BUSINESS LAW 1 FAU (MIDTERM)
EXAM QUESTIONS AND ANSWERS
Which of the following is true regarding the relationship between ethical relativism and
situational ethics? - Correct Answers -Like ethical relativism, situational ethics requires
that we evaluate the morality of an action by imagining ourselves in the position of the
person facing the ethical dilemma; but unlike ethical relativism, situational ethics allows
us to judge other people's actions.
(Difficulty: Hard)
(page 35)
Laws which enable the court to serve a defendant outside the state as long as the
defendant has sufficient minimum contacts within the state and it seems fair to assert
jurisdiction are called - Correct Answers -Long-arm statutes passed by most states,
enable the court to serve defendants outside the state as long as the defendant has
sufficient minimum contacts within the state and it seems fair to assert long-arm
jurisdiction over him or her
(difficulty: easy)
(page 41)
Which of the following is a type of ADR? - Correct Answers -The term ADR refers to
resolution of legal disputes through methods other than litigation, such as negotiation,
mediation, arbitration, summary jury trials, minitrials, neutral case evaluations, and
private trials
(Difficulty: easy)
(page 78-79)
What does the Fifth amendment's takings clause reference? - Correct Answers -The
requirement that the government pay the owner just compensation, or fair market vaule,
if the government wants to take private property for public use.
(Difficulty: Medium)
(page 116)
Which of the following allows a defendant to be found not guilty by reason of insanity if
he or she did not understand the nature of the act - Correct Answers -Approximately
,one-third of the states still apply the M'Naghten test, also known as the right-wrong test"
which allows a defendant to be found not guilty if he or she did not understand the
nature of the act
(Page 183)
Which of the following is a tort - Correct Answers -A wrong or injury to another, other
than a breach of contract (204)
Which of the following aids plaintiffs - Correct Answers -Two doctrines have been
adopted by courts to aid plaintiffs in establishing negligence claims: res ipsa loquitur
and negligence per se
(Hard. Chapter 9 section 2)
Which of the following is a mark used in conjunction with a service - Correct Answers -A
service mark.
(easy. chapter 12 section 01)
PP 8/19/2025: What is law - Correct Answers -PP 8/19/2025: A body of enforceable
rules governing relationships among individuals and between individuals and their
society
(Contracts or rules. They are obligations)
The law provides stability and predictability so people know how to order their affairs.
(legal entities)
Citizens must be able to distinguish between what is legally correct and what is not.
Citizens must know the consequences/sanctions associated with wrongdoings.
PP 8/19/2025: Business and Law - Correct Answers -PP 8/19/2025:
In order for a business to function efficiently, it must have stability and predictability,
which the law provides.
Laws and regulations affect virtually all business activities. Examples include:
,Contract, product, and premise liability, credit collections, hiring/firing, workplace safety,
environmental concerns, business financing, advertising rules, intellectual property,
leasing equipment, etc...
"Business cannot function without law"
The group that urges states to enact model laws to provide greater uniformity of law is
called the - Correct Answers -National Conference of Commissioners on Uniform State
Laws
The National Conference of Commissioners on Uniform State Laws (NCC) regularly
urges states to enact model laws to provide greater uniformity.
(Difficulty: 2 Medium. Learning Objective: 01-05 What are the sources of the law?Topic:
Sources of Business LawPage: 5)
PP 8/19/2025: Areas of Law that affect business decision making
(business decision making) - Correct Answers -PP 8/19/2025: Contracts, sales,
negotiable instruments, creditors' rights, intellectual property, e-commerce, product
liability, torts, agency, business organization, professional liability, courts and court
procedures.
PP 8/19/2025: Classification of law: - Correct Answers -PP 8/19/2025: Law is either:
private or public
civil or criminal
substantive or procedural
PP 8/19/2025: Private v public law - Correct Answers -PP 8/19/2025: regulates disputes
between private individuals or groups
Ex: Tenants/lessee is late paying rent to their landlord/lessor, the dispute is governed by
private law
PP 8/19/2025: Civil law - Correct Answers -PP 8/19/2025:
Monetary compensation is typically, but not always, sought by the injured party.
Specific performance or injunctive relief may also be sought (i.e., equitable remedies)
Civil liability sought not finding of guilt.
PP 8/19/2025: Civial law part (2) - Correct Answers -PP 8/19/2025: (2)
Preponderance of evidence burden of proof.
, case filed by private party of government
EX: breach of contract, wrongful termination, libel/slander
PP 8/19/2025: Criminal law - Correct Answers -PP 8/19/2025:
Punishes offenders
Deters criminal behavior
A case filed by the state or federal government, not the victims.
Beyond a reasonable doubt is the burden of proof
State and federal criminal statutes.
PP 8/19/2025: Criminal v Civil law - Correct Answers -PP 8/19/2025:
Sometimes, criminal and civil law will overlap.
EX: OJ simpson trial.
Nicole brown simpson and her friend Ronald Goldman were murdered on June 12,
1994
Simpson was charged for their deaths and subsequently acquitted of all criminal
charges in a controversial criminal trial.
PP 8/19/2025: Sources of business law - Correct Answers -PP 8/19/2025:
Constitution
Statutes
Cases
Administrative Law
Treaties
Executive Orders
PP 8/19/2025: Common law tradition - Correct Answers -PP 8/19/2025:
American law is based largely on English common law
Develop by judges through court decisions
PP 8/19/2025: Statues - Correct Answers -PP 8/19/2025:
Statutes are laws created by legislative bodies (Congress or state legislators)
Federal statutes contained in the United States Code ( Internal Revenue Code is Title
28; Bankruptcy Code is Title 11)
EXAM QUESTIONS AND ANSWERS
Which of the following is true regarding the relationship between ethical relativism and
situational ethics? - Correct Answers -Like ethical relativism, situational ethics requires
that we evaluate the morality of an action by imagining ourselves in the position of the
person facing the ethical dilemma; but unlike ethical relativism, situational ethics allows
us to judge other people's actions.
(Difficulty: Hard)
(page 35)
Laws which enable the court to serve a defendant outside the state as long as the
defendant has sufficient minimum contacts within the state and it seems fair to assert
jurisdiction are called - Correct Answers -Long-arm statutes passed by most states,
enable the court to serve defendants outside the state as long as the defendant has
sufficient minimum contacts within the state and it seems fair to assert long-arm
jurisdiction over him or her
(difficulty: easy)
(page 41)
Which of the following is a type of ADR? - Correct Answers -The term ADR refers to
resolution of legal disputes through methods other than litigation, such as negotiation,
mediation, arbitration, summary jury trials, minitrials, neutral case evaluations, and
private trials
(Difficulty: easy)
(page 78-79)
What does the Fifth amendment's takings clause reference? - Correct Answers -The
requirement that the government pay the owner just compensation, or fair market vaule,
if the government wants to take private property for public use.
(Difficulty: Medium)
(page 116)
Which of the following allows a defendant to be found not guilty by reason of insanity if
he or she did not understand the nature of the act - Correct Answers -Approximately
,one-third of the states still apply the M'Naghten test, also known as the right-wrong test"
which allows a defendant to be found not guilty if he or she did not understand the
nature of the act
(Page 183)
Which of the following is a tort - Correct Answers -A wrong or injury to another, other
than a breach of contract (204)
Which of the following aids plaintiffs - Correct Answers -Two doctrines have been
adopted by courts to aid plaintiffs in establishing negligence claims: res ipsa loquitur
and negligence per se
(Hard. Chapter 9 section 2)
Which of the following is a mark used in conjunction with a service - Correct Answers -A
service mark.
(easy. chapter 12 section 01)
PP 8/19/2025: What is law - Correct Answers -PP 8/19/2025: A body of enforceable
rules governing relationships among individuals and between individuals and their
society
(Contracts or rules. They are obligations)
The law provides stability and predictability so people know how to order their affairs.
(legal entities)
Citizens must be able to distinguish between what is legally correct and what is not.
Citizens must know the consequences/sanctions associated with wrongdoings.
PP 8/19/2025: Business and Law - Correct Answers -PP 8/19/2025:
In order for a business to function efficiently, it must have stability and predictability,
which the law provides.
Laws and regulations affect virtually all business activities. Examples include:
,Contract, product, and premise liability, credit collections, hiring/firing, workplace safety,
environmental concerns, business financing, advertising rules, intellectual property,
leasing equipment, etc...
"Business cannot function without law"
The group that urges states to enact model laws to provide greater uniformity of law is
called the - Correct Answers -National Conference of Commissioners on Uniform State
Laws
The National Conference of Commissioners on Uniform State Laws (NCC) regularly
urges states to enact model laws to provide greater uniformity.
(Difficulty: 2 Medium. Learning Objective: 01-05 What are the sources of the law?Topic:
Sources of Business LawPage: 5)
PP 8/19/2025: Areas of Law that affect business decision making
(business decision making) - Correct Answers -PP 8/19/2025: Contracts, sales,
negotiable instruments, creditors' rights, intellectual property, e-commerce, product
liability, torts, agency, business organization, professional liability, courts and court
procedures.
PP 8/19/2025: Classification of law: - Correct Answers -PP 8/19/2025: Law is either:
private or public
civil or criminal
substantive or procedural
PP 8/19/2025: Private v public law - Correct Answers -PP 8/19/2025: regulates disputes
between private individuals or groups
Ex: Tenants/lessee is late paying rent to their landlord/lessor, the dispute is governed by
private law
PP 8/19/2025: Civil law - Correct Answers -PP 8/19/2025:
Monetary compensation is typically, but not always, sought by the injured party.
Specific performance or injunctive relief may also be sought (i.e., equitable remedies)
Civil liability sought not finding of guilt.
PP 8/19/2025: Civial law part (2) - Correct Answers -PP 8/19/2025: (2)
Preponderance of evidence burden of proof.
, case filed by private party of government
EX: breach of contract, wrongful termination, libel/slander
PP 8/19/2025: Criminal law - Correct Answers -PP 8/19/2025:
Punishes offenders
Deters criminal behavior
A case filed by the state or federal government, not the victims.
Beyond a reasonable doubt is the burden of proof
State and federal criminal statutes.
PP 8/19/2025: Criminal v Civil law - Correct Answers -PP 8/19/2025:
Sometimes, criminal and civil law will overlap.
EX: OJ simpson trial.
Nicole brown simpson and her friend Ronald Goldman were murdered on June 12,
1994
Simpson was charged for their deaths and subsequently acquitted of all criminal
charges in a controversial criminal trial.
PP 8/19/2025: Sources of business law - Correct Answers -PP 8/19/2025:
Constitution
Statutes
Cases
Administrative Law
Treaties
Executive Orders
PP 8/19/2025: Common law tradition - Correct Answers -PP 8/19/2025:
American law is based largely on English common law
Develop by judges through court decisions
PP 8/19/2025: Statues - Correct Answers -PP 8/19/2025:
Statutes are laws created by legislative bodies (Congress or state legislators)
Federal statutes contained in the United States Code ( Internal Revenue Code is Title
28; Bankruptcy Code is Title 11)
