BUSINESS LAW FINAL STUDY GUIDE UPDATED
ACTUAL QUESTIONS AND CORRECT ANSWERS
Question:
1. Chapter 1: 1-1. Binding versus Persuasive Authority. A
county court in Illinois is deciding a case involving an
issue that has never been addressed before in that state's
courts. The Iowa Supreme Court, however, recently
decided a case involving a very similar fact pattern. Is the
Illinois court obligated to follow the Iowa Supreme
Court's decision on the issue? If the United States
Supreme Court had decided a similar case, would that
decision be binding on the Illinois court? Explain.
Answer:
The Illinois court is
Question:
2. Chapter 1: This chapter discussed a number of sources of
American law. Which source of law takes priority in the
following situations, and why?
1. A federal statute conflicts with the U.S. Constitution.
2. A federal statute conflicts with a state constitutional
provision.
3. A state statute conflicts with the common law of that
state.
4. A state constitutional amendment conflicts with the U.S.
Constitution.
Answer:
1. The U.S. constitution is the supreme law of the land
2. A federal statute
3. A state statute
4. The U.S. constitution is the supreme law of the land
Question:
3. Chapter 1: 1-3. Stare Decisis. In this chapter, we stated that
the doctrine of stare decisis "became a cornerstone of
the English and American judicial systems." What does
stare decisis mean, and why has this doctrine been so
fundamental to the development of our legal tradition?
Answer:
Stare decisis is the legal principle of determining points in litigation according to
precedent. Under the doctrine of stare decisis, judges are obligated to follow the
precedents established within their jurisdictions.
, Question:
4. Chapter 2: 2-2. Venue. Brandy Austin used powdered
infant formula manufactured by Nestlé USA, Inc., to feed
her infant daughter. Austin claimed that a can of the
formula was contaminated with Enterobacter sakazakii
bacteria, causing severe injury to the infant. The bacteria
can cause infections of the bloodstream and central
nervous system-in particular, meningitis (inflammation of
the tissue surrounding the brain or spinal cord). Austin
filed an action against Nestlé in Hennepin County District
Court in Minnesota. Nestlé argued for a change of venue
because the alleged harm had occurred in South
Carolina. Austin is a South Carolina resident and had
given birth to her daughter in that state. Should the case
be transferred to a South Carolina venue? Why or why
not?
Answer:
The case should be transferred to a South Carolina venue because Nestle has had
sufficient amount of contacts in South Carolina
Question:
5. Chapter 2: 2-3. Arbitration. PRM Energy Systems owned
patents licensed to Primenergy to use in the United
States. Their contract stated that "all disputes" would be
settled by arbitration. Kobe Steel of Japan was interested
in using the technology represented by PRM's patents.
Primenergy agreed to let Kobe use the technology in
Japan without telling PRM. When PRM learned about the
secret deal, the firm filed a suit against Primenergy for
fraud and theft. Does this dispute go to arbitration or to
trial? Why?
Answer:
This dispute will be settled through arbitration since the contract stated "all
disputes" would be settled by arbitration.
ACTUAL QUESTIONS AND CORRECT ANSWERS
Question:
1. Chapter 1: 1-1. Binding versus Persuasive Authority. A
county court in Illinois is deciding a case involving an
issue that has never been addressed before in that state's
courts. The Iowa Supreme Court, however, recently
decided a case involving a very similar fact pattern. Is the
Illinois court obligated to follow the Iowa Supreme
Court's decision on the issue? If the United States
Supreme Court had decided a similar case, would that
decision be binding on the Illinois court? Explain.
Answer:
The Illinois court is
Question:
2. Chapter 1: This chapter discussed a number of sources of
American law. Which source of law takes priority in the
following situations, and why?
1. A federal statute conflicts with the U.S. Constitution.
2. A federal statute conflicts with a state constitutional
provision.
3. A state statute conflicts with the common law of that
state.
4. A state constitutional amendment conflicts with the U.S.
Constitution.
Answer:
1. The U.S. constitution is the supreme law of the land
2. A federal statute
3. A state statute
4. The U.S. constitution is the supreme law of the land
Question:
3. Chapter 1: 1-3. Stare Decisis. In this chapter, we stated that
the doctrine of stare decisis "became a cornerstone of
the English and American judicial systems." What does
stare decisis mean, and why has this doctrine been so
fundamental to the development of our legal tradition?
Answer:
Stare decisis is the legal principle of determining points in litigation according to
precedent. Under the doctrine of stare decisis, judges are obligated to follow the
precedents established within their jurisdictions.
, Question:
4. Chapter 2: 2-2. Venue. Brandy Austin used powdered
infant formula manufactured by Nestlé USA, Inc., to feed
her infant daughter. Austin claimed that a can of the
formula was contaminated with Enterobacter sakazakii
bacteria, causing severe injury to the infant. The bacteria
can cause infections of the bloodstream and central
nervous system-in particular, meningitis (inflammation of
the tissue surrounding the brain or spinal cord). Austin
filed an action against Nestlé in Hennepin County District
Court in Minnesota. Nestlé argued for a change of venue
because the alleged harm had occurred in South
Carolina. Austin is a South Carolina resident and had
given birth to her daughter in that state. Should the case
be transferred to a South Carolina venue? Why or why
not?
Answer:
The case should be transferred to a South Carolina venue because Nestle has had
sufficient amount of contacts in South Carolina
Question:
5. Chapter 2: 2-3. Arbitration. PRM Energy Systems owned
patents licensed to Primenergy to use in the United
States. Their contract stated that "all disputes" would be
settled by arbitration. Kobe Steel of Japan was interested
in using the technology represented by PRM's patents.
Primenergy agreed to let Kobe use the technology in
Japan without telling PRM. When PRM learned about the
secret deal, the firm filed a suit against Primenergy for
fraud and theft. Does this dispute go to arbitration or to
trial? Why?
Answer:
This dispute will be settled through arbitration since the contract stated "all
disputes" would be settled by arbitration.
