Business Law
Mock Exam
Course Introduction
Business Law introduces students to the legal framework within which businesses operate, covering essential topics such as contracts, agency, employment law, business organizations, and commercial transactions. The course explores the rights and obligations of parties in various business environments, the formation and enforcement of legal agreements, as well as liabilities and regulations affecting corporations, partnerships, and sole proprietorships. Emphasizing real-world application, students will analyze case studies and legal scenarios to understand how the law impacts decision-making and risk management in business operations.
Recommended Textbook
Business Law Text Cases An Accelerated Course 14th Edition by Roger LeRoy Miller
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19 Chapters
1368 Verified Questions
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Page 2
Chapter 1: Law and Legal Reasoning
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Sample Questions
Q1) Procedural law consists of all laws that outline the methods of enforcing rights.
A)True
B)False
Answer: True
Q2) Judge Bell decides that the precedent for the case she is hearing is no longer correct due to technological changes. She overturns the precedent when she decides the case. It is likely that her case will A) go unnoticed by the public.
B) be thrown out of court.
C) receive a great deal of publicity.
D) be ignored by the media.
Answer: C
Q3) The North Carolina state legislature enacts a law that violates the U.S. Constitution. This law can be enforced by A) no one.
B) the federal government only.
C) the state of North Carolina only.
D) the United States Supreme Court only.
Answer: A
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Page 3
Chapter 2: Business and the Constitution
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Sample Questions
Q1) The Constitution sets out the authority and the limits of the branches of the government. The term checks and balances means that
A) Congress writes checks and the other branches balance the budget.
B) each branch has some power to limit the actions of the others.
C) the courts balance their authority to the other branches' checklists.
D) the president "checks" the courts, which "balance" the laws.
Answer: B
Q2) Substantive due process limits what the government can do in its legislative and executive capacities.
A)True
B)False
Answer: True
Q3) Procedural due process requires that any government decision to take a person's property must be made equitably.
A)True
B)False
Answer: True
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Chapter 3: Courts and Alternative Dispute Resolution
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Sample Questions
Q1) Laredo loses his suit against McLain in a North Dakota state trial court. Laredo appeals to a state intermediate court of appeals and loses again. Laredo would appeal next to
A) the American Arbitration Association.
B) the North Dakota Supreme Court.
C) the United States Supreme Court.
D) the U.S. Court of Appeals for the Eighth Circuit.
Answer: B
Q2) Small claims courts are inferior trial courts.
A)True
B)False
Answer: True
Q3) Trials courts conduct trials.
A)True
B)False
Answer: True
Q4) The United States Supreme Court does not have original jurisdiction in any case.
A)True
B)False
Answer: False
Page 5
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Chapter 4: Tort Law
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Sample Questions
Q1) A successful defense releases the defendant from liability for a tortious act.
A)True
B)False
Q2) Cal is driving a car in which Duff is a passenger when an accident occurs. Cal and Duff are emotionally rattled, but neither is physically hurt. Cal is not liable to Duff on a negligence theory because
A) both parties were emotionally rattled.
B) Cal did not apparently intend to cause an accident.
C) Duff must have been comparatively negligent.
D) Duff was not injured.
Q3) To avoid liability for negligence, a business owner must protect its customers against all risks.
A)True
B)False
Q4) Data Analytics, Inc., and eProducts Corporation market competing software products. Data Analytics launches an advertising campaign claiming that eProducts, instead of testing software before it is marketed, has customers "test" the software by using it. eProducts knows this is not true but begins to lose sales to Data Analytics. On what ground could eProducts sue Data Analytics for injury to eProducts' reputation?
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Chapter 5: Criminal Law and Cyber Crime
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Sample Questions
Q1) Corporations, like persons, can be liable for crimes.
A)True
B)False
Q2) A company takes a risk by storing its online customers' credit-card numbers.
A)True
B)False
Q3) Mae is granted immunity after she agrees to testify about a crime. Mae has an absolute privilege against self-incrimination and can
A) be prosecuted only for a crime about which she agreed to testify.
B) not be prosecuted for any crime.
C) not refuse to testify.
D) refuse to testify.
Q4) Bull is arrested at a warehouse in Corporate Park and charged with the crime of theft. Bull will be prosecuted by
A) the owner of the warehouse.
B) the owner of the property that Bull is charged with stealing.
C) a public official.
D) any third party unrelated to Bull, the property, or the crime.
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Chapter 6: Business Ethics
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Sample Questions
Q1) Housemate, Inc., makes and sells a variety of household products. With a fair amount of certainty, Housemate's decision makers can predict whether a given business action would be legal in
A) all situations.
B) many situations.
C) no situations.
D) few situations.
Q2) Lucas is a business manager for Micro Manufacturing Company. Ethical dilemmas that Lucas is not likely to encounter include deciding A) the kind of pizza to order for a company meeting.
B) whether to lay off employees or take a loss in corporate profits.
C) whether to admonish an employee making rude jokes in the workplace.
D) what to tell a reporter about the recent drop in corporate stock prices.
Q3) Ethical reasoning is the process through which an individual links his or her moral convictions or ethical standards to the particular situation at hand.
A)True
B)False
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Chapter 7: Nature and Terminology
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Sample Questions
Q1) If a contractual promise is not fulfilled, the person who made it may be required to perform the promised act.
A)True
B)False
Q2) Lane applies for a firefighter's job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is "an employment offer conditioned on the applicant passing the exam." This is
A) a bilateral contract that Lane accepted by applying for the job.
B) a quasi contract on which Lane can rely for employment.
C) a unilateral contract that Lane can accept by passing the exam.
D) no contract.
Q3) Movers LLC promises to deliver a certain couch to Nora, who promises to pay for the service. If Movers does not perform, it may be required to A) cease business.
B) make another promise.
C) pay money damages.
D) perform a different service.
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9
Chapter 8: Agreement in Traditional and E-Contracts
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Sample Questions
Q1) Bret buys a subscription to the catalog of music provided by Concerto, an online music vendor. Before accessing the catalog, Bret must agree to a provision stating that she will not make and sell copies of the music. This provision is
A) a browse-wrap term.
B) a click-on agreement.
C) a shrink-wrap agreement.
D) a partnering agreement.
Q2) A court decision that makes an offer illegal automatically terminates the offer. A)True
B)False
Q3) Maya tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nero, a passerby who owns Nero's Motors, hands Maya $10. This is
A) a valid acceptance because Maya is seriously frustrated.
B) a valid acceptance because Nero is a professional dealer.
C) not a valid acceptance because Maya does not seriously intend to sell.
D) not a valid acceptance because Nero is only passing by.
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Chapter 9: Consideration, Capacity, and Legality
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Sample Questions
Q1) A release does not require consideration to be legally binding.
A)True
B)False
Q2) A court adjudicates Henry mentally incompetent and appoints Inez to be his guardian. Later, without Inez's knowledge, Henry signs a contract to sell his farm to Jason for its real market value. The contract is
A) enforceable if Henry comprehended the consequences.
B) enforceable if Henry knew the market value of the farm.
C) enforceable if Henry was the record owner of the farm.
D) void.
Q3) Rescission is the remaking of a contract so as to enrich one party at the expense of the other.
A)True
B)False
Q4) Contracts in restraint of trade are contrary to the public policy that favors competition in the economy.
A)True
B)False
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11
Chapter 10: Defenses to Contract Enforceability
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Sample Questions
Q1) Refer to Fact Pattern 10-2. Under these circumstances, Sam's best course of action is most likely to
A) scam Riley.
B) induce Riley to give him the commission on her next sale.
C) recover damages or rescind the contract to buy the building.
D) sabotage Riley's career with bad publicity.
Q2) Pumps, Inc., agrees to assume a debt of Quality Parts Company to Reliable Finance
LP. The agreement is not in writing. To be enforceable, the promise must be for the benefit of
A) all of the choices.
B) Pumps.
C) Quality.
D) Reliable.
Q3) A prenuptial agreement must be in writing to be enforceable.
A)True
B)False
Q4) An oral contract for a transfer of land is always enforceable.
A)True
B)False
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Chapter 11: Third Party Rights and Discharge
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Sample Questions
Q1) Construction LLC agrees to build a store for Discount Retail, Inc., at a specific location. Before the work begins, the local zoning law is changed to prohibit commercial buildings at that location. In this situation
A) Construction is in breach of contract.
B) the local zoning authority is in breach of contract.
C) the contract is discharged.
D) Discount must compensate Construction for its lost profit.
Q2) An insurance policy is an example of a right that can be assigned.
A)True
B)False
Q3) Ed's Electric substantially performs its contract with Forest Hills Apartments, Inc., to deliver and install an alarm system and parking lot lighting. Forest Hills is entitled to A) damages.
B) nothing more.
C) to be excused from performance.
D) suspend performance.
Q4) A special form is required to create a delegation of duties.
A)True B)False
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Chapter 12: Breach of Contract and Remedies
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Q1) Punitive damages are generally not awarded in an action for breach of contract.
A)True
B)False
Q2) The failure of one party to perform a contract entitles the other party to rescind it.
A)True
B)False
Q3) Equine World enters into a contract with FabuloSales to provide Equine World with a plan to repurpose its marketing strategy. If FabuloSales breaches the contract, Equine World has a duty to
A) reduce the damages that Equine World might otherwise suffer.
B) reduce the loss that FabuloSales might otherwise suffer.
C) punish FabuloSales and deter others from similar acts.
D) take no action.
Q4) Restitution is limited to rescission cases.
A)True
B)False
Q5) Liquidated damages provisions are generally unenforceable.
A)True
B)False
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Chapter 13: Intellectual Property Rights
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Sample Questions
Q1) With a few exceptions, almost anything is patentable.
A)True
B)False
Q2) Chris operates the Devil's Brew chain of coffee stands. "Devil's Brew" is a
A) certification mark.
B) collective mark.
C) service mark.
D) trade name.
Q3) The Anti-Counterfeiting Trade Agreement applies to pirated, copyrighted works being distributed via the Internet.
A)True
B)False
Q4) The need to protect intellectual property is recognized in the Declaration of Independence.
A)True
B)False
Q5) A person who buys a copyrighted work cannot sell it to someone else.
A)True
B)False
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Chapter 14: Internet Law, Social Media, and Privacy
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Sample Questions
Q1) File-sharing software can be used to download others' copyrighted property without liability for any infringement.
A)True
B)False
Q2) Federal law permits the intentional interception of any wire, oral, or electronic communication.
A)True
B)False
Q3) Without authorization, Bennie uses the trademark of Cielo Coffee Company to promote cheap, flavorless candy, which is not similar to Cielo's products but diminishes the quality of the coffee company's mark. This is
A) cybersquatting.
B) typosquatting.
C) trademark infringement.
D) trademark dilution.
Q4) Much of the material on the Internet, including software and database information, is not copyrighted.
A)True
B)False
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Chapter 15: The Formation of Sales and Lease Contracts
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Sample Questions
Q1) Rally Corporation enters into a contract to sell ski gear to Sno-Sports Inc., which sells a pair of the skis to Tyra, a consumer, who later sells them to Upton, another consumer.
Article 2 of the UCC applies to the sales transactions between A) all of the buyers and sellers.
B) Rally and Sno-Sports only.
C) Sno-Sports and Tyra only.
D) Tyra and Upton only.
Q2) A merchant's firm offer is revocable at any time before acceptance.
A)True
B)False
Q3) Over the course of a year, Retail Marketers, Inc., sells goods from its inventory and one of its warehouses. In exchange, Retail receives checks and other items that substitute for cash, which Retail uses to repay a loan from Savings Bank. Article 2 of the UCC governs
A) the checks.
B) the payment of the loan.
C) the sale of the buildings.
D) the sale of the goods.
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Chapter 16: Performance, Breach, and Warranties of Sales and
Lease Contracts
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Sample Questions
Q1) If goods in every respect conform to a contract, the buyer or lessee does not have a right to reject the goods.
A)True
B)False
Q2) Quade is an expert in twentieth-century art. Rachel visits Quade's gallery, seeking to buy artwork as an investment. Quade shows her a painting that in his opinion is by Picasso. Quade's statement is
A) an express warranty.
B) an implied warranty.
C) a warranty of title.
D) puffery.
Q3) Field Farms and Gourmet Restaurant enter into a contract for a sale of produce. After Field Farms ships the lettuce but before the restaurant receives it, the buyer declares bankruptcy. The seller can stop delivery of the goods in transit
A) only if the quantity is at least 50 percent of the contract amount.
B) only if the quantity is in a single "unit."
C) only if the quantity is at least a truckload.
D) regardless of the quantity.
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Chapter 17: Agency Relationships in Business
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Sample Questions
Q1) Private Security Service employs Olsen as an agent. Without Private Security's knowledge but otherwise acting within the scope of employment, Olsen commits a crime. The state can successfully prosecute A) none of the choices.
B) Private Security.
C) Private Security or Olsen.
D) Olsen.
Q2) Watercraft, Inc., employs Vladimir as a sales agent for a trial period. At the end of the period, Watercraft and Vladimir disagree on the amount of the commissions Vladimir is due for sales that he made. Vladimir may demand A) a constructive trust.
B) an accounting.
C) nothing.
D) specific performance.
Q3) A principal is not bound to an unauthorized contract unless the principal ratifies it. A)True
B)False
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Chapter 18: Small Businesses and Limited Liability Companies
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Sample Questions
Q1) Anyone who does business must create a separate business organization.
A)True
B)False
Q2) Kim and Lyle are partners in K&L Sales, which exports technical equipment. If Congress declares that the equipment can no longer be exported, K&L
A) can continue its business for one twelve-month period.
B) can continue its business indefinitely.
C) dissolves immediately unless the partners change its business.
D) is immediately subject to criminal prosecution and penalties.
Q3) Stefani and Tyler agree in an exchange of e-mail to form a partnership to buy and sell real property. Their partnership agreement is legally binding
A) only if a copy of the agreement is filed in the appropriate state office.
B) only if the agreement is printed in hard copy and signed by the parties.
C) only if the parties exchange valid consideration.
D) without more.
Q4) A sole proprietorship offers less flexibility than does a partnership or a corporation.
A)True
B)False
Page 20
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Chapter 19: Corporations
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Sample Questions
Q1) As a general rule, shareholders are responsible for the daily management of a corporation.
A)True
B)False
Q2) The board of directors makes corporate policy decisions.
A)True
B)False
Q3) The articles of incorporation serve as a primary source of authority for a corporation's business operations.
A)True
B)False
Q4) Charlie, Dora, and Ethel are the first directors on the board of Face Time Corporation, a social media host. Subsequent directors are elected by a majority vote of Face Time's A) users.
B) employees.
C) officers.
D) shareholders.
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21