Introductory Business Law CLEP Prep Practice Exam

Which of the following is a source of law?

1. Administrative agency rule

2. Judicial precedent

3. Opinion of non-attorney

4. State legislature

The correct answer is: Administrative agency rule

The inclusion of administrative agency rules as a source of law is based on the extensive framework provided by administrative law. Administrative agencies are created by legislative bodies and are empowered to create regulations that have the force of law. These rules implement and interpret statutes passed by legislatures, filling in the details necessary for their enforcement. This makes administrative agency rules a vital source of law because they address specific regulatory needs across a wide range of industries—from environmental protection to labor relations. The process through which these agencies create rules usually involves public notice and the opportunity for public comment, ensuring that the rules are not only laws but also reflect public interest and accountability. While judicial precedents, created through court decisions, are also significant as they establish legal principles and interpretations that influence future cases, they stem from judicial interpretations rather than from the rule-making authority of an administrative body. An opinion of a non-attorney does not constitute a source of law, as it reflects personal views rather than legal authority. State legislatures, on the other hand, create statutes, contributing another essential source of law but distinct from the regulatory framework established by administrative agencies.