0073524999 Business Law

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ch1

Student: ___________________________________________________________________________

1. Law and "rule of law" are synonymous terms.True False

2. The first known written set of laws was the Code of Hammurabi.

True False

3. Rule-of-law nations adopt laws supporting the private market because it is in everyone's interest,including the lawmakers'.True False

4. Common property, applies to public resources owned by the government (or "state") like roads, publicbuildings, public lands, and monuments.True False

5. Contract law compensates owners whose resources are wrongfully harmed by the actions of others.True False

6. The secret to economic prosperity and the wealth of nations lies in the foundation of property law and thelegal system to implement it under the rule of law.True False

7. Jurisprudence is the rule of law.True False

8. Natural law theory asserts that law contains universal moral principles.True False

9. Sociological jurisprudence emphasizes that contemporary law should focus on legal principles that have

withstood the test of time in a nation.True False

10. Jurisprudence refers to the general body of law interpretations by judges as different from legislationpassed by legislators.True False

11. Legal realism is the idea that courts should understand the meaning of the Constitution relative to thetimes in which they interpret it.True False

12. The United Kingdom, the United States, Canada, Jamaica, India, Nigeria, New Zealand, and a few other

countries—all colonized by England—follow the common law.True False

13. Civil law arose in the eleventh and twelfth centuries as the English monarch appointed royal judgesto ride circuits around the English countryside and to resolve disputes in the name of the king (orqueen).True False

14. Louisiana is the only state in the U.S. that follows a partial civil law system due to Louisiana's historicalties with France, a civil law nation.

True False

15. Common law relies more on legislation than judicial decisions to determine what the law is.True False

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16. In administrative law, a government official represents society, or "the people," and the official isresponsible for seeking justice to achieve the ends of society.True False

17. Although property law is categorized as one kind of private law; in our legal system, it is at the heart ofboth public and private law.True False

18. Contract law often but not always requires actual injury to the owner's resources.

True False

19. Legislation passed by the Congress is called a statute or an act.True False

20. The Second Amendment to the Constitution holds that "No State shall . . . deprive any person of life,liberty or property without due process of law."True False

21. Disadvantages of case law do not destroy the benefits of certainty, predictability, and stability providedby case law and stare decisis.True False

22. Judges in future cases are not so likely to follow the dicta in prior cases as they are the holdings.True False

23. Conflicting precedents when applying the principle of stare decisis do not create confidence in thecertainty of law.True False

24. With reference to the hierarchy of sources of law, Case law prevails over local ordinances.True False

25. The Fourteenth Amendment to the Constitution recognizes that the law is enforced by taking a person's

life, freedom, or the resources that he or she owns.True False

26. Whether it's stated in the contract or not, when a breach of contract occurs, the injured party will usuallyrecover her attorney fees as part of her compensatory damages.True False

27. The single largest number of lawsuits today, especially in the federal courts, involves one business suinganother business for tortious conduct.True False

28. Tort law helps protect property boundaries by providing compensation when someone wrongfully crossessuch boundaries.True False

29. In addition to compensatory damages, breach-of-contract cases may award punitive damages, when thebreaching party knew or had reason to know that special circumstances existed that would cause the otherparty to suffer additional losses if the contract were breached.True False

30. Drake verbally lashes out at his neighbor one evening following a drunken party. He also beats him upwhen Drake tries to back away from the argument. He is said to have committed a strict liability tort.True False

31. Corporate governance can fail even when corporate managers do nothing illegal.

True False

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32. Article 6 of the Treaty on European Union, called the Maastricht Treaty, says the EU is "founded"on:A. specific performance.B. private markets.C. stare decisis.D. rule of law.E. property.

33. Economic growth depends "in particular on the rule of law" which is a "lodestar for all countries." Why? A.

Rule-of-law nations adopt laws supporting the private market because it is in everyone's interest,including the lawmakers'.

B. It distinguishes lawmakers as being above the rule of law.C. It allows special interest groups to benefit at the expense of others.D.

It adopts laws supporting the growth of the public markets over private markets increasing economicgrowth of nations.

E.

It removes the power of the courts and creates an autocratic regime where businesses can freely investand economic growth is high.

34. _____ property is an ownership fence which applies to resources like land that more than one individual

owns jointly.A. PrivateB. CivilC. PublicD. CommonE. Tort

35. A property based legal system:A. is unimportant in Western legal systems.B. protects and assists the wealthy over the poor.C. applies only to common property or resources like land that more than one individual owns jointly.

D. does not allow for the transfer of private resources.E. allows people to exclude others from interfering with what their efforts produce.

36. _____ can be thought of as the central concept underlying Western legal systems.A. Rule of lawB. PropertyC. Tort lawD. EthicsE. Stare decisis

37. Contract law:A. enables an owner to exchange resources, especially at a future date.

B. compensates owners whose resources are wrongfully harmed by the actions of others.C. punishes those who harm an owner's resources in particular ways.D. identifies how individuals can own and use private resources in groups.E. protects ownership and sets limits on private resource use.

38. _____ law both protects ownership and sets limits on private resource use.A. TortB. AntitrustC. SecuritiesD. RegulatoryE. Contract

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39. The law protecting the owners of a business organization from the managers who run it for them is_____.A. corporate governanceB. antitrust lawC. labor lawD. contract lawE. tort law

40. Which law forbids owners from monopolizing classes of resources and sets rules for how businesses cancompete to acquire ownership in new resources?A. RegulatoryB. TortC. AntitrustD. AntidiscriminationE. Contract

41. The ideas and philosophies that explain the origin of law and its justification is called _____.A. rule of lawB. tortsC. stare decisis

D. jurisprudenceE. statutes

42. _____ law jurisprudence believes that law is simply the commands of the state backed up by force andpunishments.A. PositiveB. NaturalC. HistoricalD. SociologicalE. Tort

43. Friedrich Savigny, a prominent German legal philosopher, helped develop _____ jurisprudence, whichemphasizes that contemporary law should focus on legal principles that have withstood the test of time ina nation.A. sociologicalB. tortC. positiveD. historicalE. natural

44. _____ jurisprudence supports the idea that law can and should change to meet new developments insociety.A. Historical

B. NaturalC. SociologicalD. Positive lawE. Tort

45. Which idea of law tries to go beyond just the words of law to examine what police, administrators,prosecutors, and judges are actually doing as they enforce, interpret, and apply laws?A. Positive law jurisprudenceB. Sociological jurisprudenceC. Stare DecisisD. Legal realism

E. Originalism

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46. So significant is the role of judges in the United States that they determine the meaning of theConstitution and can declare void the legislation of Congress and the acts of the president. This illustratesthat the legal system in the U.S. is based on _____.A. civil lawB. religious lawC. common lawD. hybrid lawE. constitutional law

47. _____ law courts do not make law nor do their judges think themselves obligated to follow prior judicialdecisions, called precedents.A. CommonB. ReligiousC. CivilD. HybridE. Constitutional

48. _____ law covers the legal principles that apply to government agencies, bureaus, boards, orcommissions.A. Administrative

B. ConstitutionalC. TortD. CriminalE. Contract

49. Which of the following is not a typical area of concern in property law?A. Promises to exchange resources in the futureB. Rules regarding patent, copyright, trademark, and trade secretC. Rules for compensation when an owner's legal boundaries are wrongfully crossedD. Rules regarding injury to an owner's resourcesE. Legal principles that apply to government agencies, bureaus, boards, or commissions

50. Stephanie has written a book, "Mirari" and was talking to some interested parties from Hollywood aboutmaking a movie based on it. However, she turned down the offer due to differences of opinion. A yearlater, Mirari was made into a movie but it did not acknowledge the author. Such situations come under_____ law.A. propertyB. administrativeC. constitutionalD. criminalE. tort

51. Burberry is a luxury brand that has its own distinctive trademark pattern. The company recently learned

that another retailer has been selling fake Burberry bags. The legal dispute that will arise here is governedby _____ law.A. administrativeB. constitutionalC. propertyD. criminalE. tort

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52. Which of the following statements are true of tort law?A.

It involves the recognition of exclusive right in both tangible (physically touchable) and intangibleresources such as copyrights, patents, trademarks etc.

B. It covers the rules of how owners transfer resources by exchanging them.C. It specifies various offenses against the proper order of the state.D. It covers the legal principles that apply to government agencies, bureaus, boards, or commissions.E.

It establishes rules for compensation when an owner's legal boundaries are wrongfully crossed byanother.

53. Kate has entered into a binding agreement to sell a house to Michael. When Michael shows up tocomplete the deal as per the agreement, Kate refuses to go through with the transaction. Which of thefollowing best categorizes Kate and Michael's issues with regard to classification of laws?A. This is a public law issue regarding contract law.B. This is a private law issue regarding contract law.C. This is a public law issue regarding property law.D. This is a private law issue regarding criminal law.E. This is a public law issue regarding tort law.

54. In most criminal cases, an arrest can be made only based on probable cause and requires the officer toread out the Miranda rights to the criminal suspect before the arrest is made. This is an example of:

A. tort law.B. procedural law.C. rule of law.D. substantive law.E. sociological jurisprudence.

55. Which of the following statements about substantive law is true?A. It is regulation and made by agencies of the federal government.B. It covers the rules of how owners transfer resources by exchanging them.C. The time allowed for one party to sue another is an example of substantive law.D. Enforcement of a contractual promise is substantive in nature.

E. It provides the machinery for rights and duties.

56. A collection of legislations passed by the Congress on the same subject are called:A. statutes.B. jurisprudence.C. stare decisis.D. codes.E. citations.

57. Following much debate the Congress has decided to pass a bill that will increase the taxes on tobacco.This legislation is called a:A. statute.

B. regulation.C. ordinance.D. tort.E. citation.

58. The City of Dover has passed a written law banning smoking in most restaurants and bars. Dover hasenacted a/an:A. statute.B. act.C. regulation.D. ordinance.

E. jurisprudence.

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59. At the state level, the hierarchy of law sources begins with the state _____.A. actB. statuteC. constitutionD. citationE. commercial code

60. Judicial decisions, called _____ laws, apply to a legal problem and interpret the relevant constitutional,legislative, and regulatory laws.A. caseB. proceduralC. ordinanceD. commercialE. code

61. The _____ in prior cases are precisely what was necessary to the decision reached.A. dictaB. holdingsC. citationsD. statutes

E. ordinances

62. According to _____, judges in current cases follow whenever possible the interpretation of lawdetermined by judges in prior cases.A. stare decisis.B. constitutional realism.C. statutory construction.D. constitutional relativism.E. legal realism.

63. When judges, decide appeals from trial courts, make decisions on legal issues, they write their decisions,

or _____, setting out reasons.A. citationsB. opinionsC. codesD. statutesE. ordinances

64. Which of the following are judicial decisions that interpret the relevant constitutional, legislative, andregulatory laws?A. CitationsB. OpinionsC. Case law

D. DictaE. Statutes

65. In constitutional law the idea that courts should understand the meaning of the Constitution relative to thetimes in which they interpret it is known as _____.A. constitutional relativityB. legal realismC. originalismD. dictaE. rule of law

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66. _____ stands for the idea that courts should interpret the Constitution only according to the intentions ofthose who wrote it.A. Constitutional relativityB. OriginalismC. Legal realismD. DictaE. Conflicts of law

67. The source of law which ranks the lowest among all the others is a _____.A. local ordinanceB. statuteC. case lawD. state administrative regulationE. federal administration regulation

68. _____ are in effect a form of punishment for violating the law and sometimes also serve as a preventiveaction.A. OrdinancesB. StatutesC. Sanctions

D. TortsE. Opinions

69. The right of an individual to take another person's resources (especially money) because that person hasfailed to meet the requirements of the law (e.g., the breach of a contract) is known as a(n) _____.A. sanctionB. amendmentC. remedyD. dictaE. holding

70. A(n) _____ is a civil wrong other than a breach of contract.A. ordinanceB. tortC. sanctionD. remedyE. dicta

71. Which of the following statements about a breach of contract is false?A.

If a breach by one party is serious enough, the other party may be permitted to rescind or cancel thecontract.

B.

The remedy of an injured party may be an order by the court commanding the other party actually toperform a bargain as agreed.

C.

The single largest number of lawsuits today involves businesses suing one another for a breach ofcontract.

D. A tort is a kind of breach of contract which is a civil wrongdoing.E.

Compensatory damages along with additional consequential damages may be awarded in some cases ofbreach of contract.

72. In some cases of a breach of contract, a decree of _____ may be made —an order by the courtcommanding the other party actually to perform a bargain as agreed.A. consequential damagesB. compensatory damagesC. stare decisis

D. specific performanceE. dicta

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73. Each of the following is a remedy in case of a breach of contract EXCEPT:A. punitive damages.B. consequential damages.C. specific performance.D. rescind the contract.E. cancel the contract.

74. Coach Kleats is in charge of the softball team at Phoenix Junior School. He loses his temper with one ofthe substitutes following a game and slams the child against the lockers in his anger. The child is badlybruised and is bleeding from the nose. The coach can be sued for committing a(n) _____ tort.A. negligenceB. intentionalC. strict liabilityD. specific performanceE. criminal conduct

75. Punitive damages are frequently awarded in:A. ordinary negligence cases.B. intentional tort cases.C. breach of contract cases.

D. criminal cases.E. violating the statutes.

76. In a broad general sense, _____ includes the legal property relations that large businesses have with eachother, with their customers, and with society.A. corporate governanceB. specific performanceC. stare decisisD. tort lawE. strict liability

77. Give three explanations for why national economies are weak or strong.

78. When the former Soviet Union collapsed, many observers thought that the new private market wouldpromptly improve Russia's economy. Why has the Soviet economy been slow to recover from the declinethat it experienced?

79. What is rule of law?

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80. With reference to property in the legal sense, what are the 3 main types of ownership?

81. Compare natural law and positive law in jurisprudence.

82. Illustrate the concept of sociological jurisprudence with an example.

83. Compare common law and civil law and how stare decisis is important in both instances.

84. Describe public law and its categories.

85. What is private law? What are its categories?

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86. What is civil and criminal law?

87. Illustrate the concept of substantive and procedural law with examples.

88. What are acts, statutes and codes?

89. Define stare decisis.

90. What are opinions, precedents and citations?

91. What information can be obtained from the citation of a case?

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92. List two disadvantages of stare decisis or case law?

93. Distinguish between holding and dicta in prior precedent.

94. What is constitutional relativity? How does it affect stare decisis?

95. Explain conflicts of law.

96. List the various sources of law and their order of hierarchy.

97. The 14th amendment recognizes that law may be enforced by taking resources owned by a citizen. Namethe instances in which someone's resources may be taken.

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98. Differentiate between an intentional tort and negligence.

99. What are exemplary damages?

100.What sanctions may be imposed for violating statutes and regulations?

101.Define a corporation?

102.How does corporate governance break down due to the illegal actions of managers?

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ch1 Key 1. Law and "rule of law" are synonymous terms.

FALSE

Law is known by everyone as being intended to tell members of society what they can or cannot do.

Under the rule of law, laws that are made are generally and equally applicable.

AACSB: Analytic

Blooms: Understand Difficulty: 1 Easy

Learning Objective: 01-01 To recognize why the legal systems of nations contribute to making the economies of some nations much stronger than the economies ofother nations.

Reed - Chapter 01 #1 Topic: Law, the Rule of Law, and Property

2. The first known written set of laws was the Code of Hammurabi.TRUE

The first known written set of laws was the Code of Hammurabi, named after the Babylonian king of

the 18th century BC.

AACSB: Analytic

Blooms: Remember Difficulty: 1 Easy



3. Rule-of-law nations adopt laws supporting the private market because it is in everyone's interest,including the lawmakers'.TRUE

Lawmakers have an incentive to make laws that benefit everyone. Rule-of-law nations adopt lawssupporting the private market because it is in everyone's interest, including the lawmakers'.

AACSB: Analytic




4. Common property, applies to public resources owned by the government (or "state") like roads, publicbuildings, public lands, and monuments.FALSE

Common property applies to resources like land that more than one individual owns jointly.

AACSB: Analytic


Learning Objective: 01-02 To explain that "property" in the law refers not to something that is owned but to the right of ownership itself; which gives maximumincentive for wealth creation.


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5. Contract law compensates owners whose resources are wrongfully harmed by the actions ofothers.FALSE

Tort law compensates owners whose resources are wrongfully harmed by the actions of others.

AACSB: Analytic




6. The secret to economic prosperity and the wealth of nations lies in the foundation of property law andthe legal system to implement it under the rule of law.TRUE

The secret to economic prosperity and the wealth of nations lies in the foundation of property law andthe legal system to implement it under the rule of law. Modern private markets within nations simplydo not work well without generally and equally applied property law.

AACSB: Analytic




7. Jurisprudence is the rule of law.FALSE

Jurisprudence is the philosophy of law.

AACSB: Analytic




8. Natural law theory asserts that law contains universal moral principles.TRUE

Aristotle and other ancient philosophers believed in the natural law theory. It asserts that law containsuniversal moral principles.

AACSB: Analytic




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9. Sociological jurisprudence emphasizes that contemporary law should focus on legal principles thathave withstood the test of time in a nation.FALSE

Sociological jurisprudence supports the idea that law can and should change to meet newdevelopments in society.

AACSB: Analytic




10. Jurisprudence refers to the general body of law interpretations by judges as different from legislationpassed by legislators.TRUE

Jurisprudence is not law itself. But it also refers to the general body of law interpretations by judges asdifferent from legislation passed by legislators.

AACSB: Analytic




11. Legal realism is the idea that courts should understand the meaning of the Constitution relative to thetimes in which they interpret it.FALSE

Legal realism tries to go beyond just the words of law to examine what police, administrators,

prosecutors, and judges are actually doing as they enforce, interpret, and apply laws.

AACSB: Analytic


Learning Objective: 01-04 To classify what legal sources lawyers turn to in answering legal questions from their clients; and the hierarchy of those sources. Reed - Chapter 01 #11

Topic: Law, the Rule of Law, and Property 12. The United Kingdom, the United States, Canada, Jamaica, India, Nigeria, New Zealand, and a few

other countries—all colonized by England—follow the common law.TRUE

Common law is followed in the United Kingdom, the United States, Canada, Jamaica, India, Nigeria,New Zealand, and a few other countries.

AACSB: Analytic

Blooms: Remember Difficulty: 2 Medium

Learning Objective: 01-03 To analyze why stare decisis is different in common law nations than in civil law nations. Reed - Chapter 01 #12

Topic: Classifications of Law

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13. Civil law arose in the eleventh and twelfth centuries as the English monarch appointed royal judgesto ride circuits around the English countryside and to resolve disputes in the name of the king (orqueen).FALSE

Common law arose in the eleventh and twelfth centuries as the English monarch appointed royal judges to ride circuits around the English countryside and to resolve disputes in the name of the king(or queen).

AACSB: Analytic



Topic: Classifications of Law 14. Louisiana is the only state in the U.S. that follows a partial civil law system due to Louisiana's

historical ties with France, a civil law nation.TRUE

Only Louisiana among the U.S. states follows a partial civil law system. This is due to Louisiana's

historical ties with France, a civil law nation.

AACSB: Analytic



Topic: Classifications of Law 15. Common law relies more on legislation than judicial decisions to determine what the law is.

FALSE

The common law legal system emphasizes the role of judges in determining the meaning of laws and

how they apply.

AACSB: Analytic



Topic: Classifications of Law 16. In administrative law, a government official represents society, or "the people," and the official is

responsible for seeking justice to achieve the ends of society.TRUE

Public law includes constitutional law, administrative law and criminal law. In each of these matters,a government official represents society, or "the people," and the official is responsible for seeking

justice to achieve the ends of society.

AACSB: Analytic




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17. Although property law is categorized as one kind of private law; in our legal system, it is at the heartof both public and private law.TRUE

Although we mention property law as only one kind of private law, actually, in its broad sense,property in our legal system is at the heart of both public and private law.

AACSB: Analytic



Topic: Classifications of Law 18. (p. 14)

Contract law often but not always requires actual injury to the owner's resources.FALSE

Contracts often involve enforceable promises to exchange resources in the future.

AACSB: Analytic



Topic: Classifications of Law 19. Legislation passed by the Congress is called a statute or an act.

TRUE

The legislation passed by the Congress is called "act" or "statute".

AACSB: Analytic


Learning Objective: 01-04 To classify what legal sources lawyers turn to in answering legal questions from their clients; and the hierarchy of those sources.

Reed - Chapter 01 #19 Topic: Sources of Law

20. The Second Amendment to the Constitution holds that "No State shall . . . deprive any person of life,liberty or property without due process of law."FALSE

The Second Amendment to the Constitution says that "the right to bear arms shall not be infringed."

AACSB: Analytic


Learning Objective: 01-04 To classify what legal sources lawyers turn to in answering legal questions from their clients; and the hierarchy of those sources.


21. Disadvantages of case law do not destroy the benefits of certainty, predictability, and stabilityprovided by case law and stare decisis.TRUE

Disadvantages of case law do not destroy the benefits of certainty, predictability, and stabilityprovided by case law and stare decisis.

AACSB: Analytic



Topic: Sources of Law

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22. Judges in future cases are not so likely to follow the dicta in prior cases as they are the holdings.TRUE

The holdings in prior cases are what are necessary to the decision reached. Dicta are whatever elsethe court said. Judges in future cases are not so likely to follow the dicta in prior cases as they are theholdings.

AACSB: Analytic



Topic: Sources of Law 23. Conflicting precedents when applying the principle of stare decisis do not create confidence in the

certainty of law.

TRUE

Under stare decisis, judges in current cases follow whenever possible the interpretation of lawdetermined by judges in prior cases. Conflicting precedents do not create confidence in the certaintyof law.

AACSB: Analytic

Blooms: Understand Difficulty: 2 Medium


Topic: Sources of Law 24. With reference to the hierarchy of sources of law, Case law prevails over local ordinances.

FALSE

Case law is the lowest source of law; local ordinances rank higher and prevail over them.

AACSB: Analytic



Topic: Sources of Law 25. The Fourteenth Amendment to the Constitution recognizes that the law is enforced by taking a

person's life, freedom, or the resources that he or she owns.TRUE

The Fourteenth Amendment to the Constitution recognizes that the law is enforced by taking aperson's life, freedom, or the resources that he or she owns.

AACSB: Analytic




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26. Whether it's stated in the contract or not, when a breach of contract occurs, the injured party willusually recover her attorney fees as part of her compensatory damages.FALSE

Damages do not make most parties totally "whole," however, because they do not as a general ruleinclude attorney's fees. Unless the contract or some special law provides to the contrary, parties to thecontract litigation pay their own attorneys.

AACSB: Analytic



Topic: Sources of Law 27. The single largest number of lawsuits today, especially in the federal courts, involves one business

suing another business for tortious conduct.FALSE

The single largest number of lawsuits today, especially in the federal courts, involves one businesssuing another business for breach of contract.

AACSB: Analytic



Topic: Sources of Law 28. Tort law helps protect property boundaries by providing compensation when someone wrongfully

crosses such boundaries.

TRUE

Torts involve improper crossing of property boundaries, usually causing injury to our person or other

things we own.

AACSB: Analytic



Topic: Sources of Law 29. In addition to compensatory damages, breach-of-contract cases may award punitive damages, when

the breaching party knew or had reason to know that special circumstances existed that would causethe other party to suffer additional losses if the contract were breached.

FALSE

In addition to compensatory damages, breach-of-contract cases may award consequential damageswhen the breaching party knew or had reason to know that special circumstances existed that wouldcause the other party to suffer additional losses if the contract were breached.

AACSB: Analytic




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30. Drake verbally lashes out at his neighbor one evening following a drunken party. He also beats himup when Drake tries to back away from the argument. He is said to have committed a strict liabilitytort.FALSE

Strict liability torts usually require the plaintiff to prove only that the defendant has injured somethingproper to the plaintiff.

AACSB: Analytic

Blooms: Apply Difficulty: 1 Easy


Topic: Sources of Law 31. Corporate governance can fail even when corporate managers do nothing illegal.

TRUE

Corporate governance can fail even when corporate managers do nothing illegal.

AACSB: Analytic



Topic: A Property-Based Legal System and Corporate Governance 32. Article 6 of the Treaty on European Union, called the Maastricht Treaty, says the EU is "founded"

on:A. specific performance.B. private markets.C. stare decisis.D. rule of law.

E. property.

Article 6 of the Treaty on European Union, called the Maastricht Treaty, says the EU is "founded"on "the rule of law."

AACSB: Analytic




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33. Economic growth depends "in particular on the rule of law" which is a "lodestar for all countries."Why?A.

Rule-of-law nations adopt laws supporting the private market because it is in everyone's interest,including the lawmakers'.

B. It distinguishes lawmakers as being above the rule of law.C. It allows special interest groups to benefit at the expense of others.D.

It adopts laws supporting the growth of the public markets over private markets increasingeconomic growth of nations.

E.

It removes the power of the courts and creates an autocratic regime where businesses can freelyinvest and economic growth is high.

Rule-of-law nations adopt laws supporting the private market because it is in everyone's interest,including the lawmakers'. The Rule of Law has been called "a cornerstone of free trade".

AACSB: Analytic




34. _____ property is an ownership fence which applies to resources like land that more than oneindividual owns jointly.A. PrivateB. CivilC. Public

D. Common

E. Tort

Common property applies to resources like land that more than one individual owns jointly.

AACSB: Analytic




35. A property based legal system:A. is unimportant in Western legal systems.B. protects and assists the wealthy over the poor.C. applies only to common property or resources like land that more than one individual owns jointly.D. does not allow for the transfer of private resources.E. allows people to exclude others from interfering with what their efforts produce.

It is a property based legal system that enables control by allowing people to exclude others frominterfering with what their efforts produce.

AACSB: Analytic




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36. _____ can be thought of as the central concept underlying Western legal systems.A. Rule of lawB. Property

C. Tort lawD. EthicsE. Stare decisis

Property can be thought of as the central concept underlying Western legal systems.

AACSB: Analytic




37. Contract law:A. enables an owner to exchange resources, especially at a future date.

B. compensates owners whose resources are wrongfully harmed by the actions of others.C. punishes those who harm an owner's resources in particular ways.D. identifies how individuals can own and use private resources in groups.E. protects ownership and sets limits on private resource use.

Contract law enables an owner to exchange resources, especially at a future date.

AACSB: Analytic




38. _____ law both protects ownership and sets limits on private resource use.

A. TortB. AntitrustC. SecuritiesD. Regulatory

E. Contract

Regulatory law both protects ownership and sets limits on private resource use.

AACSB: Analytic




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39. The law protecting the owners of a business organization from the managers who run it for them is_____.A. corporate governance

B. antitrust lawC. labor lawD. contract lawE. tort law

Corporate governance specifically concerns the law protecting the owners of a business organizationfrom the managers who run it for them.

AACSB: Analytic




40. Which law forbids owners from monopolizing classes of resources and sets rules for how businessescan compete to acquire ownership in new resources?A. RegulatoryB. TortC. AntitrustD. Antidiscrimination

E. Contract

Antitrust law forbids owners from monopolizing classes of resources and sets rules for how businessescan compete to acquire ownership in new resources.

AACSB: Analytic




41. The ideas and philosophies that explain the origin of law and its justification is called _____.A. rule of lawB. tortsC. stare decisisD. jurisprudence

E. statutes

The ideas and philosophies that explain the origin of law and its justification is called jurisprudence.

AACSB: Analytic




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42. _____ law jurisprudence believes that law is simply the commands of the state backed up by force andpunishments.A. Positive

B. NaturalC. HistoricalD. SociologicalE. Tort

Positive law jurisprudence believes that law is simply the commands of the state backed up by forceand punishments.

AACSB: Analytic




43. Friedrich Savigny, a prominent German legal philosopher, helped develop _____ jurisprudence, whichemphasizes that contemporary law should focus on legal principles that have withstood the test of timein a nation.A. sociologicalB. tortC. positiveD. historical

E. natural

The historical school of jurisprudence emphasizes that contemporary law should focus on legalprinciples that have withstood the test of time in a nation.

AACSB: Analytic

Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-02 To explain that "property" in the law refers not to something that is owned but to the right of ownership itself; which gives maximum

incentive for wealth creation. Reed - Chapter 01 #43

Topic: Law, the Rule of Law, and Property 44. _____ jurisprudence supports the idea that law can and should change to meet new developments in

society.A. HistoricalB. NaturalC. Sociological

D. Positive lawE. Tort

Sociological jurisprudence supports the idea that law can and should change to meet newdevelopments in society.

AACSB: Analytic




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45. Which idea of law tries to go beyond just the words of law to examine what police, administrators,prosecutors, and judges are actually doing as they enforce, interpret, and apply laws?A. Positive law jurisprudenceB. Sociological jurisprudenceC. Stare DecisisD. Legal realism

E. Originalism

Legal realism tries to go beyond just the words of law to examine what police, administrators,prosecutors, and judges are actually doing as they enforce, interpret, and apply laws.

AACSB: Analytic




46. So significant is the role of judges in the United States that they determine the meaning of theConstitution and can declare void the legislation of Congress and the acts of the president. Thisillustrates that the legal system in the U.S. is based on _____.A. civil lawB. religious lawC. common law

D. hybrid lawE. constitutional law

The common law legal system emphasizes the role of judges in determining the meaning of laws andhow they apply.

AACSB: Analytic

Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-02 To explain that "property" in the law refers not to something that is owned but to the right of ownership itself; which gives maximum


Topic: Classifications of Law 47. _____ law courts do not make law nor do their judges think themselves obligated to follow prior

judicial decisions, called precedents.A. CommonB. ReligiousC. Civil

D. HybridE. Constitutional

Civil law courts do not make law nor do their judges think themselves obligated to follow prior judicial decisions, called precedents.

AACSB: Analytic



Reed - Chapter 01 #47 Topic: Classifications of Law

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48. _____ law covers the legal principles that apply to government agencies, bureaus, boards, orcommissions.A. Administrative

B. ConstitutionalC. TortD. CriminalE. Contract

Administrative law covers the legal principles that apply to government agencies, bureaus, boards, orcommissions.

AACSB: Analytic




49. Which of the following is not a typical area of concern in property law?A. Promises to exchange resources in the futureB. Rules regarding patent, copyright, trademark, and trade secret

C. Rules for compensation when an owner's legal boundaries are wrongfully crossedD. Rules regarding injury to an owner's resourcesE. Legal principles that apply to government agencies, bureaus, boards, or commissions

Special areas of property concern land, goods, copyrights, patents, and trademarks.

AACSB: Analytic




50. Stephanie has written a book, "Mirari" and was talking to some interested parties from Hollywoodabout making a movie based on it. However, she turned down the offer due to differences of opinion.A year later, Mirari was made into a movie but it did not acknowledge the author. Such situationscome under _____ law.A. property

B. administrativeC. constitutionalD. criminalE. tort

Property law, involves the recognition of exclusive right in both tangible (physically touchable) andintangible resources.

AACSB: Analytic




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51. Burberry is a luxury brand that has its own distinctive trademark pattern. The company recentlylearned that another retailer has been selling fake Burberry bags. The legal dispute that will arise hereis governed by _____ law.A. administrativeB. constitutionalC. property

D. criminalE. tort

Property law, involves the recognition of exclusive right in both tangible (physically touchable) andintangible resources. Special areas of property law concern land, goods, copyrights, trademarks,patents, and trade secrets.

AACSB: Analytic




52. Which of the following statements are true of tort law?A.

It involves the recognition of exclusive right in both tangible (physically touchable) and intangibleresources such as copyrights, patents, trademarks etc.

B. It covers the rules of how owners transfer resources by exchanging them.C. It specifies various offenses against the proper order of the state.D. It covers the legal principles that apply to government agencies, bureaus, boards, or commissions.

E. It establishes rules for compensation when an owner's legal boundaries are wrongfully crossed byanother.

Tort law establishes rules for compensation when an owner's legal boundaries are wrongfully crossedby another.

AACSB: Analytic




53. Kate has entered into a binding agreement to sell a house to Michael. When Michael shows up tocomplete the deal as per the agreement, Kate refuses to go through with the transaction. Which of thefollowing best categorizes Kate and Michael's issues with regard to classification of laws?A. This is a public law issue regarding contract law.B. This is a private law issue regarding contract law.

C. This is a public law issue regarding property law.D. This is a private law issue regarding criminal law.E. This is a public law issue regarding tort law.

Private law covers those legal problems and issues that concern your private resource relationshipswith other people. Private law traditionally includes contract law, which covers the rules of howowners transfer resources by exchanging them.

AACSB: Analytic

Blooms: Apply Difficulty: 3 Hard



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54. In most criminal cases, an arrest can be made only based on probable cause and requires the officerto read out the Miranda rights to the criminal suspect before the arrest is made. This is an exampleof:A. tort law.B. procedural law.

C. rule of law.D. substantive law.E. sociological jurisprudence.

Procedural law deals with the method and means by which substantive law is made and administered.The rules of law governing the process of a lawsuit are examples of procedural laws.

AACSB: Analytic




55. Which of the following statements about substantive law is true?A. It is regulation and made by agencies of the federal government.B. It covers the rules of how owners transfer resources by exchanging them.C. The time allowed for one party to sue another is an example of substantive law.D. Enforcement of a contractual promise is substantive in nature.

E. It provides the machinery for rights and duties.

Substantive law defines the legal relationship of people with other people or between them and thestate. The rules of law governing the creation or enforcement of a contractual promise are substantivein nature.

AACSB: Analytic

Blooms: Remember Difficulty: 3 Hard Learning Objective: 01-02 To explain that "property" in the law refers not to something that is owned but to the right of ownership itself; which gives maximum


Topic: Classifications of Law 56. A collection of legislations passed by the Congress on the same subject are called:

A. statutes.B. jurisprudence.C. stare decisis.D. codes.

E. citations.

A collection of legislations passed by the Congress on the same subject are called codes.

AACSB: Analytic




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57. Following much debate the Congress has decided to pass a bill that will increase the taxes on tobacco.This legislation is called a:A. statute.

B. regulation.C. ordinance.D. tort.E. citation.

The legislation passed by Congress, is also called "act" or "statute".

AACSB: Analytic



Topic: Sources of Law 58. The City of Dover has passed a written law banning smoking in most restaurants and bars. Dover has

enacted a/an:A. statute.B. act.

C. regulation.D. ordinance.

E. jurisprudence.

Law in the counties and cities is called ordinances.

AACSB: Analytic



Topic: Sources of Law 59. At the state level, the hierarchy of law sources begins with the state _____.

A. actB. statuteC. constitution

D. citationE. commercial code

At the state level, the hierarchy of law sources begins with the state constitution.

AACSB: Analytic

Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-04 To classify what legal sources lawyers turn to in answering legal questions from their clients; and the hierarchy of those sources.


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60. Judicial decisions, called _____ laws, apply to a legal problem and interpret the relevantconstitutional, legislative, and regulatory laws.A. case

B. proceduralC. ordinanceD. commercialE. code

After considering constitutional language, reading legislation, and referring to administrativeregulation, your attorney must still know the judicial decisions, called case law, that apply to yourlegal problem. These decisions interpret the relevant constitutional, legislative, and regulatory laws.

AACSB: Analytic



Topic: Sources of Law 61. The _____ in prior cases are precisely what was necessary to the decision reached.

A. dicta

B. holdingsC. citationsD. statutesE. ordinances

The holdings in prior cases are precisely what were necessary to the decision reached.

AACSB: Analytic



Topic: Sources of Law 62. According to _____, judges in current cases follow whenever possible the interpretation of law

determined by judges in prior cases.A. stare decisis.

B. constitutional realism.C. statutory construction.D. constitutional relativism.E. legal realism.

According to stare decisis, judges in current cases follow whenever possible the interpretation of lawdetermined by judges in prior cases.

AACSB: Analytic




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63. When judges, decide appeals from trial courts, make decisions on legal issues, they write theirdecisions, or _____, setting out reasons.A. citationsB. opinions

C. codesD. statutesE. ordinances

When judges, decide appeals from trial courts, make decisions on legal issues, they write theirdecisions, or opinions, setting out reasons.

AACSB: Analytic



Topic: Sources of Law 64. Which of the following are judicial decisions that interpret the relevant constitutional, legislative, and

regulatory laws?A. Citations

B. OpinionsC. Case law

D. DictaE. Statutes

In searching prior cases, attorneys find cases in which judicial decisions conflict with each other.Conflicting precedents do not create confidence in the certainty of law. Attorney must know the

judicial decisions, called case law, that apply to your legal problem. These decisions interpret therelevant constitutional, legislative, and regulatory laws.

AACSB: Analytic



Topic: Sources of Law 65. In constitutional law the idea that courts should understand the meaning of the Constitution relative to

the times in which they interpret it is known as _____.A. constitutional relativity

B. legal realismC. originalismD. dictaE. rule of law

In constitutional law the idea that courts should understand the meaning of the Constitution relative tothe times in which they interpret it is known as constitutional relativity.

AACSB: Analytic




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66. _____ stands for the idea that courts should interpret the Constitution only according to the intentionsof those who wrote it.A. Constitutional relativityB. Originalism

C. Legal realismD. DictaE. Conflicts of law

Originalism stands for the idea that courts should interpret the Constitution only according to theintentions of those who wrote it.

AACSB: Analytic



Topic: Sources of Law 67. The source of law which ranks the lowest among all the others is a _____.

A. local ordinanceB. statute

C. case lawD. state administrative regulationE. federal administration regulation

The source of law which ranks the lowest among all the others is a case law.

AACSB: Analytic



Topic: Sources of Law 68. _____ are in effect a form of punishment for violating the law and sometimes also serve as a

preventive action.A. OrdinancesB. StatutesC. Sanctions

D. TortsE. Opinions

Sanctions are in effect a form of punishment for violating the law and sometimes serve as a preventiveaction.

AACSB: Analytic




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69. The right of an individual to take another person's resources (especially money) because that personhas failed to meet the requirements of the law (e.g., the breach of a contract) is known as a(n)_____.A. sanctionB. amendmentC. remedy

D. dictaE. holding

The right of an individual to take another person's resources (especially money) because that personhas failed to meet the requirements of the law (e.g., the breach of a contract) is known as a remedy.

AACSB: Analytic



Topic: Sources of Law 70. A(n) _____ is a civil wrong other than a breach of contract.

A. ordinance

B. tortC. sanctionD. remedyE. dicta

A tort is a civil wrong other than a breach of contract.

AACSB: Analytic



Topic: Sources of Law 71. Which of the following statements about a breach of contract is false?

A.

If a breach by one party is serious enough, the other party may be permitted to rescind or cancel thecontract.

B.

The remedy of an injured party may be an order by the court commanding the other party actuallyto perform a bargain as agreed.

C. The single largest number of lawsuits today involves businesses suing one another for a breach ofcontract.

D. A tort is a kind of breach of contract which is a civil wrongdoing.

E.

Compensatory damages along with additional consequential damages may be awarded in somecases of breach of contract.

A tort is a civil wrong other than a breach of contract.

AACSB: Analytic




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72. In some cases of a breach of contract, a decree of _____ may be made —an order by the courtcommanding the other party actually to perform a bargain as agreed.A. consequential damagesB. compensatory damagesC. stare decisisD. specific performance

E. dicta

In some circumstances, the remedy of an injured party may be a decree of specific performance —anorder by the court commanding the other party actually to perform a bargain as agreed.

AACSB: Analytic



Topic: Sources of Law 73. Each of the following is a remedy in case of a breach of contract EXCEPT:

A. punitive damages.

B. consequential damages.

C. specific performance.D. rescind the contract.E. cancel the contract.

Punitive damages —also called exemplary damages —are appropriate when the tort is intentional orthe unreasonable conduct is extremely severe.

AACSB: Analytic



Topic: Sources of Law 74. Coach Kleats is in charge of the softball team at Phoenix Junior School. He loses his temper with one

of the substitutes following a game and slams the child against the lockers in his anger. The childis badly bruised and is bleeding from the nose. The coach can be sued for committing a(n) _____tort.A. negligenceB. intentional

C. strict liabilityD. specific performanceE. criminal conduct

Intentional torts include assault (intentionally placing someone in apprehension of his physical safety),battery (intentionally making offensive, unconsented to physical contact with someone).

AACSB: Analytic

Blooms: Apply Difficulty: 2 Medium



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75. Punitive damages are frequently awarded in:A. ordinary negligence cases.B. intentional tort cases.

C. breach of contract cases.D. criminal cases.E. violating the statutes.

Punitive damages —also called exemplary damages —are also appropriate when the tort is intentional

or the unreasonable conduct is extremely severe.

AACSB: Analytic



Topic: Sources of Law 76. In a broad general sense, _____ includes the legal property relations that large businesses have with

each other, with their customers, and with society.A. corporate governance

B. specific performance

C. stare decisisD. tort lawE. strict liability

In a broad general sense, corporate governance includes the legal property relations that largebusinesses have with each other, with their customers, and with society.

AACSB: Analytic



Topic: A Property-Based Legal System and Corporate Governance 77. Give three explanations for why national economies are weak or strong.

Several explanations attempt to show why national economies are weak or strong: Dependency theory: This theory argues that economically strong nations exploit the resources andlabor of weaker nations through trade. It asserts that some nations grow and flourish at the expense ofkeeping others economically poor. Lack of conditions encouraging internal economic activity ratherthan overdependence on international trade causes weak national economies. Private market: According to many economists, the presence or absence of a modern private market isthe single most significant reason why some economies are strong and others are weak. Yet the mereexistence of a private market may not be enough to create an economically prosperous economy. Law and the legal system: An adequately enforced system of equally applied law is increasinglyrecognized as a necessary foundation for strong, productive economies. Abundant natural resources,education and technology, a temperate climate, and the institutions of the private market all contributeto strong national economies.

AACSB: Analytic



Reed - Chapter 01 #77 Topic: Introduction

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78. When the former Soviet Union collapsed, many observers thought that the new private market wouldpromptly improve Russia's economy. Why has the Soviet economy been slow to recover from thedecline that it experienced?

A certain framework of law is necessary for maximum incentive to entrepreneurs, investors, andinventors. The law of property, contract, tort, and various government regulations provides afoundation for institutions such as corporations, banks, and securities exchanges. As the countriesof the former Soviet Union are finding out, written laws mean little unless they can be promptly and

fairly enforced. Without adequate enforcement, resources can be taken from those who have them, andagreements can be disregarded.

AACSB: Analytic




79. What is rule of law?

Under the rule of law, laws that are made are generally and equally applicable. They apply to all ormost members of society and they apply to various groups in the same way. Under the rule of law, lawapplies to lawmakers as well as to the rest of society. Thus, lawmakers have an incentive to make lawsthat benefit everyone. Rule-of-law nations adopt laws supporting the private market because it is ineveryone's interest, including the lawmakers'.

AACSB: Analytic




80. With reference to property in the legal sense, what are the 3 main types of ownership?

In law the word "property" (or "ownership") means the right to turn to public authorities like thepolice or the courts to help you keep others from interfering with what you own. Three types ofownership fences are • Public property, which applies to public resources owned by the government (or "state") like roads, public buildings, public lands, and monuments. • Private property, which applies to resources that you own as an individual. • Common property, which applies to resources like land that more than one individual owns jointly.

AACSB: Analytic




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81. Compare natural law and positive law in jurisprudence.

According to Aristotle and other ancient philosophers, natural law theory asserts that law containsuniversal moral principles. These principles are observable in nature, and we can determine themthrough human reason. Positive law jurisprudence believes that law is simply the commands of thestate backed up by force and punishments. It is contrary to the philosophy of natural law.

AACSB: Analytic




82. Illustrate the concept of sociological jurisprudence with an example.

Sociological jurisprudence supports the idea that law can and should change to meet newdevelopments in society. From this point of view, the Second Amendment to the U.S. Constitution,which asserts the right to "bear arms," or weapons, should not be interpreted today to allow citizensto own and carry lightweight fully automatic rifles that can fire hundreds of rounds a minute. When

the Second Amendment was written, a highly trained person carrying a 25-pound rifle could fire onlyabout two rounds a minute.

AACSB: Analytic




83. Compare common law and civil law and how stare decisis is important in both instances.

Common law emphasizes the role of judges in determining the meaning of laws and how they apply.

Civil law relies more on legislation than judicial decisions to determine what the law is. Stare decisis is the doctrine of prior precedents. Like common law courts, courts in civil law nationsdecide the facts in a disputed case (for example, who did what, who committed a crime or breacheda contract), but civil law courts do not make law nor do their judges think themselves obligated tofollow prior judicial decisions, called precedents, as they do in common law nations, although they dorefer to "settled" cases.

AACSB: Analytic




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84. Describe public law and its categories.

Public law includes those matters that involve the regulation of society as opposed to individualsinteracting. The main types of public law include: • Constitutional law, which involves the interpretation and application of either the federal or state

constitutions.

• Administrative law, which covers the legal principles that apply to government agencies, bureaus,boards, or commissions. • Criminal law, which specifies various offenses against the proper order of the state.

AACSB: Analytic



Topic: Classifications of Law 85. What is private law? What are its categories?

Private law covers those legal problems and issues that concern your private resource relationshipswith other people. Private law traditionally includes: • Property law, which involves the recognition of exclusive right in both tangible (physicallytouchable) and intangible resources. • Contract law, which covers the rules of how owners transfer resources by exchanging them. • Tort law, which establishes rules for compensation when an owner's legal boundaries are wrongfullycrossed by another.

AACSB: Analytic



Topic: Classifications of Law 86. What is civil and criminal law?

For administrative purposes, courts usually separate criminal actions from all other lawsuits. Civilcases may include suits for breach of contract or tort cases, such as suits for personal injuries.Typically, they involve a request for damages or other appropriate relief that does not involvepunishment of the wrongdoer. Criminal cases involve a representative of government attempting toprove the wrong committed against society and seeking to have the wrongdoer punished by the courtsystem.

AACSB: Analytic




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87. Illustrate the concept of substantive and procedural law with examples.

Substantive law defines the legal relationship of people with other people or between them and thestate. That a plaintiff must prove the defendant failed to use reasonable care in order to establish thetort of negligence is an example of substantive law. Procedural law deals with the method and means by which substantive law is made and administered.The fact that an officer of the law must produce a search warrant before looking for evidence at asuspect's property is an example of procedural law.

AACSB: Analytic

Blooms: Understand Difficulty: 3 Hard


Topic: Classifications of Law 88. What are acts, statutes and codes?

In federal law, the legislation passed by the congress is called an act or statute. A collection oflegislations on the same subject are codes.

AACSB: Analytic



Topic: Sources of Law 89. Define stare decisis.

Stare decisis is the doctrine of prior precedents. The Latin meaning of these words is "let the priordecision stand." One important advantage of stare decisis was people became secure in their right ofproperty. Case law helps specify in great detail the boundaries of our property-based legal system, andit protects what is "proper" to people from the interference of others.

AACSB: Analytic



Topic: Sources of Law 90. What are opinions, precedents and citations?

When judges, especially judges who decide appeals from trial courts, make decisions on legal issues,they write their decisions, or opinions, setting out reasons. These case opinions are collected andpublished in book volumes known as "reporters," and these opinions now become precedents for

future cases involving similar facts and legal issues. To locate prior precedents, it is helpful to knowthe citation for the case where a precedent is found.

AACSB: Analytic




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91. What information can be obtained from the citation of a case?

To locate prior precedents, it is helpful to know the citation for the case where a precedent is found.For example, a case opinion cited as 313 N.W.2d 601 (1982) can be located on page 601 of volume313 of the Northwestern Reporter, second edition, a case decided in 1982. Knowing a case citation,you can easily locate the case in a library or through computer databases.

AACSB: Analytic



Topic: Sources of Law 92. List two disadvantages of stare decisis or case law?

Two disadvantages of case law are: Conflicting precedents: Sometimes in searching prior cases, attorneys find cases in which judicialdecisions conflict with each other. Rejection of precedent: Because of stare decisis, courts usually hesitate to reject the precedents ofprior cases, but sometimes they do. They may think that prior cases were wrongly decided, or they

may think that times have changed.

AACSB: Analytic



Topic: Sources of Law 93. Distinguish between holding and dicta in prior precedent.

Increasing the difficulty of determining how to follow prior precedent is the distinction between theholding in a prior case and mere dicta. The holdings in prior cases are precisely what was necessary to

the decision reached. Dicta are whatever else the court said. Judges in future cases are not so likely tofollow the dicta in prior cases as they are the holdings.

AACSB: Analytic



Topic: Sources of Law 94. What is constitutional relativity? How does it affect stare decisis?

In constitutional law the idea that courts should understand the meaning of the Constitution relative

to the times in which they interpret it is known as constitutional relativity. Because of stare decisis,courts usually hesitate to reject the precedents of prior cases, but sometimes they do. They may thinkthat prior cases were wrongly decided, or they may think that times have changed.

AACSB: Analytic

Blooms: Remember Difficulty: 3 Hard



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95. Explain conflicts of law.

In some cases, a question arises as to what state's law applies to a situation. Courts resolve suchproblems by applying conflicts of law rules, but even these rules may vary from state to state. In a tortcase, the usual conflicts of law rule applies the law of the state where the injury occurred, no matterwhere the injury occurred. If a contract specifies no particular state's law for the parties to a dispute tofollow, a court interpreting the contract will usually apply the law of the state where the contract wasmade.

AACSB: Analytic



Topic: Sources of Law 96. List the various sources of law and their order of hierarchy.

The hierarchy of the sources of law, however, is well understood. That hierarchy is as follows.Remember that each higher source of law voids, or prevails, over every lower source of law in thehierarchy Hierarchy of sources of law from highest to lowest: • U.S. Constitution and Amendments. • Statutes (also called "acts" or "legislation") of Congress. • Federal administration regulation. • State constitutions (apply only in individual states). • State statutes (apply only in individual states). • State administrative regulation (applies only in individual states). • Local ordinances (apply only in cities, towns, and other such areas). • Case law (court cases, as they interpret all of the other sources, may or may not void sources lowerthan the source being interpreted).

AACSB: Analytic



Topic: Sources of Law 97. The 14th amendment recognizes that law may be enforced by taking resources owned by a citizen.

Name the instances in which someone's resources may be taken.

This provision recognizes that the law is enforced by taking a person's life, freedom, or the resourcesthat he or she owns. The taking of an owner's resources may be (1) for the benefit of society generally,

as when land is taken through eminent domain; (2) to punish someone, as with a traffic fine; or (3) forthe benefit of another person, as an award of damages.

AACSB: Analytic




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98. Differentiate between an intentional tort and negligence.

Intentional torts all require the plaintiff (the person who initiates a lawsuit) to prove the defendantintended to cross the boundaries protecting the plaintiff. Intentional torts include assault (intentionallyplacing someone in apprehension of his physical safety), battery (intentionally making offensive,unconsented to physical contact with someone), conversion (intentionally depriving someone of goodsowned), and trespass (intentionally crossing someone else's land boundaries without permission). Negligence is when the plaintiff shows that the defendant injured what was proper to the plaintiff

through unreasonable behavior.

AACSB: Analytic



Topic: Sources of Law 99. What are exemplary damages?

In law, the sanction (or remedy) for tortious conduct is money damages. The damages compensate injured plaintiffs for medical expenses, lost wages or earning power, pain

and suffering, and damages to other owned goods and land. Punitive damages —also called exemplarydamages —are also appropriate when the tort is intentional or the unreasonable conduct is extremelysevere.

AACSB: Analytic



Topic: Sources of Law 100. What sanctions may be imposed for violating statutes and regulations?

Statutes at both the federal and state levels of government impose a variety of sanctions for violatingthe statutes or regulations of administrative agencies adopted to accomplish statutory purposes. Manystatutes, for example, impose a fine for a violation and authorized damages to injured parties as well.Although common law did not make a defendant pay a plaintiff's attorney fees, many statutes dorequire so in various circumstances.

AACSB: Analytic



Topic: Sources of Law 101. Define a corporation?

A corporation is a business chartered by the state to do business as a legal person in a certain form oforganization.

AACSB: Analytic



Topic: A Property-Based Legal System and Corporate Governance

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102. How does corporate governance break down due to the illegal actions of managers?

Corporate governance rules protect the property interest that the owners have in corporations. Becauseof the complexity of modern corporations, there are sometimes breakdowns in corporate governance.Managers like the president, vice presidents, or chief financial officer of a corporation can abuse theircontrol of its resources to benefit themselves in ways that impair or even destroy the corporation'svalue to the shareholders. managers' engaging in insider trading of stock, running up stock prices inorder to exercise stock options, and taking advantage of business opportunities that rightfully belong

to the corporation and its shareholders are all examples of how corporate misgovernance occurs.

AACSB: Analytic



Topic: A Property-Based Legal System and Corporate Governance

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ch1 Summary Category # of Questions

AACSB: Analytic 102

Blooms: Apply 6

Blooms: Remember 78

Blooms: Understand 18

Difficulty: 1 Easy 68

Difficulty: 2 Medium 30

Difficulty: 3 Hard 4

Learning Objective: 01-01 To recognize why the legal systems of nations contribute to making the economies of some nations much stronger than the economies of other nations.

9

Learning Objective: 01-02 To explain that "property" in the law refers not to something that is owned but to the right of ownership itself; which gives maximum incentive for wealth creation.

31

Learning Objective: 01-03 To analyze why stare decisis is different in common law nations than in civil law nations. 21

Learning Objective: 01-04 To classify what legal sources lawyers turn to in answering legal questions from their clients; and the hierarchy of those sources

.

41

Reed - Chapter 01 102

Topic: A Property-Based Legal System and Corporate Governance 4

Topic: Classifications of Law 22

Topic: Introduction 1

Topic: Law, the Rule of Law, and Property 30

Topic: Sources of Law 45

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