Legal 2700 Exam 1 Nichols UPDATED ACTUAL Questions and
CORRECT Answers
Why is Law the Foundation of Business? • Builds basic legal vocabulary
• Develops the ability to identify risk and potential liability
• Informs Business Decisions
What Three Things Does an Efficient Market Need? 1. Law
2. Rule of Law
3. Property
Law A rule established by the state that is backed by enforcement
Rule of Law A concept that laws are made generally and equally applicable
Property A legal right that allows you to exclude others from your resources
What can be owned? • Real and Personal Property
• Obligations
• Rights
• Legal entitlements
What are the three types of property? 1. Public
2. Private
3. Common
Public Property Property owned by government (or its agency)
Private Property Property owned by individuals or private groups
Common Property Propery owned by more than one person or group
Constitutional Law Establishes the framework of the state whose purpose is to protect property in its
broadest sense
Contract Law Determines how resources, including labor, are exchanged between owners
Law of Business/Organizations Identifies how individuals can own and use resources in groups. Includes
corporate governance.
Tort Law Protects and compensates owners through private civil lawsuits when their
resources, including those they have in themselves, are wrongfully harmed by the
action of others
Administrative and Regulatory Law Concerns public laws that protect, tax, regulate, or redistribute an owner's
resources
, Jurisprudence the philosophy of law
Natural Law Philosophy that states that thtere are laws that are common to all societies,
regardless of whether they are written down or enacted. Based on the idea that
these laws are inherent in human nature/morals.
Positive Law Refers to legal rules enacted by people in a political community or governing
body
Examples of Positive Law: Constitutions, Statutes, Regulations
Historical School School of Law that focuses on the origins of law and its evolution over time.
Emphasizes that law is shaped by peoples' customs and habits, not by divine
origins or universal principles
Sociological Jurisprudence The study of law with social sciences so as to become an effective social control
to prevent conflicting interests of members of society
Legal Realism Legal theory that emphasizes the role of judges in shaping legal outcomes and
the importance of social interests and public policy of law. (Naturalistic approach
based on empirical evidence)
Common Law emphasizes the role of Judges in determining the meaning of laws and how they apply
Civil law relies primarily on , while common law relies on legislation ; court decisions
Pros of Common Law 1. Laws can be concise
2. Stare Decisis:
• Let the prior decision stand
• Judges follow precedents whenever possibile
• Ensures certainty, stability, and predictability in law
Cons of Common Law 1. Volume of cases
2. Conflicting Precedents
3. Distinction between the holding and dicta
4. Rejection of precedents
Public Law • Constitutional Law
• Administrative Law
• Criminal Law
Private Law • Property law
• Contract law
• Tort law
Substantive Law The set of laws that define and regulate the rights, duties, and obligations of
people and entities in a society
Procedural Law Deals with the method and means by which substantive law is made and
administered
CORRECT Answers
Why is Law the Foundation of Business? • Builds basic legal vocabulary
• Develops the ability to identify risk and potential liability
• Informs Business Decisions
What Three Things Does an Efficient Market Need? 1. Law
2. Rule of Law
3. Property
Law A rule established by the state that is backed by enforcement
Rule of Law A concept that laws are made generally and equally applicable
Property A legal right that allows you to exclude others from your resources
What can be owned? • Real and Personal Property
• Obligations
• Rights
• Legal entitlements
What are the three types of property? 1. Public
2. Private
3. Common
Public Property Property owned by government (or its agency)
Private Property Property owned by individuals or private groups
Common Property Propery owned by more than one person or group
Constitutional Law Establishes the framework of the state whose purpose is to protect property in its
broadest sense
Contract Law Determines how resources, including labor, are exchanged between owners
Law of Business/Organizations Identifies how individuals can own and use resources in groups. Includes
corporate governance.
Tort Law Protects and compensates owners through private civil lawsuits when their
resources, including those they have in themselves, are wrongfully harmed by the
action of others
Administrative and Regulatory Law Concerns public laws that protect, tax, regulate, or redistribute an owner's
resources
, Jurisprudence the philosophy of law
Natural Law Philosophy that states that thtere are laws that are common to all societies,
regardless of whether they are written down or enacted. Based on the idea that
these laws are inherent in human nature/morals.
Positive Law Refers to legal rules enacted by people in a political community or governing
body
Examples of Positive Law: Constitutions, Statutes, Regulations
Historical School School of Law that focuses on the origins of law and its evolution over time.
Emphasizes that law is shaped by peoples' customs and habits, not by divine
origins or universal principles
Sociological Jurisprudence The study of law with social sciences so as to become an effective social control
to prevent conflicting interests of members of society
Legal Realism Legal theory that emphasizes the role of judges in shaping legal outcomes and
the importance of social interests and public policy of law. (Naturalistic approach
based on empirical evidence)
Common Law emphasizes the role of Judges in determining the meaning of laws and how they apply
Civil law relies primarily on , while common law relies on legislation ; court decisions
Pros of Common Law 1. Laws can be concise
2. Stare Decisis:
• Let the prior decision stand
• Judges follow precedents whenever possibile
• Ensures certainty, stability, and predictability in law
Cons of Common Law 1. Volume of cases
2. Conflicting Precedents
3. Distinction between the holding and dicta
4. Rejection of precedents
Public Law • Constitutional Law
• Administrative Law
• Criminal Law
Private Law • Property law
• Contract law
• Tort law
Substantive Law The set of laws that define and regulate the rights, duties, and obligations of
people and entities in a society
Procedural Law Deals with the method and means by which substantive law is made and
administered
