Business Law and Ethics Overview

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Questions and Answers

Which type of law primarily focuses on resolving disputes between individuals or entities?

Criminal Law

Public Law

Private Law (correct)

Procedural Law

In a civil case, what is the standard of proof required to establish guilt or liability?

Probable cause

Beyond a reasonable doubt

Clear and convincing evidence

Preponderance of the evidence (correct)

Which of the following best describes substantive law?

The process of appealing a court decision

The legal rights and behaviors that are regulated (correct)

The rules for conducting trials

The methods for enforcing legal judgments

What does integrity primarily involve in the context of business ethics?

Living by a moral code and ethical standards Signup and view all the answers

In Lamson v. Crater Lake Motors, what specific unethical practice did Lamson observe regarding 'packed payments'?

Including life insurance and service contracts in purchase agreements without customer knowledge Signup and view all the answers

In Lamson v. Crater Lake Motors, what was Lamson's primary concern that led him to write a letter to the company owner?

RPM's violations of sales ethics and a 'profit at any cost' mentality Signup and view all the answers

In Lamson v. Crater Lake Motors, what was a misrepresentation made during the RPM sales promotion?

Only vehicles in a promotional video were offered at reduced prices, despite advertising 'all vehicles'. Signup and view all the answers

Public perception of many business is often low. What negative impact can this poor perception have on businesses that become involved in litigation?

High jury awards against corporations. Signup and view all the answers

What legal protection does Dr. Smith have in relation to McFadden's treatment?

Judicial immunity Signup and view all the answers

Which court primarily reviews cases from U.S. District Courts?

U.S. Courts of Appeals Signup and view all the answers

How many justices typically hear cases in the U.S. Supreme Court?

9 justices Signup and view all the answers

What does 'en banc' refer to in the appeals process?

A case heard by all active judges in a circuit Signup and view all the answers

What is the primary role of U.S. District Courts?

Conduct trials involving issues of fact Signup and view all the answers

What must be granted for the U.S. Supreme Court to review a case?

A Writ of Certiorari Signup and view all the answers

Which federal court has limited jurisdiction, such as bankruptcy cases?

U.S. Bankruptcy Courts Signup and view all the answers

What typically happens if the U.S. Supreme Court does not grant a writ?

The lower court's decision remains final Signup and view all the answers

What is the primary reason the concept of federal common law in diversity of citizenship cases was ended?

Courts will apply a state’s law. Signup and view all the answers

In tort cases, which law is typically applied according to conflict of laws rules?

Laws of the state where the tort occurred. Signup and view all the answers

What does the doctrine of forum non conveniens allow the parties to do?

Request a change of venue to a more convenient court. Signup and view all the answers

Which stage of trial involves formal statements made to the court?

Pleading Stage Signup and view all the answers

What is the role of judges within the adversarial court system?

To apply legal rules to facts presented. Signup and view all the answers

During which stage of litigation do parties typically exchange information and gather evidence?

Discovery Stage Signup and view all the answers

In the context of trial stages, which stage occurs after a ruling has been made?

Appellate Stage Signup and view all the answers

What typically makes trials costly and uncertain?

Complex facts and extensive evidence. Signup and view all the answers

What was the outcome of the appeal regarding Lamson's wrongful discharge claim?

Lamson's claim of wrongful discharge was rejected. Signup and view all the answers

Which type of court is primarily responsible for conducting trials and determining issues of fact?

Trial Courts Signup and view all the answers

What is a key characteristic of federal judges in the United States?

They are appointed for life. Signup and view all the answers

What protection does judicial immunity provide to judges?

Judges are immune from lawsuit for actions taken within their jurisdiction. Signup and view all the answers

How are state judges typically selected in the United States?

They are usually elected, appointed, or a combination of both. Signup and view all the answers

Which statement is true regarding Lamson's internal complaints?

They were considered laudable but not protected at law. Signup and view all the answers

In the context of the court systems, appellate courts are responsible for which of the following?

Reviewing decisions made by lower courts. Signup and view all the answers

What must be demonstrated to prove wrongful discharge in Lamson's case?

Proof of an attempt by the company to silence him. Signup and view all the answers

What is the purpose of voir dire in the jury selection process?

To allow attorneys to challenge and reject prospective jurors. Signup and view all the answers

During which stage of the trial are opening statements made?

At the beginning of the trial process. Signup and view all the answers

What is a peremptory challenge in jury selection?

A challenge that allows rejection without a reason. Signup and view all the answers

What must parties request before the case goes to the jury?

Motions for a verdict. Signup and view all the answers

In the case of Clark v. Enchanted Hills Community, what was the primary reason for Clark's appeal?

The HOA's actions prevented her from utilizing her property. Signup and view all the answers

What does the term 'res judicata' refer to?

A principle that limits further appeals on a final judgment. Signup and view all the answers

What type of remedy includes an order to stop a party from continuing with specific conduct?

Injunctions. Signup and view all the answers

What is the primary purpose of long-arm statutes?

To allow states to exercise jurisdiction over non-resident businesses Signup and view all the answers

What must be proven for damages to be awarded in a case?

Evidence must ascertain the amount of damages beyond mere speculation. Signup and view all the answers

Under which circumstance is a corporation subject to jurisdiction in a state?

If it has established its business headquarters in that state Signup and view all the answers

Which scenario most likely subjects a defendant to jurisdiction in a state based on internet business engagement?

A website that allows purchases and offers customer inquiry contact Signup and view all the answers

In the case of Schoenbeck v. Masterlink, what was the ruling regarding personal jurisdiction over CPM?

There was insufficient minimum contacts for jurisdiction in Illinois Signup and view all the answers

What type of jurisdiction is exercised when the dispute involves property located in a state?

In rem jurisdiction Signup and view all the answers

Which statement about subject matter jurisdiction in federal courts is true?

Federal courts may hear cases involving federal questions Signup and view all the answers

Which of the following properties can create in rem jurisdiction?

A bank account registered in the state Signup and view all the answers

What does it mean when a business's contact with a state is solely informational?

It has no effect on the state's jurisdiction over the business Signup and view all the answers

Study Notes

Business Law and Ethics Summary

Modern Business Environment: Law is a set of rules and principles that direct and limit human behavior. It creates predictability and uniformity in social conduct. Laws improve social stability by defining acceptable actions and discouraging activities that harm the public interest. Laws reflect social values and customs which can change. Examples include the changing legality of marijuana and alcohol.
Conflict Resolution: Courts are one mechanism for resolving disputes. Businesses increasingly use alternative dispute resolution (ADR) systems, which operate outside of courts.
Sources of Law in the U.S.: Law is derived from constitutions, statutes (federal, state, and municipal), and administrative regulations.
U.S. Constitution and State Constitutions: These are fundamental laws that establish the limits and power of government. State constitutions are often easier to amend compared to the U.S. Constitution. The U.S. and state constitutions create legislative, executive and judicial branches of government.
Legislatures and Statutes: Legislatures create laws, which are called statutes. Examples include the Clean Water Act and state laws regulating industries (like insurance).
Administrative Agencies and Regulations: Congress creates administrative agencies, which are delegated authority to create regulations to carry out the law. These regulations frequently affect business environments.
The Judiciary and Common Law: The judicial system originates from the British common law. Judges are guided by precedent from prior similar cases; this is called "stare decisis". Common law often provides stability within the legal system but allows changes as society and technology evolve.

Case Study: Davis v Baugh Industrial Contractors, Inc.

Overview: Glacier Northwest hired Baugh Industrial Contractors to create an underground pipe system. Three years later, a wall collapsed, killing a worker hired by Glacier. Davis, the deceased worker's daughter, sued Baugh for negligence.
Court Proceedings: The trial court ruled in favor of Baugh, citing established precedent that a contractor's liability ends once their work is accepted by the client. This precedent was challenged by the appellate court.
Supreme Court Decision: The court ruled that the contractor (Baugh) is liable for injuries to others even after the work has been accepted, as property owners (like Glacier) often rely on the expertise of contractors rather than fully understanding the quality of work and potential risks.

Civil and Criminal Law

Criminal Law: Deals with offenses against the state or society; conviction requires "beyond a reasonable doubt".
Civil Law: Deals with disputes between individuals or entities; conviction requires a "preponderance of evidence".

Case Study: Lamson v. Crater Lake Motors

Overview: Company hired outside sales firm (RPM) to run a sales promotion. Company's sales manager (Lamson) caught unethical practices by RPM in the campaign and reported his concerns.
Case Outcome: Lamson was discharged for his concerns. In court, the jury decided in his favor, but the appellate court overturned the verdict, determining that the wrongful discharge claims failed. (No public duty violation, and not an illegal action).

Subject Matter and Personal Jurisdiction

Federal Courts: Federal court jurisdiction is based on the constitution, and it can hear cases involving federal questions, but also diversity jurisdiction issues (citizens from different states). Amounts in controversy over $75,000.
State Courts: State courts have jurisdiction based on state law and handle various issue areas (like family disputes, contract disputes).
Personal Jurisdiction: This relates to the authority a court has over the people involved in a case. A court generally needs jurisdiction over the parties or property involved. Different types exist (in personam, in rem).

Exclusive and Concurrent Jurisdiction

Exclusive Jurisdiction: Jurisdiction in certain cases is specific to one court type (Federal or State).
Concurrent Jurisdiction: A case can be heard by both state(local) and/or federal courts.

Case Study: Erie Railroad Co. v. Tompkins

Overview: A person (Tompkins) was injured in Pennsylvania while standing near a train belonging to a New York-based company (Erie). Tompkins sued Erie in a federal court, attempting to use federal common law (a general concept of legal precedent) to apply to the jurisdiction.
Court Proceedings: The federal court used federal common law to make a ruling. The case was appealed and resulted in the Supreme court deciding that federal courts must use state common law for this type of diversity case.

Applying Appropriate Law in State Court

Conflict of Laws: If a legal case involves instances in more than one state, the 'conflict of laws' or 'choice of law' rules apply. Generally, there are rules for selecting the governing laws.
Venue: Venue Considerations – The most convenient court to hear the case can be chosen.

Overview of the Judicial System

Overview: The Court system is adversarial; parties must present evidence and arguments to a court; judges don't investigate. Cases (trials) can be expensive and time-consuming.
Procedures: The basic stages of trial procedures include pleadings, discovery, pre-trial stage, trial stage, enforcement.

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Description

This quiz covers the foundational principles of business law and ethics, including sources of law in the U.S., conflict resolution methods, and the role of the constitution. Explore how laws reflect social values and the mechanisms used to resolve disputes within a modern business environment.