Gibson, Business Law 11^th Edition

Chapter 1: Legal Foundations

LO1.1 Explain the importance of the law as a regulatory tool in society and business

Multiple choice: Choose the one alternative that best completes the statement or answers the question.

1. Which of the statements below best describes law?

1. Law is a state-enforced tool used to control the economic and social behaviour of people.
2. Law is a set of parliamentary rules that dictate daily social and family behaviour.
3. Law is based on centuries-old legislature and civil law systems.
4. Law is a mechanism used by the state to dictate and enslave society.

Difficulty: Basic

Topic: What is law

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.1 Explain the importance of the law as a regulatory tool in society and business.

1. Which of the following is considered a main source of Australian law?
2. Case law, which is found in decisions of the US Supreme Court.
3. Legislation passed by State and Commonwealth parliaments.
4. The common law and statute law of England that has not been repealed.
5. All of the above.

Difficulty: Basic

Topic: Where is the law found

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.1 Explain the importance of the law as a regulatory tool in society and business

1. Which one of the following terms does not describe common law?
2. Precedent.
3. Statute law.
4. Case law.
5. Unwritten law.

Difficulty: Basic

Topic: Where is the law found

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.1 Explain the importance of the law as a regulatory tool in society and business.

1. In the event that common law and statute law conflict with one another:
2. Statute law will prevail.
3. Either could prevail depending on the circumstances of the case.
4. Common law will prevail.
5. Statute law prevails but only if the judge allows it to.

Difficulty: Moderate

Topic: Where is the law found

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.1 Explain the importance of the law as a regulatory tool in society and business.

True/False: Identify whether the statement is True or False.

2. Australia’s common law legal system consists of common law and statute law.

1. True
2. False

Difficulty: Basic

Topic: Are rules always law

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.1 Explain the importance of the law as a regulatory tool in society and business.

1. The Attorney-General is a main source of law within Australia.
2. True
3. False

Difficulty: Moderate

Topic: Where is the law found

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.1 Explain the importance of the law as a regulatory tool in society and business.

1. Laws made by parliaments are called statute law.
2. True
3. False

Difficulty: Basic

Topic: Where is the law found

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.1 Explain the importance of the law as a regulatory tool in society and business.

Essay: Write your answer in the space provided or on a separate sheet of paper.

1. How would you describe the law?

Difficulty: Basic

Topic: Where is the law found

Standard/Graduate Attribute AACSB: Analytical thinking

Learning Outcome: LO 1.1 Explain the importance of the law as a regulatory tool in society and business.

1. Are rules always laws? If not, explain how they differ?

Difficulty: Basic

Standard/Graduate Attribute AACSB: Analytical thinking

Topic: Where is the law found

Learning Outcome: LO 1.1 Explain the importance of the law as a regulatory tool in society and business.

To try to determine when a ‘rule’ becomes ‘law’ is not always an easy task. It is necessary to consider:

• where the rule comes from
• how an offender will be dealt with when the rule is broken
• how the offender will be punished and
• by whom.

LO1.2 Identify and explain the characteristics of a legal system and the main sources of Australian Law

Multiple choice: Choose the one alternative that best completes the statement or answers the question.

1. Which of the following characteristics describes an effective and acceptable legal system?
2. Seen to be fair by most people.
3. Able to change and adapt to changing circumstances.
4. Easy for people to learn about.
5. All of the above.

Difficulty: Complex

Topic: What are the characteristics of a legal system

Standard/Graduate Attribute AACSB: Reflective thinking

Learning Outcome: LO 1.2 Identify and explain the characteristics of a legal system and the main sources of Australian law.

1. In the context of the common law system, the term ‘civil law’ implies:
2. A legal action incorporating Indigenous laws.
3. A legal action brought by an individual against another.
4. A legal action brought by the state against an individual.
5. A legal action brought by the crown against an individual.

Difficulty: Moderate

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of laws in Australia .

1. When describing a nation’s legal system, the term ‘common law’ can be distinguished from which of the following terms?
2. Equity law.
3. Civil law.
4. Canon law.
5. Statute law.

Difficulty: Moderate

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of laws in Australia.

Answer: B

1. Which of the following is an example of civil law?
2. Negotiable instruments.
3. Criminal law.
4. Constitutional law.
5. Administrative law.

Difficulty: Moderate

Topic: What are the major types of laws found in the Australian legal system Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of laws in Australia.

1. In Australia, it is expected that everyone has access to the law and, therefore, knows the law.
2. True
3. False

Difficulty: Basic

Topic: What are the characteristics of a legal system

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.2 Identify and explain the characteristics of a legal system and the main sources of Australian law.

1. In disputes between equity and criminal law, equity prevails over criminal law.
2. True
3. False

Difficulty: Moderate

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of laws in Australia.

1. For civil law, the emphasis is on remedies, while in common law, the emphasis is on penalties.
2. True
3. False

Difficulty: Basic

Topic: What are the major types of laws found in the Australian legal system Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1. 3 Identify and explain the main types of laws in Australia.

Answer: B

1. The main objective of criminal law is to seek compensation for the victim.
2. True
3. False

Difficulty: Basic

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1. 3 Identify and explain the main types of laws in Australia.

1. Describe the relationship between law and justice.

Difficulty: Basic

Topic: What are the characteristics of a legal system

Standard/Graduate Attribute AACSB: Analytical thinking

Learning Outcome: LO 1.2 Identify and explain the characteristics of a legal system and the main sources of Australian law.

LO1.3 Identify and explain the main types of law in Australia

Multiple choice: Choose the one alternative that best completes the statement or answers the question.

1. Which of the following statements about common law are true, except?
2. Common law rights are enforceable at any time.
3. Common law is a comprehensive system.
4. Common law rights are valid against the whole world.
5. Common law remedies are discretionary.

Difficulty: Basic

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Application of Knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of law in Australia.

1. The law of equity originated as a collection of rules and principles that were developed and administered by which of the following bodies?
2. The British Parliament.
3. The Court of Chancery.
4. The Privy Council.
5. The Common Law Courts.

Difficulty: Basic

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Application of Knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of law in Australia.

1. Equity law:
2. Provides a wider range of remedies than the common law.
3. Complements the common law system.
4. Is based upon the concept of fairness.
5. All of the above.

Difficulty: Basic

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Application of Knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of law in Australia.

1. The reason statute law takes priority over the common law is because:
2. Politicians are accountable to the electorate.
3. Common law principles come from old English cases.
4. Politicians are more accessible to the electorate.
5. Judges are accountable to the parliament.

Difficulty: Moderate

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Reflective thinking

Learning Outcome: LO 1.3 Identify and explain the main types of law in Australia.

1. Which of the following statements is true?
2. The law of equity applies to all civil disputes.
3. The law of equity only applies to criminal matters.
4. The law of equity does not apply to all criminal matters.
5. The law of equity does not apply to all civil disputes.

Difficulty: Basic

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Application of Knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of law in Australia.

1. Which of the following statements is not true?
2. Equity applies to all civil disputes.
3. Equity provides a wider range of remedies than the common law.
4. Equitable remedies have to be specifically requested.
5. Equity is a discretionary remedy.

Difficulty: Basic

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Application of Knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of law in Australia.

1. The Australian Constitution gives the Federal Parliament exclusive power to make laws with respect to:
2. Education.
3. Business.
4. Health.
5. Defence.

Difficulty: Basic

Topic: What are the commonwealth and state powers

Standard/Graduate Attribute AACSB: Application of Knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of law in Australia.

1. Equity is a system of fairness that applies to all legal disputes in Australia.
2. True
3. False

Difficulty: Moderate

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Application of Knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of law in Australia.

1. Common law and equity law are administered in different areas of the Supreme Court.
2. True
3. False

Difficulty: Moderate

Topic: What are the major types of laws found in the Australian legal system

Standard/Graduate Attribute AACSB: Application of Knowledge

Learning Outcome: LO 1.3 Identify and explain the main types of law in Australia.

Essay: Write your answer in the space provided or on a separate sheet of paper.

1. Why do you think Australian states are reluctant to give up their legislative powers?

Difficulty: Complex

Topic: What are the commonwealth and state powers

Standard/Graduate Attribute AACSB: Analytical thinking

Learning Outcome: LO 1.4 Explain the division of powers under the Commonwealth Constitution.

1. Discuss the relationship between common law and equity.

Difficulty: Moderate

Topic: What are the commonwealth and state powers

Standard/Graduate Attribute AACSB: Application of Knowledge

Learning Outcome: LO 1.3 Explain the division of powers under the Commonwealth Constitution.

LO1.4 Explain the division of powers under the Commonwealth Constitution

Multiple choice: Choose the one alternative that best completes the statement or answers the question

1. Which of the following is not a concurrent power of the Commonwealth under s 51 of the Commonwealth Constitution?
2. Insurance.
3. Customs.
4. Industrial relations.
5. Banking.

Difficulty: Moderate

Topic: What are the commonwealth and state powers

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.4 Explain the division of powers under the Commonwealth Constitution.

1. Section 109 of the Commonwealth Constitution provides that where there is an inconsistency between a Commonwealth law and a State law:
2. The law that was made first shall prevail.
3. The Commonwealth law shall prevail.
4. The State law shall prevail.
5. The law which was made most recently shall prevail.

Difficulty: Basic

Topic: The division of powers under the Constitution

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.4 Explain the division of powers under the Commonwealth Constitution.

1. What was the reason for the court’s decision in the case of O’Sullivan v Noarlunga Meat Ltd (No1) [1954] HCA 29?
2. The company was not registered.
3. The company was only registered in South Australia.
4. The state law did not apply under s 51.
5. There was an inconsistency between the state law and the Commonwealth law.

Difficulty: Complex

Topic: The division of powers under the Constitution

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.4 Explain the division of powers under the Commonwealth Constitution.

1. In the Australian context, what does the division of power refer to?
2. The division of power between the Commonwealth and the States.
3. The division of power between Britain and Australia.
4. The division of power between the legislature and the executive.
5. The division of power between the courts and the government.

Difficulty: Basic

Topic: The division of powers under the Constitution

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.4 Explain the division of powers under the Commonwealth Constitution.

1. Which of the following statements about the Commonwealth of Australia is correct?
2. The Commonwealth of Australia has exclusive powers in respect of some aspects of government.
3. The Commonwealth of Australia has all those powers with regard to government in Australia that are not exercised by the States.
4. The Commonwealth of Australia has overriding powers in all aspects of Australian government.
5. The Commonwealth of Australia has reserve powers, which override all aspects of Australian government.

Difficulty: Moderate

Topic: The division of powers under the Constitution

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.4 Explain the division of powers under the Commonwealth Constitution.

1. The Constitution gives the Federal Parliament absolute power to make laws to govern Australia.
2. True
3. False

Difficulty: Basic

Topic: The division of powers under the Constitution

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.4 Explain the division of powers under the Commonwealth Constitution.

Essay: Write your answer in the space provided or on a separate sheet of paper.

1. Explain why the plaintiff was successful in the case of Wallis v Downard-Pickford (North Queensland) Pty Ltd [1994] HCA 17?

Difficulty: Complex

Topic: The division of powers under the Constitution

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.4 Explain the division of powers under the Commonwealth Constitution.

LO1.5 Explain the ways in which the High Court has expanded Commonwealth powers at the expense of the states

Multiple choice: Choose the one alternative that best completes the statement or answers the question

1. In order to amend the Commonwealth Constitution, which of the following is not one of the requirements that must be satisfied?
2. The amendment must be approved by an absolute majority of members in both Houses of Parliament or be passed twice in either the House of Representatives or the Senate.
3. The amendment must be approved by a majority of voters in a majority of the States and by the Governor General.
4. The amendment must be approved by a majority of Australian voters.
5. The amendment must be approved by the High Court of Australia.

Difficulty: Moderate

Topic: The r ole of the high court in federal expansion

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.5 Explain the ways in which the High Court has expanded Commonwealth powers at the expense of the states.

1. The decision of the High Court in the case Commonwealth v Tasmania (1983) HCA 21, was based upon which head of constitutional power?
2. The reserve power.
3. The external affairs power.
4. The environmental power.
5. The conciliation and arbitration power.

Difficulty: Moderate

Topic: The role of the high court in federal expansion

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.5 Explain the ways in which the High Court has expanded Commonwealth powers at the expense of the states.

1. Why have only eight Constitution amendments been successfully passed since Federation?
2. Because the proposed amendments must be approved by a majority of voters in a majority of States.
3. Because the proposed amendments must be passed by a majority of voters or a majority of States.
4. Because the approval of the Governor-General on behalf of the Queen is required.
5. Because the proposed amendments must be passed by an absolute majority of all elected members in both Houses of Parliament.

Difficulty: Moderate

Topic: The role of the high court in federal expansion

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.5 Explain the ways in which the High Court has expanded Commonwealth powers at the expense of the states.

1. When a Commonwealth law is cumulative upon state law, the state law must be followed.
2. True
3. False

Difficulty: Moderate

Topic: The role of the high court in federal expansion

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.5 Explain the ways in which the High Court has expanded Commonwealth powers at the expense of the states.

1. The attitude of the High Court of Australia to the interpretation of the Constitution has been to expand the power of the Commonwealth Government.
2. True
3. False

Difficulty: Moderate

Topic: The role of the high court in federal expansion

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.5 Explain the ways in which the High Court has expanded Commonwealth powers at the expense of the states.

Essay: Write your answer in the space provided or on a separate sheet of paper.

1. In a number of constitutional cases that have been heard by the High Court, the powers of the Federal Government have been expanded at the expense of the States. Explain fully why the High Court has taken this approach; and in your answer, provide one case example to support your argument and discussion.

Difficulty: Complex

Topic: The r ole of the high court in federal expansion

Standard/Graduate Attribute AACSB: Reflective Thinking

Learning Outcome: LO 1.5 Explain the ways in which the High Court has expanded Commonwealth powers at the expense of the states.

LO1.6 Define the doctrine of the separation of powers and explain its purpose

Multiple choice: Choose the one alternative that best completes the statement or answers the question

1. According to the doctrine of the separation of powers, which branch or arm of government actually makes the law?
2. The Legislature.
3. The Judiciary.
4. The Executive.
5. All of the above.

Difficulty: Basic

Topic: What does the separation of powers mean

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.6 Define the doctrine of the separation of powers and explain its purpose.

1. Which of the following statements supports the philosophy of the doctrine of separation of powers?
2. The power to interpret law is exercised by the Judiciary.
3. One limb of Government should not exercise the functions of another limb.
4. The Legislature and the Executive must remain separate.
5. All of the above.

Difficulty: Complex

Topic: What does the separation of powers mean

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.6 Define the doctrine of the separation of powers and explain its purpose.

1. The doctrine of separation of powers:
2. Is a constitutional requirement of federalism in Australia.
3. Is based on the idea that no one person or body should exercise more than one power.
4. Requires that there is a separation of power between the state and federal governments.
5. Refers to the division of power between the House of Representatives and the Senate.

Difficulty: Complex

Topic: What does the separation of powers mean

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.6 Define the doctrine of the separation of powers and explain its purpose.

1. Which section of the Australian Constitution vests Judicial Power in the High Court of Australia?
2. Section 71 of the Constitution.
3. Section 51 of the Constitution.
4. Section 1 of the Constitution.
5. Section 61 of the Constitution.

Difficulty: Basic

Topic: What does the separation of powers mean

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.6 Define the doctrine of the separation of powers and explain its purpose.

1. The supreme law-making power in Australia is exercised by:
2. The Parliament.
3. The High Court.
4. The Government.
5. The Ministers in the Cabinet.

Difficulty: Moderate

Topic: What does the separation of powers mean

Standard/Graduate Attribute AACSB: Analytical thinking

Learning Outcome: LO 1.6 Define the doctrine of the separation of powers and explain its purpose.

1. Separation of powers is a reference to the division of powers between the Commonwealth and the states.
2. True
3. False

Difficulty: Basic

Topic: What does the separation of powers mean

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.6 Define the doctrine of the separation of powers and explain its purpose.

1. Executive power in Australia is vested in the Queen.
2. True
3. False

Difficulty: Moderate

Topic: What does the separation of powers mean

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.6 Define the doctrine of the separation of powers and explain its purpose.

1. The High Court interprets legislation created by Parliament.
2. True
3. False

Difficulty: Basic

Topic: What does the separation of powers mean

Standard/Graduate Attribute AACSB: Application of knowledge

Learning Outcome: LO 1.6 Define the doctrine of the separation of powers and explain its purpose.

Essay: Write your answer in the space provided or on a separate sheet of paper.

1. Describe the three arms or functions of government, who they are held by and whether the separation is real or artificial.

Difficulty: Moderate

Topic: What does the separation of powers mean

Standard/Graduate Attribute AACSB: Reflective thinking

Learning Outcome: LO 1.6 Define the doctrine of the separation of powers and explain its purpose.

• Legislative power, to enact or make law, which is held by Parliament.
• Executive power, formulation of policy and administration, which is held by the federal Executive Council or Cabinet.
• Judicial power, for interpretation application and enforcement of the law, which is held by the Courts.

The Australian Constitution provides for the separation between the legislative, executive and judicial powers of the Commonwealth. This gives effect to the doctrine of separation of powers.

In theory, the doctrine of the separation of powers means that no one person or body shall exercise more than one power and is a limitation on the powers of the Commonwealth Parliament. However, in reality, there is no separation between the executive and legislative functions of federal or state government in Australia. This is because members of the executive must also be elected members of Parliament.

However, the separation between the judicature on the one hand and the executive and legislature is strict. Judges are not allowed to be members of either the executive or legislative arms of government. There is then a clear separation of the judicial power from both the executive and legislative powers.

1. Do you think it wise that judges in Australia are appointed as opposed to being elected by the people or community?

Difficulty: Complex

Topic: What does the separation of powers mean

Standard/Graduate Attribute AACSB: Reflective thinking

Learning Outcome: LO 1.6 Define the doctrine of the separation of powers and explain its purpose.