Business Law
Exam Practice Tests
Course Introduction
Business Law examines the legal principles and frameworks that govern commercial transactions and the operations of businesses. This course covers foundational topics such as contracts, torts, agency relationships, business organizations, intellectual property, and regulatory compliance. By exploring real-world case studies and legal scenarios, students will gain an understanding of how laws protect both businesses and consumers, resolve disputes, and shape ethical decision-making in the business environment. This knowledge is essential for entrepreneurs, managers, and professionals who need to navigate the complex legal landscape of modern commerce.
Recommended Textbook
Business Law and the Legal Environment Standard Volume 23rd Edition by David
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Page 2
P. Twomey
Chapter 1: The Nature and Sources of Law
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Sample Questions
Q1) Procedural law specifies the steps that must be followed in enforcing those rights and liabilities.
A)True
B)False
Answer: True
Q2) Equity provides justice when the law is inadequate.
A)True
B)False
Answer: True
Q3) The Uniform Commercial Code is a good example of uniform state laws.
A)True
B)False
Answer: True
Q4) One of our most important rights is the right of privacy.
A)True
B)False
Answer: True
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Chapter 2: The Court System and Dispute Resolution
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Q1) All courts have general jurisdiction.
A)True
B)False
Answer: False
Q2) Billy has a dispute with Sleepdigit Bedspring Company over a number of beds Billy recently purchased from Sleepdigit for use in his hotel.Billy needs to decide whether to pursue litigation or employ an alternative means of dispute resolution.What advantages are most often associated with alternative dispute resolution? Which choice would be most appropriate in this case?
Answer: The most frequently cited advantages of alternative dispute resolution, compared to litigation, are a) cost savings and b) time savings. As far as a specific method of alternative dispute resolution, arbitration might be the best approach for Billy in his commercial dispute with Sleepdigit; in addition to the cost-saving and time-saving advantages of alternative dispute resolution, arbitration has a long history of success in the area of commercial contracts.
Q3) State supreme courts generally hear all cases appealed to them.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Business Ethics, Social Forces, and the Law
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Q1) Civil disobedience is the remedy natural law proponents use to change positive laws.
A)True
B)False
Answer: True
Q2) The importance of trust as a fundamental principle in capitalism is illustrated by expectations that:
A)investors will be able to earn a return on their investments.
B)employees may be discharged at any time for any reason without notice.
C)litigation is inevitable because parties to agreements usually break promises.
D)insider trading proves that the economic system underlying business is flawed.
Answer: A
Q3) Ethical egoists such as Ayn Rand hold that:
A)people always act in their own self-interest.
B)people do the most good for the most people.
C)ethical dilemmas are resolved according to time and place.
D)solving ethical dilemmas requires ethical training
Answer: A
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Chapter 4: The Constitution As the Foundation of the Legal Environment
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Q1) Which of the following powers is not reserved solely to the national government?
A)power to regulate interstate commerce
B)power to tax
C)power to coin money
D)power to borrow money on the credit of the United States
Q2) Ex post facto laws can be adopted by either the states or the national government.
A)True
B)False
Q3) In a "bedrock view" the Constitution is merely a statement of goals and objectives, intended to grow and change with time.
A)True
B)False
Q4) The equal protection clause prohibits a statute from treating one person differently from another:
A)when there is no reasonable ground for classifying them differently.
B)unless the statute  discriminates on the basis of cultural standards.
C)unless the statute is clearly arbitrary or capricious.
D)if the statute discriminates on the basis of gender.
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Chapter 5: Government Regulation of Competition and Prices
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Q1) The Clayton Act prohibits:
A)all unfair methods of competition.
B)conspiracies in restraint of trade.
C)attempts to monopolize.
D)price discrimination between buyers of like commodities.
Q2) Unfair competition is controlled by:
A)statutes.
B)administrative agencies.
C)administrative regulations.
D)all of these.
Q3) Having a large percentage of the market is not necessarily a monopoly.
A)True
B)False
Q4) Each of the states and the federal government have statutes and regulations that prohibit unfair methods of competition.
A)True
B)False
Q5) Criminal penalties are possible under the Sherman Act.
A)True
B)False
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Chapter 6: Administrative Agencies
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Q1) Administrative hearings often have additional parties involved, called ______, who are _______ with an interest in the case are permitted to participate.
A)intervenors, political entities.
B)industry organizations, intervenors
C)intervenors, ALJ's.
D)intervenors, industry organizations.
Q2) The ______can issue a(n) ______Â to stop a practice that it decides is improper.This order is binding unless reversed on an appeal.
A)ALJ, cease-and-desist order
B)Court, monetary fine
C)FTC, cease-and-desist order.
D)FTC, appeal
Q3) Meetings are to be open to the public under:
A)the Administrative Protection Act.
B)the Sunshine Act.
C)the Freedom of Information Act.
D)the Administrative Procedure Act.
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8
Chapter 7: Crimes
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Q1) Some types of instruments of crime are automatically forfeited.
A)True
B)False
Q2) Sally operates a large manufacturing firm near a federal land preserve known for its waterfowl and fauna.The federal government has just filed suit against Sally and her corporation, charging them with criminal violations of various environmental protection statutes.What rights do Sally and her corporation have that are guaranteed under the United States Constitution?
Q3) When a defendant is convicted of a crime, the court may also declare that the defendant's rights in any property used or gained from the crime be confiscated.This is known as __________.
A)forfeiture
B)reversion
C)subversion
D)divestiture
Q4) The Racketeer Influenced and Corrupt Organizations (RICO) Act authorizes both criminal and civil actions.
A)True
B)False
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Chapter 8: Torts
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Sample Questions
Q1) The tort of invasion of privacy includes all of the following except:
A)intrusion into private affairs.
B)public disclosure of private facts.
C)misappropriation of another's name.
D)defamation of privacy.
Q2) The degree of care required of a person is:
A)that degree of care the person exercised in the situation at hand.
B)that degree of care an extraordinary person would exercise under similar circumstances.
C)that degree of care a reasonably prudent person would exercise under similar circumstances.
D)that degree of care professionals exercise in similar situations.
Q3) Concerning torts and crimes, choose the correct statement:
A)Every tort is a crime.
B)Every crime is a tort.
C)No crime is a tort.
D)A crime may also be a tort.
Q4) The assumption of risk defense has been abolished in several states.
A)True
B)False
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Chapter 9: Intellectual Property Rights and the Internet
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Q1) The type of patent that may be granted to developers of new and non-obvious ornamental features of manufactured articles is called a(n):
A)design patent.
B)functional or utility patent.
C)improvement patent.
D)plant patent.
Q2) To analyze a copyright infringement claim in the context of computer programs, courts will primarily examine:
A)the total number of program steps that are substantially similar.
B)the number of significant program steps that are substantially similar.
C)whether the programs appear substantially similar in ordinary language.
D)whether the programs appear substantially similar in machine language.
Q3) Descriptive terms such as locations and colors are never subject to trademark protections.
A)True
B)False
Q4) Stealing trade secrets can result in fines, but not imprisonment.
A)True
B)False
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Chapter 10: The Legal Environment of International Trade
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Sample Questions
Q1) The _______ is administered by ___________ to protect trademarks in the international community.
A)Madrid System, the WIPO,
B)Berne Convention, the WIPO.
C)Madrid System, TRIPS.
D)Berne Convention, TRIPS.
Q2) The transfer of technology rights in a product to allow another firm in a foreign country to produce a product in return for royalties or other specified payments is called:
A)exporting.
B)licensing.
C)agency representation.
D)subsidiary sales.
Q3) Under which of the following doctrines is it held that a foreign sovereign cannot be sued unless it engages in illegal commercial conduct?
A)act-of-state
B)sovereign compliance
C)Timberlane
D)sovereign immunity
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12
Chapter 11: Nature and Classes of Contracts: Contracting
on the Internet
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Sample Questions
Q1) Negotiable instruments are:
A)formal contracts.
B)informal contracts.
C)option contracts.
D)first-refusal agreements.
Q2) In a bilateral contract, each party will be a promisor and, therefore, each party will:
A)be an obligor.
B)be able to avoid the contract.
C)not be in privity of contract.
D)be an agent for the other side.
Q3) An option contract gives one of the parties an absolute right to enter into a second contract at a later date.
A)True
B)False
Q4) A bilateral contract is essentially an exchange of enforceable promises.
A)True
B)False
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Chapter 12: Formation of Contracts: Offer and Acceptance
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Q1) An offer that is indefinite may be clarified by reference to another writing through:
A)incorporation.
B)reference.
C)annotation.
D)indexing.
Q2) An option is itself a contract to refrain from revoking an offer.
A)True
B)False
Q3) If either the offeror or offeree dies or becomes mentally incompetent before the offer is accepted, the offer is automatically terminated.
A)True
B)False
Q4) If an offeree accepts an offer before it is effectively revoked:
A)a void contract is formed.
B)a voidable contract is formed.
C)an unenforceable contract is formed.
D)a valid contract is formed.
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14
Chapter 13: Capacity and Genuine Assent
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Q1) Generally, when a person of legal age makes a contract with a minor, the contract is voidable by either party.
A)True
B)False
Q2) A claim of undue influence will be unsuccessful unless the contracting parties have a close relationship of trust.
A)True
B)False
Q3) The "necessaries" of minors are precisely defined by law.
A)True
B)False
Q4) All of the following statements refer to an element of fraud except:
A)the defendant desired to obtain a financial benefit.
B)the defendant made a false statement.
C)the defendant knew that the statement was false or was recklessly indifferent regarding its truth.
D)the defendant intended for the other party to rely on the false statement.
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Chapter 14: Consideration
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Q1) When a debtor tenders a check stating "paid in full" and the creditor cashes the check, the debt:
A)is always discharged.
B)may be discharged if it is a liquidated debt.
C)may be discharged if it is a unliquidated debt.
D)is never discharged.
Q2) One promise may serve as consideration for many return promises.
A)True
B)False
Q3) Promissory estoppel does NOT require
A)a signed writing explaining the promise.
B)a clear and definite promise
C)that justice be better served by enforcement of a promise
D)that a promisee has justifiably relied on the promise
Q4) Consideration is the bargained-for exchange between the parties to a contract. A)True
B)False
Q5) An illusory promise creates a bilateral contract.
A)True
B)False
Page 16
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Chapter 15: Legality and Public Policy
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Sample Questions
Q1) In an employment contract, agreements not to compete are:
A)illegal
B)uniformly held to be in the public interest and therefore legal
C)valid only if the restriction protects the employee
D)valid, if the restriction is reasonable and necessary for the protection of the former employer
Q2) Substantive unconscionability has to do with matters of freedom of assent.
A)True
B)False
Q3) An agreement that calls for the commission of a civil wrong is illegal and void.
A)True
B)False
Q4) The validity of a contract is not affected by:
A)the effect of the contract on the community.
B)unconscionability.
C)the absence of good faith.
D)the fact that the contract turned out to be a bad bargain for one of the parties.
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17
Chapter 16: Writing, Electronic Forms, and Interpretation of Contracts
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Q1) If a contract is unclear, it will be interpreted against the party who drafted it.
A)True
B)False
Q2) To be enforceable under the statute of frauds, the note or memorandum must be signed by the party sought to be bound by the contract.
A)True
B)False
Q3) A contract is interpreted to give effect to:
A)the intent of the parties.
B)what the court believes is a fair contract.
C)what the defendant thought the contract meant.
D)what will be best for the economic life of the community.
Q4) A promise to pay a debt must be in writing if:
A)the debt is for more than $500.
B)the debt is now due and payable.
C)the promise is to pay the debt of another.
D)the debt owed is the promisor's.
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Chapter 17: Third Persons and Contracts
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Q1) Only written words that show an intention to transfer or assign will be given the effect of an assignment.
A)True
B)False
Q2) The substitution of an old contract for a new one that replaces an obligation or a party for another is a:
A)novation.
B)warranty.
C)assignment.
D)delegation of duties.
Q3) The rights of a third-party beneficiary always cannot be destroyed without that beneficiary's consent.
A)True
B)False
Q4) A person who has a right to buy on credit can transfer that right to a close relative.
A)True
B)False
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Page 19
Chapter 18: Discharge of Contracts
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Q1) Contracts may be discharged by the joint action of both contracting parties or, in some cases, by the action of one party alone.
A)True
B)False
Q2) A Federal Trade Commission regulation gives a buyer three (3) business days in which to cancel a home-solicited sale of goods or services costing more than:
A)$25.
B)$50.
C)$100.
D)$500.
Q3) A contract may be discharged under the frustration of purpose doctrine if the event which frustrated the purpose was foreseeable.
A)True
B)False
Q4) A house-painting contract is discharged if continual rain makes it impossible to complete the painting by the time specified in the contract.
A)True
B)False
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Chapter 19: Breach of Contract and Remedies
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Q1) Consequential damages may be recovered if:
A)the damages were not a foreseeable consequence of the breach.
B)the damages reasonably flow from the breach as a result of the injured party's particular circumstances.
C)the breach did not cause the damages.
D)the loss exceeds $500.
Q2) If one party to a contract breaks the contract, the other party generally is under a duty to stop any further performance to avoid sustaining greater damages.
A)True
B)False
Q3) A provision in a contract which states no damages can be recovered in the event of breach of contract is called:
A)a contributory clause
B)an exculpatory clause
C)a waiver clause.
D)a force majeur clause
Q4) Consequential damages are those that necessarily flow from the breach.
A)True
B)False
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Chapter 20: Personal Property and Bailments
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Q1) If a maintenance employee at a hotel finds a pocketbook with $500 in cash while cleaning an empty guest room, the employee:
A)is entitled to keep the property, because the employee has the legal status of a "finder."
B)must give the property to the manager of the hotel to be kept for the owner.
C)must place an advertisement in a local newspaper, and if the property is not claimed within seven (7) business days, the employee is entitled to keep it.
D)can retain possession of the property until the owner establishes ownership.
Q2) A gift causa mortis is considered a conditional gift.
A)True
B)False
Q3) A bailee's duty of care for bailed property depends on the type of bailment.
A)True
B)False
Q4) __________ property means land and things embedded in the land.
A)Real
B)Personal
C)Intangible
D)Tangible
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Chapter 21: Legal Aspects of Supply Chain Management
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Q1) All of the following are true statements about warehousers except:
A)A warehouser is a bailee.
B)A warehouser may issue a negotiable or nonnegotiable receipt.
C)A warehouser is an insurer of the goods.
D)A warehouser is liable for damaged goods if damage is caused by the warehouser's negligence.
Q2) The rights and duties of a warehouse are for the most part the same as those of a(n):
A)bailee under a bailment for the sole benefit of the bailee.
B)bailee under an ordinary mutual-benefit bailment.
C)bailor under a bailment for the sole benefit of the bailor.
D)bailee under a bailment for the sole benefit of the bailor.
Q3) A transferor of a bill of lading makes all of the following implied warranties to the transferee, except:
A)the transferor has no knowledge of defects.
B)the transfer is rightful.
C)the bill of lading is genuine
D)the goods are market value.
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23
Chapter 22: Nature and Form of Sales
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Q1) The UCC has adopted the common law 'mirror image' rule.
A)True
B)False
Q2) Goods physically existing and owned by a seller at the time of a transaction are called existing goods.
A)True
B)False
Q3) Defenses raised in a suit based on a sales contract differ greatly from defenses used in regard to any other type of contract.
A)True
B)False
Q4) When an oral contract is made to sell a 75-inch LED LCD TV for $6,800, payment and acceptance of part of the purchase price avoids the bar of the statute of frauds.
A)True
B)False
Q5) Sales law includes special rules that apply to merchants.
A)True
B)False
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Chapter 23: Title and Risk of Loss
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Q1) In an FOB place of shipment contract the seller's risk of loss for goods under an that are damaged in transit, ends when they are
A)True
B)False
Q2) In the case of a nonshipment contract, risk of loss passes to the buyer upon actual receipt of goods:
A)only if the seller is a merchant
B)only if the seller is a nonmerchant
C)only if the buyer has already paid for them
D)in all nonshipment contracts
Q3) A document of title is not sufficient for a creditor to take an interest in goods.
A)True
B)False
Q4) In an FOB shipment contract, title to the goods pass to the buyer when goods are delivered to the carrier.
A)True
B)False
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Chapter 24: Product Liability: Warranties and Torts
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Q1) An express warranty is a statement of fact about the product that becomes part of the basis of the bargain.
A)True
B)False
Q2) Under the concept of ______, only the original parties to a sales contract could sue each other.
A)exclusivity of contract.
B)privity of contract.
C)privacy of contract.
D)priority of contract.
Q3) The warranties of both merchantability and fitness for a particular purpose exist under the Convention on Contracts for the International Sale of Goods (CISG).
A)True
B)False
Q4) The theories of product liability
A)are mutually exclusive.
B)are not mutually exclusive.
C)are set forth exclusively in the UCC.
D)are set forth exclusively in the common law.
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Chapter 25: Obligations and Performance
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Q1) A delivery is sufficient if it is made in accordance with the terms of the sales contract.
A)True
B)False
Q2) When a method of transportation called for by a contract becomes unavailable for any reason, the contract is automatically voided.
A)True
B)False
Q3) Unless otherwise agreed by the parties, payment by a buyer requires payment either in cash or by certified check.
A)True
B)False
Q4) The right to ___________ is a second chance for a seller to make a proper tender of conforming goods.
A)rehabilitate
B)repair
C)heal
D)cure
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Chapter 26: Remedies for Breach of Sales Contracts
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Q1) A sales contract may provide that in case of breach, no damages may be recovered or no consequential damages may be recovered.
A)True
B)False
Q2) An action for breach of warranty generally must be brought within three (3) years of the breach.
A)True
B)False
Q3) A liquidated damages clause is a contractually-agreed upon amount of damages to be paid in the event of default or breach.
A)True
B)False
Q4) When a seller breaches a contract for the sale of goods to a buyer, the buyer is entitled to specific performance of the contract if the:
A)goods are unique.
B)market cost of the goods has increased.
C)goods can be purchased in any major city in the country.
D)buyer's customers will be disappointed if the buyer does not obtain the goods.
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Chapter 27: Kinds of Negotiable Instruments and Negotiability
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Q1) Article 3 of the UCC establishes a four year statute of limitations for most actions involving negotiable instruments.
A)True
B)False
Q2) Negotiation of commercial paper results in lesser rights to transferees than those rights afforded assignees of contracts under contract law.
A)True
B)False
Q3) The party who writes or creates a promissory note is called the: A)payee.
B)drawee.
C)drawer.
D)maker.
Q4) The bank is the drawee on a check and has no liability until it has accepted the instrument.
A)True B)False
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Chapter 28: Transfers of Negotiable Instruments and
Warranties of Parties
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Q1) Bearer paper may only be negotiated by the actual transfer of possession of the instrument.
A)True
B)False
Q2) An instrument can be delivered by constructive delivery, in which the transferee has exclusive access to the instrument.
A)True
B)False
Q3) Order paper is converted into bearer paper by the holder's blank indorsement.
A)True
B)False
Q4) In the case of a check, when the impostor rule applies:
A)the drawer of the check can successfully raise the defense of the forged indorsement.
B)the forged indorsement is effective to negotiate the instrument.
C)the forged indorsement is ineffective to negotiate the instrument.
D)the instrument becomes nonnegotiable.
Q5) An instrument may be transferred only by negotiation.
A)True
B)False
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Chapter 29: Liability of the Parties Under Negotiable Instruments
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Q1) Universal defenses work against all of the following except: A)holders.
B)holders through a holder in due course.
C)holders in due course.
D)secondary parties.
Q2) An altered instrument can be enforced according to its original terms.
A)True
B)False
Q3) A person who acquires a negotiable instrument with notice of a defense:
A)has acted in bad faith.
B)has acted illegally.
C)cannot be a holder in due course.
D)has taken unfair advantage of the maker.
Q4) A holder through a holder in due course is subject to only certain, limited defenses. A)True
B)False
Q5) Value is similar to consideration..
A)True
B)False
Page 31
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Chapter 30: Checks and Funds Transfers
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Q1) Customers are precluded from asserting unauthorized signatures or alterations if they do not report them within __________ from the time the bank statement is received.
A)fourteen (14) days
B)forty (40) days
C)six (6) months
D)one (1) year
Q2) A written stop payment order is binding on the bank for 90 days.
A)True
B)False
Q3) A debit transaction occurs when a person making a payment requests such payment be made to the beneficiary's bank.
A)True
B)False
Q4) A written stop payment order or confirmation is effective for:
A)fourteen (14) days.
B)thirty (30) days.
C)six (6) months.
D)one (1) year.
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Chapter 31: Nature of the Debtor-Creditor Relationship
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Q1) Bailment given as security for the payment of a debt is a(n): ______.
A)pledge.
B)contribution.
C)guaranty.
D)subrogration.
Q2) Standby letters of credit are used only in international trade situations.
A)True B)False
Q3) In most states contracts of guaranty do not have to be in writing to be enforceable.
A)True B)False
Q4) A guaranty of payment creates a(n):
A)contract of surety.
B)contract of credit.
C)letter of credit.
D)absolute guaranty.
Q5) A letter of credit must be in writing and signed by the issuer. A)True B)False
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Chapter 32: Consumer Protection
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Q1) Consumer protection law often requires those dealing with consumers to make certain mandated disclosures.
A)True
B)False
Q2) If you allow another person to use your credit card but the person uses the card for a purpose other than the one you specified:
A)an unauthorized usage has occurred.
B)an authorized usage has occurred.
C)you will not be responsible for more than $50 of the amount charged.
D)you are not liable for any of the amount charged.
Q3) An unsolicited distribution of credit cards to persons who have not applied for them is:
A)always allowed.
B)voidable.
C)illegal.
D)only allowed if the recipient is at least 21 years old.
Q4) The Fair Credit Reporting Act applies only to consumer credit.
A)True
B)False
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Chapter 33: Secured Transactions in Personal Property
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Q1) King Electronics, a retailer of video equipment, sold two DVRs to Larson, a psychologist, for use in her professional practice, which was located in her home.The sale to Larson was made on credit.King retained a security interest in the DVRs sold but did not file a financing statement.Mills, another creditor of Larson, has asserted that his lien on the two DVRs is superior to King's security interest.Is he right? As you decide, remember to classify the DVRs as collateral in the hands of King and Larson.
Q2) Collateral may change its form and character during the course of a security agreement.
A)True
B)False
Q3) Because the financing statement is intended as notice to third parties, it must be filed in a public place.
A)True
B)False
Q4) Secured transactions are governed by Article 2 of the Uniform Commercial Code. A)True B)False
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Chapter 34: Bankruptcy
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Q1) Certain transfers of property by the debtor to a creditor within 90 days of filing may be set aside by the bankruptcy trustee as __________ transfers, and the transferred property recovered by the trustee.
A)predetermined
B)preternatural
C)preordained
D)preferential
Q2) Debtor's exemptions are provided under federal law and thus are the same in each state.
A)True
B)False
Q3) Where the debtor has fewer than twelve (12) creditors, how many must sign an involuntary petition?
A)one (1), assuming that the creditor's unsecured claim is at least $15,325
B)one (1), assuming that the creditor's secured claim is at least $15,575
C)three (3), assuming that the creditors' unsecured claims total at least $14,425
D)three (3), assuming that the creditors' secured claims total at least $15,575
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Chapter 35: Insurance
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Q1) A person has an insurable interest in property if destruction of that property would cause a monetary or pecuniary loss to that person.
A)True
B)False
Q2) If a man names his wife as beneficiary of his life insurance and the two are thereafter divorced, the insurance policy: ______.
A)is canceled automatically.
B)is not affected.
C)is divided into two policies on the life of each for one-half the amount of the original policy.
D)becomes the property of the former wife.
Q3) What is a correct statement concerning burden of proof?
A)The insured has the burden of proving that the loss was a covered loss.
B)The insurer has the burden of proving that the loss was not covered.
C)Exceptions to coverage are liberally interpreted in favor of the insurer.
D)Exceptions to coverage are disregarded in life insurance matters.
Q4) All fires that cause damage are classified as hostile fires.
A)True
B)False
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Chapter 36: Agency
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Q1) The third person who desires to bind the principal because of the act of an alleged agent has the burden of proving that the latter person was in fact the authorized agent of the principal and possessed the authority to do the act in question.
A)True
B)False
Q2) When an unauthorized act is ratified, the effect is the same as though the act had been originally authorized.
A)True
B)False
Q3) An agent has an interest in the authority when consideration has been given or paid for the right to exercise the authority.
A)True
B)False
Q4) A written authorization of agency is called a power of attorney.
A)True
B)False
Q5) An agency may arise by appointment, conduct, ratification, or operation of law. A)True
B)False
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Chapter 37: Third Persons in Agency
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Q1) Subject to certain limitations, a third person, on learning of the existence of an undisclosed principal, may sue the principal.
A)True
B)False
Q2) A principal is not bound by statements made by an agent during the transaction of business that is within the scope of the agent's authority.
A)True
B)False
Q3) In a simple contract made by an authorized agent on behalf of a disclosed principal, the third person may sue either the agent or the principal in the event of a breach.
A)True
B)False
Q4) A customer who has given a purchase order to a salesperson is not bound by any contract until the employer of the salesperson accepts the order.
A)True
B)False
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Chapter 38: Regulation of Employment
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Q1) In the case of defined benefit plans, the employer must cover any underfunding that may result from the plan's poor performance.
A)True
B)False
Q2) Under a collective bargaining situation: ______.
A)groups of employers meet to draw up contracts for all of their employees.
B)representatives of the employees bargain with a single employer or a group of employers for an agreement on wages, hours, and working conditions for the employees.
C)groups of employees meet to dictate the terms of employment to their employers.
D)both management and labor meet to arbitrate their differences.
Q3) The sole issue addressed in the Fair Labor Standards Act is child labor.
A)True
B)False
Q4) Any adversely affected person may challenge the validity of an OSHA in a U.S.Court of Appeals.
A)True
B)False
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Chapter 39: Equal Employment Opportunity Law
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Q1) A party claiming discrimination must first file a complaint with a local or state EEOC office before filing a charge with the EEOC.
A)True
B)False
Q2) The Equal Pay Act:
A)does not allow variances in wages pursuant to a seniority system.
B)generally requires that members of both sexes be paid equally for equal work.
C)prohibits all variations in wage rates paid to men and women.
D)makes payment variances a BFOQ.
Q3) An employer is liable for the sexual harassment of non-supervisors only when it knew, or should have known, of the misconduct - and failed to take prompt remedial action.
A)True
B)False
Q4) To be lawful, affirmative action must be time-limited.
A)True
B)False
Q5) Title VII requires equal pay for men and women.
A)True
B)False
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