Legal Environment of Business Exam
Solutions
Course Introduction
The Legal Environment of Business explores the foundational legal principles that govern commercial activity and impact managerial decision-making. This course examines the structure of the American legal system, sources of law, and the roles of federal and state courts. Topics include contract law, torts, product liability, intellectual property, agency, employment law, government regulations, and business ethics. Emphasis is placed on understanding legal terminology, assessing legal risks, and applying legal reasoning to real-world business scenarios, thereby equipping students with the knowledge needed to navigate the complex regulatory landscape that surrounds modern enterprises.
Recommended Textbook
Introduction to Law 5th Edition by Joanne B. Hames
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Chapter 1: Introduction to Law
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Q1) A law that makes shoplifting a crime is an example of which type of law?
A) Substantive law
B) Procedural law
C) A rule of court
D) A bylaw
Answer: A
Q2) Substantive laws define the rights and duties of parties and establish the legal basis for any lawsuit
A)True
B)False
Answer: True
Q3) Jurisprudence is:
A) another term for precedent.
B) another term for common law.
C) the study of law.
D) the study of the philosophy of law.
Answer: D
Q4) Murder, assault, and theft are examples of _____ criminal laws.
Answer: substantive
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Chapter 2: The US Legal System
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Q1) In order to override a presidential veto, each house of Congress must approve the presidential override by vote?
A) One-third
B) Majority vote
C) Two-thirds
D) Three-fourths
Answer: C
Q2) The common law is a body of law that is developed through which branch of government?
A) Executive branch
B) Judicial branch
C) Legislative branch
D) Administrative agencies
Answer: B
Q3) Which type of powers given to Congress are spelled out in the U.S. Constitution?
A) Express powers
B) Implied powers
C) Inherent powers
D) Police powers
Answer: A
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Chapter 3: The Courts and Legal Personnel
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Q1) Which of the following is not part of an appeal?
A) Live testimony by witnesses before the appellate court
B) Transcripts of the trial court proceedings
C) Appellate briefs
D) All of the above
Answer: A
Q2) The _____of ethics adopted by the federal judicial conference exemplify the type of rules regulating judges throughout the United States.
Answer: canons
Q3) All federal court judges or justices are appointed by the President and subject to approval by which government body?
A) The Senate
B) The U.S. House of Representatives
C) Both the Senate and the U.S. House of Representatives
D) The U.S. Supreme Court
Answer: A
Q4) Cases heard in U.S. Court of Appeals are normally heard by a panel of_____ judges who decide the case by a majority vote.
Answer: three
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Chapter 4: Finding the Law: Legal Research
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Q1) What type of secondary source is the American Bar Association Journal?
A) Legal dictionary
B) Legal encyclopedia
C) Treatise
D) Legal periodical
Q2) Statutes are enacted by which branch of the government?
A) Executive branch
B) Judicial branch
C) Legislative branch
D) All of the above
Q3) There is only one reporter for federal and state court cases.
A)True
B)False
Q4) What are the different components of case law?
Q5) Which of the following are not primary sources?
A) Constitutions
B) Statutes
C) Cases
D) Periodicals
Q6) _______ facts help the researcher understand what happened.
Page 6
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Chapter 5: Using the Law: Analysis and Legal Writing
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Sample Questions
Q1) Which of the following is a type of citation manual?
A) Uniform System of Citation [Bluebook]
B) A.L.W.D. Manual
C) Chicago Manual of Style
D) All of the above
Q2) "The actions were quickly regretted by her" is an example of:
A) active voice.
B) passive voice.
C) use of unnecessary words.
D) ambiguous terms.
E) None of the above
Q3) The Thesis Paragraph should not:
A) set forth the client's problem.
B) state the legal issue.
C) explain in detail the legal rules governing the issues.
D) state the legal conclusions.
E) None of the above.
Q4) A case brief is an example of persuasive writing.
A)True
B)False
Page 7
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Chapter 6: Constitutional Law
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Q1) Which right found in the First Amendment to the U.S. Constitution is most important to you personally? Why?
Q2) How many amendments have been added to the U.S. Constitution?
A) 10
B) 26
C) 27
D) 28
Q3) The Due Process Clause is found in both the Fifth and Fourteenth Amendments.
A)True
B)False
Q4) What is the name of the U.S. Supreme Court case decided in 1973 that held that a state law banning abortion was unconstitutional because it violated the right to privacy implied in the Fourteenth Amendment?
A) Gideon v.Wainwright
B) Lawrence v. Texas
C) Baker v. Carr
D) Roe v. Wade
Q5) Which U.S. Supreme Court case do you think has had the most impact on society? Explain your reasoning.
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Chapter 7: Tort Law
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Q1) What activities give rise to strict liability?
Q2) Intentional and outrageous conduct that causes mental suffering forms the basis of the tort of intentional infliction of emotional distress.
A)True
B)False
Q3) Intentional infliction of emotion distress causes:
A) mental suffering.
B) general damages.
C) special damages.
D) negligence.
E) mental disorder.
Q4) Vicarious liability is also known as respondeat superior.
A)True
B)False
Q5) An intentional tort is one in which the party committing the tort intends to do the act knowing it will cause serious injury.
A)True
B)False
Q6) Explain the difference between assault and battery.
Page 9
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Chapter 8: Family Law
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Q1) Why would a couple planning to marry have a pre-marital agreement?
Q2) The deponent is the person whose testimony is given under oath during a deposition.
A)True
B)False
Q3) What is the name of the uniform law that many states have adopted that recognizes that both natural parents have certain rights and obligations regarding their children?
A) Uniform Parentage Act
B) Uniform Child Custody Jurisdiction Act
C) Uniform Premarital Agreement Act
D) Uniform Family Law Act
Q4) An annulment proceeding is used to obtain a court declaration that:
A) the marriage is over.
B) a legal separation has begun.
C) no legal marriage ever existed.
D) the marriage is voidable.
E) the marriage was illegal.
Q5) A(n) ______ is used to obtain a court declaration that no legal marriage ever existed.
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Chapter 9: Estate Planning: Wills, Trusts, and Probate
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Q1) A will can be changed or revoked any time after the will is properly created and before ______.
Q2) A trust is a document in which a person makes provisions for the disposition of all real property.
A)True
B)False
Q3) Probate is the court-supervised process that takes places after a person dies.
A)True
B)False
Q4) What type of will is oral will be made by one on his or her deathbed?
A) Formal
B) Holographic
C) Nuncupative
D) Statutory will
Q5) Technically a trust is a situation where the title to property is divided into two parts: legal title and equitable title.
A)True
B)False
Q6) Explain how a will can be revoked or changed.
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Q7) The most common types of express trusts are living trusts and _______ trusts.
Chapter 10: Contract and Property Law
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Q1) The "Golden Arches" is an example of something that is entitled to protection under:
A) patent law.
B) copyright law.
C) trade secret law.
D) trademark law.
E) All of the above
Q2) A ______ is an agreement between an owner of property and another in which the owner of the property gives the other person the right to use the property for a set period of time.
Q3) Explain the parol evidence rule.
Q4) Which of the following indicates a non-ownership interest in real property?
A) Mortgage
B) Deed of trust
C) Lien
D) Lease
E) All of the above
Q5) The key feature of joint tenancy is a right of survivorship.
A)True
B)False
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Chapter 11: The Business Environment: Agency,
Employment, Business Organizations, and Bankruptcy Laws
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Q1) The Securities and Exchange Commission (SEC) is a federal agency that adopts rules that must be followed by corporations and other businesses that sell securities through any national exchange.
A)True
B)False
Q2) Each partner in a partnership is the agent of the other partners and is responsible for the torts of the other partners if committed in the course and scope of the partnership.
A)True
B)False
Q3) What type of employment is an employment arrangement without a fixed term?
A) Contract employment
B) Free-will employment
C) At-will employment
D) Temporary employment
Q4) A limited partnership must have at least one general partner.
A)True
B)False
Q5) What are the differences between a limited liability partnership and a limited liability company?
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Chapter 12: Civil Procedure Before Trial
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Q1) Personal jurisdiction is in part controlled by the due process clause of the Constitution.
A)True
B)False
Q2) Describe the different discovery methods used in civil litigation.
Q3) Once a complaint is filed, the plaintiff gives notice to the defendant that a lawsuit has been filed through ___________.
Q4) Diversity of citizenship means that one party is not a resident of the United States.
A)True
B)False
Q5) What type of service of process is done with a notice appearing in a paper of general circulation?
A) Personal service
B) Substituted service
C) Service by publication
D) Service by mail
Q6) A deposition takes place outside the courtroom.
A)True
B)False
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Chapter 13: Alternative Dispute Resolution
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Q1) Early neutral ________ is a proceeding that takes place early in a civil case in which the disputing parties meet with a neutral person who evaluates the case in an attempt to settle the dispute.
Q2) In what types of cases should court-ordered mediation be required?
Q3) What is a type of informal, nonbinding trial in which disputing parties, usually businesses, present their side of the dispute to a jury of executives from the businesses?
A) Summary trial
B) Arbitration
C) Mini-trial
D) Mediation
Q4) What is the process in which the parties discuss and negotiate the issues in dispute with the assistance of a neutral person?
A) Mediation
B) Arbitration
C) Mini-trial
D) Summary trial
Q5) The form of arbitration in which the parties are not obligated to accept the arbitrator's decision is ________ arbitration.
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Chapter 14: Criminal Practice: Criminal Law and Juvenile Law
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Q1) A(n) _____ is a reckless or intentional, harmful, or offensive touching of another.
Q2) In California, the equivalent of a sentencing in criminal court for adults is a _______ hearing in juvenile court.
Q3) Which of the four purposes of criminal law should be the most important goal: deterrence, rehabilitation, incapacitation, or retribution? Explain.
Q4) During a dispute in a parking lot over a parking space, Mark intentionally hits Robin on the right arm with a baseball bat that he keeps in the trunk of his vehicle. Robin suffers a broken arm. What crime has Mark committed?
A) Assault
B) Battery
C) False imprisonment
D) Burglary
Q5) Actus reus is:
A) an element of mens rea.
B) another term for a purposeful act.
C) the second element of a crime.
D) the intent element of mens rea.
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Chapter 15: Criminal Procedure Before Trial
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Q1) The Sixth Amendment lists several rights regarding a criminal trial. The defendant has the right to counsel, the right to a jury trial, the right to a speedy trial, the right to a trial in the area where the crime occurred, and the right to subpoena witnesses for trial. The Fifth Amendment provides for due process. The Fourth Amendment protects against unreasonable searches and seizures. Which constitutional right afforded to criminal defendants is the most important? Which constitutional right is being threatened the most today?
Q2) Criminal procedure is a branch of federal law.
A)True
B)False
Q3) What are the exceptions to the warrant requirement?
Q4) What did the U.S. Supreme Court decide in Mapp v. Ohio (1961)?
Q5) In the U.S. Supreme Court case Boumediene v. Bush, 553 U.S. 723 (2008), the U.S. Supreme Court held that detainees at Guantanamo Bay are entitled to the protection of the Fifth Amendment right not to be deprived of liberty without due process of law. Should the Fifth Amendment due process rights apply just to U.S. citizens or should the due process also be extended to other persons, including enemy combatants?
Q6) A motion for change of _______ requests that the court change the location of the trial.
Page 17
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Chapter 16: Rules of Evidence
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Q1) A chart that depicts an intersection and location of vehicles in an automobile negligence case is an example of __________ evidence.
Q2) There are four basic types of evidence: the testimony of a witness, exhibits, facts that the attorneys have stipulated, and judicial notice.
A)True
B)False
Q3) Which types of witnesses add more value to a case: lay witnesses or expert witnesses? Does it make a difference on the type of case? If so, in which types of cases are expert witnesses more valuable?
Q4) What type of evidence is testimony by an eyewitness?
A) Direct evidence
B) Documentary evidence
C) Demonstrative evidence
D) Circumstantial evidence
Q5) Evidence is either direct or circumstantial.
A)True
B)False
Q6) Why is hearsay evidence generally not admissible?
Q7) Explain the four types of evidence.
Page 18
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Chapter 17: The Trial
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Q1) Who has the burden of proof in a criminal case?
A) The prosecution
B) The defendant
C) The judge
D) The jury
Q2) Explain how a judge decides which jury instructions to give to a jury.
Q3) Preparation for trial is similar to preparation for:
A) settlement.
B) discovery.
C) investigation.
D) opening statements.
E) closing arguments.
Q4) The jury is a group of citizens who decide the facts of the case.
A)True
B)False
Q5) If a prospective juror shows bias, then that individual is excused for cause.
A)True
B)False
Q6) In a criminal case, the prosecutor must prove (1) that a crime was committed and (2) that the evidence shows that the defendant is guilty beyond a __________.
Page 19
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