AppA
1. (p. 574) The executive branch of the government is responsible for overseeing the legal system.
2. (p. 574) The U.S. court system is organized solely at the federal and state levels.
3. (p. 574) Trial courts hear cases involving criminal and civil law.
4. (p. 574) Criminal law defines crimes, establishes punishments, and includes payment for personal injury.
5. (p. 574) Laws regulating marriage and the payment for personal injuries are part of our body of civil law.
6. (p. 574) Laws regulating marriage and personal injury liability are part of our body of criminal law.
7. (p. 574) Business law creates the legal framework for the enforcement of criminal statutes.
8. (p. 574) Appellate courts hear the appeals of decisions made at the trial court level brought by the losing party in
the case.
9. (p. 574) Businesses today prefer to have the government set the standards for acceptable behavior.
10. (p. 574) Business law refers to a body of regulations that, when enforced, provides a framework within which
business may be conducted.
11. (p. 574) Business law is enforceable by the courts.
12. (p. 574) Trial courts hear cases involving criminal and civil law.
13. (p. 574) The government’s involvement in governing the behavior of business people seems to be increasing.
14. (p. 574) Statutory law refers to written legislation.
15. (p. 574) Common law is the body of law established through legislative action by Congress.
16. (p. 574) Common law is based on the precedent of earlier court decisions.
17. (p. 574) The language used in statutory law often requires interpretation by the courts.
18. (p. 575) Law school students study statutory law rather than common law.
19. (p. 575) Lower courts must abide by the precedents set by higher courts.
20. (p. 575) Administrative agencies actually have a greater impact on businesses that courts do.
21. (p. 575) Administrative agencies are given the power by Congress to pass rules and regulations within a
specific area of authority.
25. (p. 574) Congress is responsible for passing legislation that is enforced by the judiciary.
26. (p. 574) Congress prohibited discrimination against people with physical disabilities when they enacted the
Americans with Disabilities Act. This is an example of common law.
27. (p. 574) When John Dough was brought to court accused of robbing a bank, he was prosecuted under civil
law.
28. (p. 574) Big Buxx National Bank has decided to change its advertising campaign. In the new campaign it will
announce that the bank has the lowest bank fees in the country even though it has not done research to discover
whether this is, in fact, true. Business law is the framework within which a competitor could take Big Buxx to
court in the event its claims are not true.
29. (p. 574) Decisions made by judges in previous cases are an important part of common law.
31. (p. 575) The Federal Trade Commission issues and interprets rules and regulations regarding business
activities. The Federal Trade Commission is a governmental administrative agency.
32. (p. 575, figure A.1) A public utility commission sets rates that can be charged by various public utilities to prevent
unfair pricing by regulated monopolies. These public utility commissions are examples of state administrative
33. (p. 576) The recent lawsuits against the tobacco industry are examples of tort law.
34. (p. 576) Unintentional behavior that causes harm or injury is an example of a tort.
35. (p. 576) An intentional tort is a willful act that results in injury.
36. (p. 576) Tort law involves criminal acts where victims can be awarded compensation.
37. (p. 576) Tort law includes product liability cases.
38. (p. 576) Negligence, in tort law, deals with behavior that causes intentional harm or injury.
39. (p. 576) The rule of strict product liability holds a firm liable for a defective product only if the firm knowingly
placed a hazardous product on the market.
40. (p. 576) Under the doctrine of product liability, gun manufacturers could be held liable for the costs of police
work and medical care brought about by gun violence.
41. (p. 576) Companies that produced lead-based paint 30 years ago are still subject to the strict product liability
provisions of federal tort law.
42. (p. 576) Producers of government approved drugs and chemicals cannot be sued by individuals who develop
side effects years later.
43. (p. 576–577) The Class Action Fairness Act is a first step toward setting limits on the amount of damages for
which companies are liable should their products harm consumers.
45. (p. 576) The tort law system is an example of statutory law.
46. (p. 576) A patient injured through the negligence of a health care provider can be awarded compensation
through the tort law system.
47. (p. 576) If an automobile manufacturer unknowingly sells a defective product that causes an injury, the
manufacturer is protected from product liability lawsuits.
48. (p. 576) With today’s widespread use of water-based house paint, no paint manufacturer can be sued for
damages today that are caused by lead-based paint that may still remain on the surface of some house and
apartment walls.
49. (p. 576) McDonald’s was the subject of a product liability suit charging that its food caused obesity, diabetes,
and other health problems in children.
50. (p. 578) A patent protects an inventor’s right to a product or process.
51. (p. 577) A patent gives inventors exclusive rights to their inventions for 20 years.
52. (p. 577) Patent owners are prohibited from selling or licensing their patent rights to others.
53. (p. 578) Developers of unique Internet-related business methods are not offered the protection of a patent.
54. (p. 578) Submarine patents are primarily designed to generate large patent royalties for their owners.
55. (p. 578) Recent legislation encourages the use of submarine patents.
56. (p. 578) The American Inventor’s Protection Act requires patent applications to be made public after 18 months
regardless of whether a patent has been granted.
57. (p. 578) A copyright protects an individual’s ownership rights to materials such as books, articles, photos, and
cartoons, which they created.
58. (p. 579) The recording industry’s legal action against individuals who download music without paying involves
59. (p. 579) If in the normal course of a job an employee creates a cartoon, the copyright belongs to the employer.
60. (p. 578) Copyrights are filed with the Library of Congress and involve large amounts of paperwork.
61. (p. 579) Copyrights can be passed on to the creator’s heirs.
62. (p. 579) The holder of an exclusive copyright may charge a fee to anyone who wishes to use the copyrighted
63. (p. 579) A trademark gives exclusive legal protection to a name, symbol, or design that distinguishes the goods
or services of one seller from those of competitors.
64. (p. 579) Unlike a patent, trademarks are not protected from infringement.
65. (p. 579) Trademarks generally belong to the owner forever, as long as they are properly registered and renewed
every 10 years.
66. (p. 577) Congratulations! You’ve just finished composing a song that will be the next big hit. You’re next step
is to apply for a patent through the U.S. Patent & Trademark Office.
67. (p. 578) The issue of business-method patents first surfaced when Amazon.com sued competitor Barnes &
Noble for violating the patent for its One-Click online purchasing system.
68. (p. 579) John Fielder is a renowned photographer of the Colorado Rocky Mountain region. Each of his works
are copyrighted. This means that anyone can use his photos so long as they give Mr. Fielder notice.
69. (p. 579) The Nike Swoosh and the McDonald’s Golden Arches are examples of corporate trademarks.
70. (p. 579) The Uniform Commercial Code establishes a standardized set of regulations for business transactions
in all 50 states.
71. (p. 579) Regulations covering sales, checks, bank deposits and bills of lading are contained in the Uniform
Commercial Code.
72. (p. 579) The Uniform Commercial Code has 11 articles, which contain laws covering business transactions.
73. (p. 579) The warranty you receive in the box with a DVD player is an implied warranty.
74. (p. 579) A warranty guarantees that the product sold will be acceptable for the purpose for which the buyer
intends to use it.
75. (p. 579) Batteries and tires sold with an express warranty provide the buyer with a guarantee regarding the life
of the product.
76. (p. 579) Implied warranties are guarantees legally imposed on the seller.
77. (p. 580) A full warranty limits the defects or mechanical problems that are covered in a product.
78. (p. 580) Generally a warranty is an important part of a product.
79. (p. 580) Negotiable instruments provide a conditional promise to pay a specified amount of money.
80. (p. 580) A check is an example of a negotiable instrument.
81. (p. 580) Negotiable instruments are forms of commercial paper.
82. (p. 580) When a payee signs the back of a check the payee’s signature is referred to as an endorsement.
83. (p. 579) When your New Jersey based mail-order computer company sells to a customer in Illinois, the
Uniform Commercial Code (UCC) will establish the legal requirements that your firm must follow.
84. (p. 579) The offer of a 3-year or 36,000-mile warranty by a car dealer on a new vehicle is an example of an
implied warranty.
85. (p. 579) The warranty you receive in the box with an iPod is an express warranty.
86. (p. 579) When Sears agrees to replace or repair your defective treadmill at no charge to you, Sears is fulfilling
a full warranty on your treadmill.
87. (p. 579) Your paycheck and the check you write to Old Navy for a pair of jeans are both examples of a
negotiable instrument.
88. (p. 579) When your younger brother signs the back of his paycheck and gives it to you in payment for money
he owes you, he has endorsed the check, and you may deposit it in your checking account.
89. (p. 580) A contract is a legally enforceable agreement between two or more parties.
90. (p. 580) Contract law is a set of laws that covers sales laws and other commercial laws.
91. (p. 580) In order for a contract to be legal, mutual acceptance is achieved when one party is under duress.
92. (p. 580) Under contract law, “duress” means the presence of coercion through force or threat of force.
93. (p. 580) Under contract law, “consideration” means something of value.
94. (p. 580–581) If a contract is to be legally binding, both parties must give consideration.
95. (p. 581) In order to be legally binding, a contract must be a written agreement between two or more parties.
96. (p. 581) Under contract law, a 15-year-old may be a party to a contract.
97. (p. 581) Under contract law, an agreement for the sale of goods worth $50 or more must be in writing.
98. (p. 581) A breach of contract occurs when one party fails to follow the terms of the contract.
99. (p. 581) Under contract law, “damages” are the monetary settlements awarded to a person who is injured by a
breach of contract.
100. (p. 581) “Specific performance” means that a person who violates a contract is required to live up to the
agreement even if money damages are adequate.