Real Estate Council of Alberta Fundamentals Practice Exam

Which of the following statements best describes common law?

1. Legislation passed by governments

2. Laws established through court decisions

3. Guidelines created by professional associations

4. Policies enforced by regulatory agencies

The correct answer is: Laws established through court decisions

The statement that best describes common law is that it consists of laws established through court decisions. Common law is built upon judicial precedents, meaning that it evolves over time as judges interpret and apply legal principles to specific cases. This body of law is distinct from statutory law, which is created by legislative bodies. In common law systems, when a court makes a decision on a case, that decision can be cited as a precedent for future cases, thus shaping the law's development. This characteristic enables the law to adapt to new situations and societal changes over time, guided by the rulings of judges who analyze previous cases and apply reasoning that may influence similar future scenarios. The other options refer to different types of law or regulations that do not accurately capture the essence of common law. Legislation involves statutes passed by legislatures, guidelines are typically established by professional groups for their members, and policies enforced by regulatory agencies pertain to administrative laws. Each of these plays a role in the legal landscape but does not reflect the defining features of common law.