Business law Exam (2025 Version) Tested Questions with Updated Answers Guaranteed A.

Business law Exam (2025 Version) Tested Questions with Updated Answers Guaranteed A. M & M candies wants its suppliers to conform to U. S. environmental and labor laws, not just the local laws in the supplier's country, where regulations may not be as stringent. Their policy reflects the beliefs that people have a right to be treated fairly in their jobs and a right as human beings to have a clean environment. This is an example of what school of jurisprudence? Legal Positivism; Natural Law; Legal Realism; Historical School: Tradition; All of the Above. Natural Law Milton Friedman was a strong believer in the ___________________________model. He_________________ argued that a corporate leader's, or a corporations, obligation is to follow the law and make money for the company's owners, who are___________. Shareholder; did; shareholders Shareholder; did not; stock owners Stakeholder; did; investors Stakeholder; did not; employees Shareholder; did; shareholders In studying business law and ethics, Judge Showalter's students also study ethics in a business context. Ethics is the study of what constitutes financially rewarding behavior. legal behavior. religious behavior. right or wrong behavior. right or wrong behavior TRUE or FALSE Technological developments can lead to ethical and legal uncertainties. T Ross, in 2016, was visiting this area, Blacksburg, VA. He is an out-of- state resident, California. He was driving his car and was texting (yes, while driving). Kenzie, a resident of Blacksburg, Mont. Co., Va. was in the M&M Truck directly behind Ross, listening to her favorite artist, JB. Kenzie, a new driver, accidentally pushed the accelerator of her M&M Truck, and she crashed into the rear of Ross' car. Ross leapt from his car. "I'm injured, “he yelled, "I'm hurt. I'll sue." Which is the best answer? Ross may file his lawsuit in Federal Court only because of diversity of citizenship; Ross may file his lawsuit in Federal Court or State Court because of the parties are from different states; Ross may file his lawsuit in Federal Court if the amount of controversy is greater than $75,000; None of the above. Ross may file his lawsuit in Federal Court if the amount of controversy is greater than $75,000; The burden of proof in a civil trial is to prove a case _______________. The burden of proof rests with the ___________ . a. beyond a reasonable doubt; plaintiff. b. by a preponderance of the evidence; plaintiff. c. beyond a reasonable doubt; defendant. d. by a preponderance of the evidence; defendant. B Glen lives in Illinois. He applies for a job with a Missouri company, and he is told, amazingly, that the job is open only to white applicants. He will now sue the Missouri company under the Civil Rights Act, a federal statute. Can Glen sue in federal court? a. Yes, absolutely. b. Yes, but only if he seeks damages of at least $75,000. Otherwise, he must sue in a state court. c. Yes, but only if the Missouri company agrees. Otherwise, he must sue in a state court. d. No, absolutely not. He must sue in a state court. A A default judgment can be entered if which of the following is true? a. A plaintiff presents her evidence at trial and clearly fails to meet her burden of proof. b. A defendant loses a lawsuit and does not pay a judgment within 180 days. c. A defendant fails to file an answer to a plaintiff's complaint on time. d. A citizen fails to obey an order to appear for jury duty. c Beef farming was more expensive in the State of West Virginia than other states. To help its beef farmers, the State of West Virginia takes all beef sales, regardless of where the beef was produced. The revenues went into a fund that was then distributed to in-state dairy farmers. a.This law is valid as states have the absolute authority to regulate all trade within their borders. b. This law is invalid because it discriminates against interstate commerce. c. This law is valid. As with all pork products, bacon is regionally disseminated and local governments may pass laws to protect its citizens. d. a and b. b Casey is a freshman at Virginia Tech, a public institution; her older sister Ashley attends a private school, Hollins University. Both girls are upset because their schools prohibit them from joining their respective wrestling teams, where only boys are allowed. The two girls sue based on the US Consitituion. The US Constitution offers protection from the government. Casey's case is based on Equal Protection Clause and Intermediate Scrutiny is applied. Both girls win because you cannot discriminate against gender. Neither girl wins because each college is afforded freedom of speech and choice. a and b. a and b The United States of America is unique in that we have freedom of speech. But not all speech is protected. The US Supreme Court has held that certain speech is unprotected speech that is not protected by the First Amendment and may be not allowed at all by government. Dangerous Speech Fighting words Speech that incites violence or overthrow of our government Child Pornography Obscene Speech Defamation defamation The First Amendment to the US Constitution protects Zach and other individuals who engage in speech that harms others' good reputation all the time none of the time only if it is commercial speech only of it is political speech none of the time The Virginia General Assembly enacts a law that directly conflicts with a federal law. The state law will be rendered invalid under the commerce clause the equal protection clause the establishment clause the supremacy clause supremacy clause Sierra Mist owns a retail soda pop shop in downtown Blacksburg. The store is repeatedly painted with graffiti, "Pepsi is the BEST.". Sierra Mist is convinced that 15 year-old John, a frequent customer, is the person painting the graffiti. The next time John comes to the store, Sierra Mist locks the men's room door while John is inside. Sierra Mist calls the police, but because of a misunderstanding, the police are very slow to arrive. John shouts and cries for help, banging on the door, but Sierra Mist does not release him for over two hours. John sues. What intentional tort could John sue? False Imprisonment Assault Battery Both b and c because John was had apprehension that he was locked in the men's room. False imprisonment Trey had a radio talk show. On the program, he complained about an incident in which a police officer Bob had stopped his car, apparently for lack of a proper license plate and safety sticker. Trey explained that the license plate had been stolen and the sticker fallen onto the dashboard, but Officer Bob refused to let him drive away. Trey and two young grandsons had to find other transportation. On his radio show, Trey angrily recounted the incident, then described Officer Bob and all police officers generally: "we are not paying officers to be dictators and Nazis"; "this man is an absolute barbarian, a lunkhead, a meathead." Officer Bob sued Trey for defamation. What would be the result? This is libel; This is slander; This is Not defamation because the statements are not statements of fact because most of them could not be proven true or false. This is nuisance because it bothered the reputation of Officer Bob. this is not defamation Sierra Mist is the only soft drink business in the Town of Blacksburg. The citizens of Blacksburg love their special drink called, Mistiquilas (you know, one part tequila and three parts Sierra Mist). Seth, independently wealthy, hates Sierra Mist. He moves to Blacksburg and sets up a soft drink business to company that makes NO profit, just to drive Sierra Mist out of business. His plans are to have an acquaintance of his to move to Blacksburg and open up a legitimate store once the competition is eliminated. What tort is this? Disparagement; Duty; Intentional interference with contract; Unfair Competition unfair competition Remember the question with little John who was locked in the bathroom? (Please refer to a previous question following the Torts of Assault, Battery and False Imprisonment). John, locked in the bathroom, shouts and cries for help, banging on the door, but Sierra Mist does not release him for over two hours. John sues for false imprisonment; he claims that he has suffered great psychological harm because of the incident; his psychiatrist asserts that John may have unpredictable suffering in the future. After this lawsuit, may John return to court in the future to seek further damages? Yes. A plaintiff may return to court at any time to recover any damages suffered. No. False Imprisonment does not provide for plaintiffs to sue at different intervals. No. The single recovery rule forces John to recover now for all past and future harm. Yes. John has psychological damages. They are ongoing and John may file a lawsuit for each year, bringing the defendant into court every year. No. The single recovery rule forces John to recover now for all past and future harm. Jane writes an article for the Collegiate Times newspaper reporting that Simone was arrested for stealing a car. The story is entirely false. Simone is not a public figure. Which of the following torts has Jane committed? Ordinary slander Slander per se Libel None of the above libel Refer back to the previous question. If Simone decides to sue, she _______________have to show evidence that she suffered an injury. If she ultimately wins her case, a jury_____________have the option to award punitive damages. will; will will; will not will not; will will not; will not will not; will Debbie sneaks up on AnnaKate, hits her with a hairbrush, and knocks her unconscious. AnnaKate never saw Debbie coming. She wakes up with a horrible headache. Which of the following tort(s) has Debbie committed? Assault Battery Both A and B None of the above battery Judge Showalter is an employee with M&M's. He loves those delicious, chocolatey treats. He helps himself to many, many boxes of those confections. He does so without permission from M&M's. Judge Showalter is liable for: Appropriation Conversion Disparagement of property Wrongful interference with a business relationship conversion Bobby says, falsely, that Judge Showalter is stealing from their employer, M&M's. The statement is defamatory only if Judge showalter suffers emotional distress The statement is made in an annoying manner The statement is published in the media A third party hears it. a third party hears it T/F: Liability for negligence requires intending certain consequences or believing that they will occur. false T/F To avoid liability for negligence, a business owner must protect its patrons against all risks. false Kelly is injured when she slips and falls on Lee's sidewalk. To determine whether Lee owed a duty of care to Kelly, Lee is subject to the standard of: a realistic person a reasonable person a recognizable person a reliable person reasonable person To protect its customers and other business invitees, M&M's must warn them of: all dangers concealed dangers open dangers no dangers concealed dangers Dirk is driving a sport utility vehicle in which Elin is a passenger when they are involved in a traffic accident, and Elin is injured. Liability may be imposed on Dirk for Elin's injury if Dirk's driving is: neither the causation in fact nor the proximate cause of the injury only the causation in fact of the injury only the proximate cause of the injury the causation in fact and the proximate cause of the injury. the causation in fact and the proximate cause of the injury Bob is injured in a car accident and files a suit against Mary, whom Bob alleges was driving negligently. Mary claims that Bob was driving more carelessly than she was. Comparative negligence in tort cases may reduce a plaintiff's recovery: only if the plaintiff was more at fault than the defendant only if the plaintiff and defendant were equally at fault only if the plaintiff was less at fault than the defendant even if the plaintiff was only a small fraction at fault even if the plaintiff was only a small fraction at fault Marta owns National Demolition Company. During a demolition by Marta's crew, Owen, a passerby, is injured. Under the theory of strict liability, Marta must pay for the injury: only if the crew intended to injure Owen whether or not the crew was at fault only if the crew was at fault under no circumstances whether or not the crew was at fault Matt is using his new Samsung Galaxy 7 phone when it explodes in his hand, causing Matt to have 3rd degree burns and suffers injury. Matt files a suit against Samsung, Inc., the manufacturer. A significant application of the doctrine of strict liability is in the area of: constitutional law ethics product liability negligence product liability Marie, a driver for National Transport Company, causes a five-car accident on an interstate highway. Marie and National are liable to: all those who are injured only those whose injuries could reasonably have been foreseen only those whose cars were immediately ahead and behind Marie's vehicle only those who do not have insurance only those whose injuries could reasonably have been foreseen Branch Construction Company engages in blasting in its operation. This is subject to strict liability because Blasting is an abnormally dangerous activity. Blastinging is a negligent activity. Construction can be done without blasting. Branch is a construction company. Blasting is an abnormally dangerous activity. Accountant Aaron, employed with KPMG, is given a tax return to prepare for the April 15, 2019, tax deadline. He fails to prepare the taxes is time for the client to file for the April 15, 2019 tax deadline. Which statement is correct? a. Aaron has committed the intentional tort of professional malpractice because he intentionally failed to prepare the tax returns by April 15, 2019. b. Aaron has committed the intentional tort of negligence. c. Aaron has committed the unintentional tort of negligence. d. Aaron has committed the unintentional tort of conversion e. A and B C trier of fact judge or jury T/F: Constitution is the supreme law of the land TRUE Where do we get our laws from? Common law, agency law, Constitution, statutory law Common law is: retrospective (look in the past) Statutory law is: prospective Equity courts may issue rulings (orders) such as injunctions to provide an equitable remedy Injunctions Can make someone do something/not do it What is determined in criminal law? civil law? criminal - guilt civil - liability Legal Positivism what the gov't sets is the law, decision stands legal realism combination of natural law and legal positivism, enforcement of the law is more important than the law itself, enforcers determine if the law is applied in a fair and consistent way stare decisis let the decision stand, previous decisions withheld T/F: You have to help someone under common law if you are a bystander. F Exceptions to the Good Samaritan law: aid in special relationships employee/employer, parent/child, therapist, lifeguard, etc. Enabling legislation describes a problem and describes the agency's powers Executive Federal Agency part of the exec. branch, under control of the President Independent Federal Agency Not part of executive branch What is the difference between a subpoena and summons? subpoena - order 2 appear at hearing/provide evidence/sometimes documents summons - don't have to do anything Enabling where gov't funds the agency Powers of the Agencies (define it) Adjudicate - means to hold a hearing, have to go to court, if you are unhappy with the result, you can appeal Freedom of Information Act allows any person to request info from an agency Commerce Clause (Substantial effect) Congress may regulate any activity which has a substantial economic effect on interstate commerce Supremacy Clause the Constitution/ Federal Statutes/Fed Treaties = supreme law - federal law is more important than state law Judicial Review fed courts can declare a statute/gov't action unconstitutional T/F: Gov't can't restrict free speech on public land in ANY way. F (can in time/place/manner) T/F: If private property you have the RIGHT to control speech. T Intermediate Scrutiny Gender - can't discriminate based off of gov't classifications Are sometimes upheld VMI court case was an example of intermediate scrutiny (had to let girl in) ADR Any other formal/informal process for settling disputes without going to trial Why an ADR (alternative dispute resolution) time, money, keeps people talking Types of ADRs Negotiation, mediation, arbitration How do mediation and arbitration differ? mediator DOESN'T render a decision, arbitrator DOES render a decision Negotiation parties make offers/counteroffers for settlements, may be face to face/lawyers, can be informal Mediation a neutral person (mediator) attempts to get parties to reach a settlement, mediator DOESN'T render a decision, just brings together Arbitration (think of judge Judy) neutral person (arbitrator) is involved, arbitrator DOES render a decision, may be mandatory if chosen in advance as the method for dispute resolution (contract will say) What are the two types of court jurisdiction? Subject-matter (do they have the authority to hear?) and personal jurisdiction (corporation or person must have minimum contacts (do something in jurisdiction) within the state) T/F: All courts must have subject-matter and personal jurisdiction. T Subject Matter Jurisdiction do they have the authority to hear? Personal Jurisdiction corporation or person must have minimum contacts (do something in jurisdiction) within the state International Shoe v. Washington ONLY stands for personal jurisdiction, only takes 1 person/time T/F International Shoe v. Washington is an example of subject-matter jurisdiction case. F (personal jurisdiction case) long arm statute Assert jurisdiction over non-resident who engage in some purposeful act, every state has this Diversity Cases When the plaintiff/defendant are citizens of 2 different states AND amount is greater than 75000 When the plaintiff/defendant are citizens of 2 different Why are circuit courts of VA the coolest? All courts have limited matter jurisdiction - Except VA, general jurisdiction (subject matter) - can hear everything Only court where you can have a jury trial Interrogratories Written questions that the other party must answer under oath Depositions interview (under oath) to tell exactly what happened; done by opposing lawyer default judgement didn't answer within 21 days, judgement given Demurrer didn't file a proper claim Summary Judgement no party disputes the facts, all agree, never happens motion in limine A request that the court order that certain information not be mentioned in the presence of the jury. file before you go to court Burden of Proof in a civil case? criminal case? civil - proof needs to be a preponderance of evidence (at least slightly more likely to be true) criminal - beyond a reasonable doubt T/F: You can settle a case at any time, even after a jury had reached a verdict T T/F: After the verdict has been given, new evidence can be given F (After the verdict has been given, no new evidence has been given) Tort violation of a duty imposed by civil law Fraud offering to sell something that doesn't exist Tort. vs Crim law vs Contract Law Criminal law - behavior classified as dangerous to society, prosecuted by the government Contract law - based on breach of an agreement between the two parties; victim prosecutes and receives compensation or restitution Tort Law - based on an obligation imposed by the law with no agreement needed between parties; victim prosecutes and receives compensation/restitution, files a lawsuit What is the one and only non-intentional tort? (technically a bonus one) negligence (and strict liability) Strict Liability -Some activities are so dangerous that the law imposes a high burden on them -Plaintiff doesn't have to prove breach of duty or foreseeable harm product liability -Defective products often cause a person's injuries, can sue a product manufacturer or seller for product liability -Manufacturer, distributor, retailer are all liable -Consumer is strictly liable Defenses to product liability: Generally known danger, abnormal misuse of the product, product is materially altered Conditions of Strict Liability -Seller is in business to sell this product -The defective condition is unreasonably dangerous to the user -The product reaches the user without substantial change (negligent by failing to warn) Intentional torts doesn’t require an intention to harm the victim only the intention to perform the act which caused the injury Intentional torts examples battery, assault, false imprisonment, trespass, conversion, fraud, nuisance, defamation, intentional affliction of emotional distress battery touching of another person in a way that is unwanted or offensive assault action that causes the victim to fear an imminent battery T/F: If you pull a gun on someone, its an assault T false imprisonment Restraint of someone against their will without reasonable cause trespass intentionally entering land that belongs to someone else or remaining after being asked to leave conversion taking/using someone's property without consent (civil law version of theft) nuisance activity of one's property that endangers the life/health of another/interferes with the reasonable and comfortable use of the property of another defamation irresponsible speech to harm another's reputation written defamation is... libel spoken defamation is.. slander 4 elements of defamation 1) Statement actually made 2) Statement is false 3) Statement was communicated to someone other than the plaintiff 4) In slander --- must show some injury Slander per se Statement so harst/potentially damaging that the plaintiff is assumed 2 be damaged/doesn't have to prove injury Yeggle v. Collegiate times: wrote "director of butt licking" libel per se Why do public personalities have a harder time winning defamation? have to prove actual malice Privilege defendant receives extra protection in special cases absolute privilege may speak freely Intentional Infliction of Emotional Distress Behavior causing injury must be extreme/outrageous, must have caused serious emotional harm Business torts: interference with contract 1) Contract between the plaintiff/3rd party and the defendant knew of the contract 2) The defendant induced the 3rd party to breach contract/make performance impossible 3) There was injury to the plaintiff Disparagement Statement that's untrue made by 1 person, business about the products/services/property/reputation of another business intrusion Prying into someone's private life Intrusion is a tort if a _______________ person would find it offensive reasonable commercial exploitation Person's image/voice is used for commercial purposes without that person's permission Defenses/exceptions to assault/battery self-defense, permission, ability (yes/no) Defenses/exceptions to conversion permission, ownership Defenses/exceptions to Trespass necessity, still liable for damages Defenses/exceptions to nuisance if one moves to the nuisance Defenses, Exceptions to Defamation truth privilege Defenses, exceptions to false imprisonment knowledge Compensatory Damage what you want when you sue, most common form of damages, applies to both intentional torts/negligence The Single Recovery Principle court must decide all damages (past, present, and future) at one time and settle the matter completely, you only get to go to court one time Punitive Damages Are intended to punish the liable party - to set an example that this behavior won't be tolerated Contributory Negligence In a few states, if the plaintiff is AT ALL negligence he can't recover damanges from the defendant Comparative Negligence - In most states, if the plaintiff is negligent, a percentage of negligence is applied to both the defendant and the plaintiff. - The plaintiff can recover from the defendant to the percentage that the defendant is negligent. - In some cases, a plaintiff found to be more than 50% negligent cannot recover at all. Dram Shop Laws Making liquor stores, bars, and restaurants liable for serving drinks to intoxicated customers who later cause harm Assumption of the risk A person who voluntarily enters a situation that has an obvious danger can't complain if she is injured Res Ipsa Loquitur - The defendant must prove he was not negligent or the fact imply that his negligence did not cause the injury -Raises a presumption of negligence and switches the burden to the defendant to prove that he was not negligent -Ex: commercial airplane crashes/falling elevators To win the plaintiff must prove that the defendant failed in 5 areas 1) Duty of due care 2) Duty must be breached 3) factual case 4) proximate cause 5) Damages Duty of due care If the defendant could have foreseen injury to a particular person, she has a duty to him Duty to Children if a man-made item on the land attract children, landowner may be liable Duty to Trespassers not to injure intentionally Duty to Licensees a license is entitled to a warning of hidden dangers that the owner knows about Who is a licensee? Social guests/someone doing work on your property Duty to Invitees exercise reasonable care to protect invitees against dangerous conditions possessors should know of, but invitees are unlikely to discover Who is an invitee? someone who has a right to be on the property because it is a public place/business open to the public T/F: Professionals, while on the job, must act as a reasonable person T Breach Defendant breaches his duty of due care by failing to behave the way a reasonable person would under similar circumstances Negligence per se legislature set a min standard for groups of people (esp. children) Factual case injury must have been caused by the defendant's actions T/F: If the defendant's breach ultimately led to an injury, he is NOT liable F (he is liable) proximate cause it must have been FORESEEABLE that the action would cause this kind of harm A bystander may recover for emotional distress if... She was near the scene, seeing the injury caused immediate shock and she is a close relative of the victim T/F: Damages are usually compensatory T Lemon Laws buyers can return cars for a refund after reasonable time if car has substantial defects Consumer Protection Laws focuses on a merchant's deceit Magnuson-Moss Warranty Act protects purchasers of household goods by ensuring fairness in warranties Ex: Mechanic fails to fix brakes which causes, car accident/car hitting bike. Who is liable? Mechanic is liable to cyclist Factual cause and foreseeable type of injury Ex: Noise from accident startles someone who falls out a window. Who's liable? Mechanic is NOT liable for falling person Factual cause but NO foreseeable type of injury EX: Car DOESN'T hit bike, bike hits pothole and crashes mechanic NOT liable No factual cause The law is _______, _________, and _________ powerful, important, fascinating T/F: The law adapts and grows to the needs of society. T natural law laws must have a good moral basis Plaintiff the party who is suing defendant the party being sued judge-made law common law T/F: Laws or ordinances can be enacted at all levels of government. T law interpretation: plain meaning rule must use the common sense definition of the words law interpretation: legislative history and intent sometimes can look to the reasons behind the law to determine the legislators' intent law interpretation: public policy the courts will use accepted social policies, such as reducing crime or providing education to interpret a law precedent an example that may serve as a basis for imitation or later action T/F: Agencies don't exist at all levels of government F ; THEY DO The Privacy Act prohibits agencies from giving information about an individual to other agencies without consent The Takings Clause Government can take private property for a public purpose, but it must provide fair compensation to the owners of that property. How is litigation different than ADRS litigation - lawsuits ADR - not going to trial T/F: Intentional torts doesn't require an attention to harm the victim, only intention to preform the act that caused the injury T Element something a plaintiff must prove to win a lawsuit T/F: Extreme exaggerations are usually taken as fact F; they aren't Inference with the contract exists: There was a contract between the plaintiff/3rd party and the defendant knew of the contract The defendant induced the 3rd party to breach contract/make performance impossible There was injury to the plaintiff What is the statute of limitations for intentional torts and negligence? 2 years T/F: Strict liability may be imposed based on design defect, manufacture defect or failure to warn. T