Business Law Ch. 1

8/11/2019 Business Law Ch. 1

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Chapter 1

The Legal Environment

N.B.: TYPE indicates that a question is new modi!ed or unchangedas "ollows.

N # question new to this edition o" the Test Ban$.% # question modi!ed "rom the previous edition o" the TestBan$& # question included in the previous edition o" the Test Ban$.

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1. The law esta/lishes rights duties and privileges that are consistentwith the values o" societ0.

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3. 5ow 6udges appl0 the law to speci!c disputes ma0 depend in part ontheir personal philosophical views.

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7. Law includes en"orcea/le rules governing relationships /etweenindividuals and their societ0.

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8. The natural law philosopher /elieves that the law should re4ectuniversal moral and ethical principles that are part o" human nature.

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;. Constitutional law includes onl0 the (.+. Constitution.

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17. Ever0 state has adopted the (ni"orm Commercial Code in its entiret0.

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18. *ederal administrative agencies speci"0 the powers o" Congress.

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1;. +tate agenc0 regulations ta$e precedence over con4icting "ederalagenc0 regulations.

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37. Equit0 is a /ranch o" law that see$s to suppl0 remedies other thandamages.

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38. # de"endant is a person against whom a lawsuit is /rought.

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3;. # plainti is a person against whom a lawsuit is /rought.

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3. # courtAs order to a part0 to do or to re"rain "rom doing a particularact is a rescission.

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3?. Equita/le remedies include in6unctions and decrees o" speci!cper"ormance.


7@. # su/stantive law creates or de!nes legal rights and o/ligations.

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71. Criminal law "ocuses on duties that eDist /etween persons.

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73. -nternational law is the law o" a "oreign nation and varies "romcountr0 to countr0.

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77. # re"erence to 3> (.+.C. +ection 1773F means that a "ederal courtAsdecision can /e "ound on Page 3> o" +ection 1773 o" the (nited+tates Cases.

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78. 'ules and regulations adopted /0 "ederal administrative agencies are

compiled in the Code o" *ederal 'egulations.

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7;. ost state trial court decisions are not pu/lished.


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1. To Pete the written law o" a particular societ0 at a particular time ismost signi!cant. Pete is

a. a legal positivist./. a legal rationalist.c. a legal realist.d. a person who adheres to the natural law tradition.

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3. To pal the law is a tool "or promoting 6ustice. This is a view o" whatis sometimes called

a. promotional 6urisprudence.


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/. the 6ust societ0.c. the sociological school.d. utilitarianism.

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7. 9oters in North Carolina approve a new state constitution a"ter whichthe cean Cit0 Council passes new ordinances the North CarolinaHepartment o" Par$s and 'ecreation issues new rules and the cean

Cit0 Cham/er o" Commerce sends out new instructions. +ources o"law do not include

a. instructions issued /0 the cean Cit0 Cham/er o" Commerce./. ordinances passed /0 the cean Cit0 Council.c. rules issued /0 the North Carolina Hepartment o" Par$s and

'ecreation.d. state constitutions passed /0 popular vote.

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8. -n Ne/ras$a the highestGran$ing IsuperiorJ law is

a. a case decided /0 the Ne/ras$a +upreme Court./. a provision in the Ne/ras$a constitution.c. a rule created /0 a Ne/ras$a state administrative agenc0.d. a statute enacted /0 the Ne/ras$a legislature.

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;. 5awaii enacts a state law that violates the (.+. Constitution. This lawcan /e en"orced /0

a. no one./. the "ederal government onl0.c. the state o" 5awaii onl0.d. the (nited +tates +upreme Court onl0.

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=. The (.+. Congress enacts a new "ederal statute that sets dierentstandards "or the lia/ilit0 o" /usinesses selling de"ective products.This statute applies

a. onl0 to matters not covered /0 state law./. onl0 to those states that adopt the statute.c. to all o" the states.d. to none o" the states.

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>. The 'iver Cit0 Council the +anta Clara Count0 Board the TeDas statelegislature and the (.+. Congress enact laws. These laws constitute

a. administrative law. /. case law.

c. stare decisis.d. statutor0 law.

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?. ar0 is a consultant to the National Con"erence o" Commissioners on(ni"orm +tate Laws. This organiKation

a. adopts uni"orm laws "or the states./. applies uni"orm laws to the states.c. dra"ts uni"orm laws "or adoption /0 the states.d. imposes uni"orm laws on the states.

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1@. The *ederal Trade Commission I*TCJ is a government agenc0 thatissues rules orders and decisions. The 2eorgia state legislatureenacts statutes. The ac$son Count0 Board and the Peach Cit0Council enacts ordinances. #dministrative law includes


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a. all law that aects a /usinessAs operation./. decisions orders and rules o" the *TC.c. ordinances enacted /0 count0 /oard and the cit0 council.

d. statutes enacted /0 the state legislature.

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11. The (ni"orm Commercial Code has /een adopted at least in part in

a. all states./. "ort0G!ve states.c. twent0G!ve states.d. no states.

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13. a0 is a "ederal 6udge. a0As 6udicial decisions are part o" case law. Thislaw includes interpretations o"

a. administrative regulations onl0./. constitutional provisions onl0.c. statutes onl0.d. administrative regulations constitutional provisions and

statutes.

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17. -n #lpha v. Beta a state supreme court held that a minor could cancela contract "or the sale o" a car. Now a trial court in the same state isdeciding Helta v. 2amma a case with similar "acts. (nder thedoctrine o" stare decisis the trial court is li$el0 to

a. allow the minor to cancel the contract.

/. disregard the previous case.c. order the minor to cancel the contract.d. require the minor to "ul!ll the contract.

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1;. #reas o" the law not governed /0 statutor0 or administrative law are

a. governed /0 the common law.

/. open to each individualAs own interpretation.c. regulated /0 the states under the (.+. Constitution.d. su/6ect to local ordinances.

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1. ill is an appellate court 6udge. -n this capacit0 ill esta/lishes a ruleo" law. (nder the doctrine o" stare decisis the principle must /eadhered to /0

a. all courts./. courts o" lower ran$ onl0.

c. that court and courts o" lower ran$.d. that court onl0.

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37. -n a suit against #dam Beth o/tains a remed0 which is the meansgiven to a part0

a. onl0 to en"orce a right./. onl0 to redress a wrong.c. to en"orce a right or to redress a wrong.d. none o" the choices.

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38. Net Corporation !les a suit against mega -nc. alleging that mega/reached a contract to sell Net a computer s0stem "or M1@@@@@. Netis

a. the appellant./. the appellee.c. the de"endant.d. the plainti.

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3;. +tandard Business Compan0 appeals a decision against it in "avor o"Top *light Corporation "rom a lower court to a higher court. +tandard

is

a. the appellant./. the appellee.c. the de"endant.d. the plainti.

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d. direct a part0 to do or not to do a particular act onl0.

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3=. -n a suit against Charles Hiana o/tains the cancellation o" a contractwhich is

a. a decree o" speci!c per"ormance./. an award o" damages.c. an in6unction.d. rescission.

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3>. -n a suit against ath0 Lon o/tains speci!c per"ormance. This is

a. an equita/le remed0 and a remed0 at law.

/. an equita/le remed0 onl0.c. a remed0 at law onl0.d. not a remed0.

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3?. Beth is a victim o" CarlAs violation o" a criminal law. Criminal law isconcerned with

a. the prosecution o" private individuals /0 other private

individuals./. the prosecution o" pu/lic ocials /0 private individuals.c. the relie" availa/le when a personAs rights are violated.d. wrongs committed against the pu/lic as a whole.

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7@. 2reat -nternet -nc. I2--J is an -nternet service provider. 2--As techsupport emplo0ees are on stri$e. +iD o" the wor$ers are /loc$ing 2--Asdoor. To get them awa0 "rom the door 2-- should o/tain

a. a decree o" speci!c per"ormance./. an award o" damages.c. an in6unction.d. a rescission.


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71. Lev is a 6udge. -n his court Lev ma0 /ar a suit i" it is not !led within aproper time according to

a. a statute o" limitations. /. the doctrine o" stare decisis.

c. the chancellorAs discretion.d. the $ingAs conscience.

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73. hen verseas EDports -nc. /ased in New Yor$ does /usinessinternationall0 the !rm ma0 /e su/6ect to international law. Thesources o" this law include

a. the laws o" individual nations onl0./. treaties and international organiKations onl0.c. the laws o" individual nations and treaties and international

organiKations.d. none o" the choices.

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77. -" the title o" a case appears as ,ualit0 +ales Corp. v. 'egional

Histri/ution Co.F the part0 in whose "avor the court decided is

a. ,ualit0 +ales. /. 'egional Histri/ution. c. either part0. d. neither part0.

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78. The ontana +upreme Court decides the case o" National Co. v.

verseas Corp. " nine 6ustices eight /elieve the 6udgment should /ein NationalAs "avor. ustice Pine disagrees and writes a separateopinion. This opinion is

a. a concurring opinion./. a dissenting opinion.c. a minorit0 opinion.


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d. a unanimous opinion.

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7;. etro Cit0 Center is an area o" tourist attractions in etro Cit0. TheCenterAs director under the cit0As authorit0 issues a rule to requirestreet per"ormers to o/tain permits. The Center cites No//0 amagician "or per"orming without a permit. (nder the principlesdiscussed in # +ample Court CaseF Berger v. Cit0 o" +eattle theCenter most li$el0 acted

a. in violation o" No//0As rights under the *irst #mendment./. reasona/l0 in issuing the rule /ut not in citing No//0.

c. reasona/l0 in citing No//0 /ut not in issuing the rule.d. reasona/l0 in the circumstances and under the law.

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1. -n a lawsuit /etween Higital +ales Corporation and Engineering#ssociates -nc. the court applies the doctrine o" stare decisis. hat

is this doctrineO hat does this doctrine have to do with the#merican legal s0stemO

#N+E': -n a common law legal s0stem past 6udicial decisions are/inding in current disputes with similar "acts. This "eature o" the comGmon law which is the /asis o" the #merican legal s0stem is unique/ecause unli$e the law in other legal s0stems it is 6udgeGmade law.ithin the common law s0stem when possi/le 6udges attempt to /econsistent and to /ase their decisions on the principles suggested /0earlier cases. The /od0 o" principles and doctrines that "orm thecommon law emerged over time as 6udges applied the principles

announced in earlier cases to su/sequent legal controversies. Thepractice o" deciding cases with re"erence to "ormer decisions orprecedentsthe cornerstone o" the #merican legal s0stemis calledthe doctrine o" stare decisis. (nder this doctrine 6udges are o/ligatedto "ollow the precedents esta/lished within their 6urisdictions. Thishelps courts to /e more ecient and ma$es the law more sta/le andpredicta/le.


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3. #lpha Corporation !les a suit against Beta -nc. alleging that Beta/reached a contract to sell #lpha a computer s0stem "or M1@@@@@.The court rules in #lphaAs "avor and Beta appeals to a higher court.-n the initial suit who was the plainti and who was the de"endantand on appeal which part0 was the appellant and which theappelleeO The higher courtAs opinion in the case is at Beta -nc. v.#lpha Corp. 7@= *.7d 1@>; I?th Cir. 3@@=J. +peci!call0 where can thisopinion /e "oundO

#N+E': -n the original suit #lpha was the plainti and Beta was

the de"endant. -n the appeal Beta was the appellant Ior thepetitionerJ and #lpha was the appellee Ior the respondentJ. This case Beta -nc. v. #lpha Corp. 7@= *.7d 1@>; I?th Cir. 3@@=Jcan /e"ound in its entiret0 in volume 7@= o" the *ederal 'eporter Third+eries on page 1@>;. The (.+. Court o" #ppeals "or the Ninth Circuitdecided this case in 3@@=.

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Business Law Ch. 1