Legal Environment of Business is Certain Answer Key

1. The legal environment of business is certain; laws are always obeyed and enforced. FALSE 2. Common law and precedent are the foundation for all other law in the United States and are the supreme law of the land. FALSE 3. A bill is a federal statute passed by Congress then signed into law by the president. FALSE 4. 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 5. Criminal laws protect society and those who violate criminal laws face legal penalties such as fines or imprisonment. TRUE 6. PRECEDENT 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. 7. 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 Ruled that using bitcoin to launder money violates the statute because it carries value and can be exchanged for other currency. 8. Attorneys who are part of the executive or midlevel management team of large companies are known as In-house counsel 9. Which of the following is an example of “equitable relief”? Specific Performance 10. 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? EQUITY AIDS THE VIGILANT 11. It is not burdensome for a business to comply with the law. 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. 12. Savvy business owners who approach attorneys for guidance in resolving their business-related disputes are also referred to as “counsel”. 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. 13. Civil laws are designed to compensate parties (including businesses) for losses resulting from another party’s wrongful conduct. 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. 14. When a remedy at law (i.e., money damages) is fully sufficient to provide justice for the injured party, equitable remedies are still permitted. 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. 15. 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. TRUE 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. 16. 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. Law serves as an important catalyst for commerce by 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. 18. The _____ is the principle that similar cases with similar facts and issues should have the same judicial outcome. DOCTORINE 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. 19. Which of the following is a secondary source of law? 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. 17. 20. Which of the following primary sources of federal and state law has the highest priority? 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. 21. Which source(s) do courts look to when interpreting statutes? 1. I. Ordinances 2. II. Statutory scheme 3. III. Legislative history 4. IV. Citations II and III Courts look to the statutory scheme (structure of the statute) and its legislative history (records of the progress of the law through the legislature) to determine how the legislature intended the statute to apply. 22. The city council passed a zoning law prohibiting any manufacturing facility to be located within one mile of a public park. The law is a LOCAL ORDINANCE 23. Constitutional law: 1. I. establishes a structure of government. 2. II. grants specific powers for the different branches of government. 3. III. provides procedural protection of citizens against wrongful government actions. 4. IV. allows executive branch and independent agencies to create and enforce regulations. I, II, III Constitutional law operates in three primary arenas: government structure, powers of the government, and protections from unlawful acts of the government. 24. Which source of law establishes a structure for federal and state governments? CONSTITUIONAL LAW One of the primary purposes of constitutional law is to establish the structure of government (e.g., executive, legislative, and judicial). 25. Federal officials arrive at Joshua's home and inform him he is the subject of a tax-fraud investigation. If the government demands to search his home, what source of law provides procedural protections for Joshua from an unlawful search by the authorities without a warrant? CONSTITIONAL LAW Procedural protections for citizens from wrongful government conduct are provided in federal and state constitutions. 26. In the hierarchy of primary sources of law, which of the following is the highest? THE US. CONSITITUTION 27.In the course of her day, O'Connor gives legal advice and prepares daily memorandums for the executive management team of a publicly traded technology company outlining all current and potential legal challenges faced by the company including the status of any securities compliance issues. She is a member of executive management and provides official record keeping and certification procedures for the company's board of directors. O'Connor is likely to be: Vice president and general counsel at a technology company The question describes a typical general counsel at a large company with complex legal issues (securities compliance) and also acts as secretary of the corporation. 28.Which of the following is the highest in the hierarchy of primary sources of law? FEDERAL STATUTES 29.Which of the following types of law, if any, relies primarily on the concept of stare decisis? COMMON LAW 30.Which of the following is not a primary source of law? RESTATEMENT OF LAW 31.A state legislature passes a law that requires all contracts for the sale of goods over $500 be in writing. The law is a: STATE STAUTES 32.Large corporations and businesses with complex legal problems will typically employ ______ to help manage and respond to legal challenges. IN-HOUSE COUNSEL Very large businesses or those with complex legal problems (such as securities compliance or patent holders) use inhouse counsel. They rely on outside firms when they require a litigator (trial lawyer) or other expertise. 33.The term ______ has been defined in a variety of ways throughout recorded history. LAW 34.The U.S. Congress passes a law imposing criminal penalties on executives at corporations who engage in banking fraud. The law is a: FEDERAL STAUTE U.S. Congress creates federal statutes. 35. In determining how a statute applies, a state court judge looks at the structure of the statute and the format of the law's mandates. What is the court using to interpret the statute? 1. I. Ordinances 2. II. Statutory scheme 3. III. Legislative history 4. IV. Citations II ONLY This is an example of a court examining the statutory scheme (structure of the statute) to determine how the legislature intended the statute to apply. 36.Which of the following is not a primary purpose of the law? TO ALLOW THOSE WITH BETTER LEGAL COUNSEL TO HAVE A BUSINESS ADVANTAGE 37.Most businesses rely on _______ for their corporate legal services. LAW FIRMS Most businesses use attorneys in law firms for legal needs. Only very large businesses or those with complex legal problems use in-house counsel. 38._____ is roughly defined as the science and philosophy of law. JURISPRUDENCE 39.Law that is essentially created by courts and relies heavily on precedent is: COMMON LAW Common law is the tradition of judges filling in gaps where needed to result in a just resolution for the parties. 40._______ is the highest in the hierarchy of primary sources of the law. THE U.S. CONSTITUTION 41.A generally accepted generic definition of the law is ___________ A BODY OF RULES BY A CONTROLLING AUTHORITY HAVING LEGAL BINDING FORCE. A generally accepted generic definition of the law is a body of rules of action or conduct prescribed by controlling authority, and having legal binding force. 42.The primary purposes of the law include all but which one of the following? TO ALLOW THOSE WITH BETTER COUNSEL TO HAVE A BUSINESS ADVANTAGE 43.A statute of limitations invokes which of these equitable maxims? EQUITY AIDS THE VIGILANT 44.O'Connor is an attorney hired by a technology company's in-house counsel after the company was sued for patent infringement. O'Connor is likely: A LITIGATOR WORKING FOR A LAW FIRM The facts suggest that O'Connor is being brought in for the patent infringement trial. Trial lawyers are also referred to as litigators and are needed when a lawsuit is commenced or threatened. 45.The U.S.-based system of common law has deep-seated roots from BRITISH COMMON LAW American colonists brought notions of English common law wherever they settled. 46.Administrative law: 1. I. establishes a structure of government. 2. II. grants specific powers for the different branches of government. 3. III. provides procedural protection of citizens against wrongful government actions. 4. IV. allows executive branch and independent agencies to create and enforce regulations. IV ONLY Administrative law covers regulation and enforcement by executive branch and independent administrative agencies. 47.In the course of her day, O'Connor counsels several business clients on issues related to start-up ventures in the technology sector. She gives advice related to incorporation, shareholders agreements, leases, employment contracts, and charges each client based on her hourly rate. O'Connor is likely to be: A BUSINESS LAWYER WORKING IN A LAW FIRM The question describes a typical business lawyer who services several clients and gives advice on corporate matters such as shareholders agreements and employment contracts. 48.In determining how a statute applies, a state court judge looks at the legislative records of conferences and debates. What source is the court using to interpret the statute? I. Ordinances  II. Statutory scheme  III. Legislative history   IV. Citations III ONLY This is an example of a court examining the legislative history (records of the progress of the law through the legislature) to determine how the legislature intended the statute to apply. 49.The official publication of federal statutory law is: UNITED STATES CODE (U.S.C.) 