BUS-L 201: The Legal Environment of
Business - Indiana University
Bloomington Kelley School of
Business - Exam 1 Review Questions
Fully Solved 2025-2026.
What is Law?
(Introduction to Law) - Answer The rules enforced on us by the government.
Laws are most effective when... (2 items)
(Introduction to Law) - Answer 1. Written down
2. Accessible by the public
Primary Elements of Law (3 items)
(Introduction to Law) - Answer 1. Sets forth rules
2. Rules are set forth by the government
3. Enforced by the government
Code of Hammurabi
(Introduction to Law) - Answer Babylon, 1790 B.C. - Guilt or innocence was decided by, for
example, forcing suspects to jump into a river. Inaccurate due to someone who is a good
swimmer never being guilty. Also, if a house was to cave in, the builder would be put to death.
Benefits provided by U.S. legal system (2 items)
,Common Law vs Civil Law (Numerous items)
(Introduction to Law) - Answer Common Law
- US Relies primarily on common law
- Judges have lots of power
- Common law originates in England
- Follows prior legal decisions aka precedent
- US, Canada, England, India
Civil Law
- Role of judge is minimized
- Judge has no power to create or interpret law
- France, Spain, Louisiana
Civil Law vs Criminal Law (Few Items)
(Introduction to Law) - Answer Civil Law
- Two non-government entities suing each other
Criminal Law
- Government entities have caught you
- Your punishment is not to make the victim whole
State Constitutions (1 item)
(Introduction to Law) - Answer 1. Each state has a constitution that sets rules for its local
governments and overall structure.
What is Legislation?
, (Introduction to Law) - Answer A law at the state/national level.
What is an ordinance?
(Introduction to Law) - Answer A law at the local level.
Main issue with legislation: Uniformity. Explain the issue...
(Introduction to Law) - Answer If each state has different laws, it can be confusing.
How to solve Uniformity issue w/ Legislation... (2 items)
(Introduction to Law) - Answer 1. Go to congress and get national law passed
2. Go to each individual state and get 50 laws passed
What does interpretation mean? How does it apply to law? Who has the power to interpret
law?
(Introduction to Law) - Answer EXAMPLE: Loitering law is very ambiguous and puts power of
interpretation in hands of police. Legally, power of interpretation is delegated to judges.
What is Statutory Construction?
(Introduction to Law) - Answer When judges have to make a ruling and look to prior
precedent, dictionary definitions, and legislative history.
What is the Notice and Comment Cycle? (4 items)
(Introduction to Law) - Answer 1. Notify the public on the issue and proposal of solution
2. Individuals have the opportunity to weigh in for at least 30 days
Business - Indiana University
Bloomington Kelley School of
Business - Exam 1 Review Questions
Fully Solved 2025-2026.
What is Law?
(Introduction to Law) - Answer The rules enforced on us by the government.
Laws are most effective when... (2 items)
(Introduction to Law) - Answer 1. Written down
2. Accessible by the public
Primary Elements of Law (3 items)
(Introduction to Law) - Answer 1. Sets forth rules
2. Rules are set forth by the government
3. Enforced by the government
Code of Hammurabi
(Introduction to Law) - Answer Babylon, 1790 B.C. - Guilt or innocence was decided by, for
example, forcing suspects to jump into a river. Inaccurate due to someone who is a good
swimmer never being guilty. Also, if a house was to cave in, the builder would be put to death.
Benefits provided by U.S. legal system (2 items)
,Common Law vs Civil Law (Numerous items)
(Introduction to Law) - Answer Common Law
- US Relies primarily on common law
- Judges have lots of power
- Common law originates in England
- Follows prior legal decisions aka precedent
- US, Canada, England, India
Civil Law
- Role of judge is minimized
- Judge has no power to create or interpret law
- France, Spain, Louisiana
Civil Law vs Criminal Law (Few Items)
(Introduction to Law) - Answer Civil Law
- Two non-government entities suing each other
Criminal Law
- Government entities have caught you
- Your punishment is not to make the victim whole
State Constitutions (1 item)
(Introduction to Law) - Answer 1. Each state has a constitution that sets rules for its local
governments and overall structure.
What is Legislation?
, (Introduction to Law) - Answer A law at the state/national level.
What is an ordinance?
(Introduction to Law) - Answer A law at the local level.
Main issue with legislation: Uniformity. Explain the issue...
(Introduction to Law) - Answer If each state has different laws, it can be confusing.
How to solve Uniformity issue w/ Legislation... (2 items)
(Introduction to Law) - Answer 1. Go to congress and get national law passed
2. Go to each individual state and get 50 laws passed
What does interpretation mean? How does it apply to law? Who has the power to interpret
law?
(Introduction to Law) - Answer EXAMPLE: Loitering law is very ambiguous and puts power of
interpretation in hands of police. Legally, power of interpretation is delegated to judges.
What is Statutory Construction?
(Introduction to Law) - Answer When judges have to make a ruling and look to prior
precedent, dictionary definitions, and legislative history.
What is the Notice and Comment Cycle? (4 items)
(Introduction to Law) - Answer 1. Notify the public on the issue and proposal of solution
2. Individuals have the opportunity to weigh in for at least 30 days
