Business Law - Ch. 2 | Comprehensive Questions and Answers Latest Updated 2024/2025
With 100% Verified Solutions
Jurisdiction - A court's power to hear a case and to issue a decision binding on the parties.
In order to render a binding decision in a civil case, a court must have *subject matter jurisdiction* and
*in personal jurisdiction* (*in rem jurisdiction*).
Even if a court has jurisdiction, applicable venue requirements must also be satisfied in order for the
case to proceed in that court.
Subject Matter Jurisdiction - A court's power to decide the type of dispute involved in the case.
Criminal courts cannot hear civil matters.
In Personam/In Rem Jurisdiction - Based on the residence, location, or activities of the defendant. A
state court has this jurisdiction over defendants who are citizens or residents of the state (even if
situated out-of-state), who are within the state's borders when process is served on them (even if
nonresidents),1 or who con- sent to the court's authority (for instance, by entering the state to defend
against the plaintiff's claim).
The same principle governs federal courts' in personam jurisdiction over defendants.
Long Arm Statutes - Under these statutes, nonresident individuals and businesses become subject to the
jurisdiction of the state's courts by, for example, doing business within the state, contracting to supply
goods or services within the state, or committing a tort (a civil wrong) within the state.
Minimum Contacts - Must involve acts by which the defendant purposefully avails himself of the
privilege of conducting activities within the forum state, thereby invoking the benefits and protection of
its laws.
Concurrent Jurisdiction - Both state and federal courts have jurisdiction over the case.
