Business Law Chapter 1

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Questions and Answers

What is original jurisdiction?

The ability to enforce federal laws.

The authority to review decisions of lower courts.

The jurisdiction that applies to appellate courts.

The authority to hear a case for the first time. (correct)

In which situation do federal courts have subject matter jurisdiction?

When both parties reside in the same state.

When there is diversity of citizenship or a federal question. (correct)

Only for appeals from state courts.

Only when a case involves a state law.

What is the primary characteristic of appellate jurisdiction?

It allows for the first trial of a case.

It reviews decisions from lower courts. (correct)

It involves a new evaluation of evidence.

It allows for jury selection processes.

What must occur for a case to invoke diversity of citizenship jurisdiction in federal court?

The plaintiff and defendant must be from different states. Signup and view all the answers

When does a federal question arise in a lawsuit?

When the cause of action is based on the US Constitution, a treaty, or federal law. Signup and view all the answers

What is the doctrine that requires judges to follow precedents within their jurisdiction?

Stare decisis Signup and view all the answers

What must a court have in order to overturn its own precedents?

A compelling reason Signup and view all the answers

What does substantive law do?

Defines and regulates legal rights and obligations Signup and view all the answers

Which of the following best describes the legal reasoning process?

Evaluating laws in relation to cases Signup and view all the answers

What characterizes the relationship between law and ethics?

Not all ethical requirements can be codified into law Signup and view all the answers

What does the concept of 'moral minimum' imply?

Legal actions are the lowest acceptable ethics Signup and view all the answers

What is the primary role of law in society?

To establish enforceable rules governing relationships Signup and view all the answers

Which part of the court system is bound to follow decisions made by a higher court?

Lower courts Signup and view all the answers

Which of the following represents a common area of law that can impact business decision-making?

Contract Law Signup and view all the answers

What does the term 'liability' imply in a legal context?

Legally responsible for something Signup and view all the answers

What is the 'triple bottom line' primarily concerned with?

Corporate profitability and social responsibility Signup and view all the answers

What is the duration of patent protection under US law?

20 years Signup and view all the answers

Which of the following best defines ethics in the context of business decision-making?

Principles governing right or wrong behavior Signup and view all the answers

What is the principle of 'stare decisis' in the legal framework?

The need for courts to follow precedent Signup and view all the answers

Which of the following is NOT considered a primary source of American law?

Judicial Decisions from around the world Signup and view all the answers

What happens to the royalties a licensee must pay to a patent holder after the patent expires?

They are canceled Signup and view all the answers

What is the definition of jurisdiction in the context of judicial review?

The authority of a court to hear and decide a case Signup and view all the answers

What must be established before a court can exercise long arm jurisdiction over an out-of-state defendant?

Sufficient minimum contacts with the state must exist Signup and view all the answers

Which of the following describes in personam jurisdiction?

Jurisdiction over a person or business in a specific geographic area Signup and view all the answers

Which court is an example of a state court with limited subject matter jurisdiction?

Probate court Signup and view all the answers

What is a characteristic of a federal court of limited jurisdiction?

It is restricted to specific types of cases such as bankruptcy Signup and view all the answers

Which of the following is NOT a way through which a court's subject matter jurisdiction can be limited?

The age of the defendant Signup and view all the answers

Which type of jurisdiction refers to a court's authority over cases involving particular subject matters?

Subject matter jurisdiction Signup and view all the answers

When can a state trial court exercise jurisdiction over a resident who resides outside of the state?

If the defendant has minimum contacts with the state Signup and view all the answers

What is the minimum dollar amount in controversy for a case involving diversity of citizenship to be filed in federal court?

$75,000 Signup and view all the answers

In what situation does exclusive jurisdiction exist?

When only federal courts have the authority to hear a case Signup and view all the answers

Which of the following types of cases falls under the exclusive jurisdiction of federal courts?

Bankruptcy cases Signup and view all the answers

What determines jurisdiction over an out-of-state defendant based on their web activities?

The sliding scale standard Signup and view all the answers

Which condition indicates that personal jurisdiction may be proper according to the sliding scale standard?

The defendant conducts substantial business over the internet Signup and view all the answers

What are the three elements that define standing to sue?

Harm, Causation, Injury Signup and view all the answers

In a case where a defendant merely engages in passive advertising online, what is the jurisdictional result?

Jurisdiction is never proper Signup and view all the answers

Which scenario does not indicate sufficient standing to sue?

A party suffers emotional distress without physical harm Signup and view all the answers

Study Notes

Law Overview

Law consists of enforceable rules governing relationships among individuals and their society.
In the U.S., laws include written legislation and court decisions from legislative and judicial bodies.
All laws establish rights, duties, and privileges aligned with societal values and beliefs.

Business Activities and Legal Environment

Liability refers to legal responsibility for actions or decisions.
Key legal areas impacting business decisions: contracts, intellectual property, torts, product liability, sales, internet laws, social media, privacy, and environmental law.

Ethics in Business Decision Making

Business decisions should consider legality and ethics.
Ethics involves principles of right and wrong behavior, influencing business conduct.
Patent protection grants exclusive rights for 20 years; licensees can use the invention for royalties.
Court decisions apply the doctrine of Stare decisis for consistency, but may not be followed if precedent is unworkable.

Sources of American Law

Primary legal sources include the U.S. Constitution, statutory law, and regulations from administrative agencies.
Courts generally do not overturn precedents without compelling reasons; higher court decisions bind lower courts.

Legal Reasoning and Classification

Legal reasoning involves applying laws to situations and ensuring harmony with previous judicial decisions.
Substantive law defines legal rights and obligations; procedural law outlines methods for enforcing these rights.

Court System Structure

U.S. court system is divided into federal and state courts, with levels including trial courts, appellate courts, and supreme courts.

Ethics and Law Relationship

Government enacts laws to enforce ethical standards and prevent fraud.
Actual compliance with the law represents the lowest acceptable ethical behavior—legal does not always equal ethical.

Business as a Corporate Citizen

Business goals include profit generation while considering social and environmental impacts (triple bottom line).
Judicial review allows federal and state courts to assess laws and regulations.

Jurisdiction Basics

Jurisdiction is a court's authority to hear and decide cases, needing relevance to both the person and the subject matter involved.
In personam jurisdiction covers individuals or businesses within a geographic area, while in rem jurisdiction pertains to property within state boundaries.

Long Arm Statutes

Long arm statutes allow a court to exercise jurisdiction over out-of-state defendants based on state interactions.
Minimum contacts establish sufficient ties between a defendant and the state for jurisdiction.

Subject Matter Jurisdiction

Jurisdiction over subject matter limits the types of cases a court can hear; federal and state courts have both general and limited jurisdiction.
Examples include probate courts (state limited jurisdiction) and bankruptcy courts (federal limited jurisdiction).

Original vs Appellate Jurisdiction

Original jurisdiction courts hear cases first-hand, while appellate courts review lower court decisions without re-evaluating original evidence.

Federal Court Jurisdiction

Federal jurisdiction exists for federal questions (related to constitutional or federal law) and diversity of citizenship (conflict between residents of different states with claims exceeding $75,000).

Concurrent vs Exclusive Jurisdiction

Concurrent jurisdiction allows both federal and state courts to hear cases; parties can choose the court.
Exclusive jurisdiction applies where only designated courts can adjudicate specific matters, such as federal crimes or divorce cases.

Sliding Scale Standard for Internet Jurisdiction

Determines jurisdiction based on an out-of-state defendant’s internet activity, with three contact types influencing jurisdiction appropriateness:
- Substantial online business leads to proper jurisdiction.
- Some interactivity allows flexibility in jurisdiction decision.
- Passive web advertising does not permit jurisdiction.

Standing to Sue

Standing to sue requires demonstrable interest in a controversy; the plaintiff must show harm, causation, and real controversy in legal terms.

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Description

Explore the fundamentals of law in Chapter 1 of Business Law. This chapter covers the enforceable rules governing relationships among individuals and the societal framework in which they operate. Understand the roles of written laws and court decisions in shaping legal liability and rights.