Business Law 1 Final Exam – 2026 – Study Guide and
Practice Material
Law - correct answer ✔✔ a body or set of rules that are recognized and enforced by the legal
courts
Civil Law - correct answer ✔✔ defines wrongs between private parties; creates a forum for
people to resolve private disputes
criminal law - correct answer ✔✔ defines wrongs/breaches against society in general;
representative of the public
substantive law - correct answer ✔✔ the conduct/behavior rules; this is what most people think
of as the law
procedural law - correct answer ✔✔ establishes the process for determining whether a
substantive law has been violated
contract law - correct answer ✔✔ the only area of law where you can personally write the law
that will govern your conduct; the promises you make become legal duties
tort law - correct answer ✔✔ civil wrongs that are based on societal standards rather than
contractual promises
U.S. Constitution - correct answer ✔✔ highest law of the land
list the hierarchy of the law: - correct answer ✔✔ 1.U.S. Constitution
2.Federal Statutes
,3.Federal Administrative regulations
4.Federal court decisions (common law)
5.state constitutions
6.state statutes
7.state administrative regulations
8.state court decisions (common law)
Litigation - correct answer ✔✔ the process of taking legal action
how many types of courts make up the federal and state court system - correct answer ✔✔ 2
trial courts - correct answer ✔✔ courts of original jurisdiction
appellate courts - correct answer ✔✔ Courts hearing cases appealed from a lower court.
factual error - correct answer ✔✔ argues jury/judge drew the wrong conclusion from the
evidence
legal error - correct answer ✔✔ a mistake in the way the court interprets or applies the law
federal courts system - correct answer ✔✔ 1. U.S. Supreme Court
2. U.S. Courts of Appeal
3. U.S. District Courts
U.S. District Courts - correct answer ✔✔ Courts within the lowest tier of the three-tiered federal
court system; courts where litigation begins.
,U.S. Courts of Appeal - correct answer ✔✔ the intermediate appellate courts in the federal
system, frequently referred to as circuit courts of appeal; consist of 13 courts, each of which
reviews the decisions of federal district courts in the state or several states within its circuit
U.S. Supreme Court - correct answer ✔✔ the highest court of the United States; it sits at the top
of the federal court system
State Courts systems - correct answer ✔✔ mostly deal with disputes about state laws
what is the main difference between the federal court system and state court system? - correct
answer ✔✔ The state courts system has two types of trial courts: courts of general jurisdiction
and courts of limited jurisdiction
T or F: on appeal, the parties must stay within the court system where the trial was held. -
correct answer ✔✔ True: if the trial was held in state court, appeal must be to state appellate
court
T or F: a case that originated in a state court system can always be brought to the Supreme
Court on appeal - correct answer ✔✔ False: it can only be brought to the supreme court if it
involves an issue of federal law
Jurisdiction - correct answer ✔✔ The authority of a court to hear a case
what types of cases can the U.S. District courts hear? - correct answer ✔✔ 1. exclusively federal
cases
2. federal question cases
3. diversity citizenship cases
what type of case can a state trial court hear? - correct answer ✔✔ general jurisdiction can hear
any type of case unless it is exclusively federal
, what two steps are necessary for personal jurisdiction (civil process)? - correct answer ✔✔ 1.
service of process
2. jurisdictional basis
a sufficient jurisdictional basis exists if: - correct answer ✔✔ 1. defendant is a resident of the
state in which the lawsuit is filed
2. defendant is a non-resident who does business in the state, works in the state, owns property
in the state, etc.
public wrongs - correct answer ✔✔ wrongs against the public
felonies - correct answer ✔✔ A serious criminal offense punishable by a prison sentence of
more than one year
Misdemeanor - correct answer ✔✔ a crime or offense that is less serious than a felony; any
minor misbehavior or misconduct
what are the essentials of a crime? - correct answer ✔✔ 1. statutory prohibition
2. beyond reasonable doubt
3. criminal intent
white collar crime - correct answer ✔✔ Nonviolent crime committed by individuals or
corporations to obtain a personal or business advantage.
Sarbanes-Oxley Act of 2002 - correct answer ✔✔ established requirements for proper financial
record keeping for public companies and penalties of as much as 25 years in prison for
noncompliance
Practice Material
Law - correct answer ✔✔ a body or set of rules that are recognized and enforced by the legal
courts
Civil Law - correct answer ✔✔ defines wrongs between private parties; creates a forum for
people to resolve private disputes
criminal law - correct answer ✔✔ defines wrongs/breaches against society in general;
representative of the public
substantive law - correct answer ✔✔ the conduct/behavior rules; this is what most people think
of as the law
procedural law - correct answer ✔✔ establishes the process for determining whether a
substantive law has been violated
contract law - correct answer ✔✔ the only area of law where you can personally write the law
that will govern your conduct; the promises you make become legal duties
tort law - correct answer ✔✔ civil wrongs that are based on societal standards rather than
contractual promises
U.S. Constitution - correct answer ✔✔ highest law of the land
list the hierarchy of the law: - correct answer ✔✔ 1.U.S. Constitution
2.Federal Statutes
,3.Federal Administrative regulations
4.Federal court decisions (common law)
5.state constitutions
6.state statutes
7.state administrative regulations
8.state court decisions (common law)
Litigation - correct answer ✔✔ the process of taking legal action
how many types of courts make up the federal and state court system - correct answer ✔✔ 2
trial courts - correct answer ✔✔ courts of original jurisdiction
appellate courts - correct answer ✔✔ Courts hearing cases appealed from a lower court.
factual error - correct answer ✔✔ argues jury/judge drew the wrong conclusion from the
evidence
legal error - correct answer ✔✔ a mistake in the way the court interprets or applies the law
federal courts system - correct answer ✔✔ 1. U.S. Supreme Court
2. U.S. Courts of Appeal
3. U.S. District Courts
U.S. District Courts - correct answer ✔✔ Courts within the lowest tier of the three-tiered federal
court system; courts where litigation begins.
,U.S. Courts of Appeal - correct answer ✔✔ the intermediate appellate courts in the federal
system, frequently referred to as circuit courts of appeal; consist of 13 courts, each of which
reviews the decisions of federal district courts in the state or several states within its circuit
U.S. Supreme Court - correct answer ✔✔ the highest court of the United States; it sits at the top
of the federal court system
State Courts systems - correct answer ✔✔ mostly deal with disputes about state laws
what is the main difference between the federal court system and state court system? - correct
answer ✔✔ The state courts system has two types of trial courts: courts of general jurisdiction
and courts of limited jurisdiction
T or F: on appeal, the parties must stay within the court system where the trial was held. -
correct answer ✔✔ True: if the trial was held in state court, appeal must be to state appellate
court
T or F: a case that originated in a state court system can always be brought to the Supreme
Court on appeal - correct answer ✔✔ False: it can only be brought to the supreme court if it
involves an issue of federal law
Jurisdiction - correct answer ✔✔ The authority of a court to hear a case
what types of cases can the U.S. District courts hear? - correct answer ✔✔ 1. exclusively federal
cases
2. federal question cases
3. diversity citizenship cases
what type of case can a state trial court hear? - correct answer ✔✔ general jurisdiction can hear
any type of case unless it is exclusively federal
, what two steps are necessary for personal jurisdiction (civil process)? - correct answer ✔✔ 1.
service of process
2. jurisdictional basis
a sufficient jurisdictional basis exists if: - correct answer ✔✔ 1. defendant is a resident of the
state in which the lawsuit is filed
2. defendant is a non-resident who does business in the state, works in the state, owns property
in the state, etc.
public wrongs - correct answer ✔✔ wrongs against the public
felonies - correct answer ✔✔ A serious criminal offense punishable by a prison sentence of
more than one year
Misdemeanor - correct answer ✔✔ a crime or offense that is less serious than a felony; any
minor misbehavior or misconduct
what are the essentials of a crime? - correct answer ✔✔ 1. statutory prohibition
2. beyond reasonable doubt
3. criminal intent
white collar crime - correct answer ✔✔ Nonviolent crime committed by individuals or
corporations to obtain a personal or business advantage.
Sarbanes-Oxley Act of 2002 - correct answer ✔✔ established requirements for proper financial
record keeping for public companies and penalties of as much as 25 years in prison for
noncompliance
