BUSINESS LAW 3201_ Testbank (Test 1) | Louisiana State University | (100 OUT OF 100 ), Grade A+

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Chapter 1—Introduction to Law TRUE/FALSE 1. The law can be defined as predictions of the way in which a court will decide specific legal questions. 2. The law is the same as moral an ... d ethical concepts. 3. Societies that have law are guaranteed justice. ANS: F PTS: 1 4. Substantive law sets forth the rules for enforcing rights that exist in a society. ANS: F PTS: 1 5. The federal Constitution provides that federal statutes and treaties are paramount to state constitutions. 6. Usual remedies granted in a criminal case include compensation for the victim. 7. The law does not change; it is based on unchanging and universal truths. 8. A reason for the application of sanctions is to assure that laws will be enforced. 9. A private citizen may bring a criminal action against an individual for breaking a criminal law. 10. Under the civil law system, adversaries initiate and conduct litigation. 11. A judge deciding a common law case must look to decisions in prior, similar cases for guidance. 12. In nearly every jurisdiction in the United States, courts of equity are distinct and separate from courts of law. 13. State statutes are not subordinate to state constitutional mandates. 14. Laws that are enacted by legislatures are called statutes. 15. The Uniform Commercial Code is a federal law that applies to commercial transactions among the states. 16. Laws passed by Congress are the supreme law of the land in the United States and take precedence over the United States Constitution. 17. The final arbiter as to the constitutionality of laws passed by Congress or by the legislature of a state is the Supreme Court of the United States. 18. The common law system of law is used in most of Europe, Scotland, and Latin America. 19. Decisions in state trial courts generally are reported or published. 20. The principle of stare decisis precludes courts from changing any decisions they previously announced. 21. Under the principle of stare decisis, the U.S. Supreme Court must follow a rule of law applied by a district court (federal trial court) in a prior decision involving a similar issue. 22. Common law systems of jurisprudence follow the inquisitorial method of adjudication. 23. Business law topics such as contracts, agency, property, and trusts are governed primarily by the common law. 24. The law is pervasive; it is in part prohibitory and in part mandatory. 25. The State of Minnesota has been negotiating with the Canadian government on issues involving acid rain and eventually reaches an agreement with Canadian officials. This is a valid treaty under the United States Constitution. 26. In the United States, treaties are not subject to judicial review. 27. The party bringing a civil lawsuit must prove the case by a preponderance of the evidence. 28. The only purpose of law is to define what conduct constitutes a crime. 29. Business law is primarily public law. 30. Decisions of state courts of appeals are published in volumes known as "reports." ANS: T PTS: 1 31. The terms "law" and "justice" are interchangeable. 32. The President of the United States has the authority to issue laws. 33. You find a decision of the U.S. Court of Appeals in the Federal Reporter. MULTIPLE CHOICE 1. In the common law system of the United States, a crime is defined as: a. a private wrong that necessitates litigation between the victim and the perpetrator. b. any act or omission prohibited by the government and made punishable in a judicial proceeding brought by the government. c. litigation where the injured party sues to recover compensation for the damages and injury sustained as a result of the defendant's wrongful conduct. d. interstate compacts and the rules and regulations of federal and state agencies. ANS: B PTS: 1 2. What is the supreme law of the land in the United States? a. Federal statutes b. The state U.C.C. statute c. The common law d. The U.S. Constitution ANS: D PTS: 1 3. Which of the following is a remedy that can be obtained from a court of equity? a. A maxim b. Specific performance c. Money damages d. Stare decisis 4. The courts are likely to provide remedies in all but which of the following cases? a. A person refuses to return your friend's book. b. A passerby refuses to help rescue a drowning woman. c. A person pushes a man into the lake. d. A person does not drive carefully on a busy street. 5. Which one of the following is NOT true of a suit brought under criminal law? a. It must be brought by the government. b. It is brought on the ground of public policy. c. Proof of guilt must be "by preponderance of the evidence." d. Conviction may result in imprisonment. 6. Sources of federal law include all but which of the following? a. Rules of administrative agencies b. Decisions of federal courts c. Executive orders of the President of the United States d. Hearings before the Senate 7. American jurists and defined law in a functional sense as predictions of the way that a court will decide specific legal questions. a. Roscoe Pound and Alexander Hamilton b. Blackstone and Austin c. Roscoe Pound and Benjamin Cardozo d. Oliver Wendell Holmes and Benjamin Cardozo ANS: D PTS: 1 8. The separation of powers involves: a. the federal judiciary. b. the Congress. c. the Executive branch. d. All of the above. 9. The law is in part: a. prohibitory. b. mandatory. c. permissive. d. All of the above. 10. A(n) is the fundamental law of a particular level of government. a. Restatement of law b. executive order c. constitution d. code 11. A is any act or omission prohibited by public law in the interest of protection of the public and made punishable by the government in a judicial proceeding brought by it, whereby proof must be beyond a reasonable doubt. a. rescission b. sanction c. crime d. maxim 12. The courts in common law systems have developed a body of law that serves as precedent for determination of later controversies. This is called: a. judge-made law. b. case law. c. common law. d. All of the above. 13. In a court of equity, a chancellor could issue an order called a , compelling a defendant to do or refrain from doing a certain act. a. judgment b. decree c. stare decisis d. rescission 14. The branch of public law that deals with the various regulatory functions and activities of the government is: a. criminal law. b. administrative law. c. constitutional law. d. substantive law. 15. The common law system is found in: a. Australia. b. Louisiana. c. England. d. (a) and (c) above. 16. A constitution: a. restricts the powers of government. b. specifically enumerates certain liberties of the people. c. establishes governmental structure. d. All of the above. 17. The person who files or commences a civil lawsuit is known as the: a. plaintiff. b. prosecuting attorney. c. defendant. d. attorney general. 18. Because of the increasing complexity of the social, economic, and industrial life of the nation, the scope of law has expanded enormously. a. common b. administrative c. procedural d. equity 19. A court order requiring that a person do or refrain from doing a particular act is known as a(n): a. injunction. b. maxim. c. statute. d. executive order. 20. The three distinct and independent branches of the United States government are: a. the executive branch, the House of Representatives, and the U.S. Senate. b. the federal judiciary, the House of Representatives, and the U.S. Senate. c. the federal judiciary, the Congress, and the executive branch. d. the state government, the Congress, and the executive branch. ANS: C PTS: 1 21. Which of the following is a true statement? a. A treaty signed by the President and approved by the Senate has the legal force of a federal statute. b. A federal statute may supersede a prior treaty. c. Both (a) and (b). d. Neither (a) nor (b). 22. The are orderly compilations of the general common law of the United States, prepared by a distinguished group of lawyers, judges, and law teachers. a. Statutes b. Executive Orders c. Maxims d. Restatements of Law ANS: 23. The sources of law in the American legal system include which of the following? a. State administrative regulations b. Executive orders c. Ordinances d. All of the above. e. (b) and (c), but not (a) or (d). 24. Which of the following is a common purpose of the civil and criminal law? a. Compensation b. Rehabilitation c. Deterrence d. Punishment 25. Which of the following is characteristic of a common law legal system? a. It relies heavily on the adversary method for settling disputes. b. It depends heavily on comprehensive legislative enactments called Codes. c. It applies the principle of stare decisis. d. Both (a) and (c) are characteristics of common law systems. ANS: D PTS: 1 26. The area of public law that creates the most rules and decides the most controversies is: a. criminal law. b. judicial law. c. legislative law. d. administrative law. 27. Which of the following is NOT considered to be an equitable remedy? a. Specific performance b. Injunction c. Reformation d. Money damages 28. Which of the following is NOT true about the equity courts? a. They were originally presided over by a chancellor. b. They provided remedies not available in courts of law. c. They provided for trials by jury. d. They followed maxims. 29. Characteristics of a common law system include which of the following? a. A common law system relies heavily on comprehensive legislative enactments and an inquisitorial system of determining disputes. b. In a common law system the judiciary initiates litigation, investigates pertinent facts, and conducts the presentation of evidence. c. The common law system prevails in most of Europe and Scotland. d. A common law system relies heavily on the judiciary as a source of law and on the adversary system for settling disputes. 30. The doctrine of stare decisis means that: a. the common law has not been able to evolve in a stable and predictable manner. b. decisions can be overruled. c. courts adhere to and rely on rules of law that they or superior courts announced and applied in prior similar decisions. d. courts are not allowed to correct erroneous decisions or choose among conflicting precedents. 31. Which of the following is correct with regard to treaties in the United States legal system? a. They have no legal effect. b. Under the U.S. Constitution they must be signed by the President and approved by the U.S. Senate. c. They have no effect on business law. d. They must be approved by the States before they have the force of law. ANS: B PTS: 1 32. Which of the following is correct regarding the decisions of state trial courts? a. They are generally not reported. b. They are reported in regional reports. c. They are reported in state court reports. d. They are binding upon higher courts based upon the principle of stare decisis. 33. The law that creates, defines, and regulates legal rights and obligations is known as: a. substantive law. b. procedural law. c. Constitutional law. d. criminal law. 34. Which of the following is correct regarding the English courts of equity? a. They were presided over by a chancellor. b. They could only award money damages. c. They could issue a decree ordering a defendant to do or refrain from doing a specific act. d. Both (a) and (c) are correct. 35. The to the U.S. Constitution makes it clear that the enumeration of rights found in the Constitution does not in any way deny or limit other rights that the people retain. a. 1st Amendment b. 10th Amendment c. 12th Amendment d. 9th Amendment 36. The party who files an appeal is the: a. appellant. b. appellee. c. defendant. d. plaintiff. 37. The is composed of a distinguished group of lawyers, judges, and law teachers who have assumed the task of preparing "an orderly restatement of the general common law of the United States." a. New York City Bar b. American Law Institute c. U.S. Supreme Court d. National Reporter System ANS: B ESSAY 1. What is the relationship between rights and duties under the law? PTS: 1 2. What is stare decisis? Discuss its place in the American legal system. PTS: 1 3. What are the various kinds or sources of American law? Discuss how these various types of law interrelate to form the system of law in the United States. PTS: 1 4. What is law? Discuss the various definitions of law by legal scholars. What is the relationship between law and morality and between law and justice? PTS: 1 5. You have just been asked to serve as a host for a visitor from France who is very interested in the American legal system and the formation of law in the United States. How would you explain the nature of the legal system in this country to your guest? PTS: 1 6. What is the function of law? Some observers claim we have too much law today. What accounts for the increased number of laws that exist today? PTS: 1 7. Explain how the terms civil law and civil law system differ. PTS: 1 Chapter 3—Legal Process TRUE/FALSE 1. A U.S. Court of Appeals is the final step in the appeal process within the federal court system. 2. The U.S. District Court is the trial level court in the federal court system. 3. The United States Supreme Court is staffed by judges who receive lifetime appointments from the President, subject to confirmation by the Senate. 4. The federal courts only have jurisdiction to hear cases involving federal law. 5. Judges in state courts are always elected by the voters to a life term or retirement. 6. The decisions of the U.S. Court of Appeals are binding on the other federal courts except for the U.S. Supreme Court. 7. Venue has to do with which state has jurisdiction over the subject matter of a lawsuit. 8. A quorum of the U.S. Supreme Court consists of any three justices. 9. On appeal, neither party may bring new evidence to the court. 10. If a plaintiff in a civil lawsuit wins the case but the defendant does not pay the judgment, the plaintiff may request the clerk to issue a writ of execution. If the writ is returned unsatisfied, certain property of the defendant may be seized by the sheriff and sold to pay the judgment. 11. The U.S. Supreme Court has original jurisdiction in certain types of cases. 12. The U.S. Supreme Court reviews most cases by way of appeal by right, not by discretionary review. 13. The federal courts have jurisdiction over all matters that have not been given exclusively to the state courts by the Constitution or Congress. 14. Congress enacted legislation that almost completely eliminated the right to appeal to the U.S. Supreme Court. 15. All states have at least one federal judicial district and some, more populous states have more than one. 16. In the federal system, appeals from the Bankruptcy Court and Tax Court are heard directly by the U.S. Supreme Court. 17. A deposition is a pretrial discovery device, which consists of sworn testimony of a witness, taken out of court. 18. In the United States, there is never a right to a jury trial in a civil case. 19. Mediation, like arbitration, is often a compulsory process in which the mediator can render a decision, which is binding upon the parties. 20. The federal courts and the state courts can have concurrent jurisdiction over the same case. 21. Subject matter jurisdiction refers to the authority of a particular court to adjudicate a controversy of a particular kind. 22. A long-arm statute allows a state to obtain jurisdiction over a nonresident defendant when the nonresident defendant has sufficient contacts with the state. 23. In rem jurisdiction refers to jurisdiction over the person. 24. A court needs to have both subject matter jurisdiction and jurisdiction over the defendant involved before it can hear a particular case. 25. Often arbitration is preferred over litigation because the quality of the arbitrator's decision is often higher than that available through the court system. 26. Federal courts have exclusive jurisdiction over bankruptcy, patent, trademark, and copyright cases. 27. Stare decisis has no application in a dual court system. 28. The purpose of venue is to regulate the distribution of cases within a specific court system and to identify a convenient forum. 29. Attachment jurisdiction is jurisdiction over property. 30. A typical state long-arm statute applies only to nonresident defendants who commit criminal acts in the state. 31. Pleadings are a series of responsive, formal, written statements in which each side to a lawsuit states its claims and defenses. 32. The purpose of pleadings is to give notice and to establish what issues of fact and law are disputed. 33. A demurrer is a motion filed by a defendant denying the allegations of the complaint. 34. A counterclaim is a document filed by a defendant denying the allegations of the complaint. 35. If a defendant fails to respond to a summons, a default judgment will be entered against the defendant for the relief the court determines in a hearing. 36. A directed verdict is a judge’s final binding determination on the merits after a jury’s verdict. 37. The jury's verdict in a summary jury trial is always binding on the parties. 38. In making conflict of law decisions, judges need not be concerned about choosing what laws to follow since conflict of law rules are the same from state to state. A 39. An appeal from a small claims court is taken to the state court of appeals, where a trial de novo is begun. ANS: F PTS: 1 40. In a typical case before a U.S. Court of Appeals, all the judges of the circuit sit en banc to decide the case. ANS: F PTS: 1 41. A civil lawsuit commences when the plaintiff files with the clerk of the trial court a complaint against the defendant. A 42. The jury in a jury trial decides issues of fact. 43. Federal courts have limited subject matter jurisdiction. MULTIPLE CHOICE 1. Appellate judges can reverse a decision of the trial court: a. where any error below is found. b. only where there was an error that prejudiced the decision. c. only where the outcome of the case is clearly wrong. d. where the losing party desires a new trial. A 2. The nonbinding, informal process in which a third party is selected by the disputing parties to attempt to help them reach a mutually acceptable agreement is known as: a. conciliation. b. negotiation. c. consensual arbitration. d. compulsory arbitration. 3. Mark, a resident of Illinois, while driving on the freeway, hits Bill, a resident of Wisconsin, and totally destroys Bill's brand new vehicle. Bill may bring suit in federal district court: a. because of federal question jurisdiction. b. because there is always jurisdiction if there is diversity of citizenship. c. if the amount in controversy is over $75,000. d. if the accident occurred outside of Illinois or Wisconsin. 4. A decision of the Supreme Court of Washington would always be binding on: a. a federal district court in Washington. b. a state trial court in Washington. c. the U.S. Court of Appeals for the 9th Circuit. d. a state trial court in Oregon. 5. Generally, State A may exercise "long arm" jurisdiction over a defendant located in State B if the defendant: a. once resided in State A. b. uses a product produced in State A. c. made a contract in State A. d. has relatives in State A. 6. The "discovery" stage of a trial includes which one of the following? a. Production of documents b. Written interrogatories c. Depositions d. All of the above ANS: D PTS: 1 7. When the unsuccessful party challenges the verdict and the judge in a jury trial decides that the evidence is so clear that reasonable people could not differ as to the outcome of the case, the judge grants a: a. judgment on the verdict. b. motion for judgment notwithstanding the verdict. c. directed verdict. d. motion for a new trial. ANS: B PTS: 1 8. The U.S. Supreme Court reviews most decisions of lower courts by: a. the mandatory writ of certiorari. b. the discretionary writ of certiorari. c. appeal by right. d. appeal in rem. 9. A traffic offense, such as a speeding ticket, would be heard by a: a. U.S. District Court. b. state inferior trial court. c. state probate court. d. U.S. Court of Federal Claims. 10. Bankruptcy cases are heard by: a. the U.S. Bankruptcy Courts within the federal court system. b. only special courts within the state court system. c. either federal or state courts. d. the U.S. Court of Appeals for the Federal Circuit, if an appeal is made. 11. On a federal question, a decision of the Sixth Circuit Court of Appeals: a. may be persuasive but is not binding on a Tennessee court. b. is binding on a Tennessee court. c. has no effect on any state court. d. is binding on all other federal appeals courts. 12. Diversity of citizenship exists when: a. the plaintiffs are all citizens of a state or states different from the state or states of which the defendants are citizens. b. a foreign country brings an action against citizens of the United States. c. the controversy is between citizens of the United States and citizens of a foreign country. d. All of the above. 13. The pleadings in a lawsuit include: a. the complaint. b. the answer. c. written interrogatories. d. Both (a) and (b) above. 14. Which of the following is NOT considered to be an alternative method of dispute resolution? a. Special verdict b. Negotiation c. Conciliation d. Mediation A 15. To resolve a lawsuit, a court must have how many different types of jurisdiction? a. One b. Two c. Three d. Four 16. Janet is called for jury duty and is selected for possible service on a jury. However, when the defendant's attorney sees her, he notices that she is wearing a green dress. Both the defendant and the defendant's attorney hate green dresses, so they strike her name from the jury. a. This is a valid challenge for cause. b. This is a valid peremptory challenge. c. This is not a valid challenge. d. The plaintiff's attorney can have Janet serve by making an offer of proof to the judge. ANS: B PTS: 1 17. Janet's husband, Paul, is called for jury duty and is selected for possible service on a jury. However, when he is questioned by the defendant's attorney before final jury selection, he admits that he thinks the defendant is guilty based on the news reports that he saw on the local television news. The defendant asks the judge to excuse Paul from serving on the jury and the judge agrees. a. This is a valid challenge for cause. b. This is a valid peremptory challenge. c. This is not a valid challenge. d. The plaintiff's attorney can have Paul serve by making an offer of proof to the judge. ANS: A PTS: 1 18. Once a plaintiff has filed a complaint, the clerk of the court issues a to be served on the defendant to provide notice that a suit has been brought. a. writ of execution b. summons c. deposition d. demurrer 19. Which of the following may a U.S. Court of Appeals do in ruling on a case? a. Reverse or modify the judgment of the lower court. b. Remand or send it back to the lower court. c. Rehear the case by taking testimony of the witnesses. d. (a) and (b) above. e. (a) and (c) above. 20. Which of the following is NOT a way in which a case can reach the U.S. Supreme Court? a. Appeal by right b. Stare decisis c. Writ of certiorari d. All of the above are ways to reach the U.S. Supreme Court. ANS: B PTS: 1 21. The procedural stage of a lawsuit after the pleadings but before trial is: a. The peremptory challenge stage. b. The pretrial stage, including discovery. c. The special verdict stage. d. The offer of proof stage. 22. When a federal court hears a case solely under jurisdiction, no federal question is involved. a. exclusive federal b. constitutional c. diversity of citizenship d. quasi in rem 23. The federal courts have exclusive jurisdiction over: a. federal criminal prosecutions. b. trademark and copyright cases. c. issues involving state constitutions. d. (a) and (b) above. e. (a) and (c) above. 24. With a , the jury makes specific written findings on each factual issue; the judge then applies the law to these findings. a. general verdict b. special verdict c. voir dire d. quasi in rem 25. Able and Baker are both residents of Iowa, but they have a dispute regarding some land located in Kansas. Able files a lawsuit regarding the land in Kansas and Baker objects, claiming the Kansas courts have no jurisdiction in the case. a. Only the Iowa courts can hear the case. b. The Iowa federal district court can hear the case based on diversity of citizenship. c. The Kansas courts have in rem jurisdiction to adjudicate the claim regarding the property. d. The Kansas federal district court can hear the case based upon diversity of citizenship. ANS: C PTS: 1 26. When a trial is conducted with a jury, the judge determines issues of and the jury determines questions of . a. evidence, law b. law, evidence c. law, fact d. fact, law 27. When the defendant's property located within a state is seized to obtain payment of a judgment from a court from another state that is unrelated to the property being seized, the jurisdiction over the property is known as jurisdiction. a. quasi in rem b. in personam c. in rem d. forum non conveniens 28. The U.S. Supreme Court in applying the doctrine of stare decisis is: a. rigidly bound by its own decisions. b. subject to a majority decision by the federal appellate courts. c. not rigidly bound by its own decisions. d. bound on all federal questions by state and lower federal court decisions. ANS: C PTS: 1 29. In diversity of citizenship cases, federal courts apply: a. federal substantive and procedural law. b. state substantive and procedural law. c. state procedural and federal substantive law. d. federal procedural and state substantive law. 30. Conflict of law rules: a. are federal laws. b. are state laws. c. vary from state to state. d. (b) and (c) are correct. 31. Personal jurisdiction: a. may be obtained by personally serving a person within a state if that person is domiciled in that state. b. is also known as in rem jurisdiction. c. is obtained by seizing the defendant's property. d. may arise only through a party's consent. 32. Patricia Plaintiff, a resident of California, has a valid judgment against David Defendant, a resident of Nevada, which she now wishes to execute. David owns thousands of acres of beach-front property in California. Patricia may execute her judgment in California based on what type of jurisdiction? a. Subject matter jurisdiction b. Concurrent federal jurisdiction c. Quasi in rem jurisdiction d. Diversity of citizenship jurisdiction 33. An example of a special court in the federal judicial system is the: a. U.S. Court of Federal Claims. b. Federal District Court. c. U.S. Supreme Court. d. U.S. Court of Appeals. ANS: 34. If the judge denies a defendant's , then the defendant has the opportunity to present evidence. However, if the judge grants the motion, then the defendant automatically wins the case and does not need to present any evidence. a. motion for a new trial b. motion for a directed verdict c. offer of proof d. motion for change of venue 35. The decision of an arbitrator is called a(n): a. verdict. b. judgment. c. award. d. binding decision. 36. State trial courts of general jurisdiction: a. may be called county, district, common pleas, or superior courts. b. have a dollar limitation on their jurisdiction in civil cases. c. cannot hear criminal cases. d. maintain no formal records of their proceedings. 37. Midway Corporation is incorporated in Delaware, but it has its principal place of business in Minnesota. It does much of its business in California. For purposes of diversity of citizenship, Midway is a resident of: a. Delaware. b. Minnesota. c. both Delaware and Minnesota. d. Delaware, Minnesota, and California. 38. Able, a resident of New York, has a dispute with Baker, a resident of Illinois, involving a contract signed and performed in New York. His damages amount to $75,000, and he wants to sue. a. The case can be brought only in the New York state courts. b. The case can be brought only in the New York federal court. c. The case can be brought only in the Illinois state courts. d. The case can be brought in either the New York state courts or the New York federal court. 39. Alice, a resident of Ohio, has obtained a valid judgment against Bill, a resident of Kentucky. a. Alice can attach Bill's automobile in Ohio to satisfy her court judgment. b. Alice must go to Kentucky to satisfy her judgment. c. Alice has no recourse against Bill because he has left the state. d. Ohio has no jurisdiction over Bill because he is a resident of Kentucky. [Show More]

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