ACCT 2700 Ostendorf Test 1 Definitions and Sample Questions Study Guide

The stability and predictability of the law is essential to business activities

True

A state constitution is a primary source of law

True

Even if it conflicts with the U.S.Constitution, a state constitution is supreme within that state's borders

False

A local ordinance is considered statutory law

True

There is only one right answer to every legal question

False

Common law is a body of law developed from judicial decisions and the principles established in those judicial decisions

True

Primary sources of law include:

Common Law

Stare Decisis is best defined as:

A doctrine under which judges follow established precedents

Once a court has applied a principle to a certain set of facts, that principle must generally be applied in future cases involving:

Similar Facts

At one time, a court of law could grant asa remedy only:

Monetary Damages

A resident of one state, when visiting another state, can be denied the privileges and immunities of that state for any reason

False

The system of checks and balances in the US Constitution allows each branch of government to limit the actions of the other branches

True

The commerce clause has never been held to support the federal regulation of commercial activities that take place wholly within a state's borders

False

When there is a direct conflict between a federal law and a state law, both laws are rendered invalid

False

Political speech (that is, political campaign contributions) by a corporation falls within the protection of the First Amendment

True

Under the full faith and credit clause, any judicial decision in one state with respect to contract rights will be honored and enforced in all states

True

Equal protection means that the government must treat all individuals exactly the same

False

Today, the Commerce Clause authorizes the federal government to regulate virtually any business enterprise in any industry

True

The federal government has the power to regulate commercial activities among the states under:

The Commerce Clause

Federal regulations concerning medical devices directly conflict with a certain state law. Under the US Constitution, which law takes precedence is determined by:

The Supremacy Clause

The Bill of Rights embodies:

A series of protections for the individual against government action

A law that distinguishes among individuals based on gender will be analyzed by the court under which standard:

Intermediate Scrutiny

In the American governmental system, applying the law to specific situations is the essential role of Congress

False

A court must have proper jurisdiction over a matter in order to hear that case

True

Under a state's long-arm statute, a court can exercise jurisdiction only over certain nonresidents

True

The amount of business a corporation does within a state can serve to subject or exempt the corporation from that state's jurisdiction

True

A federal court will apply federal law in a case involving a federal question

True

A federal court will apply the relevant state law in a diversity of citizenship case

True

For purposes of diversity of citizenship, a corporation is considered a citizen of every state

False

In a case involving internet transactions, jurisdictions is proper only when the defendant conducts substantial business in the jurisdiction online

False

An element of standing includes the fact that a favorable court decision will be likely to remedy the harm

True

A question of law is generally the focus of an appellate court

True

A challenge to the constitutionality of a law of executive order is:

Within the power of judicial review

Ivan, a resident of Illinois, owns a warehouse in Alabama. A dispute arises over the ownership of the warehouse with Ginny, a resident of Georgia. Ginny files suit over Ivan in Alabama. Regarding this suit, Alabama has:

In Rem Jurisdiction

A court's subject matter jurisdiction may be limited by all of the following except:

The prior experience of the court in similar disputes

Ty, a citizen of Texas, files suit in Texas state court against Wash Sales Corporation, a Washington state company that does business in Texas. The Texas state court has original jurisdiction which means:

The case is being heard for the first time

Hardware Inc. makes hand saws of substandard quality. Home Building Company has never bought or used a Hardware hand saw, but files a suit against Hardware

Standing to Sue

The federal courts are an independent system of courts which are superior to the state courts

False

A question of law is generally not the focus of an appellate court

False

Negotiation requires the use of a neutral third party to facilitate a settlement

False

To use arbitration as a method of dispute resolution, the parties must agree to arbitrate any dispute before it arises

False

Arbitration differs from other forms of alternative dispute resolution in that a third-party hearing a dispute makes a decision for the parties

True

A decision on a question of state law is final when:

The State's highest court makes the decision

Frank files a suit in the federal district court against Greg. Frank loses the suit, appeals to the US Court of Appeals for the 9th circuit, and loses again. Frank asks the United States Supreme Court to hear the case. The Court is:

Not required to hear the case

Jill and Katie, with their attorneys, meet to try to solve a dispute. A neutral third party works with both sides and proposes a solution, but does not make a decision resolving the matter

Mediation

Liz and Mary disagree over the amount due under their contract. To avoid involving a third party

Negotiation

Attempts to settle a case must be concluded before the litigation process begins

False

A complaint contains a brief summary of the facts necessary to show that the party filing the complaint is entitled to relief

True

A defendant's motion to dismiss asserts that plaintiff's complaint failed to state a claim with any basis in law

True

Discovery is the process of serving a summons and a copy of a complaint on the defendant

False

A deposition can be used to impeach a party or witness who changes his/her testimony at trial

True

The process of jury selection is an important aspect of litigation strategy

True

Shippers Warehouse files suit against Trucking Company by filing a complaint. Trucking Company files a motion to dismiss, which asserts that:

Even if the facts in the complaint are true, the defendant is not liable

Radiant Supply wants to initiate a suit against Solar Power LLC by filing a complaint. The complaint should include a statement of the facts necessary to show that:

The plaintiff is legally entitled to a remedy

Barge Company and Cove Harbor dispute the meaning of their contract. Unable to agree on settlement, the parties prepare for trial. To obtain information, they engage in discovery. This includes gaining access to each other's witnesses and other types of evidence by:

Depositions and other discovery tools

In Rebuild Company's suit against Structural Engineers Inc., the plaintiff wants to introduce evidence that it claims is relevant. This is evidence that:

Establishes the degree of probability of a fact or fiction, Tends to disprove a fact in question, tends to prove a fact in question.

Law

A body of rules of conduct prescribed by controlling authority, and having binding legal force, and must be obeyed and followed by citizens subject to sanctions or legal consequences

Functions of the Law

Keeping the peace

Shaping moral standards

Promoting social justice

Maintaining the status quo

Facilitating orderly change

Facilitating planning

Encouraging compromise

Maximizing individual freedom

Provide stability and predictability

Primary Sources of American Law:

Constitutional Law, Statutory Law, Administrative Law, Case Law, Common Law

Constitutional Law

(Fed and State) Sets out organization, powers and limits State constitution cannot conflict with US Constitution

Statutory Law

(Fed and State) Laws passed by governing bodies Federal law → all states; State law → only that state

Administrative law

Rules/regulations issued by administrative agencies

Case Law

Rules of law found in court decisions

Common Law

General rules formed by case law

Secondary Sources of American Law:

Books and articles that summarize or discuss primary sources of law

Scholarly treatises

Law Review articles

Stare Decisis

When possible, judges attempt to be consistent and to base their decisions on the principles suggested by earlier cases with similar facts. Each decision becomes a legal precedent that can affect future cases

Two Aspects of Stare Decisis:

Courts should not overturn their own precedents without compelling reasons.

Decisions made by a higher court are binding on lower courts (in the same jurisdiction).

Courts will generally only change/overrule a precedent under one of the following conditions:

The precedent is clearly wrong.

Times have changed and a new precedent is needed.

Constitution

Shared power between national and state governments.

National government was given limited, enumerated powers.

All other powers were retained by the States

Powers Retained by the States:

"Police Powers" but include more than just law enforcement.

Public safety, health, safety, morals, general welfare

Privileges and Immunities Clause:

Prevents States from discriminating against non- citizens (can't arbitrarily discriminate)

Full Faith and Credit Clause:

Requires States to enforce the laws and court rulings of other states, especially concerning property, contracts, and criminal proceedings

Legislative (Congress)

Create/enact laws

Executive (President/Agencies):

Enforce laws

Judicial (Courts):

Interpret laws

Commerce Clause

Most Important Clause, Gives the Federal Government the exclusive right to regulate interstate commerce

Applies to interstate commerce and most intrastate commerce (if it substantially affects interstate commerce)

The Supremacy Clause and Federal Preemption

Applies when the federal government chooses to legislate in an area of shared powers with the state.

A valid federal statute or regulation will preempt a conflicting state or local statute.

Congressional intent is key when determining whether preemption applies.

Privacy Rights:

A fundamental right to privacy is clearly inherent in the Constitution and its amendments, but is not specifically stated or guaranteed.

Bill of Rights

First Ten Amendments to the United States Constitution. All apply to natural persons, and most apply to business entities as well.

First Amendment:

Freedom of Speech Commercial speech (by businesses) is not as protected as individual speech (except for political contributions)

Fourth Amendment:

Freedom from Unreasonable Searches and Seizures

Fifth Amendment:

Right against Self-Incrimination Only available to natural persons (not corporations) Due Process

14th Amendment

Equal Protection: Government must treat similarly situated individuals in a similar manner (but not equally)

Strict Scrutiny

Race, national origin, citizenship

Intermediate Scrutiny

Gender, legitimacy

Rational Basis

Economic or social welfare

Judicial Review

The essential role of the judiciary is to interpret the laws and apply them to specific situations. Gives the judiciary the ability to declare a law unconstitutional Established by the U.S. Supreme Court in Marbury v. Madison(1803)

Basic Judicial Requirements: Before a lawsuit can be brought before a court, the following three requirements must be met:

Jurisdiction

Venue

Standing to Sue

All three must be present for a particular court to hear a particular case

Jurisdiction:

"Juris" (law) "Diction" (to speak) is the power of a court to hear a dispute and to "speak the law" into a controversy and render a verdict that is legally binding on the parties to the dispute.

Must have either: In Personam Jurisdiction(over the person):

In Rem Jurisdiction(over the thing):

In Rem Jurisdiction(over the thing):

Courts have in rem jurisdiction over land within that state's borders

In Personam Jurisdiction(over the person):

Courts have jurisdiction over residents in that geographic area

Businesses are considered to reside in the state in which they are incorporated, the state of principal place of business, and some states where they do business

Subject Matter Jurisdiction:

Limitations on the Types of cases a court can hear

General Jurisdiction:

Can hear any type of case(unless it should go to a court of limited jurisdiction)

Limited Jurisdiction:

Set up to hear specific types of cases(like divorce, small claims, probate, bankruptcy)

Original Jurisdiction:

Court of original jurisdiction is where the case started(trial court) Focus is on trying the Facts of the case.

Appellate Jurisdiction:

Court of appellate jurisdiction has the power to hear an appeal from another court. Focus is on a question of law

Federal Question:

Rights or obligations of a part are created or defined by some federal law or the Constitution Apply federal law

Diversity of Citizenship:

Parties are not from the same state; and

The amount in controversy is greater than $75,000 Apply relevant state law

Venue:

Geographical district in which an action is tried, and from which the jury is selected

Generally, proper venue is where the injury occurred or where the defendant resides or does business

Standing to Sue:

The requirement that an individual must have a sufficient stake in a controversy before bringing the suit.

Standing has three elements: