Solution and Answer Guide: Beatty/Samuelson/Abril, Business Law and the Legal Environment - Standard Edition 10e, ©2026, 9798214045207; Chapter 1:
Introduction to Law
Solution and Answer Guide
Beatty/Samuelson/Abril, Business Law and the Legal Environment - Standard Edition 10e, ©2026,
9798214045207; Chapter 1: Introduction to Law
TABLE OF CONTENTS
Multiple Choice Questions............................................................................................1
Additional Exam Strategy Questions............................................................................2
Case Questions..............................................................................................................3
Discussion Questions....................................................................................................4
MULTIPLE CHOICE QUESTIONS
1. The United States Constitution is among the finest legal accomplishments in the history of the world.
Which of the following influenced Ben Franklin, Thomas Jefferson, and the rest of the Founding Fathers?
I. English common-law principles
II. The Iroquois system of federalism
a. Only I
b. Only II
c. Both I and II
d. Neither I nor II
Answer: C.
2. Which of the following parts of the modern legal system are “borrowed” from medieval England?
a. Jury trials
b. Special rules for selling land
c. Following precedent
d. All of these
Answer: D
3. Union organizers at a hospital wanted to distribute leaflets to potential union members, but hospital rules
prohibited leafleting in areas of patient care, hallways, cafeterias, and any areas open to the public. The
National Labor Relations Board (NLRB), a government agency, ruled that these restrictions violated the
law and ordered the hospital to permit the activities in the cafeteria and coffee shop. What kind of law was
NLRB creating?
a. A statute
b. Common law
c. A constitutional amendment
d. Administrative regulation
Answer: D. The NLRB, as an agency, creates regulations. Congress creates statutes, and judges
shape the common law.
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 1
accessible website, in whole or in part.
,Solution and Answer Guide: Beatty/Samuelson/Abril, Business Law and the Legal Environment - Standard Edition 10e, ©2026, 9798214045207; Chapter 1:
Introduction to Law
4. For a statute to become law, Congress must pass it by a:
I. Majority vote in the House
II. Majority vote in the Senate
III. Two-thirds vote in the House, but only if the president has first vetoed it
IV. Two-thirds vote in the Senate, but only if the president has first vetoed it
a. Just I and II
b. Just III and IV
c. All of these
d. None of these
Answer: C
5. Dr. Martin Luther King, Jr., wrote “An unjust law is no law at all.” As such, “One has ... a moral
responsibility to disobey unjust laws.” Dr. King’s view is an example of:
a. legal realism.
b. jurisprudence.
c. legal positivism.
d. natural law.
Answer: D
ADDITIONAL EXAM STRATEGY QUESTIONS
1. The stock market crash of 1929 and the Great Depression that followed were caused, in part, because so
many investors blindly put their money into stocks they knew nothing about. During the 1920s, it was often
impossible for an investor to find out what a corporation was planning to do with its money, who was
running the corporation, and many other vital things. Congress responded by passing the Securities Act of
1933, which required a corporation to divulge more information about itself before it could seek money for
a new stock issue. What kind of law did Congress create?
Strategy: What is the question seeking? The question asks you which type of law Congress created when
it passed the 1933 Securities Act. What are the primary kinds of law? Administrative law consists of rules
passed by agencies. Congress is not a federal agency. Common law is the body of cases decided by judges.
Congress is not a judge. Statutes are laws passed by legislatures. Congress is a legislature.
Solution: The Securities Act of 1933 is a statute.
2. Bill and Diane are hiking in the woods. Diane walks down a hill to fetch fresh water. Bill meets a stranger
who introduces herself as Katrina. Bill sells a kilo of cocaine to Katrina, who then flashes a badge and
mentions how much she enjoys her job at the Drug Enforcement Agency. Diane, heading back to camp
with the water, meets Freddy, a motorist whose car has overheated. Freddy is late for a meeting where he
expects to make a $30 million profit; he’s desperate for water for his car. He promises to pay Diane $500
tomorrow if she will give him the pail of water, which she does. The next day, Bill is in jail and Freddy
refuses to pay for Diane’s water. Explain the criminal law/civil law distinction and what it means to Bill
and Diane. Who will do what to whom, with what results?
Strategy: You are asked to distinguish between criminal and civil law. What is the difference? Criminal
law concerns behavior that threatens society and is therefore outlawed. The government prosecutes the
defendant. Civil law deals with the rights and duties between parties. One party files a suit against the other.
Apply those different standards to these facts.
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 2
accessible website, in whole or in part.
,Solution and Answer Guide: Beatty/Samuelson/Abril, Business Law and the Legal Environment - Standard Edition 10e, ©2026, 9798214045207; Chapter 1:
Introduction to Law
Solution: The government will prosecute Bill for dealing in drugs. If convicted, he will go to prison.
The government will take no interest in Diane’s dispute. However, if she chooses, she may sue Freddy
for $500, the amount he promised her for the water. In that civil lawsuit, a court will decide whether
Freddy must pay what he promised; however, even if Freddy loses, he will not go to jail.
CASE QUESTIONS
1. Lance, a hacker, stole 15,000 credit card numbers and sold them on the dark web, making millions. Police
caught Lance, and two legal actions followed, one civil and one criminal. Who will be responsible for
bringing the civil case? What will be the outcome if the jury believes that Lance was responsible for
identity thefts? Who will be responsible for bringing the criminal case? What will be the outcome if the
jury believes that Lance stole the numbers?
Solution: The civil cases will be brought by the victims of identity theft, and the outcome of a
successful case against Lance would be some type of monetary award for damages suffered. The
criminal case will be brought by state prosecutors and the outcome would be imprisonment for Lance.
2. As The Oculist’s Case indicates, the medical profession has faced many lawsuits for centuries. In Texas, a
law provides that, so long as a doctor was not reckless and did not intentionally harm a patient, recovery for
“pain and suffering” is limited to $250,000. In many other states, no such limit exists. If a patient will
suffer a lifetime of pain after a botched operation, for example, they might recover millions in
compensation. Which rule seems more sensible to you—the Texas rule or the alternative?
Solution: Answers may include the following:
Some students may focus on the patients, saying that $250,000 is not enough for some
patients who are destined to live their entire lives in pain and unable to accomplish many
of their personal and professional goals because of poor health.
Other students, however, may focus on the larger healthcare system, noting that
unchecked awards could have an adverse effect on the public as a whole. For example, if
patients are routinely awarded millions for pain and suffering, doctors will more
comprehensive malpractice insurance coverage, and these expenses will be passed along
to the public through higher healthcare costs.
3. Leslie Bergh and his two brothers, Milton and Raymond, formed a partnership to help build a fancy saloon
and dance hall in Evanston, Wyoming. Later, Leslie met with his friend and drinking buddy, John Mills,
and tricked Mills into investing in the saloon. Leslie did not tell Mills that no one else was investing cash or
that the entire enterprise was already bankrupt. Mills remortgaged his home and invested $150,000 in the
saloon—and lost every penny of it. Mills sued all three partners for fraud. Milton and Raymond defended
on the grounds that they did not commit the fraud; only Leslie did. The defendants lost. Was that fair? By
holding them liable, what general idea did the court rely on? What Anglo-Saxon legal custom did the ruling
resemble?
Solution: The partners are indeed liable. Bergh v. Mills, 763 P.2d 214 (Wyo. 1988). That is the
essence of a partnership: All partners are liable for the acts of any partner committed in the
partnership’s normal business. This is the general idea of collective responsibility. It relates to the
“tithing” of English legal history, in which all tithing members were legally responsible for the conduct
of the others.
4. In 2015, terrorists coordinated a series of attacks on civilians in Paris, France. The father of an American
woman killed in a nightclub sued various social media companies including YouTube, alleging the sites
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 3
accessible website, in whole or in part.
, Solution and Answer Guide: Beatty/Samuelson/Abril, Business Law and the Legal Environment - Standard Edition 10e, ©2026, 9798214045207; Chapter 1:
Introduction to Law
knowingly allowed terrorists to recruit members and spread extremist propaganda. The sites defended
themselves by saying that their policies prohibit terrorist recruitment and that, when alerted to it, they
quickly remove offending videos. What type of lawsuit is this—criminal or civil? What responsibilities, if
any, should social media sites have for the spread of terrorism?
Solution: The case is a civil case, but answers will vary as to the scope of the responsibilities social
media sites should have for the spread of terrorism.
DISCUSSION QUESTIONS
1. In the 1980s, the Supreme Court ruled that it is legal for protesters to burn the American flag. This activity
counts as free speech under the Constitution. If the Court hears a new flag-burning case in this decade,
should it consider changing its ruling, or should it follow precedent? Is following past precedent something
that seems sensible to you: always, usually, sometimes, rarely, or never?
Solution: Students’ answers should demonstrate an understanding of our legal system, which is
generally based on past precedent. Answers may include the following:
Most students will also recognize the need to periodically (as in usually, sometimes, or rarely)
re-evaluate laws and statutes based on evolving social norms and concerns.
To never reconsider a ruling would be to deny social change, and to always reconsider every
ruling would mean overwhelming our legal system with unnecessary litigation.
2. When should a business be held legally responsible for customer safety? Consider the following statements,
and consider the degree to which you agree or disagree.
A business should keep customers safe from its own employees.
A business should keep customers safe from other customers.
A business should keep customers safe from themselves (for example, by refusing to serve alcohol
to a visibly intoxicated customer).
A business should keep people outside its own establishment safe if it is reasonable to do so.
Solution: Students’ answers will be based largely on the degree to which they believe individuals are
responsible for their own actions. Answers may include the following:
In general, those students who feel that people should be held accountable for their own
actions will say that businesses have relatively little responsibility for customer safety, other
than to take basic precautions of maintaining a safe facility and ensuring that employees and
customers abide by laws.
Other students may argue that many individuals don’t know how or aren’t capable of
behaving responsibly, which is why businesses should take greater precautions on behalf of
their customers.
3. In his most famous novel, The Red and the Black, French author Stendhal (1783–1842) wrote: “There is no
such thing as ‘natural law’: This expression is nothing but old nonsense. Prior to laws, what is natural is
only the strength of the lion, or the need of the creature suffering from hunger or cold, in short, need.”
What do you think? Does legal positivism or legal realism seem more sensible to you?
Solution: Natural law should be a question in the back of our minds throughout the course, because it
is a reminder of morality, and law without morality is despotism. Nonetheless, Stendhal is obviously
correct that both strength and need help to create law. The important thing for this course is continually
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 4
accessible website, in whole or in part.
Introduction to Law
Solution and Answer Guide
Beatty/Samuelson/Abril, Business Law and the Legal Environment - Standard Edition 10e, ©2026,
9798214045207; Chapter 1: Introduction to Law
TABLE OF CONTENTS
Multiple Choice Questions............................................................................................1
Additional Exam Strategy Questions............................................................................2
Case Questions..............................................................................................................3
Discussion Questions....................................................................................................4
MULTIPLE CHOICE QUESTIONS
1. The United States Constitution is among the finest legal accomplishments in the history of the world.
Which of the following influenced Ben Franklin, Thomas Jefferson, and the rest of the Founding Fathers?
I. English common-law principles
II. The Iroquois system of federalism
a. Only I
b. Only II
c. Both I and II
d. Neither I nor II
Answer: C.
2. Which of the following parts of the modern legal system are “borrowed” from medieval England?
a. Jury trials
b. Special rules for selling land
c. Following precedent
d. All of these
Answer: D
3. Union organizers at a hospital wanted to distribute leaflets to potential union members, but hospital rules
prohibited leafleting in areas of patient care, hallways, cafeterias, and any areas open to the public. The
National Labor Relations Board (NLRB), a government agency, ruled that these restrictions violated the
law and ordered the hospital to permit the activities in the cafeteria and coffee shop. What kind of law was
NLRB creating?
a. A statute
b. Common law
c. A constitutional amendment
d. Administrative regulation
Answer: D. The NLRB, as an agency, creates regulations. Congress creates statutes, and judges
shape the common law.
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 1
accessible website, in whole or in part.
,Solution and Answer Guide: Beatty/Samuelson/Abril, Business Law and the Legal Environment - Standard Edition 10e, ©2026, 9798214045207; Chapter 1:
Introduction to Law
4. For a statute to become law, Congress must pass it by a:
I. Majority vote in the House
II. Majority vote in the Senate
III. Two-thirds vote in the House, but only if the president has first vetoed it
IV. Two-thirds vote in the Senate, but only if the president has first vetoed it
a. Just I and II
b. Just III and IV
c. All of these
d. None of these
Answer: C
5. Dr. Martin Luther King, Jr., wrote “An unjust law is no law at all.” As such, “One has ... a moral
responsibility to disobey unjust laws.” Dr. King’s view is an example of:
a. legal realism.
b. jurisprudence.
c. legal positivism.
d. natural law.
Answer: D
ADDITIONAL EXAM STRATEGY QUESTIONS
1. The stock market crash of 1929 and the Great Depression that followed were caused, in part, because so
many investors blindly put their money into stocks they knew nothing about. During the 1920s, it was often
impossible for an investor to find out what a corporation was planning to do with its money, who was
running the corporation, and many other vital things. Congress responded by passing the Securities Act of
1933, which required a corporation to divulge more information about itself before it could seek money for
a new stock issue. What kind of law did Congress create?
Strategy: What is the question seeking? The question asks you which type of law Congress created when
it passed the 1933 Securities Act. What are the primary kinds of law? Administrative law consists of rules
passed by agencies. Congress is not a federal agency. Common law is the body of cases decided by judges.
Congress is not a judge. Statutes are laws passed by legislatures. Congress is a legislature.
Solution: The Securities Act of 1933 is a statute.
2. Bill and Diane are hiking in the woods. Diane walks down a hill to fetch fresh water. Bill meets a stranger
who introduces herself as Katrina. Bill sells a kilo of cocaine to Katrina, who then flashes a badge and
mentions how much she enjoys her job at the Drug Enforcement Agency. Diane, heading back to camp
with the water, meets Freddy, a motorist whose car has overheated. Freddy is late for a meeting where he
expects to make a $30 million profit; he’s desperate for water for his car. He promises to pay Diane $500
tomorrow if she will give him the pail of water, which she does. The next day, Bill is in jail and Freddy
refuses to pay for Diane’s water. Explain the criminal law/civil law distinction and what it means to Bill
and Diane. Who will do what to whom, with what results?
Strategy: You are asked to distinguish between criminal and civil law. What is the difference? Criminal
law concerns behavior that threatens society and is therefore outlawed. The government prosecutes the
defendant. Civil law deals with the rights and duties between parties. One party files a suit against the other.
Apply those different standards to these facts.
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 2
accessible website, in whole or in part.
,Solution and Answer Guide: Beatty/Samuelson/Abril, Business Law and the Legal Environment - Standard Edition 10e, ©2026, 9798214045207; Chapter 1:
Introduction to Law
Solution: The government will prosecute Bill for dealing in drugs. If convicted, he will go to prison.
The government will take no interest in Diane’s dispute. However, if she chooses, she may sue Freddy
for $500, the amount he promised her for the water. In that civil lawsuit, a court will decide whether
Freddy must pay what he promised; however, even if Freddy loses, he will not go to jail.
CASE QUESTIONS
1. Lance, a hacker, stole 15,000 credit card numbers and sold them on the dark web, making millions. Police
caught Lance, and two legal actions followed, one civil and one criminal. Who will be responsible for
bringing the civil case? What will be the outcome if the jury believes that Lance was responsible for
identity thefts? Who will be responsible for bringing the criminal case? What will be the outcome if the
jury believes that Lance stole the numbers?
Solution: The civil cases will be brought by the victims of identity theft, and the outcome of a
successful case against Lance would be some type of monetary award for damages suffered. The
criminal case will be brought by state prosecutors and the outcome would be imprisonment for Lance.
2. As The Oculist’s Case indicates, the medical profession has faced many lawsuits for centuries. In Texas, a
law provides that, so long as a doctor was not reckless and did not intentionally harm a patient, recovery for
“pain and suffering” is limited to $250,000. In many other states, no such limit exists. If a patient will
suffer a lifetime of pain after a botched operation, for example, they might recover millions in
compensation. Which rule seems more sensible to you—the Texas rule or the alternative?
Solution: Answers may include the following:
Some students may focus on the patients, saying that $250,000 is not enough for some
patients who are destined to live their entire lives in pain and unable to accomplish many
of their personal and professional goals because of poor health.
Other students, however, may focus on the larger healthcare system, noting that
unchecked awards could have an adverse effect on the public as a whole. For example, if
patients are routinely awarded millions for pain and suffering, doctors will more
comprehensive malpractice insurance coverage, and these expenses will be passed along
to the public through higher healthcare costs.
3. Leslie Bergh and his two brothers, Milton and Raymond, formed a partnership to help build a fancy saloon
and dance hall in Evanston, Wyoming. Later, Leslie met with his friend and drinking buddy, John Mills,
and tricked Mills into investing in the saloon. Leslie did not tell Mills that no one else was investing cash or
that the entire enterprise was already bankrupt. Mills remortgaged his home and invested $150,000 in the
saloon—and lost every penny of it. Mills sued all three partners for fraud. Milton and Raymond defended
on the grounds that they did not commit the fraud; only Leslie did. The defendants lost. Was that fair? By
holding them liable, what general idea did the court rely on? What Anglo-Saxon legal custom did the ruling
resemble?
Solution: The partners are indeed liable. Bergh v. Mills, 763 P.2d 214 (Wyo. 1988). That is the
essence of a partnership: All partners are liable for the acts of any partner committed in the
partnership’s normal business. This is the general idea of collective responsibility. It relates to the
“tithing” of English legal history, in which all tithing members were legally responsible for the conduct
of the others.
4. In 2015, terrorists coordinated a series of attacks on civilians in Paris, France. The father of an American
woman killed in a nightclub sued various social media companies including YouTube, alleging the sites
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 3
accessible website, in whole or in part.
, Solution and Answer Guide: Beatty/Samuelson/Abril, Business Law and the Legal Environment - Standard Edition 10e, ©2026, 9798214045207; Chapter 1:
Introduction to Law
knowingly allowed terrorists to recruit members and spread extremist propaganda. The sites defended
themselves by saying that their policies prohibit terrorist recruitment and that, when alerted to it, they
quickly remove offending videos. What type of lawsuit is this—criminal or civil? What responsibilities, if
any, should social media sites have for the spread of terrorism?
Solution: The case is a civil case, but answers will vary as to the scope of the responsibilities social
media sites should have for the spread of terrorism.
DISCUSSION QUESTIONS
1. In the 1980s, the Supreme Court ruled that it is legal for protesters to burn the American flag. This activity
counts as free speech under the Constitution. If the Court hears a new flag-burning case in this decade,
should it consider changing its ruling, or should it follow precedent? Is following past precedent something
that seems sensible to you: always, usually, sometimes, rarely, or never?
Solution: Students’ answers should demonstrate an understanding of our legal system, which is
generally based on past precedent. Answers may include the following:
Most students will also recognize the need to periodically (as in usually, sometimes, or rarely)
re-evaluate laws and statutes based on evolving social norms and concerns.
To never reconsider a ruling would be to deny social change, and to always reconsider every
ruling would mean overwhelming our legal system with unnecessary litigation.
2. When should a business be held legally responsible for customer safety? Consider the following statements,
and consider the degree to which you agree or disagree.
A business should keep customers safe from its own employees.
A business should keep customers safe from other customers.
A business should keep customers safe from themselves (for example, by refusing to serve alcohol
to a visibly intoxicated customer).
A business should keep people outside its own establishment safe if it is reasonable to do so.
Solution: Students’ answers will be based largely on the degree to which they believe individuals are
responsible for their own actions. Answers may include the following:
In general, those students who feel that people should be held accountable for their own
actions will say that businesses have relatively little responsibility for customer safety, other
than to take basic precautions of maintaining a safe facility and ensuring that employees and
customers abide by laws.
Other students may argue that many individuals don’t know how or aren’t capable of
behaving responsibly, which is why businesses should take greater precautions on behalf of
their customers.
3. In his most famous novel, The Red and the Black, French author Stendhal (1783–1842) wrote: “There is no
such thing as ‘natural law’: This expression is nothing but old nonsense. Prior to laws, what is natural is
only the strength of the lion, or the need of the creature suffering from hunger or cold, in short, need.”
What do you think? Does legal positivism or legal realism seem more sensible to you?
Solution: Natural law should be a question in the back of our minds throughout the course, because it
is a reminder of morality, and law without morality is despotism. Nonetheless, Stendhal is obviously
correct that both strength and need help to create law. The important thing for this course is continually
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 4
accessible website, in whole or in part.
