Business Law Multiple Choice Questions (Enter your answers on the enclosed answer sheet)

Unit 1 Business Law


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1) According to Judge Jerome Frank, uncertainty in the law:


a. is an unfortunate accident

b. should be avoided whenever possible c. is of immense social value

d. does not exist in the U.S. legal system



2) Which of the following is most consistent with the Natural Law School of jurisprudence?


a. Law is based on moral and ethical principles of what are right, and it is the job of men and women, through study, to discover what these principles are.

b. The law is a reflection of society, thus the law must change naturally as society changes over time.

c. The laws of man are secondary to the laws of nature, and thus the laws of nature take precedence whenever the laws of man are in conflict with the laws of nature.

d. By applying the rules of logic to specific cases, the logical, or natural, result will be obtained.

e. Laws must first and foremost respect, preserve, and promote the preservation of the environment and life in all its forms.



3) The school of jurisprudence that believes that free market forces should determine the out comes to lawsuits is the:


a. Command school

b. Sociological school

c. Critical Legal Studies school d. Law and Economics school



4) What is an equity court’s function?


a. To deal with just the law of merchants.

b. To issue opinions in cases that later set the precedent for similar cases. c. To investigate the merits of a case.

d. To issue executive orders.

e. To set state or federal laws between two or more nations.



5) The Uniform Commercial Code is an example of what type of law?


a. statutory law b. treaty

c. administrative law d. judicial law

e. executive order







( BAM 317 Business Law ) ( Unit 1 Examination )


( BAM 317 Business Law ) ( Unit 1 Examination )





6) When statutes are organized by topic, the resulting compilation of law is known as:


a. codified law b. common law c. civil law

d. precedent



7) Which of the following powers do administrative agencies typically have?


a. rulemaking only

b. statute interpretation

c. dispute adjudication only d. All of these are correct.



8) The Federal Trade Commission is an example of:


a. a federal agency created by Congress

b. a corporation subsidized by the federal government c. a branch of the U.S. Supreme Court

d. a temporary commission created by executive order that has become permanent e. a judicially created subdivision of the executive branch



9) John lives in a large city and desires to start an airport shuttle service. In order to do so, John must go through a complicated permit application and approval process. John believes that this process is in place in order to protect the persons already operating such services. John

believes that these rules are arbitrary, and he should be allowed to start his business based on general notions of fairness. John’s beliefs most closely correspond to which school of jurisprudence?


a. Critical Legal Studies School b. Law and Economics School c. Natural Law School

d. Historical School

e. Sociological School



10) The U.S. court of federal claims hears what kinds of cases?


a. any case with claims involving more than one state b. civil cases where at least $75,000 is in dispute

c. cases against the United States

d. cases where counterclaims have been filed

e. cases involving disputes in the way an earlier case was decided









11) The consequence of a plurality decision is that:


a. the decision of the Circuit Court of Appeals is affirmed

b. the case is not decided and will be reheard at a later date c. the case is decided but is not precedent for later cases

d. the case is decided and becomes precedent for later cases

e. the case is not decided, but the applicable legal reasoning becomes precedent for later cases



12) The term for jurisdiction based on the location of a piece of property is:


a. long-arm jurisdiction

b. in personam jurisdiction c. in rem jurisdiction

d. subject matter jurisdiction e. de facto jurisdiction



13) How are long-arm statutes and forum-selection clauses similar?


a. They both eliminate the necessity for a court to have subject matter jurisdiction.

b. They both eliminate any requirement that there be a connection between a state and a party over whom that state is attempting to exercise jurisdiction.

c. They both can be factors in determining whether or not a state has personal jurisdiction over a defendant.

d. They both eliminate the need to meet venue requirements in a case.



14) How is a forum-selection clause related to questions of personal jurisdiction?


a. The two are not related at all.

b. The forum-selection clause will be valid only if it names a jurisdiction that would have personal jurisdiction over the parties to the contract even in the absence of the

forum-selection clause.

c. Forum-selection clauses are attempts by some parties to contracts to take away jurisdictional rights from the other party, and are generally found to be invalid.

d. A forum-selection clause will specify which courts have personal jurisdiction over the parties to the contract, and for disputes related to the particular contract, the

forum-selection clause will control over the general jurisdiction rules.

e. Forum-selection clauses are usually enacted by one party to select a jurisdiction most favorable to that party, thus they are effective only if, after a lawsuit has been filed, the defendant in the action agrees to jurisdiction as provided in the clause.

















15) Someone who is not a party to a lawsuit but has an interest in the outcome and therefore wants to become a party to the suit must:


a. await the outcome of this trial and then file a separate action b. intervene

c. counter-sue d. consolidate

e. file a cross-complaint



16) Once a complaint has been filed with the court, the court issues a:


a. judgment

b. motion for summary judgment c. summons

d. both A and D



17) The defendant’s written response to the plaintiff’s complaint that is filed with the court and served on the plaintiff is known as the:


a. a licensee b. appeal

c. answer

d. judgment

e. prayer for relief



18) The purpose of a closing argument is to allow an attorney to:


a. call additional witnesses and introduce other evidence to counter a rebuttal b. render jury instructions to the judge

c. convince the jury to render a verdict for their clients by pointing out the strengths in their client’s case and the weaknesses in the other side’s case

d. summarize the main factual and legal issues of the case and tell why the attorney believes his or her client’s position is valid



19) Which of the following is true regarding mediation?


a. A mediator often meets with both parties at the same time. b. A settlement agreement is never reached with a mediator. c. A mediator does not make a decision or an award.

d. If a settlement agreement is not reached in mediation, then the parties hire a new mediator.




20) Mable has balanced the cost against the benefit of bringing a lawsuit against Harvey. She has decided to sue him for monies owed to her as per a contract the two entered into. However, she would much rather settle her case at the pretrial hearing. If you were advising her about the statis- tics of cases that settle before they go to trial, what would you tell her?


a. That less than 10 percent of all cases settle.

b. That she is wasting her time as less than 5 percent of all cases settle. c. That 50 percent of all cases go to trial.

d. That more than 90 percent of all cases settle.



21) Since declaring independence, the current U.S. Constitution is the document to set out the general operations of the government.


a. first

b. second c. third

d. fourth



22) In responding to a constitutional challenge to the Computer Decency Act, the U.S. Supreme

Court ruled which of the following about the Act?


a) Computers and the Internet were not covered by the free speech provisions of the U.S.

Constitution because they did not exist when the Constitution was drafted. b) The Act was constitutional because obscene speech receives no protection.

c) Obscene materials could not be available between 6:00 a.m. and 10:00 p.m. local time.

d) The Internet deserves the “highest protection” from government intrusion.

e) The Internet was similar to television and that restrictions similar to those on television programming were appropriate.



23) Which of the following is true regarding obscene speech?


a. It cannot be prevented, but can be subject to time, place, or manner restrictions.

b. Because the definition of obscene is so subjective, it cannot be restricted or prevented. c. Even though the definition of obscene speech is subjective, if speech is determined to be obscene, it loses all constitutional protection.

d. Obscene speech and offensive speech receive the same degree of protection.

e. The U.S. Supreme Court has set out a clear definition of what speech is defined as obscene and therefore unprotected.



















24) Which of the following is correct regarding freedom of religion under the U.S. Constitution?


a. It comes from the Establishment Clause as well as the Free Exercise Clause.

b. It applies only to those religions in existence on the date the Constitution became effective.

c. It gives practitioners of any religion absolute rights to take part in actions that are based on that religion.

d. It allows the government to establish an official religion or religions so long as citizens remain free to practice any other religion they choose.



25) Which of the following would likely violate the freedom of religion protections in the U.S. Constitution?


a. the government promoting one religion as better than other religions

b. the government preventing the practice of unpopular or fringe religions

c. the government establishing a time in school for persons to practice the religion of their choice

d. A and B only. e. A, B, and C.



Written Assignment for Unit One



• Include your name, student number, course number, course title and unit number on each page

of your written assignment (this is for your protection in case your materials become separated).


• Begin each written assignment by identifying the question number you are answering followed by the actual question itself (in bold type).


• Use a standard essay format for responses to all questions (i.e. an introduction, middle paragraphs and conclusion).


• Responses must be submitted as a MS Word Document only, typed double-spaced, using a standard font (i.e. Times New Roman) and 12 point type size.


Word count is NOT one of the criteria that is used in assigning points to written assignments. However, students who are successful in earning the maximum number of points tend to submit written assignments that fall in the following ranges:


Undergraduate courses: 350 – 500 words or 1 – 2 pages.



All work must be free of any form of plagiarism. Put written answers into your own words. Do not simply cut and paste your answers from the Internet and do not copy your answers from the textbook. Be sure to refer to the course Syllabus for more details on plagiarism and proper citation styles.




Please answer ONE of the following:




1) Evaluate the views of the Critical Legal Studies School of jurisprudence. What are the benefits

and drawbacks of using broad notions of fairness in deciding cases?




2) What are the good and bad aspects of relying on precedent to decide current cases? Give an

example of precedent that either was not followed in the past, or should not be followed in the fu- ture. How much leeway do judges have in deciding whether to follow precedent? How much leeway should they have?




3) Assume that there are numerous Internet service providers in a large city. Because of fierce

competition, these businesses advertise heavily. One of the features that some of them provide and advertise is streamlined access to pornography sites as well as proprietary pornography sites that can be accessed only by those who subscribe with that particular service provider. This city passes an ordinance that prohibits any advertising about being able to access pornography over the Internet. One of the service providers challenges the constitutionality of this statute. Discuss how the case would turn out.

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