Business Law Chapter 1 Quiz

Business Law Course Information

• Course title: Business Law
• Institution: "Alexandru I. Cuza" University of Iasi, Faculty of Economics and Business Administration
• Course level: 1st year Business Administration

Chapter 1: Introduction to Legal Heritage

• What is law?
  • Laws govern individuals, businesses, and organizations within a society.
  • Laws regulate behavior and protect persons and property from unwanted interference.
• Definition of law:
  • A body of rules of action or conduct.
  • Prescribed by a controlling authority.
  • Having binding legal force.
  • Citizens subject to sanctions (legal consequences) for breaking the law.
• Social Conduct Rules: Laws shape social and economic existence and provide an ordered system.
• Human Rights: Laws establish and protect rights to freedom, education, work, private enterprise, etc.
• Functions of law:
  • Keeping social peace (examples: making certain activities crimes).
  • Shaping moral standards (examples: laws discouraging drug and alcohol abuse).
  • Promoting social justice (examples: laws to prohibit employment discrimination).
  • Maintaining status quo (examples: laws preventing forceful overthrow of government).
  • Facilitating orderly change (evolved laws enacted after study, debate, and public input).
  • Facilitating planning (well-designed commercial laws that allow businesses to plan).
• Fairness of the law:
  • A legal system must be comprehensive, fair, and democratic, yet exceptions exist as mistakes.
• Flexibility of law:
  • Laws must adapt to societal changes (technology, norms of society, growth of activities).
• Classical legal philosophies: Law development from Natural Theory to economics & critical legal studies.

Chapter 2: Business Entities

• Types of business entities:
  • Business organization is a matter of national law.
  • Purpose of organizations: make profit from commercial activities, distinguishes them from charitable, social, or non-business purposes.
  • Legal associations of persons: single person, natural person, or by a group of people.
  • Legal person characteristics: a group of individuals, their own patrimony separate from founders, common agreement (memorandum) of promoters.
  • Objectivity rule: trader is engaged in commercial activity.
  • Subjectivity rule: trader makes activity their usual profession.
• Sole proprietorship; partnership; limited partnership:
  • Simplest business entity, owner has complete management authority, responsibility for business debts.
  • Partnerships have multiple owners with personal liability, duties of fair dealing, honesty, & fiduciary responsibility.
  • Limited partnerships limit liability for some owners.
• Limited Liability Company; Stock Company; Cooperative:
  • Governed by national law, ownership is limited, ownership interests are traded publicly, and financial statements must be divulged.

Chapter 3: Business Financing

• Business Financing:
  • Sources: equity financing (new owners), debt financing (loans), commercial papers, security interests.
  • Stocks and bonds:
    • Issuance of additional shares.
    • Raise capital without pressure to make payments, accurate financial reporting is important.

Chapter 4: Competition Law

• Goal of Promoting Competition: Laws design to ensure adequate competition among business entities.
• Issues Addressed:
  • Monopolies, market allocation, price fixing, resale maintenance, group boycotts, tying arrangements, mergers

Chapter 5: Bankruptcy

• Aim of bankruptcy law: Mechanism to deal with business entities experiencing severe financial difficulties.
• Common Themes and Concepts:
  • Circumstances triggering bankruptcy.

  • Immediate effects of proceedings.

  • Differences between liquidation and reorganization.

  • Asset seizure, sale, and distribution in liquidation.

  • Role of conservators.
• Cross-Border Insolvency:
  • Increased importance because of multinational businesses.

  • Territorial and universal models of law.

Chapter 6: Protection of Intellectual Property Rights

• Intellectual Property Rights:
  • Laws protecting knowledge and creations.

  • Types of IP: Patents (inventions), trademarks (brand names), copyrights (writings).

  • “Industrial property” and “artistic property”

  • “Knowhow.”
• Patents, trade secret, copyright.
  • Novelty, usefulness, non-obviousness in inventions.
  • Requirements, duration, and commercial use of patents.

  • Copyright protection for expression, originality, and how it varies geographically
• Trademarks:
  • Distinguishes product origin.

  • Use in commerce, international (automatic registration), procedural advantages.


Chapter 7: Product Liability and Consumer Protection

• Product Liability:
  • Business liability for injuries from product use/manufacturing.
  • Differences in treatments between legal systems (common law vs. civil law).
  • Negligence, strict liability/absolute liability, for inherently dangerous products.
• Consumer Protection:
  • Government involvement in consumer protection.
  • Laws addressing consumer protection in many countries.

Chapter 8: Cyber Law and Business

• Cyber Law and Business:
  • Interdisciplinary topic combining various legal areas (commercial law, intellectual property, criminal law, etc.) due to technological developments.
  • Governance of cyberspace, multiple jurisdictions, and their conflict.
• Rights and Freedoms
  • Intellectual Property, Freedom of Expression, Privacy.
• Cybercrime:
  • Various types of crimes (fraud, illegal copyright infringement, identity theft etc.).

  • Importance of international efforts and cooperation to address cybercrime and challenges.

Chapter 9: Transactional Aspects of Business

• Contract Law
  • Formation: Offer and acceptance, rules/procedures for legal validity, terms of contracts.
  • Validity: Capacity to contract, consideration, misrepresentation, duress, unconscionability.
  • Performance and termination.
• Commercial Contracts
  • Scope/elements.
  • Property rights relating to goods.
  • Alternative dispute-resolution in commercial contracts.
• Electronic Commerce:
  • Difficulties in applying traditional rules to e-commerce.
  • International models (UNICITRAL, ICC).