Business Law Final Exam

Name: ID:

Email:

Multiple Choice

Identify the letter of the choice that best completes the statement or answers the question.

In order to provide stability to a legal system, courts use prior cases as a guide for deciding similar new cases. These prior cases are known as

a.	precedents	c.	jurisdiction.
b.	equity.	d.	statutes.

The division of powers between people and their governments protecting U.S. citizens from government actions is set forth in the

a.	U.S. Constitution.
b.	Bill of Rights.
c.	first ten amendments of the U.S. Constitution.
d.	both b and c.

The third stage in the growth of law is

a.	personal revenge.
b.	substitution of damages for revenge.
c.	leader or central authority gives power to a system of courts.
d.	leader or central authority sets down a constitution.

Laws made by administrative agencies are often called

a.	ordinances.	c.	standards.
b.	rules and regulations.	d.	guidelines.

The subject area of business law would include which of the following topics?

a.	commercial torts	c.	criminal conspiracies to fix prices
b.	contracts	d.	all of the above

Under the Constitution, members of Congress are elected on the basis of

a.	population of the state.
b.	existence as a state.
c.	selection by all citizens in national elections.
d.	both a (for Representatives) and b (for Senators).

The Constitution may be amended by

a.	two-thirds majority vote in both the Senate and the House.
b.	ratification by the legislatures of three-fourths of the states.
c.	ratification by conventions in three-fourths of the states.
d.	all of these.

Which of these documents is not considered a basis of the U.S. Bill of Rights?

a.	Magna Carta
b.	Petition of Rights
c.	Britain's Bill of Rights
d.	All of the above are considered bases for the U.S. Bill of Rights

Personal, natural rights guaranteed by the Constitution are known as

a.	legal rights.	c.	peripheral rights.
b.	civil rights.	d.	due process rights.

10.

Municipal courts are usually divided into

a.	criminal divisions.	c.	both a and b.
b.	traffic divisions.	d.	none of these.

11.

Which of the following is not a court with a specialized jurisdiction?

a.	probate court	c.	juvenile court
b.	small claims court	d.	trial court

12.

Which level of appellate court can substitute its factual determination for that of the jury that heard the case?

a.	a state supreme court
b.	a federal appellate court
c.	the U.S. Supreme Court
d.	None of these can do so.

13.

Adan and two other attorneys in his law firm prepared an appellate brief for submission to an appellate court. After reviewing the case and listening to attorneys' arguments, the appellate court reached a decision that improper evidence was placed before the jury. As a consequence it remanded the case. This means that it

a.	upheld the lower court's decision.
b.	sent the case to the state supreme court.
c.	sent back to the trial court for corrective action or possibly a new trial.
d.	none of the above.

14.

In the federal court system who summons witnesses, maintains court order, and takes the necessary steps to carry out court judgments?

a.	judge's staff	c.	prosecutor
b.	marshals	d.	all of the above

15.

Which Article of the U.S. Constitution provides for the creation of the federal judicial system?

a.	I	c.	III
b.	II	d.	IV

16.

Municipal courts administer

a.	state fish and game licenses.	c.	special agency regulations.
b.	minor state criminal laws.	d.	city ordinances.

17.

Under common law, how were those below the age of seven treated with regard to criminal intent?

a.	Their criminal intent had to be proven in court.
b.	They were presumed incapable of forming criminal intent.
c.	They were treated the same as any other alleged criminal.
d.	none of these

18.

A crime is a punishable offense committed against

a.	the courts.	c.	a victim.
b.	society.	d.	all of the above.

19.

Rick was arrested last Friday, but the arresting police officer did not read him his Miranda Rights. What type of defense could his attorney use to defend Rick?

a.	immunity	c.	a substantive defense
b.	a procedural defense	d.	both a and c

20.

A threat to expose a secret crime or an embarrassing fact unless money is paid to the person issuing the threat is the crime of

a.	extortion.	c.	embezzlement.
b.	conspiracy.	d.	none of the above.

21.

A plea bargain that has been arrived at by negotiations between the accused and the prosecutor must still be approved by

a.	the victim of the crime.
b.	the governor of the state in which the case is being tried.
c.	the judge of the court in which the case is being tried.
d.	no approval is necessary.

22.

What two remedies are generally available in a civil lawsuit?

a.	fines and damages	c.	fines and injunctions
b.	injunctions and damages	d.	none of these

23.

Which of the following is not an element of most torts?

a.	causation	c.	injury
b.	conspiracy	d.	duty

24.

In a jury trial, who decides issues of fact?

a.	the defendant	c.	the jury
b.	the judges of the appellate court	d.	the trial judge

25.

A complete defense for a slander and libel suit would be to show that the statement is

a.	false.	c.	true.
b.	injurious to one's reputation.	d.	none of these.

26.

The most common tort is

a.	assault.	c.	invasion of privacy.
b.	battery.	d.	negligence.

27.

The party complained against in a civil case is known as the

a.	plaintiff.	c.	respondent.
b.	dependent.	d.	none of the above

28.

When a civil judgment for the plaintiff becomes final, the defendant normally pays the judgment. If the defendant does not pay, what may the plaintiff obtain to enforce the judgment?

a.	liquidation order	c.	writ of execution
b.	writ of certiorari	d.	liquidation writ

29.

Under specific circumstances some individuals are immune from liability for defamation of character, even if the statements were made with malice. Which individual or circumstance is not immune from liability?

a.	lawyer during a trial	c.	witnesses during a court hearing
b.	legislator during a political campaign	d.	legislator during a legislative session

30.

Which of the following is not one of the major requirements for a contract?

a.	offer and accommodation	c.	capacity
b.	genuine assent	d.	consideration

31.

Which of the following statements about a firm offer is untrue?

a.	It is good for the stated time but no longer than three months.
b.	It is binding whether or not the offeree paid anything to hold it open.
c.	The firm offer rules only apply to merchants who make offers in writing.
d.	All of the above statements are true.

32.

Advertisements in newspapers, radio, television, and direct mailings are considered to be

a.	valid offers.	c.	invitations to negotiate.
b.	contracts.	d.	none of the above.

33.

Reward offers are always the basis for a(n)

a.	unilateral contract.	c.	constructive contract.
b.	bilateral contract.	d.	none of the above

34.

Which of the following could not be used to show legal duress?

a.	threats of illegal conduct against a party
b.	threats to do business elsewhere
c.	threats to sue on a matter unrelated to the contract at hand
d.	All of these could be used.

35.

The two key elements in showing undue influence are

a.	the relationship and the wrongful or unfair persuasion.
b.	the relationship and the mental capacity of the person influenced.
c.	the amount in question and the wrongful or unfair persuasion.
d.	none of these.

36.

A mutual mistake of fact as to the identity of the subject matter of the contract will render the contract

a.	void.	c.	valid.
b.	voidable.	d.	none of the above.

37.

Ima has a neighbor named Judy, who works for Kevin. Ima threatens Judy that she will tell Kevin that Judy lied about her job experience on her resume unless Judy buys the $1,000 vacuum cleaners Ima sells. Ima's threat is an example of

a.	duress.	c.	ratification.
b.	undue influence.	d.	unilateral mistake.

38.

If a contract contains a clause that allows you to escape the legal obligation, the promise is said to be

a.	nominal consideration.	c.	adequate consideration.
b.	illusory.	d.	none of these.

39.

Which of the following is not consideration?

a.	future performance	c.	past performance
b.	immediate performance	d.	present performance

40.

When consideration is provided to keep an offer open, it creates

a.	a promissory estoppel.	c.	a firm offer.
b.	an option contract.	d.	none of these.

41.

A big difference in economic value of what one gives and receives may be evidence of

a.	duress.	c.	fraud.
b.	mutual mistake.	d.	all of these.

42.

When Marty agrees to take possession of her uncle's gift to her, Marty becomes a(n)

a.	promisor.	c.	donor.
b.	promisee.	d.	donee.

43.

Will disagrees with his bank over the money due to pay off a loan. After some negotiations, they agree that, if Will pays 75% of the amount the bank believes it is due, the debt will be cancelled. This agreement is termed an

a.	option.	c.	accord.
b.	release.	d.	satisfaction.

44.

In many states, a minor who lies about her or his age may be held liable for the tort of

a.	false identity.	c.	improper identification.
b.	false representation.	d.	maturity misrepresentation.

45.

Acting toward a contract as though one intends to be bound by it is considered

a.	scope of authority.	c.	ratification.
b.	contractual capacity	d.	affirmance.

46.

All contracts by a party held to be permanently insane by a court are

a.	valid but must be ratified by the party's guardian.
b.	voidable.
c.	void.
d.	reviewed by a court.

47.

Contracts made by a person that a court has ruled to be in a permanent state of alcoholism are

a.	valid.	c.	void.
b.	voidable.	d.	vacated.

48.

Gambling involves

a.	paying to play, luck, and a prize.
b.	entry fee, skill, and a prize.
c.	down payment, risk, and a guaranteed award.
d.	none of these.

49.

The practice of competing firms agreeing to and charging customers the same price is known as

a.	price rigging.	c.	price fixing.
b.	usury.	d.	restitution.

50.

Courts will enforce an oral contract for the purchase of real property if the buyer has

a.	occupied or possessed the land.
b.	made substantial improvements to the land.
c.	made partial or full payment.
d.	done any of the above.

51.

A type of contract prepared by the stronger party to favor the stronger party's interest and usually offered to the consumer on a "take or leave it basis" is known as a(n)

a.	executable contract.	c.	collateral contract.
b.	contract of adhesion.	d.	none of the above.

52.

Jean enters into a contract in which she will perform nail care services in Monique's beauty shop for a monthly fee payable to Monique plus 3 percent of Jean's retail business. By definition which of the following is not an essential term to the contract?

a.	names of parties	c.	price
b.	signatures	d.	quality of performance

53.

When there is an anticipatory breach of contract, the victim may

a.	treat the notice as evidence of a breach of contract and immediately sue for damages.
b.	wait until the promised time of performance to see if the work will be completed and then, if necessary, sue.
c.	both a and b.
d.	none of these.

54.

Which of the following is a reason for discharging a contract?

a.	complete performance	c.	impossibility of performance
b.	by agreement of the parties	d.	all of these

55.

Consequential money damages may be granted for

a.	the foreseeable injuries caused by the breach.
b.	a major breach.
c.	a minor breach.
d.	all of these.

56.

An injured party must take reasonable steps to minimize the harm done, this is referred to as the duty to

a.	maximize one's injury.
b.	mitigate damages.
c.	inform everyone of the cause of the injury.
d.	litigate.

57.

The ability to pursue remedies for breach of contract can be eliminated by

a.	bankruptcy.	c.	waivers.
b.	the statute of limitations.	d.	any of these.

58.

When a couple have been living together, sharing common property, and holding themselves out as husband and wife for a set statutory period, some jurisdictions will consider their relationship as a(n)

a.	marital consortium.	c.	common-law marriage.
b.	bigamy.	d.	prenuptial agreement.

59.

Adoption

a.	creates a parent-child relationship
b.	carries the same rights and duties as natural parenting.
c.	must be court-approved.
d.	all of these.

60.

Procreation, raising children, and fulfilling economic and companionship needs are a few of the recognized practical and legal duties of marriage known as

a.	marital compensation.	c.	mutual assignment.
b.	marital consortium.	d.	parenthood.

61.

Consideration for a sale or contract to sell goods may be expressed in the form of

a.	barter.	c.	services.
b.	money.	d.	all of these.

62.

According to the UCC, goods do not include

a.	books and clothing.	c.	patents and copyrights.
b.	dogs.	d.	all of these.

63.

Acceptance of goods occurs when

a.	the goods are used or resold.
b.	the buyer has indicated by words or conduct that the goods received are satisfactory.
c.	the buyer fails to reject the goods within a reasonable length of time.
d.	all of these.

64.

When payment for goods takes place at a later date, the transfer of title takes place when

a.	the buyer selects and agrees to buy the goods in the seller's store.
b.	the goods are accepted by the buyer.
c.	delivery is made.
d.	the final payment is made.

65.

What usually governs the various aspects of the sale of goods?

a.	Statute of Frauds	c.	Bill of Sale
b.	Universal Commercial Code	d.	none of these

66.

Shawn needs a new refrigerator for his home. At a local appliance store, he purchases one for $825 using his credit card. The appliance store should provide Shawn with a written receipt showing his payment and the transfer of the ownership of the refrigerator from the appliance store to him. This receipt is known as a(n)

a.	bill of sale.	c.	agreement of sale.
b.	sales contract.	d.	none of these.

67.

Which of the following must be included in a writing evidencing a sale of goods in order to satisfy the Statute of Frauds?

a.	price of the goods	c.	date of delivery
b.	quantity of the goods	d.	credit terms

68.

Transfer of ownership of goods may be done by the owners and authorized persons, or

a.	by merchants with possession of sold goods.
b.	by holders of negotiable documents of title.
c.	by buyers in a sale induced by fraud.
d.	all of these.

69.

A good-faith purchaser is one who

a.	purchases materials for religious organizations.
b.	charges goods on the faith that the money will be provided.
c.	believes all the claims of the seller.
d.	none of these.

70.

In a COD transaction what right does the buyer lose?

a.	the right to inspect the goods before payment
b.	the right to return damaged goods
c.	the right of ownership and risk of loss
d.	none of these

71.

Helena examines countless catalogs and pinpoints several wedding dresses that she likes. After discussing the various dresses with her maid of honor, she determines the dress she wants to purchase. She calls the company, gives the sales representative her measurements, and specifies material type, color of fabric, and delivery date, and then pays by her charge card. The wedding dress is an example of a(n)

a.	existing good.	c.	fungible good.
b.	identified good.	d.	none of the above.

72.

Tomas and Sandra visit a local nursery in order to purchase trees, shrubs, flowers, and lawn furniture for their backyard. They find the items they want and pay for them with a personal check. Which of these statements is true regarding sales transactions paid for by check?

a.	checks are considered legal tender
b.	check payment does not constitute a cash-and-carry sale
c.	the seller may accept the check but it is not considered payment until the bank pays the check
d.	both a and c

73.

Drew owns and operates a glass-blowing shop. According to the UCC, what must Drew do if he decides to sell his complete inventory of glass including glass-making supplies and glass-making equipment?

a.	notify all his creditors
b.	pay his creditors' claims against him
c.	notify the third party buyer of all the creditors so the third party can begin making payments
d.	both a and b

74.

The holder of a negotiable warehouse receipt has

a.	possession and title of the goods.
b.	possession and risk of loss of the goods.
c.	title to the goods.
d.	all of the above.

75.

FOB means

a.	Freight on Board.	c.	Free on Board.
b.	Free on Boat.	d.	none of the above.

76.

A consumer is an individual who acquired goods that he or she intends for

a.	business use.
b.	business or family use.
c.	personal, family, or household use.
d.	business, personal, family, or household use.

77.

When contracting parties enter into a legally binding agreement, their relationship is known as

a.	privity of contract.	c.	an implied warranty.
b.	an expressed warranty.	d.	strict liability.

78.

Which of the following statements is not true?

a.	An express warranty may be oral or written.
b.	By law, sellers are required to give consumers warranties.
c.	The law requires that warranties on consumer products costing more than $15 must meet certain standards.
d.	Warranties must be written in simple and readily understandable language.

79.

Implicit warranty obligations imposed by law on all sellers are known as

a.	trade warranties.	c.	implied warranties.
b.	expressed warranties.	d.	both a and c.

80.

Hilda enjoys taking her children to the local ice cream parlor. The implied assurance that the ice cream she purchases is wholesome and fit for human consumption is an example of a(n)

a.	express warranty.	c.	warranty of fitness for consumption.
b.	strict liability.	d.	warranty of merchantability.

81.

Which of the following would not be an unfair trade practice?

a.	failing to provide written warranties even though required
b.	using improper methods to figure finance charges
c.	conducting "industrial espionage" to find out a competitor's secrets
d.	all of the above are unfair trade practices

82.

Gathering shells on a public beach is acquisition by

a.	accession.	c.	adoption.
b.	adaptation.	d.	occupancy.

83.

In some states, all property acquired during a marriage is presumed to be community property and a one-half interest in such property is owned by

a.	the children or heirs.	c.	each spouse.
b.	the community.	d.	none of these.

84.

On Janette's 16th birthday, her grandmother, Mildred, gives her a box containing a family heirloom necklace. Upon giving her the box, Mildred says, "This is yours now. On your granddaughter's 16th birthday, you should pass this family heirloom on to her." In this situation Mildred is a(n)

a.	donee.	c.	donor.
b.	acquiror.	d.	both b and c.

85.

When Ed opens his own carpet-cleaning business, he creates a unique symbol that distinguishes his company from other carpet-cleaning companies. This unique symbol is known as a(n)

a.	copyright.	c.	trade secret.
b.	patent.	d.	service mark.

86.

Jaime wants to upgrade his computer so he takes it to a local retailer. The retailer, however, confuses Jaime's order with another customer's order and inadvertently adds more RAM than Jaime wanted, adds a modem, and increases the megahertz. Jaime's right to the increased value in his personal property is known as

a.	ownership.	c.	adequacy.
b.	accession.	d.	both a and b.

87.

Mark, Tom, Eileen, and Lucia decide to become co-owners of a time-share condominium. They want a form of co-ownership that would allow for a right of survivorship in which a deceased co-owner's interest could be divided equally among the remaining three, regardless of contradictory provisions in a will. Which form of co-ownership would satisfy their desires?

a.	joint tenancy	c.	ownership in severalty
b.	tenancy in common	d.	tenancy by the entireties

88.

A gift given "causa mortis" is one given

a.	after the death of the donor.
b.	in anticipation of the death of the donor.
c.	to pay the mortician's fees.
d.	none of the above.

89.

Which form of ownership allows the shares to be divided unequally and does not have a right of survivorship?

a.	joint tenancy	c.	tenancy in common
b.	tenancy by the entireties	d.	community property

90.

Liability insurance would be classified as a form of

a.	casualty insurance.	c.	inland marine insurance.
b.	fidelity insurance.	d.	social insurance.

91.

Stan and Maureen own a company that creates, manufactures, and sells software programs designed to help cities and municipalities prepare, organize, and maintain their budgets. What could they purchase to provide coverage against financial loss caused by a dishonest employee?

a.	fidelity insurance	c.	fraud endorsement
b.	disability insurance	d.	coinsurance

92.

Devon purchased a type of insurance that will pay his wife a set amount in the event of his death. This type of insurance is known as

a.	casualty insurance.	c.	life insurance.
b.	beneficiary insurance.	d.	surety bond.

93.

Manny and Austin own a three-story office building, Stonewall Towers. If the building were damaged or destroyed, they could sustain a loss. This potential to sustain loss is known as

a.	damage potential.	c.	insurable interest.
b.	inclusion.	d.	theft insurance.

94.

The female maker of a will is properly called

a.	an administratrix.	c.	a testatrix.
b.	an executrix.	d.	a trustee.

95.

A trust created during the lifetime of the settlor is

a.	a charitable trust.	c.	a spendthrift trust.
b.	an inter vivos trust.	d.	a testamentary trust.

96.

A constructive trust is a type of

a.	charitable trust.	c.	implied trust.
b.	express trust.	d.	private trust.

97.

Marla has two living children, David and Al, who each have two children. Her daughter, Amy, was killed in an automobile accident last year, but left three surviving children. Marla wants her will to specify that her children and grandchildren equally split her estate. Which of the following terms matches her desires?

a.	per stirpes	c.	per testamentary
b.	per escheats	d.	per capita

98.

Skip has an estate valued at more than $2,000,000 and would like to transfer some of the property to his attorney with clear instructions how this property is to be managed during and after his life for the benefit of his wife and children. To do this Skip will want to create a(n)

a.	living will.	c.	testamentary will.
b.	codicil.	d.	trust.

99.

Which of the following is an implied trust?

a.	spendthrift trust	c.	charitable trust
b.	constructive trust	d.	both a and c

100.

The right of a decedent's spouse to choose to receive one-third to one-half of the decedent's property instead of what the will allocated to him or her is referred to as the

a.	right of elevation.	c.	alternative settling.
b.	escheat.	d.	none of the above.