Unit 1: Essential Legal Concepts

LEG 100

Unit 1: Essential Legal Concepts

Challenge 1: Foundations of Law

• The theory of legal positivism is based on which of the following?

The social construction of laws

• The theory of legal realism is based on which of the following?

Interpretation and enforcement

• The theory of natural law is based on which of the following?

Discovered moral truths

• Knowledge of the Federal Trade Commission Act minimizes a business’ liability exposure when making

advertising decisions.

• Which of the following laws or agencies protects the public from discriminatory hiring practices?

Title VII

• Which of the following laws or agencies protects the public from the consequences of risky

accounting practices?Sarbanes-Oxley Act

• In which area of law are state and federal jurisdiction most likely to overlap?

Environmental regulations

• Which of the following is true of criminal law?

Possible remedies include jail time.

• Law that has been established by the courts over time is known as common law.
• Select the true statement about substantive law in the U.S.

It specifies the legal rights and duties of citizens.

• Select the true statement about procedural law in the U.S.

It is upheld to ensure fairness in applying the law.

• Select the true statement about public law in the U.S.

It applies to everyone within a jurisdiction.

• Within the federalist system, federal law is supreme over state law.
• The Bill of Rights in the U.S. Constitution protects certain business entities in addition to citizens. 1 / 3

• If the U.S. Constitution does not give the federal government explicit jurisdiction over an area of law,

the jurisdiction falls to the states.

• Statutory law is created by the legislative branch.
• Common law is created by the judiciary.
• Administrative law is created as a result of delegation from the legislative branch.

Challenge 2: Business Entities

• Which of the following is a consideration when choosing a form of business organization?

How much control a business owner wants to retain

• Which of the following is a consideration when choosing a form of business organization?

The degree of personal liability a business owner wishes to be exposed to

• Which of the following is a consideration when choosing a form of business organization?

The level of legal complexity the founder of a business is willing to take on

• Which of the following describes a sole proprietorship?

A business with a single owner who is responsible for all debts, but individually controls all profits

• Which of the following describes a limited partnership?

A business with a partner who share in the profits, but is not liable for debts outside of his or her initial financial contribution

• Which of the following describes a general partnership?

An agreement between two or more persons to operate a business and share profits and losses

• Why are corporations sometimes preferred over sole proprietorships and partnerships?

They are less risky, because they better protect the personal assets of shareholders.

• Why is incorporation an attractive form of business organization for many new companies?

Because it allows parties to invest in the company without taking on significant risk

• Which of the following is true of the limited liability of corporations?

It can be revoked in certain circumstances.

• Which of the following individuals would benefit most from an LLC?

Geoff is starting a small business and wants to be sure that his risk exposure is minimized, but – as a small business – it doesn’t make sense to have a board of directors or officers.

• Which of the following individuals would benefit most from an LLC? 2 / 3

Colin wants to start a business with five of his friends, but they want their business to be a separate entity that protects them from personal liability. They also do not want to deal with burdensome obligations like annual meetings.

• Which of the following individuals would benefit most from an LLC?

Hector is thinking of starting a business and wants a form of organization that gives him flexibility and adaptability when it comes to taxes.

Challenge 3: Judicial Process

• Which case would the federal courts be permitted to hear under their diversity of citizenship

jurisdiction?A citizen of North Carolina initiates a tort claim against a citizen of California from whom she recently bought a car. The car’s brake system failed, resulting in an accident, and damages are being sought in the amount of $85,000.

• Which case would the federal courts be permitted to hear under their diversity of citizenship

jurisdiction?An Idaho resident sues the owner of a company located in Montana for breach of contract, seeking damages in the amount of $450,000.

• Which case would the federal courts be permitted to hear under their diversity of citizenship

jurisdiction?A citizen of Connecticut is suing a newspaper owned and operated in Massachusetts for defamation. She is seeking damages in the amount of $2,000,000.

• Which level of state court would most likely decide a case related to child custody?

General jurisdiction court

• Which level of state court would most likely decide a case related to murder?

General jurisdiction court

• Which level of state court would most likely decide a case related to small-scale shoplifting?

Limited jurisdiction court

• Select the correct order of progress for a civil trial through the federal court system.

U.S. District Court, U.S. Circuit Court, U.S. Supreme Court

• A federal felony criminal trial would be presided over by which level of the federal court system?

District Court judge

• If a criminal defendant is dissatisfied with the outcome of a trial, where would he or she file an

appeal?U.S. Circuit Court

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