Quiz 1

Question 1

Which case established the rule that the U.S. Supreme Court has the power to decide whether a law is constitutional?

Answer 1

Marbury vs Madison

Question 2

What are the three branches of the U.S. government?

Answer 2

Legislative, Executive, Judicial

Question 3

What is “federal question” jurisdiction?

Answer 3

A federal court’s authority to hear cases that allege violations of the US Constitution, federal laws, or federal treaties

Question 4

What is an injunction?

Answer 4

A court’s order to do something or not do something

Question 5

Which Article of the Constitution sets out the powers and duties of the President?

Answer 5

Article II

Question 6

What is a grand jury?

Answer 6

The jury that determines if criminal charges should go forward

Question 7

What is the standard of proof for a civil claim?

Answer 7

Preponderance of the evidence

Question 8

What is the common law?

Answer 8

Law developed through court decisions

Question 9

A federal district court may hear a case only if:

Answer 9

There is diversity jurisdiction or the vase involves a federal question

Question 10

Generally, a case must be filed in the federal district court where either the defendant resides or most of the events that led to the lawsuit took place. This concept is known as:

Answer 10

Proper venue

Question 11

What did the Supreme Court rule in International Shoe Co. v. State of Washington Office of Unemployment Compensation and Placement?

Answer 11

A corporation is subject to jurisdiction in any state with which it has “minimum contacts”

Question 12

Pursuant to the doctrine of stare decisis:

Answer 12

A lower court must uphold decisions reached by higher courts of appeal or the Supreme Court

Question 13

What is the distinction between the holding and the rule of a case?

Answer 13

The holding is the answer to the issue presented, and the rule is what judges and lawyers can take from a case to help guide future decisions and the future representation of clients

Question 14

Which constitutional amendments address criminal investigations and prosecutions?

Answer 14

Amendments 4, 5, 6, and 8

Question 15

What is voir dire?

Answer 15

Questioning potential jurors before trial

Question 16

Barry sues his former employer Deborah for sales commissions he is owed, but that have not been paid. The papers are served, but Deborah does nothing. She says that when the case “gets to court, [she] can tell the judge that the whole thing is bogus.” Three months go by, and Deborah has made no response. What is the outcome for Deborah?

Answer 16

Barry will get a judgement against Deborah

Question 17

Which of the following is not a method of discovery?

Answer 17

Counterclaim

Question 18

When does a court order summary judgment?

Answer 18

When there is no genuine issue of material fact, and one party is entitled to judgement as a matter of law

Question 19

What are interrogatories?

Answer 19

Written questions answered in writing under oath by a party to a lawsuit

Question 20

What does a court decide on appeal?

Answer 20

Whether the trial court committed errors of law

Question 21

What is mediation-arbitration?

Answer 21

A type of ADR in which the parties attempt to mediate the case and if they do not resolve the dispute it is submitted for arbitration

Question 22

When may the parties to a dispute agree to mediation?

Answer 22

At any time

Question 23

What is the name of the order issued by the Supreme Court when it agrees to hear a case?

Answer 23

Writ of certiorari

Question 24

What is judicial arbitration?

Answer 24

Arbitration that results in a binding award only if one party does not appeal

Question 25

A judgement entered by a trial judge that reverses a jury verdict because the judge finds that there was no factual basis for the verdict was contrary to law is:

Answer 25

A judgement notwithstanding the verdict

Question 26

a case is remanded when:

Answer 26

An appellate court sends a case back to the trial court so the case can be heard again taking into account the appellate court’s decision

Question 27

Which of the following is not a true statement regarding a liquidated damages clause in a contract?

Answer 27

If the parties agree, a liquidated damages clause may state any predetermined amount of money that must be paid as damages if a party breaches the contract

Question 28

What is the difference between a limitation of liability clause and a liquidated damages clause?

Answer 28

Liquidated damages must be based on a rough estimate of damages resulting from a breach of contract. A limitation of liability …

Question 29

Suzie, an author, sued her publisher for failure to pay royalties the publisher promised. The publisher believed that it was not obligated to pay those royalties because Suzie had not met her contract deadlines, so she had breached their contract. After Suzie filed a complaint against her publisher, the publisher’s best response is to

Answer 29

Respond to the complaint and file a counterclaim

Question 30

What is a sole proprietorship?

Answer 30

An unincorporated business with only one owner

Question 31

What is the document that must be filed in order to form a LLC?

Answer 31

Articles of organization

Question 32

Darla has been hired to paint a room in her neighbor’s house for $500. In order to get the job done more quickly, she asks her friend Jennifer to help her, saying “I’ll pay you for your time.” Jennifer agrees. When the job is done, Darla offers Jennifer $100 for her time. Jennifer says she wants $250, because “I was your partner, and we’re supposed to split everything 50-50.” Was Jennifer Darla’s partner?

Answer 32

No, because there is no evidence of intent to be partners

Question 33

What does a partnership have to do in order to be a LLP?

Answer 33

File a declaration or statement with the state authorities

Question 34

In most states, how long does a corporation exist?

Answer 34

Until dissolved, unless otherwise stated in the articles of incorporation

Question 35

Yan and Joel form a corporation, but do not elect to make it a Subchapter S corporation. Each of them owns 50% of the stock. After their first year of doing business, the corporation has made a profit of $50,000. Yan and Joel set aside $15,000 for a cash reserve, and split the remaining $35,000 equally. Which of the following best describes the income tax liabilities from this situation?

Answer 35

The corporation will pay taxes on the $50,000 in profits and Yan and Hoel will have to pay taxes on the $17,500 that they earned

Question 36

Yan and Joel form an S corporation. Each of them owns 50% of the stock. After their first year of doing business, the corporation has made a profit of $50,000. Yan and Joel set aside $15,000 for a cash reserve, and split the remaining $35,000 equally. Which of the following best describes the income tax liabilities from this situation?

Answer 36

Yan and Joel will each have to pay taxes on $25,000, one half of the profits

Question 37

What is a “hostile takeover?”

Answer 37

An attempt where the management does not approve

Question 38

“Piercing the corporate veil” refers to:

Answer 38

Holding the owners of a corporation personally liable for corporate obligations

Question 39

Do shareholders have any role in managing a corporation?

Answer 39

Yes, because shareholders elect the members of the board of directors

Question 40

What is a public benefit corporation?

Answer 40

A for-profit corporation that has a purpose to create material positive benefit to society or the environment

Question 41

What is the maximum number of shareholders a Subchapter S corporation may have?

Answer 41

100, all of whom are US citizens

Question 42

T/F: LLCs may choose to be taxed as a pass-through entity or may elect to be taxed as a corporation

Answer 42

True

Question 43

T/F: Corporate bylaws are public documents that must be filed with the appropriate state corporation

Answer 43

False

Question 44

T/F: An advantage of operating as a sole proprietorship is that personal liability for any business losses is limited to the owner’s investment in the business.

Answer 44

False

Question 45

T/F: To qualify for Subchapter S status, a supermajority of the shareholders must consent to the Subchapter S designation.

Answer 45

False - must be unanimous

Question 46

T/F: Shareholders are the owners of the corporation and part of their responsibility as such is to elect the corporate officers.

Answer 46

False - the board of directors does this