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BADM 7140 BUSINESS LAW (ACTUAL 2025/2026)
EXAM 1 QUESTIONS AND VERIFIED 100% VERIFIED
ORRECT ANSWERS (LATEST UPDATE
Define Law - ...(answer)..A set of enforceable rules that govern 1) the relationship
between individuals and 2) the relationship between people and society
15 sources of Law - ...(answer)..International law, federal constitution, federal
executive order, federal statute, federal cases, federal regulations, state
constitution, state executive order, state statute, state civil code, state cases,
state regulations, ordinances, works of scholars, private party contracts, trade
usage (industry practices)
Natural law - ...(answer)..Divine law, higher code of interest
Positive law - ...(answer)..Written law
Federal court power - ...(answer)..Court with limited power, but supreme power.
Hear cases with diversity and > $75,000. Also hear federal bankruptcy, federal
questions, suits against ambassadors, maritime/admiralty cases, and federal tax
cases.
State court power - ...(answer)..Court that can hear virtually any type of case
(general SMJ)
Standing to Sue - ...(answer)..A party must have a legally protected, tangible
interest at stake.
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Privileges and immunities clause - ...(answer)..Citizens of each state shall be
entitled to all privileges and immunities of citizens in the several state.
Full faith and credit clause - ...(answer)..Full faith and credit shall be given in each
state to public acts, records, and judicial proceedings of every other state.
Commerce clause - ...(answer)..US constitution explicitly permits Congress to
regulate Commerce with foreign nations and among the several states and with
the Indian tribes.
Supremacy clause - ...(answer)..The constitution, laws, and treaties of the US are
the supreme law of the land.
Establishment clause - ...(answer)..Prohibits the government from establishing a
state-sponsored religion as well as from passing laws that promote religion or
that show a preference for one religion over another.
Free exercise clause - ...(answer)..Guarantees that a person can hold any religious
belief that he or she wants or a person can have no religious belief.
Due process clause - ...(answer)..Both fourth and fifth amendment provide that
no person shall be deprived of life liberty or property without due process.
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Procedural due process - ...(answer)..Requires government decision to take life
liberty or property be made equitably; proper notice and opportunity to be heard.
Substantive due process - ...(answer)..Protects individuals life liberty or property
against certain government actions regardless of the fairness of the procedures
used to implement them.
Equal protection clause - ...(answer)..A state may not deny to any person within
its jurisdiction the equal protection of the laws. It also means the federal
government cannot enact laws that treat similarly situated individual's differently.
Agreement - ...(answer)..Parties must agree on the terms of the contract and
manifest to each other their mutual assent to the same bargain.
Consideration - ...(answer)..Value given in return for a promise or in return for a
performance. Something of legally sufficient value must be given usually there
must be a bargained for exchange.
Capacity - ...(answer)..The legal ability to enter into a contractual agreement.
Legality - ...(answer)..Contract must be formed for legal purpose.
Three types of Alternative Dispute Resolution - ...(answer)..Negotiation,
mediation, arbitration
BADM 7140 BUSINESS LAW (ACTUAL 2025/2026)
EXAM 1 QUESTIONS AND VERIFIED 100% VERIFIED
ORRECT ANSWERS (LATEST UPDATE
Define Law - ...(answer)..A set of enforceable rules that govern 1) the relationship
between individuals and 2) the relationship between people and society
15 sources of Law - ...(answer)..International law, federal constitution, federal
executive order, federal statute, federal cases, federal regulations, state
constitution, state executive order, state statute, state civil code, state cases,
state regulations, ordinances, works of scholars, private party contracts, trade
usage (industry practices)
Natural law - ...(answer)..Divine law, higher code of interest
Positive law - ...(answer)..Written law
Federal court power - ...(answer)..Court with limited power, but supreme power.
Hear cases with diversity and > $75,000. Also hear federal bankruptcy, federal
questions, suits against ambassadors, maritime/admiralty cases, and federal tax
cases.
State court power - ...(answer)..Court that can hear virtually any type of case
(general SMJ)
Standing to Sue - ...(answer)..A party must have a legally protected, tangible
interest at stake.
,2|Page
Privileges and immunities clause - ...(answer)..Citizens of each state shall be
entitled to all privileges and immunities of citizens in the several state.
Full faith and credit clause - ...(answer)..Full faith and credit shall be given in each
state to public acts, records, and judicial proceedings of every other state.
Commerce clause - ...(answer)..US constitution explicitly permits Congress to
regulate Commerce with foreign nations and among the several states and with
the Indian tribes.
Supremacy clause - ...(answer)..The constitution, laws, and treaties of the US are
the supreme law of the land.
Establishment clause - ...(answer)..Prohibits the government from establishing a
state-sponsored religion as well as from passing laws that promote religion or
that show a preference for one religion over another.
Free exercise clause - ...(answer)..Guarantees that a person can hold any religious
belief that he or she wants or a person can have no religious belief.
Due process clause - ...(answer)..Both fourth and fifth amendment provide that
no person shall be deprived of life liberty or property without due process.
, 3|Page
Procedural due process - ...(answer)..Requires government decision to take life
liberty or property be made equitably; proper notice and opportunity to be heard.
Substantive due process - ...(answer)..Protects individuals life liberty or property
against certain government actions regardless of the fairness of the procedures
used to implement them.
Equal protection clause - ...(answer)..A state may not deny to any person within
its jurisdiction the equal protection of the laws. It also means the federal
government cannot enact laws that treat similarly situated individual's differently.
Agreement - ...(answer)..Parties must agree on the terms of the contract and
manifest to each other their mutual assent to the same bargain.
Consideration - ...(answer)..Value given in return for a promise or in return for a
performance. Something of legally sufficient value must be given usually there
must be a bargained for exchange.
Capacity - ...(answer)..The legal ability to enter into a contractual agreement.
Legality - ...(answer)..Contract must be formed for legal purpose.
Three types of Alternative Dispute Resolution - ...(answer)..Negotiation,
mediation, arbitration
