CIMA BA4 · Chapter 9
General principles of law: legal systems and sources of law MCQs with Answers
10 multiple-choice questions on General principles of law: legal systems and sources of law for CIMA BA4 Fundamentals of Ethics, Corporate Governance and Business Law. Try each one before revealing the answer and explanation.
Practise this chapter interactivelyQuestion 1
Under English law, a business sues a supplier for failing to deliver goods as agreed in their contract. Which statement correctly describes this case?
- A) It is a civil case in which the claimant seeks a remedy, such as damages, for breach of contract
- B) It is a criminal case brought by the state to punish the supplier
- C) The supplier can only be held liable if the case is proved beyond reasonable doubt
- D) It must be prosecuted by the Crown Prosecution Service on the business's behalf
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Answer: A) It is a civil case in which the claimant seeks a remedy, such as damages, for breach of contract
Breach of contract is a matter of civil law: the injured party (the claimant) brings the action against the defendant to obtain a remedy such as damages, not to have the defendant punished. Criminal cases are brought by the state, usually through the Crown Prosecution Service, and require proof beyond reasonable doubt. In a civil case the standard of proof is the balance of probabilities.
Question 2
In a civil case under English law, what is the standard of proof?
- A) Beyond reasonable doubt
- B) Beyond all possible doubt
- C) On the balance of probabilities
- D) On the evidence of at least two witnesses
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Answer: C) On the balance of probabilities
In civil cases the claimant must prove the case on the balance of probabilities, meaning it is more likely than not. In criminal cases the prosecution must prove guilt beyond reasonable doubt, a higher standard because a person's liberty may be at stake.
Question 3
Under English law, which part of a judgment creates a binding precedent for lower courts?
- A) The obiter dicta
- B) The dissenting judgment
- C) The headnote written by the law reporter
- D) The ratio decidendi
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Answer: D) The ratio decidendi
The ratio decidendi is the legal reasoning necessary for the decision and is binding on lower courts in later cases with similar material facts. Obiter dicta are things said by the way and are only persuasive. Dissenting judgments and headnotes are not binding.
Question 4
Which of the following is an example of delegated (secondary) legislation in the UK?
- A) An Act of Parliament
- B) A statutory instrument made by a government minister under powers granted by an Act of Parliament
- C) A decision of the Supreme Court
- D) A textbook written by a leading academic
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Answer: B) A statutory instrument made by a government minister under powers granted by an Act of Parliament
Delegated legislation is law made by a person or body under authority given by Parliament in an enabling (parent) Act. Statutory instruments, byelaws and Orders in Council are the main forms. An Act is primary legislation, court decisions are case law, and textbooks are at most persuasive.
Question 5
A judge interprets a statute by looking at what problem the Act was intended to remedy and interpreting it to address that problem. Which rule of statutory interpretation is being applied?
- A) The mischief rule
- B) The literal rule
- C) The golden rule
- D) The ejusdem generis rule
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Answer: A) The mischief rule
The mischief rule, from Heydon's Case, asks what the law was before the Act, what defect (mischief) it was intended to remedy, and interprets the Act to suppress that mischief. The literal rule gives words their plain meaning, the golden rule modifies a literal meaning to avoid absurdity, and ejusdem generis is a linguistic rule for general words following specific ones.
Question 6
Which of the following is an advantage of judicial precedent as a source of law?
- A) It allows judges to ignore earlier decisions they disagree with
- B) It means that law is always developed quickly in response to new issues
- C) It requires no written records of decisions
- D) It provides certainty, because similar cases are decided in a similar way
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Answer: D) It provides certainty, because similar cases are decided in a similar way
Binding precedent promotes certainty and consistency, so people can predict how the courts will decide. Its disadvantages include rigidity, since lower courts must follow decisions they may consider wrong, and slow, case-dependent development. Precedent depends heavily on law reporting.
Question 7
Why was equity developed in English law?
- A) To replace Acts of Parliament with judge-made rules
- B) To create criminal offences not covered by statute
- C) To provide fairness where the strict rules of common law produced unjust results or inadequate remedies
- D) To apply religious law in commercial disputes
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Answer: C) To provide fairness where the strict rules of common law produced unjust results or inadequate remedies
Equity developed through the Court of Chancery to mitigate the rigidity of the common law, which offered only damages and could produce unfair outcomes. It introduced discretionary remedies such as specific performance, injunctions and rescission. Where common law and equity conflict, equity prevails.
Question 8
Under English law, which statement about the relationship between common law and equity is correct?
- A) Where common law and equity conflict, common law prevails because it is the older system
- B) Where a rule of common law conflicts with a rule of equity, equity prevails
- C) Equity has been abolished, so equitable remedies are no longer available
- D) Equitable remedies are available as of right to any claimant who proves a breach of contract
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Answer: B) Where a rule of common law conflicts with a rule of equity, equity prevails
Since the Judicature Acts 1873-75 the same courts administer both common law and equity, and where the two conflict, equity prevails. Equity has not been abolished: remedies such as specific performance, injunctions and rescission remain available. They are discretionary, unlike common law damages, which are available as of right once a breach of contract is proved.
Question 9
Under English law, which of the following statements about the hierarchy of the courts and precedent is correct?
- A) The High Court binds the Court of Appeal
- B) Decisions of the Supreme Court bind all lower courts, but the Supreme Court may depart from its own previous decisions where it appears right to do so
- C) Magistrates' court decisions create binding precedents for the Crown Court
- D) The Supreme Court is always bound by its own previous decisions
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Answer: B) Decisions of the Supreme Court bind all lower courts, but the Supreme Court may depart from its own previous decisions where it appears right to do so
The Supreme Court (formerly the House of Lords) is at the top of the domestic hierarchy and binds all lower courts. Since the 1966 Practice Statement it may depart from its previous decisions when it appears right to do so. Lower courts do not bind higher ones, and magistrates' courts do not create binding precedent.
Question 10
Under English law, a seller fails to transfer a piece of land as agreed in a contract. The buyer waits two years, without good reason, before asking the court to order specific performance. What is the most likely outcome?
- A) The court must order specific performance, because the seller is clearly in breach
- B) The buyer has lost every remedy, because the limitation period for contract claims is two years
- C) The court will order specific performance only if the buyer also proves that the seller acted fraudulently
- D) The court may refuse specific performance, because equitable remedies are discretionary and delay defeats equity, but the buyer can still claim damages at common law
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Answer: D) The court may refuse specific performance, because equitable remedies are discretionary and delay defeats equity, but the buyer can still claim damages at common law
Specific performance is an equitable remedy, so it is discretionary and governed by the maxims of equity, including 'delay defeats equity': a claimant who delays unreasonably may be refused it, even for a contract for land where it would otherwise normally be granted. Damages for breach of contract are a common law remedy available as of right. The limitation period for a simple contract is six years under the Limitation Act 1980, not two, and fraud is not a requirement for specific performance.