. Curtis automatically wins because he won in the lower court. b. Ulhoff automatically wins because he lost in the lower court. c. Neither party wins because the case is being thrown out. d. We don't know who wins yet because the case is being returned to the trial court for additional steps.

d. We don't know who wins yet because the case is being returned to the trial court for additional steps.

The Occupational Safety and Health Administration promulgated a rule requiring warehouse employees to wear hardhats when in the vicinity of an operating forklift. The purpose of the hardhats is to protect employees from danger of falling objects. This rule is a. an executive order. b. a statute. c. common law. d. administrative law.

d. administrative law.

The government itself prosecutes the wrong doer in a case involving behavior so threatening that society outlaws it altogether. This kind of case involves a. procedural law. b. private law. c. civil law. d. criminal law.

d. criminal law.

The doctrine of precedent requires a. that the victim testify. b. that the defendant testify. c. a 12-member jury of the defendant's peers. d. judges to base rulings on previous cases.

d. judges to base rulings on previous cases.