JBL Module 1 Exam Questions With
Complete Solutions
Course
JBL
Question 1: Define the "rule of law" and explain its significance in business.
Answer:
Definition: The rule of law means that every individual, including government officials and
corporations, is subject to and accountable under the law.
Significance in Business:
Ensures predictability and stability in legal transactions.
Protects property rights and enforces contracts.
Prevents arbitrary use of power by authorities.
Builds investor confidence and promotes fair competition.
Question 2: Distinguish between civil law and criminal law with relevant business
examples.
Answer:
Civil Law: Deals with disputes between individuals or organizations.
Example: A company suing a supplier for breach of contract.
Criminal Law: Involves offenses against the state or public.
Example: A business executive being prosecuted for embezzlement.
Question 3: Explain the doctrine of precedent and its role in common law systems.
Answer:
Doctrine of Precedent (Stare Decisis):
Courts are bound to follow decisions of higher courts in similar cases.
Role:
Promotes consistency and fairness in legal decisions.
Allows businesses to anticipate outcomes of legal disputes based on previous rulings.
,Question 4: List and briefly explain four sources of law.
Answer:
1. Constitution: Supreme law; sets government structure and fundamental rights.
2. Statute Law (Legislation): Laws made by parliament (e.g., Companies Act).
3. Common Law: Judge-made law from court decisions.
4. Administrative Law: Rules by regulatory bodies (e.g., tax regulations).
Question 5: A business signs a contract with a supplier who fails to deliver goods. What
legal remedy is available to the business? Explain.
Answer:
Remedy: Damages (monetary compensation) or specific performance (court order to fulfill the
contract).
Explanation: Breach of contract entitles the aggrieved party to be put in the position they would
have been if the contract was performed.
Question 6: Differentiate between public law and private law. Provide examples.
Answer:
Public Law: Governs the relationship between individuals and the state.
Example: Tax law, criminal law.
Private Law: Regulates relationships between private individuals.
Example: Contract law, tort law.
Question 7: What is the difference between legal and ethical responsibilities in business?
Use a case example.
Answer:
Legal: What a business must do under the law.
Ethical: What a business should do beyond legal obligations.
Example: A company legally lays off workers (legal) but does so without severance or notice
(unethical).
,Question 8: A company uses misleading advertising. Identify the legal and ethical
implications.
Answer:
Legal Implication: Violates consumer protection laws; may incur fines or lawsuits.
Ethical Implication: Damages public trust; considered dishonest and exploitative.
Question 9: Identify three functions of law in business.
Answer:
1. Regulates behavior: Prevents fraud and promotes fair dealings.
2. Resolves disputes: Through courts or arbitration.
3. Protects rights and liberties: E.g., IP rights and consumer rights.
Question 10: Explain how the separation of powers affects law-making and enforcement in
business regulation.
Answer:
Legislative (Parliament): Makes business laws (e.g., labor laws).
Executive (Government): Enforces laws through agencies (e.g., tax authority).
Judiciary (Courts): Interprets laws and settles business disputes.
Impact: Prevents abuse of power and ensures checks and balances in business regulation.
Question 11: What is meant by “legal personality” in business law? Provide an example.
Answer:
Legal personality refers to the recognition of an entity (e.g., a company) as having its own legal
identity, separate from its owners.
Example: A limited company can own property, enter into contracts, and be sued in its own
name.
Question 12: Compare and contrast tort law and contract law in the context of business
operations.
Answer:
, Tort Law: Addresses civil wrongs (e.g., negligence) not based on agreements.
Example: A customer sues a store for injury caused by a wet floor.
Contract Law: Enforces obligations agreed upon by parties.
Example: A supplier fails to deliver goods per a purchase order.
Question 13: What is vicarious liability? How does it apply in the workplace?
Answer:
Definition: Legal responsibility imposed on one party for the actions of another.
Application: An employer may be held liable for wrongful acts of employees done during the
course of employment (e.g., delivery driver causes an accident).
Question 14: Briefly explain the principle of natural justice and its application in business
decisions.
Answer:
Principle: Fairness in decision-making; includes right to be heard and impartial judgment.
Application: Before firing an employee, the employer must allow them to respond to
allegations.
Question 15: Describe three characteristics of a valid contract.
Answer:
1. Offer and Acceptance: Clear proposal and agreement.
2. Consideration: Something of value exchanged.
3. Intention to Create Legal Relations: Both parties intend the agreement to be legally
binding.
Question 16: Identify two examples of unethical but legal practices in business.
Answer:
1. Aggressive tax avoidance using loopholes.
2. Laying off workers via text without prior consultation.
Both are legal in some jurisdictions but violate ethical expectations.
Complete Solutions
Course
JBL
Question 1: Define the "rule of law" and explain its significance in business.
Answer:
Definition: The rule of law means that every individual, including government officials and
corporations, is subject to and accountable under the law.
Significance in Business:
Ensures predictability and stability in legal transactions.
Protects property rights and enforces contracts.
Prevents arbitrary use of power by authorities.
Builds investor confidence and promotes fair competition.
Question 2: Distinguish between civil law and criminal law with relevant business
examples.
Answer:
Civil Law: Deals with disputes between individuals or organizations.
Example: A company suing a supplier for breach of contract.
Criminal Law: Involves offenses against the state or public.
Example: A business executive being prosecuted for embezzlement.
Question 3: Explain the doctrine of precedent and its role in common law systems.
Answer:
Doctrine of Precedent (Stare Decisis):
Courts are bound to follow decisions of higher courts in similar cases.
Role:
Promotes consistency and fairness in legal decisions.
Allows businesses to anticipate outcomes of legal disputes based on previous rulings.
,Question 4: List and briefly explain four sources of law.
Answer:
1. Constitution: Supreme law; sets government structure and fundamental rights.
2. Statute Law (Legislation): Laws made by parliament (e.g., Companies Act).
3. Common Law: Judge-made law from court decisions.
4. Administrative Law: Rules by regulatory bodies (e.g., tax regulations).
Question 5: A business signs a contract with a supplier who fails to deliver goods. What
legal remedy is available to the business? Explain.
Answer:
Remedy: Damages (monetary compensation) or specific performance (court order to fulfill the
contract).
Explanation: Breach of contract entitles the aggrieved party to be put in the position they would
have been if the contract was performed.
Question 6: Differentiate between public law and private law. Provide examples.
Answer:
Public Law: Governs the relationship between individuals and the state.
Example: Tax law, criminal law.
Private Law: Regulates relationships between private individuals.
Example: Contract law, tort law.
Question 7: What is the difference between legal and ethical responsibilities in business?
Use a case example.
Answer:
Legal: What a business must do under the law.
Ethical: What a business should do beyond legal obligations.
Example: A company legally lays off workers (legal) but does so without severance or notice
(unethical).
,Question 8: A company uses misleading advertising. Identify the legal and ethical
implications.
Answer:
Legal Implication: Violates consumer protection laws; may incur fines or lawsuits.
Ethical Implication: Damages public trust; considered dishonest and exploitative.
Question 9: Identify three functions of law in business.
Answer:
1. Regulates behavior: Prevents fraud and promotes fair dealings.
2. Resolves disputes: Through courts or arbitration.
3. Protects rights and liberties: E.g., IP rights and consumer rights.
Question 10: Explain how the separation of powers affects law-making and enforcement in
business regulation.
Answer:
Legislative (Parliament): Makes business laws (e.g., labor laws).
Executive (Government): Enforces laws through agencies (e.g., tax authority).
Judiciary (Courts): Interprets laws and settles business disputes.
Impact: Prevents abuse of power and ensures checks and balances in business regulation.
Question 11: What is meant by “legal personality” in business law? Provide an example.
Answer:
Legal personality refers to the recognition of an entity (e.g., a company) as having its own legal
identity, separate from its owners.
Example: A limited company can own property, enter into contracts, and be sued in its own
name.
Question 12: Compare and contrast tort law and contract law in the context of business
operations.
Answer:
, Tort Law: Addresses civil wrongs (e.g., negligence) not based on agreements.
Example: A customer sues a store for injury caused by a wet floor.
Contract Law: Enforces obligations agreed upon by parties.
Example: A supplier fails to deliver goods per a purchase order.
Question 13: What is vicarious liability? How does it apply in the workplace?
Answer:
Definition: Legal responsibility imposed on one party for the actions of another.
Application: An employer may be held liable for wrongful acts of employees done during the
course of employment (e.g., delivery driver causes an accident).
Question 14: Briefly explain the principle of natural justice and its application in business
decisions.
Answer:
Principle: Fairness in decision-making; includes right to be heard and impartial judgment.
Application: Before firing an employee, the employer must allow them to respond to
allegations.
Question 15: Describe three characteristics of a valid contract.
Answer:
1. Offer and Acceptance: Clear proposal and agreement.
2. Consideration: Something of value exchanged.
3. Intention to Create Legal Relations: Both parties intend the agreement to be legally
binding.
Question 16: Identify two examples of unethical but legal practices in business.
Answer:
1. Aggressive tax avoidance using loopholes.
2. Laying off workers via text without prior consultation.
Both are legal in some jurisdictions but violate ethical expectations.
