LEGAL ENVIRONMENT OF BUSINESS
Fall 2016 – Elizabeth Grimm-Howell, Instructor
PRACTICE QUESTIONS FOR EXAM I (Chapters 1-5 & 18)
1.
Common law is law enacted by legislatures and organized by topic into code books.
A. True
B. False
2.
Discovery is a process for gathering evidence and information in a lawsuit.
A. True
B. False
3.
To have standing to sue, a party must have been harmed or threatened with imminent harm by the action about
which he or she complains.
A. True
B. False
4.
Common law, unlike statutory law, does not change over time.
A. True
B. False
5.
Law and equity were ancient concepts in the legal system we inherited from England; in the US, all forms of
equitable relief have been abolished.
A. True
B. False
6.
A plaintiff is a person against whom a lawsuit is brought.
A. True
B. False
7.
A person who believes in the natural law theory believes that the law should reflect universal ethical and moral
principles that are part of human nature or divine law.
A. True
B. False
8.
The doctrine that requires a party to pursue his claim through every level of an administrative agency before
taking his claim to court is called:
A.
B.
C.
D.
9.
The agency in charge doctrine
The mirror image rule
The waiver of trial doctrine
The exhaustion of remedies doctrine.
When an administrative rule has been properly promulgated under the Administrative Procedures Act, what
effect does it have?
A.
B.
C.
D.
It has the same force and effect as a statute passed by the legislature.
It has an effect only on the particular parties involved but not on the public at large.
It takes effect within the agency but not outside of the agency.
It has no effect, since administrative agencies usually are not given rule-making authority.
10.
What authority do federal courts have in reviewing federal agency actions?
A. Courts cannot overturn rulings of administrative law judges, which are more powerful than federal court
judges.
B. Courts can review the legal findings of an agency but must give due deference to factual findings.
C. Courts hear the case from the beginning and pay no attention to findings of the agency.
D. None – federal agency actions usually cannot be reviewed by courts.
11.
Xeno, Inc., is considering moving its manufacturing facility from southern Illinois to Mexico. The stakeholders
in this corporate decision would include:
A. Xeno’s shareholders.
B. Xeno’s customers.
C. The Illinois community in which Xeno currently operates.
D. All of the above.
12.
Which of the following should management consider in attempting to evaluate alternative actions?
A. Which decision would lead to the best overall consequences
B. Which decision would best respect and protect the moral rights of individuals
C. Which decision would make a good general rule for people to follow in all similar circumstances
D. All of the above
13.
The case of Aaron v. Baker Co. is being heard in a Minnesota district court, which is the trial court in Minnesota.
The difference between a trial court and an appellate court is:
A. The two courts hear cases involving different subject matter.
B. Trial courts hear cases being brought for the first time.
C. Trial courts hear cases in which the court can exercise in personam jurisdiction, and appellate courts exercise
in rem jurisdiction.
D. There is no difference between the two courts.
14.
Laura has just been notified that Sam is suing her. The document that informs Laura of the allegations against
her is called a(n):
A. Answer.
B. Summons.
C. Complaint.
D. Service of process.
15.
James is a state court judge. In his court, as in the courts of most states, James has authority to grant which of
the following?
A. Both legal and equitable remedies.
B. Legal remedies only.
C. Equitable remedies only.
D. None of the above.
16.
Areas of the law not covered by specific statutes or administrative rules are governed by:
A. Local ordinances.
B. The US Constitution.
C. Common law.
D. Nothing – they are open to each individual’s own interpretation.
17.
Common-law rules have developed from:
A. Administrative regulations.
B. Court decisions.
C. Federal and state statutes.
D. Proposed uniform laws.
18.
Procedural due process requires that:
A. Notice and a hearing must be given before anyone is deprived of life, liberty or property.
B. Criminal defendants cannot be compelled to incriminate themselves.
C. Laws must treat similarly-situated persons the same.
D. Laws must not be vague or ambiguous, but must be sufficiently clear to allow a reasonable person to
understand and comply with them.
19.
According to the Supreme Court’s interpretation of the First Amendment:
A. All types of speech receive the same degree of Constitutional protection.
B. Some kinds of speech are not protected at all.
C. Commercial speech receives no protection due to its profit motive.
D. Speech critical of the government can be restricted because it is destabilizing to society.
20.
Which of the following statements is true regarding “obscenity”?
A. It cannot be prohibited, but it can be subject to time, manner and place restrictions.
B. Because the definition of obscenity is so subjective, courts cannot rule that something is “obscene” without
violating the First Amendment.
C. Obscene speech is anything that is patently offensive, and it is not protected by the First Amendment.
D. Even though the definition of obscenity is subjective, speech determined to be obscene under the Miller test
loses all Constitutional protection.
SAMPLE ESSAY QUESTIONS ON NEXT PAGE
SAMPLE ESSAY QUESTIONS
21. Susan and Sam, two tourists from Missouri, went hiking in the Grand Teton mountain range (outside of the national
park of that name) during their vacation in Wyoming. Charlie, who lives in Wyoming, was walking his Pit Bull Terrier off
the leash on the same hiking trail Susan and Sam were using. When Susan and Sam stopped to admire the view from a
scenic overlook, Charlie’s dog discovered them and attacked Sam. Before Charlie could pull the dog off, Sam had
received several serious bites on his face and arms. Sam sought emergency medical treatment for his wounds and asked
Charlie to pay the emergency room bill, but Charlie refused. Once he got back to Missouri, Sam was told he would need
very expensive plastic surgery on his face. His total medical expenses exceeded $75,000. Susan and Sam are outraged at
the whole situation and want to sue Charlie. ANSWER BOTH OF THE FOLLOWING:
A. If Sam wants to sue Charlie for damages, can he sue Charlie in state court in Missouri (he doesn’t want to
travel back to Wyoming)? Why or why not?
B. Will a federal court have jurisdiction over this case? Why or why not?
22. The City of Ladue passed an ordinance prohibiting all yard signs. The stated purpose of the law was to “prevent
ugliness, visual blight, and clutter” in the city. A woman opposed to the Gulf War put up a political sign in her yard and
was told by the city to remove it. She sued the City of Ladue on First Amendment grounds, contending that her freedom
of speech was being unlawfully infringed by the city’s ordinance. PLEASE ANSWER BOTH OF THE FOLLOWING:
A. Which of the three types of speech recognized by the US Supreme Court is involved in this case?
B. What would the City of Ladue have to show in order for a court to find that its restrictions on speech were
justified?
