COB 318 EXAM 1 | COMPREHENSIVE BUSINESS STUDY GUIDE, PRACTICE
QUESTIONS & ANSWERS 2026/2027
stare decisis - ANS ✔✔To stand on decided cases; the judicial policy of following precedents established
by past decisions.
natural law - ANS ✔✔Universal law that could be understood by applying reason; letting people govern
themselves.
legal positivism - ANS ✔✔A school of legal thought centered on the assumption that there is no law
higher than the laws created by a national government. Laws must be obeyed, even if they are unjust, to
prevent anarchy.
historical school - ANS ✔✔A school of legal thought that looks to the past to determine what the
principles of contemporary law should be.
Legal Realism - ANS ✔✔A school of legal thought that holds that the law is only one factor to be
considered when deciding cases and that social and economic circumstances should also be taken into
account.
command theory - ANS ✔✔Law is the command of the sovereign, backed by force, who is habitually
obeyed and does not habitually obey anyone else. Sovereign will is less clear in large democracies.
Gonzales v. Raich - ANS ✔✔(2005) The regulation (ban on homegrown medical marajuana) is squarely
within Congress' commerce power because production of the commodity meant for home consumption,
be it wheat (Wickard) or marijuana, has a substantial effect on supply and demand in the national
market for that commodity.
American sources of law - ANS ✔✔Constitution, statute/ordinance, administrative rules, common
law/case law
5th Amendment - ANS ✔✔The Right to Remain Silent/Double Jeopardy, right to due process
judicial review - ANS ✔✔Allows the court to determine the constitutionality of laws
jurisdiction - ANS ✔✔the official power to make legal decisions and judgments.
long arm statute - ANS ✔✔A state statute that permits a state to exercise jurisdiction over nonresident
defendants.
corporate contacts - ANS ✔✔corporation advertises or sells products within a state
probate court - ANS ✔✔A state court of limited jurisdiction that conducts proceedings relating to the
settlement of a deceased person's estate.
, diversity of citizenship - ANS ✔✔A basis for federal court jurisdiction over a lawsuit between citizens of
different states and countries.
concurrent jurisdiction - ANS ✔✔authority for both state and federal courts to hear and decide cases
standing to sue - ANS ✔✔the requirement that plaintiffs have a serious interest in a case, which depends
on whether they have sustained or are likely to sustain a direct and substantial injury from a party or an
action of government
justiciable controversy - ANS ✔✔A controversy that is not hypothetical or academic but real and
substantial; a requirement that must be satisfied before a court will hear a case.
Marbury v. Madison - ANS ✔✔This case establishes the Supreme Court's power of Judicial Review
personal jurisdiction - ANS ✔✔the power of a court to force a person to appear before it
minimum contacts - ANS ✔✔A constitutional fairness requirement that a defendant have at least a
certain minimum level of contact with a state before the state courts can have jurisdiction over the
defendant.
federal question - ANS ✔✔A question that has to do with the U.S. Constitution, acts of Congress, or
treaties. A federal question provides a basis for federal jurisdiction.
subject matter jurisdiction - ANS ✔✔the power of a court to hear a particular type of case
district courts - ANS ✔✔the lowest federal courts; federal trials can be held only here
courts of appeals - ANS ✔✔federal courts that hear appeals from district courts; no trials
writ of certiorari - ANS ✔✔A formal writ used to bring a case before the Supreme Court.
rule of four - ANS ✔✔At least four justices of the Supreme Court must vote to consider a case before it
can be heard
litigation - ANS ✔✔the process of taking legal action
discovery - ANS ✔✔A phase in the litigation process during which the opposing parties may obtain
information from each other and from third parties prior to trial.
pleadings - ANS ✔✔Statements by the plaintiff and the defendant that detail the facts, charges, and
defenses of a case.
complaint - ANS ✔✔a formal notice that a lawsuit is being brought
summons - ANS ✔✔a notice directing someone to appear in court to answer a complaint or a charge
service of process - ANS ✔✔The delivery of the complaint and summons to a defendant.
QUESTIONS & ANSWERS 2026/2027
stare decisis - ANS ✔✔To stand on decided cases; the judicial policy of following precedents established
by past decisions.
natural law - ANS ✔✔Universal law that could be understood by applying reason; letting people govern
themselves.
legal positivism - ANS ✔✔A school of legal thought centered on the assumption that there is no law
higher than the laws created by a national government. Laws must be obeyed, even if they are unjust, to
prevent anarchy.
historical school - ANS ✔✔A school of legal thought that looks to the past to determine what the
principles of contemporary law should be.
Legal Realism - ANS ✔✔A school of legal thought that holds that the law is only one factor to be
considered when deciding cases and that social and economic circumstances should also be taken into
account.
command theory - ANS ✔✔Law is the command of the sovereign, backed by force, who is habitually
obeyed and does not habitually obey anyone else. Sovereign will is less clear in large democracies.
Gonzales v. Raich - ANS ✔✔(2005) The regulation (ban on homegrown medical marajuana) is squarely
within Congress' commerce power because production of the commodity meant for home consumption,
be it wheat (Wickard) or marijuana, has a substantial effect on supply and demand in the national
market for that commodity.
American sources of law - ANS ✔✔Constitution, statute/ordinance, administrative rules, common
law/case law
5th Amendment - ANS ✔✔The Right to Remain Silent/Double Jeopardy, right to due process
judicial review - ANS ✔✔Allows the court to determine the constitutionality of laws
jurisdiction - ANS ✔✔the official power to make legal decisions and judgments.
long arm statute - ANS ✔✔A state statute that permits a state to exercise jurisdiction over nonresident
defendants.
corporate contacts - ANS ✔✔corporation advertises or sells products within a state
probate court - ANS ✔✔A state court of limited jurisdiction that conducts proceedings relating to the
settlement of a deceased person's estate.
, diversity of citizenship - ANS ✔✔A basis for federal court jurisdiction over a lawsuit between citizens of
different states and countries.
concurrent jurisdiction - ANS ✔✔authority for both state and federal courts to hear and decide cases
standing to sue - ANS ✔✔the requirement that plaintiffs have a serious interest in a case, which depends
on whether they have sustained or are likely to sustain a direct and substantial injury from a party or an
action of government
justiciable controversy - ANS ✔✔A controversy that is not hypothetical or academic but real and
substantial; a requirement that must be satisfied before a court will hear a case.
Marbury v. Madison - ANS ✔✔This case establishes the Supreme Court's power of Judicial Review
personal jurisdiction - ANS ✔✔the power of a court to force a person to appear before it
minimum contacts - ANS ✔✔A constitutional fairness requirement that a defendant have at least a
certain minimum level of contact with a state before the state courts can have jurisdiction over the
defendant.
federal question - ANS ✔✔A question that has to do with the U.S. Constitution, acts of Congress, or
treaties. A federal question provides a basis for federal jurisdiction.
subject matter jurisdiction - ANS ✔✔the power of a court to hear a particular type of case
district courts - ANS ✔✔the lowest federal courts; federal trials can be held only here
courts of appeals - ANS ✔✔federal courts that hear appeals from district courts; no trials
writ of certiorari - ANS ✔✔A formal writ used to bring a case before the Supreme Court.
rule of four - ANS ✔✔At least four justices of the Supreme Court must vote to consider a case before it
can be heard
litigation - ANS ✔✔the process of taking legal action
discovery - ANS ✔✔A phase in the litigation process during which the opposing parties may obtain
information from each other and from third parties prior to trial.
pleadings - ANS ✔✔Statements by the plaintiff and the defendant that detail the facts, charges, and
defenses of a case.
complaint - ANS ✔✔a formal notice that a lawsuit is being brought
summons - ANS ✔✔a notice directing someone to appear in court to answer a complaint or a charge
service of process - ANS ✔✔The delivery of the complaint and summons to a defendant.
