Introductory Business Law CLEP Prep Practice Exam

What is the principle of stare decisis?

1. All parties must agree to the terms of a contract before it can be enforced

2. A decision made by a court in one case must be followed by the court in similar cases

3. Violating a contract can result in civil and criminal penalties

4. A court will not enforce a contract that it believes to be unconscionable

The correct answer is: A decision made by a court in one case must be followed by the court in similar cases

The principle of stare decisis, which translates to "let the decision stand", is a fundamental concept in common law legal systems. It means that once a court has made a decision on a particular issue, that decision must be followed and applied by lower courts and future cases with similar facts. This helps to promote consistency and predictability in the legal system. Option A is incorrect because it refers to contract law, which is a different area of law. Option C is incorrect because it discusses consequences for violating a contract, rather than the principle of stare decisis. Option D is incorrect because it discusses the concept of unconscionability, which is also unrelated to stare decisis.