Dr. Dawn D. Bennett-Alexander dawndba@uga.edu

University of Georgia Terry College of Business


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LS 2700 - The Legal Environment of Business Dr. Bennett-Alexander

Chs. 1-3, Intro, Legal Prins., Ct. Syst. Spring 1998

EXAM No. 1

Place the answers to the following questions on the scantron provided. Make sure to place the answers by the proper question number. For true/false questions, A is for true, and B is for false.

PART II - Multiple Choice and True/False


31. Raphael, the owner of a small grocery store, is upset that the city is considering requiring all grocery store owners to install emergency back-up generators in their stores in order to prevent perishables from spoiling during power outages. Raphael says he is only a small business owner and cannot afford to do this. Raphael can

a. sue the city.

b. require the city to loan him the money for the generator.

c. make his views known to the city during their consideration of this matter.

d. install the generator.

32. Diane and two friends are about to start a catering business. They have already been carrying on this business for a while on an informal basis, but they decide to now deal with it seriously. When Diane checks with the city to see what permits she needs or what requirements they must meet, she finds that businesses involving food are required to have a "commissary" where they store food used in their business. Diane says that all food for her business will be purchased for the specific event being catered, at the time of the event, taken to the place of the event and cooked on sight. All leftover food will be left with the client. She therefore doesn't think she should be made to meet the requirement since to do so would mean substantial cost to her and her business partners. In attacking the regulation, what kind of law would Diane likely use?

a. administrative

b. criminal

c. torts

d. contracts

33. The theory of law which most likely underlies anti-abortion rights' protesters action of killing doctors who perform abortions at abortion clinics is probably

a. natural law.

b. sociological theory.

c. legal realism.

d. legal positivism.

34. Deshunnen discovers that his girlfriend gave to another guy the gift that she had planned to give him. Since the gift was an expensive one, DeShunnen thinks it is worth his while to sue his girlfriend for

a. breach of contract.

b. tort.

c. criminal violations.

d. none of the above.

35. Elvis accidentally drives his car into Johnson Mirror Co.'s custom-made plate glass window. The accident cost JMC a great deal of money and Mr. Johnson wants Elvis put in jail for breaking the window. Is it likely to happen?

a. No, because Elvis is dead.

b. Yes, because Elvis ran into the window and caused great damage.

c. No, because what Elvis did is not a crime.

d. Yes, because Elvis had an accident.

36. The most likely jurisprudential theory that would have been used by Hitler's military members would have been

a. legal realism.

b. sociological theory.

c. natural law.

d. legal positivism.

37. Under the Tenth Amendment (which left all matter not given to the federal government to states to deal with) the state, rather than the federal government, would be able to regulate which of the following?

a. education

b. motor vehicle regulation

c. wills

d. all of the above

38. Each of the following is a branch of our tripartite system of government except

a. legislative.

b. judicial.

c. administrative.

d. executive.

39. The check that the president has on the judicial system is the power to nominate justices to the U.S. Supreme Court and other federal and state courts.

40. Administrative agencies have the power and authority to enact laws and hear cases arising within their agency.

41. The law regulating how administrative agencies conduct their business is the Administrative Procedures Act.

42. One of the sources of law is morals and justice.

43. Civil law includes all but which of the following?

a. torts

b. property

c. crimes

d. contracts


44. Reginald owns a flower shop. As part of his business advertising, Reginald wants to plant outside his store red geraniums. A city ordinance prohibits businesses from having red flowers of any type outside their businesses because it is thought to be too bright and therefore too distracting to traffic on the narrow streets of the town. Other, lighter or darker colors can be used, but not red. Homeowners in residential areas have no color restrictions. Reginald feels that red geraniums would be the most beneficial to his business because it is the most popular flower and type and color of flower with which most people are familiar.

If Reginald challenges the ordinance, he will likely use as a basis for his challenge the ordinance being a denial of due process. True or false?

45. Sherlon tells Jinxie that since there is a federal law prohibiting employment discrimination, the area is preempted and states may not pass laws on the subject. Sherlon is correct. True or false?

46. The county passes an ordinance banning religious paraphrenelia stores after several spring up in response to people from all over the country flocking to a farm within the county because the farm owner says she receives messages from the Virgin Mary on the 13th of each month. The traffic congestion, refuse, septic challenges, and other problems caused by this occurrence all cause the county to decide on the ordinance. In passing the ordinance, the county is using its

a. power over interstate commerce.

b. police power.

c. power over taxation.

d. supremacy clause.

47. In the question immediately above, the county's ordinance will likely withstand court review and be held constitutional. True or false?

48. Shultz visited friends in New Mexico and planned to go hunting while he was there. Shultz was surprised to discover that the cost of his hunting license was ten times the cost of that of his friends, who were residents of New Mexico. Shultz wants to bring suit against the state of New Mexico for the law that discriminates against out of state hunters . The lawsuit would likely be based on the theory of

a. denial of equal protection.

b. rational basis.

c. denial of due process.

d. power over interstate commerce.

49. The compelling state interest test is used mainly for

a. laws affecting business.

b. laws affecting people.

c. neither.

d. either.

50. Which of the following would the federal government be most likely to be able to regulate under its police power?

a. The minimum alcohol drinking age for states.

b. The age during which students must attend school.

c. The closing hours of establishments which serve alcohol.

d. None of the above.

51. The state refuses to allow teens who skip school to get a drivers' license, or retain their drivers' license if they have over six unexcused absences in one quarter. If Donnie challenges the taking of his license under this law, saying that he knew nothing about the law and therefore it is unfair for the state to take it away, his challenge will likely be on the basis of

a. the rational basis test.

b. the compelling state interest test.

c. a denial of due process.

d. none of the above

52. The owners of the San Francisco Bridges, a winning national league sports team, finds that there has been a tax imposed on the sale of their game tickets in order to help defray the cost of additional security, traffic impact, cleanup, etc., that comes with the games. The Bridges think that this will have a very significant negative impact on attendance at their games. As such, they think the tax is unfair and illegally imposed and they bring suit accordingly. It is likely that they will lose their suit. True or false?

53. The government decides to legalize marijuana. In doing so, it imposes a 100% tax on the sale of the plant, in any form, and also requires a revenue tax stamp to be affixed to the product in order for the sale to be legitimate. Marijuana growers and processors complain that this is too burdensome on interstate commerce. The government says it is not and that the law should be upheld. This will be an effective argument to uphold the proposed law. True or false?

54. The grand jury's decision that prosecutor has enough evidence to try a suspect for a crime is called a(n)

a. information.

b. habeas corpus.

c. indictment.

d. notice of proposed rulemaking.

55. The prosecutor's notification to suspect that he or she is charged with committing a crime is called a(n)

a. information.

b. indictment.

c. notice of proposed rulemaking.

d. complaint.

56. If the federal government declares that only it can make law in a particular area, it is called

a. preemption.

b. ethics.

c. the adversarial system.

d. a compelling state interest.

57. The Lazy Peachtree Inn has a dilemma. It is a well-known local historic inn which has year-round guests who regularly come to stay for the peace, quiet and tranquilty. the Inn is located on 25 acres of beautiful, bucolic country. However, the Inn has sold off five of its acres and recently discovered that the purchasers are planning on building a waterpark on the land. The presence of the waterpark will greatly impact the quality of the visits of those who frequent the Inn. The Inn feels a sense of duty to its regular customers to tell them about the waterpark before they make reservations to return to the Inn for their next visit, when the park will be finished. On the other hand, they think this will negatively impact their revenue. If the Inn decides to bring a cause of action against the waterpark to keep the owners from building it, it will likely be a suit brought

a. on the basis of breach of contract.

b. on the basis of tort.

c. in equity.

d. on the basis of property.


58. Ace Manufacturing and Glissom Construction, Inc. are involved in an altercation about Glissom's performance in building a new plant for Ace. The parties have tried to talk it over, but have gotten nowhere. All parties wish to save time and money in settling the dispute. Given these facts, the most likely choice of an alternative to litigation would be

a. mock trial.

b. arbitration.

c. mini-trial.

d. conciliation.

59. In order for an administrative agency's decision to be appealed to a court of law, the parties must first

a. exhaust administrative remedies.

b. file a complaint.

c. file an amicus curiae brief.

d. file a writ of certiorari.

60. Joe and Stephanie have a long-running dispute with their neighbors, Jenna and Julie, over the trees that are located in Joe and Stephanie's yard, but that hang over and make a mess in Jenna and Julie's swimming pool, causing them to have to clean the pool much more than they would if not for the trees. The parties have decided to take the situation to a mediator. When they do, the arbitrator's award will not be binding unless the parties have decided it will be. True or false?

61. A federal question is one which is based on

a. a federal law

b. a federal treaty

c. the federal Constitution

d. all of the above.

62. Dannon, a local resident, is unhappy that Smithville passed an ordinance which changes the zoning requirements for light industry. Dannon does not have any business that is affected, but he files for an injunction to keep Smithville from enforcing its new ordinance. Dannon has sufficient standing to sue. True or false?

63. Appellate court judges hear testimony from witnesses before they decide the case. True or false?

64. Howell's Meatpacking Co. and Walt had an agreement that Howell's would deliver 500 pounds of pork spare ribs to Walt on a certain date for Walt to use for his church's fundraising barbeque. This was an annual event that Walt's church held, and it raised the majority of the church's youth development funds; approximately $5000 each year. The liquidated damage clause in the contract stipulated that if Howell's failed to deliver, it would be required to pay Walt's church $50,000 in liquidated damages. Howell's failed to deliver, and refused to pay the liquidated damage amount. Walt will likely succeed if he tries to enforce the liquidated damages provision. True or false?