MGT 2050 - BUSINESS LAW AND ETHICS - MIDTERM 1
QUESTIONS AND VERIFIED ANSWERS
What phrase is key to understanding legal and ethical systems? - Answers - "It
Depends"
What are two systems for prescribing appropriate behavior in various contexts? -
Answers - Law and Ethics
What are some business pros? - Answers - Economic growth, jobs, fill needs, longer,
easier, and more productive lives
What are some business cons? - Answers - Destroy livelihoods, negatively impact
social and physical environment
Why is knowledge of societal context of business important? - Answers - It helps inform
the impact of individual business decisions
What is the basis of all laws in the USA? - Answers - The Constitution
What is the US court system modelled after? - Answers - European system
How did "stare decisis" begin? - Answers - Judges represented the monarch and settled
disputes, then wrote down rulings to be used later.
What is Law? - Answers - (in a democratic society) body of rules of action or conduct
prescribed by controlling authority and having legal binding force
What are some functions of the law? (there are 7 in the textbook) - Answers - Keep the
peace, enforce rules to maintain order, facilitate planning, promote social justice,
prevent undesirable behavior, settle private and public disputes, provide clear rules on
how institutions should be run
What the requirements for laws to be effective and respected? - Answers - Must be fair,
equally applied, and responsive to changing situations
What is one of the most important intersections between business and law? - Answers -
Risk assessment
Define risk management - Answers - Evaluation of risks and how to minimize those
risks
,What happens when businesses take risk management to either extreme? - Answers -
They seldom engage in profitable strategy
How can people create value from the risk they are exposed to? - Answers - Consulting
with an attorney. They are trained to think through worst case scenarios and minimize
risk.
Define Jurisprudence - Answers - Study and theory of law
What are the two schools of thought for theories of law? - Answers - Natural law and
legal positivism
Define Natural Law (jus naturale) - Answers - -There exists a higher, supreme universal
law that can be found and studied, which governs all humanity.
-All persons have inalienable, natural rights that may never be taken away, only violated
and unrecognized.
-Laws are inherently moral and should be followed
Who were some key figures of Natural Law? - Answers - Aristotle- Father of natural law.
Laws come from nature.
Thomas Aquinas- Introduced religious natural law. Law given by God and can be
discovered through religion and science.
Define Legal Positivism - Answers - -Laws are human creations that reflect the reality of
human existence in that moment. Laws aren't necessarily moral or immoral, but just a
result of human activity.
-Laws are valid and should be followed. Rather than protesting laws, you should change
who is making laws.
What assumption does Legal Positivism make? - Answers - Previous practices were
carefully thought out and we should maintain tradition (historically, not modern belief)
Define Legal Realism - Answers - Law should serve the needs of people. Use public
policy, economic factors, and fairness to adapt the law to changing world
Define Sociological School - Answers - Use contextual elements in law. Shows how
cultures, identities, and peoples interact with the law
Define Critical Legal Studies (1970s, newer school of thought) - Answers - Focuses on
power dynamics of who creates, enforces, and is affected by laws. People in power
manipulate the law to maintain power. People without power receive the penalties, but
not protections of the system
Define Law Economics - Answers - Apply economic theory to law. Economic efficiency
means the law is more fair. This allows markets to determine policy.
, What is the difference between Common Law and Civil Law? - Answers - Common law
is the outcome of judge decisions through history, while civil law focuses on statutes
and codes
What is the difference between Civil Law and Criminal Law? - Answers - Civil law
focuses on disputes between private parties, while criminal law is about harm against all
people in the jurisdiction.
What is the difference between Private Law and Public Law? - Answers - Private Law is
for disputes between 2 private parties (can be civil or criminal), while Public Law means
at least one party is a government entity
What is the structure of the Constitution? - Answers - Preamble (purpose and goal of
document), 7 articles (establish 3 branches), 27 amendments (address issues of
individual rights)
What is the Supremacy Clause? - Answers - Constitution, federal law, treaties and
federal regulations have priority over state law.
What is the Commerce Clause? - Answers - Congress can regulate commerce among
the states.
What is are the two main freedoms in the 1st Ammendment? - Answers - Freedom of
conscience and expression
When can the government interfere with religion and free speech? - Answers - When it
hurts others. (Burwell v Hobby Lobby) (defamation, libel, child porn, fraud, blackmail)
What is the Due Process Clause and what amendments is it involved with? - Answers -
Involved with 5th and 14th. Government can't take life, liberty, or property without notice
and chance to be heard before neutral arbiter.
What is the Equal Protection Clause and what amendment is it involved with? - Answers
- Involved with 14th. US government must treat all citizens the same.
What are 3 tests for equal protection? - Answers - Strict scrutiny test, intermediate
scrutiny test, and rational basis test
What is the Strict Scrutiny test? - Answers - If a law treats people differently based on a
suspect class (race, ethnicity, religion) or involves a constitutional right, it can only be
passed to achieve a compelling state interest. "Strict in theory, fatal in fight"
What is the Intermediate Scrutiny test? - Answers - If a law treats people differently
based on a lower classification (gender, age), must be substantially related to important
objectives.
QUESTIONS AND VERIFIED ANSWERS
What phrase is key to understanding legal and ethical systems? - Answers - "It
Depends"
What are two systems for prescribing appropriate behavior in various contexts? -
Answers - Law and Ethics
What are some business pros? - Answers - Economic growth, jobs, fill needs, longer,
easier, and more productive lives
What are some business cons? - Answers - Destroy livelihoods, negatively impact
social and physical environment
Why is knowledge of societal context of business important? - Answers - It helps inform
the impact of individual business decisions
What is the basis of all laws in the USA? - Answers - The Constitution
What is the US court system modelled after? - Answers - European system
How did "stare decisis" begin? - Answers - Judges represented the monarch and settled
disputes, then wrote down rulings to be used later.
What is Law? - Answers - (in a democratic society) body of rules of action or conduct
prescribed by controlling authority and having legal binding force
What are some functions of the law? (there are 7 in the textbook) - Answers - Keep the
peace, enforce rules to maintain order, facilitate planning, promote social justice,
prevent undesirable behavior, settle private and public disputes, provide clear rules on
how institutions should be run
What the requirements for laws to be effective and respected? - Answers - Must be fair,
equally applied, and responsive to changing situations
What is one of the most important intersections between business and law? - Answers -
Risk assessment
Define risk management - Answers - Evaluation of risks and how to minimize those
risks
,What happens when businesses take risk management to either extreme? - Answers -
They seldom engage in profitable strategy
How can people create value from the risk they are exposed to? - Answers - Consulting
with an attorney. They are trained to think through worst case scenarios and minimize
risk.
Define Jurisprudence - Answers - Study and theory of law
What are the two schools of thought for theories of law? - Answers - Natural law and
legal positivism
Define Natural Law (jus naturale) - Answers - -There exists a higher, supreme universal
law that can be found and studied, which governs all humanity.
-All persons have inalienable, natural rights that may never be taken away, only violated
and unrecognized.
-Laws are inherently moral and should be followed
Who were some key figures of Natural Law? - Answers - Aristotle- Father of natural law.
Laws come from nature.
Thomas Aquinas- Introduced religious natural law. Law given by God and can be
discovered through religion and science.
Define Legal Positivism - Answers - -Laws are human creations that reflect the reality of
human existence in that moment. Laws aren't necessarily moral or immoral, but just a
result of human activity.
-Laws are valid and should be followed. Rather than protesting laws, you should change
who is making laws.
What assumption does Legal Positivism make? - Answers - Previous practices were
carefully thought out and we should maintain tradition (historically, not modern belief)
Define Legal Realism - Answers - Law should serve the needs of people. Use public
policy, economic factors, and fairness to adapt the law to changing world
Define Sociological School - Answers - Use contextual elements in law. Shows how
cultures, identities, and peoples interact with the law
Define Critical Legal Studies (1970s, newer school of thought) - Answers - Focuses on
power dynamics of who creates, enforces, and is affected by laws. People in power
manipulate the law to maintain power. People without power receive the penalties, but
not protections of the system
Define Law Economics - Answers - Apply economic theory to law. Economic efficiency
means the law is more fair. This allows markets to determine policy.
, What is the difference between Common Law and Civil Law? - Answers - Common law
is the outcome of judge decisions through history, while civil law focuses on statutes
and codes
What is the difference between Civil Law and Criminal Law? - Answers - Civil law
focuses on disputes between private parties, while criminal law is about harm against all
people in the jurisdiction.
What is the difference between Private Law and Public Law? - Answers - Private Law is
for disputes between 2 private parties (can be civil or criminal), while Public Law means
at least one party is a government entity
What is the structure of the Constitution? - Answers - Preamble (purpose and goal of
document), 7 articles (establish 3 branches), 27 amendments (address issues of
individual rights)
What is the Supremacy Clause? - Answers - Constitution, federal law, treaties and
federal regulations have priority over state law.
What is the Commerce Clause? - Answers - Congress can regulate commerce among
the states.
What is are the two main freedoms in the 1st Ammendment? - Answers - Freedom of
conscience and expression
When can the government interfere with religion and free speech? - Answers - When it
hurts others. (Burwell v Hobby Lobby) (defamation, libel, child porn, fraud, blackmail)
What is the Due Process Clause and what amendments is it involved with? - Answers -
Involved with 5th and 14th. Government can't take life, liberty, or property without notice
and chance to be heard before neutral arbiter.
What is the Equal Protection Clause and what amendment is it involved with? - Answers
- Involved with 14th. US government must treat all citizens the same.
What are 3 tests for equal protection? - Answers - Strict scrutiny test, intermediate
scrutiny test, and rational basis test
What is the Strict Scrutiny test? - Answers - If a law treats people differently based on a
suspect class (race, ethnicity, religion) or involves a constitutional right, it can only be
passed to achieve a compelling state interest. "Strict in theory, fatal in fight"
What is the Intermediate Scrutiny test? - Answers - If a law treats people differently
based on a lower classification (gender, age), must be substantially related to important
objectives.
