Business Law Test Bank (2025/2026) | Questions
and Answers for Business, Legal Studies, and
Management Students
Constitutions
establish governmental structure, specific rights and duties
Statutes
written laws enacted by legislatures
Common/case law
made and applied by judges at the state level as judges
decide cases according to the doctrine of precedent or stare
decisis
Stare decisis
Let the decision stand; decisions are based on precedents
from previous cases
equity
is applied by state level judiciary to achieve justice when
common law rules would produce unfair results
injunction
court forbids a party to do some act or orders a party to
perform an act
specific performance
,a party is ordered to perform according to the terms of her
contract
reformation
the court rewrites the contract's terms to reflect the parties'
real intentions
recission
the cancellation of a contract; goes back to policy inception
with all premiums paid minus and payments; usually do to
fraud, concealment or material misrepresentation
administrative regulations and decisions
made by state and federal agencies that were created by
statute and hold delegated (granted) power
treaty
made by other nations, by the US pres on behalf of the US,
approved by the senate
ordinance
made by subunits of state governments (e.g., counties,
cities) for local issues, such as zoning
executive order
issued by the pres or a state governor under limited powers
federal supremecy
, a rule of priority for conflicts between laws stating that the
U.S. Constitution is the supreme law
federal supremecy
Federal law defeats state law
State constitution defeats state legislation
Statute defeats administrative regulation
Statute or regulation defeats common law
criminal law
establishes duties to society
Government charges and prosecutes defendant, who will be
found guilty or innocent
A convicted defendant will be imprisoned or fined
civil law
establishes duties and obligations between private parties
Plaintiff sues defendant for monetary damages or equitable
relief
A defendant will be held liable or not liable for the plaintiff's
injury
substantive law
establishes rights and duties of people in society- ex: a
statute making a murder a crime
procedural law
and Answers for Business, Legal Studies, and
Management Students
Constitutions
establish governmental structure, specific rights and duties
Statutes
written laws enacted by legislatures
Common/case law
made and applied by judges at the state level as judges
decide cases according to the doctrine of precedent or stare
decisis
Stare decisis
Let the decision stand; decisions are based on precedents
from previous cases
equity
is applied by state level judiciary to achieve justice when
common law rules would produce unfair results
injunction
court forbids a party to do some act or orders a party to
perform an act
specific performance
,a party is ordered to perform according to the terms of her
contract
reformation
the court rewrites the contract's terms to reflect the parties'
real intentions
recission
the cancellation of a contract; goes back to policy inception
with all premiums paid minus and payments; usually do to
fraud, concealment or material misrepresentation
administrative regulations and decisions
made by state and federal agencies that were created by
statute and hold delegated (granted) power
treaty
made by other nations, by the US pres on behalf of the US,
approved by the senate
ordinance
made by subunits of state governments (e.g., counties,
cities) for local issues, such as zoning
executive order
issued by the pres or a state governor under limited powers
federal supremecy
, a rule of priority for conflicts between laws stating that the
U.S. Constitution is the supreme law
federal supremecy
Federal law defeats state law
State constitution defeats state legislation
Statute defeats administrative regulation
Statute or regulation defeats common law
criminal law
establishes duties to society
Government charges and prosecutes defendant, who will be
found guilty or innocent
A convicted defendant will be imprisoned or fined
civil law
establishes duties and obligations between private parties
Plaintiff sues defendant for monetary damages or equitable
relief
A defendant will be held liable or not liable for the plaintiff's
injury
substantive law
establishes rights and duties of people in society- ex: a
statute making a murder a crime
procedural law
