Test Bank for Business Law and cases 12th Edition by Kenneth W. Clarkson, Roger LeRoy Miller, Frank B

1


Chapter 1

Introduction to Law and
Legal Reasoning

N.B.: TYPE indicates that a question is new, modified, or unchanged, as
follows.

N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.


TRUE/FALSE QUESTIONS

A1. The stability and predictability of the law is essential to business activities.

ANSWER: T PAGE: 2 TYPE: =
NAT: AACSB Analytic AICPA Critical Thinking

A2. Law is a body of enforceable rules governing relationships among individuals
and between individuals and their society.

ANSWER: T PAGE: 2 TYPE: =

NAT: AACSB Analytic AICPA Legal

A3. A breach of a contract is a failure to perform it.

ANSWER: T PAGE: 3 TYPE: N

NAT: AACSB Ethics AICPA Critical Thinking

A4. Constitutional law includes only the U.S. Constitution.


ANSWER: F PAGE: 4 TYPE: =

NAT: AACSB Analytic AICPA Legal

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A5. A state constitution is supreme within the state’s borders.

ANSWER: T PAGE: 4 TYPE: =
NAT: AACSB Analytic AICPA Legal

A6. Whether a law is constitutional depends on its source.


ANSWER: F PAGE: 4 TYPE: =

NAT: AACSB Analytic AICPA Legal

A7. Uniform laws apply in all states, including those in which the laws have not
been adopted.

ANSWER: F PAGE: 4 TYPE: =
NAT: AACSB Analytic AICPA Legal

A8. A state law that conflicts with the U.S. Constitution will be deemed
unconstitutional.


ANSWER: T PAGE: 4 TYPE: =

NAT: AACSB Analytic AICPA Legal

A9. Statutory law does not include county ordinances.


ANSWER: F PAGE: 4 TYPE: =

NAT: AACSB Reflective AICPA Legal

A10. No state has adopted the Uniform Commercial Code in its entirety.

ANSWER: F PAGE: 5 TYPE: =

NAT: AACSB Reflective AICPA Legal

A11. Common law is a term for law that is common throughout the world.


ANSWER: F PAGE: 7 TYPE: =

NAT: AACSB Analytic AICPA Critical Thinking

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A12. Damages is a remedy at law.


ANSWER: T PAGE: 7 TYPE: =

NAT: AACSB Analytic AICPA Legal

A13. Remedies in equity include injunctions and decrees of specific performance.


ANSWER: T PAGE: 7 TYPE: =

NAT: AACSB Analytic AICPA Legal

A14. In most states, the courts no longer grant “equitable” remedies.


ANSWER: F PAGE: 8 TYPE: =

NAT: AACSB Analytic AICPA Legal

A15. A defendant is a person against whom a lawsuit is brought.


ANSWER: T PAGE: 8 TYPE: =

NAT: AACSB Analytic AICPA Legal

A16. Courts do not depart from precedents.

ANSWER: F PAGE: 9 TYPE: =

NAT: AACSB Reflective AICPA Critical Thinking

A17. A judge’s function is to make the law.

ANSWER: F PAGE: 13 TYPE: N

NAT: AACSB Analytic AICPA Legal

A18. Criminal law focuses on duties that exist between persons.

ANSWER: F PAGE: 14 TYPE: =
NAT: AACSB Analytic AICPA Legal

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A19. A reference to “28 U.S.C. Section 1332” means that a statute can be found in section
1332 of title 28 of the United States Code.


ANSWER: T PAGE: 15 TYPE: =

NAT: AACSB Analytic AICPA Research

A20. Most state trial court decisions are not published.


ANSWER: T PAGE: 16 TYPE: =

NAT: AACSB Analytic AICPA Research


MULTIPLE CHOICE QUESTIONS

A1. The legislature of the state of Mississippi enacts a new statute that sets standards
for the liability of businesses selling defective products. This statute applies



a. only in Mississippi.

b. only in Mississippi and its border states.

c. in all states.

d. in all states but only to matters not covered by other states’ laws.



ANSWER: A PAGE: 4 TYPE: N
NAT: AACSB Reflective AICPA Critical Thinking

A2. Lewis is a state court judge. Like other judges, Lewis often refers to
secondary sources of law for guidance. These sources include

a. official comments to statute.

b. other states’ statutes.

c. state constitutions.

d. the U.S. Constitution.