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BUS13 Exam Questions With Correct
Answers
False
Because of various real-world factors—such as limited resources, opportunistic behavior, and
asymmetrical information—the legal environment is full ofuncertainty. This means that laws are
not always obeyed or enforced. - answer✔✔The legal environment of business is certain; laws
are always obeyed and enforced.
False
The U.S. Constitution (i.e., constitutional law) the foundation for all other law in the United
States and is the supreme law of the land. - answer✔✔Common law and precedent are the
foundation for all other law in the United States and are the supreme law of the land.
False
When Congress is in the process of drafting a federal statute, but has not yet passed it or has the
executives (i.e, the president's) concurrence, it is known as a bill. - answer✔✔A bill is a federal
statue passed by Congress then signed into law by the president.
True - answer✔✔Appellate courts review the decisions of trial courts and have the authority to
overturn any decisions that are inconsistent with the current state of the law.
True - answer✔✔Criminal laws protect society and those who violate criminal laws face legal
penalties such as fines or imprisonment.
Precedent
"Precedent" is created when an appellate court renders a decision, known as the "holding" of the
case, absent acontrolling statute. Should a similar fact situation occur in a later case, all lower
courts, such as trial courts, are bound to follow the appellate court's decision as long as no new
statutes have been enacted. This provides an element ofpredictability for lawyers and litigants
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when they are contemplating legal and business decisions and actions. - answer✔✔__________
is created when an appellate court renders a decision; lower courts must follow that decision and
apply the law created by this prior case to any new cases involving similar facts and
circumstances.
ruled that using bitcoin to launder money violates the statute because it carries value and can be
exchanged for other currency.
The court found that the money laundering statute does cover the use of bitcoins in financial
transactions. In passing money laundering statutes, Congress intended to prevent criminals from
finding ways to wash the proceeds of criminal activity by transferring proceeds to similar or
different items that store significant value. In other words, the term "currency" is broad enough
to encompass bitcoin. - answer✔✔In the "Dread Pirate Roberts" case, U.S. v. Ulbricht, 31 F.
Supp. 3D 54D (S.D.N.Y. 2014), one of the issues that the court addressed was whether bitcoin is
considered "currency" under federal money laundering statutes. In this case, the court
in-house counsel.
For larger companies or companies that have extraordinary regulatory burdens (such as
complying with securities or patent laws), an attorney may very well be part of the executive or
midlevel management team. These attorneys are referred to as "in-house counsel" but usually
have the title "general counsel" at the executive management level (e.g., vice president and
general counsel). - answer✔✔Attorneys who are part of the executive or midlevel management
team of large companies are known as
Specific performance
In some cases, a party will not necessarily be fully or even partially compensated through a legal
remedy (i.e., money damages). In such a case, a court may award equitable relief instead of (or in
addition to) a remedy at law. Most commonly, equitable relief includes an injunction or
restraining order and specific performance. The remedy of specific performance is illustrated in
Case 1.4, Wilcox Investment in Chapter 1. - answer✔✔Which of the following is an example of
"equitable relief"?
Equity aids the vigilant.
Perhaps the most universal of equitable maxims is the principle that the law favors those who
exercise vigilance in efficiently pursuing their claims and disfavors those who merely rest (or
"slumber") on their legal rights and do not act to protect those rights within a reasonable period
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of time. - answer✔✔Which equitable maxim favors those who pursue their claims efficiently and
disfavors those who merely rest on their legal rights and do not act to protect those rights within
a reasonable period of time?
False
The legal environment of doing business in the real world is strategic, which means that legal
compliance can be burdensome. This is because legal rules often have gaps or grey areas; legal
compliance is costly, and laws are not always perfectly enforced. - answer✔✔It is not
burdensome for a business to comply with the law.
False
Attorneys who work closely with business owners may be referred to as "counsel" but the
business owners themselves do not have that title. Working closely with a business attorney will
result in business opportunities, reduced costs, and limitation of risk and liability. -
answer✔✔Savvy business owners who approach attorneys for guidance in resolving their
business-related disputes are also referred to as "counsel".
True
Civil laws are designed to compensate parties (including businesses) for losses resulting from
another party's conduct. These losses are known as "damages". On the other hand, criminal laws
protect society and those who violate criminal laws face legal penalties such as fines or
imprisonment. - answer✔✔Civil laws are designed to compensate parties (including businesses)
for losses resulting from another party's wrongful conduct.
False
An injured party may obtain an equitable remedy only when a remedy at law is inadequate.
When a legal remedy is fully sufficient to provide justice for the injured party, equitable
remedies are not permitted. - answer✔✔When a remedy at law (i.e., money damages) is fully
sufficient to provide justice for the injured party, equitable remedies are still permitted.
True - answer✔✔Courts base their decisions on the letter of the law and on the principle that the
party seeking the court's help cannot have hands stained by bad faith, misrepresentations, or
deceit. This is referred to as the "clean hands" doctrine.
Jurisprudence
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Jurisprudence, the science and philosophy of law, defines several approaches to the appropriate
function of law and how legal doctrines should be developed and applied. Most schools of
jurisprudential thought center around how legal rights are recognized. - answer✔✔___________,
the science and philosophy of law, defines several approaches to the appropriate function of law
and how legal doctrines should be developed and applied.
providing some degree of reliability in business planning.
In studying the impact law has on business, it is important to recognize that the law serves as an
important catalyst for commerce by promoting good faith dealing among merchants and
consumers and providing some degree of reliability in business planning and commercial
transactions. - answer✔✔Law serves as an important catalyst for commerce by
doctrine of stare decisis
The doctrine of stare decisis, one of the most important concepts in American law, is the
principle that similar cases with similar facts and issues should have the same judicial outcome.
This allows individuals and businesses to have some degree of confidence that the law will
remain reasonably constant over time and among courts in the same jurisdiction. -
answer✔✔The __________ is the principle that similar cases with similar facts and issues
should have the same judicial outcome.
Restatements of the Law
In the business context, the most important secondary sources of law are (1) the Restatements of
the Law, a collection of uniform legal principles focused on a particular area of state law, and (2)
various sets of model state statutes drafted by legal experts, which state legislatures can adopt (or
adapt) for their jurisdictions. - answer✔✔Which of the following is a secondary source of law?
Federal administrative law
Primary sources of law are arranged in a hierarchy based on priority. A primary law source with
higher priority will trump another source if the two sources conflict. This is known as
"preemption". According to the hierarchy of primary sources of federal and state law, federal
administrative law has a higher priority than federal common law, state administrative law, and
state common law. - answer✔✔Which of the following primary sources of federal and state law
has the highest priority?
True
