Entrepreneurship and the Law
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Course Introduction
This course explores the critical intersection between entrepreneurship and the legal environment, equipping students with foundational knowledge of legal concepts that affect business startups and growth. Topics include business formation, intellectual property, contracts, employment law, regulatory compliance, funding arrangements, and liability management. Through real-world case studies, students will analyze legal challenges entrepreneurs commonly face and develop practical strategies for mitigating risks while pursuing innovation. The course aims to empower aspiring entrepreneurs to make informed decisions and navigate complex legal landscapes as they build and scale their ventures.
Recommended Textbook
The Legal Environment of Business 11th Edition by Roger E. Meiners
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22 Chapters
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Page 2
Chapter 1: Todays Business Environment: Law and Ethics
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327 Verified Questions
327 Flashcards
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Sample Questions
Q1) State constitutions:
A)must be approved by majority vote in Congress
B)must be approved by a two-thirds vote of Congress
C)are the highest form of law within each state
D)tend to be much shorter than the U.S.Constitution
E)all of the other choices are correct
Answer: C
Q2) Which of the following is an accepted definition of law?
A)a body of rules of action or conduct prescribed by controlling authority,and having binding legal force
B)a body of rules of action or conduct prescribed by society,but lacking legal force
C)a body of rules of action or conduct prescribed by courts and sanction by international society
D)a body of rules of action or conduct prescribed by the Supreme Court,and having binding legal force
E)none of the other choices
Answer: A
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3
Chapter 2: The Court Systems
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Sample Questions
Q1) Federal courts have exclusive jurisdiction over cases involving:
A)divorce
B)adoption
C)patents
D)all of the other specific choices are correct
E)none of the other specific choices are correct
Answer: C
Q2) A court can exercise jurisdiction over a corporate defendant if the court is located in the state in which the corporation is incorporated.
A)True
B)False
Answer: True
Q3) There are ________ federal districts in the court system.
A)14
B)50
C)100
D)200
E)none of the other choices are correct
Answer: E
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Page 4
Chapter 3: Trials and Resolving Disputes
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Sample Questions
Q1) In the pleading known as the ____________,the defendant will admit,deny,or say that it does not know the truth,with respect to each assertion of the plaintiff.
A)rebuttal
B)answer
C)response
D)recall
E)counterpoint
Answer: B
Q2) In a civil trial the parties must prove their contentions:
A)beyond a reasonable doubt
B)with all due certainty
C)to the satisfaction of the plaintiff
D)by a preponderance of the evidence
E)unanimously
Answer: D
Q3) The U.S.judicial system is considered to be "adversarial."
A)True
B)False
Answer: True
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Page 5
Chapter 4: The Constitution: Focus on Application to Business
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Sample Questions
Q1) In Hughes v.Oklahoma,a statute passed by Oklahoma prohibiting the export of minnows out of the state,to help protect the specie,was held to be constitutional.
A)True
B)False
Q2) A states may regulate public health without permission of Congress.
A)True
B)False
Q3) In Consolidated Edison Co.v.Public Service Comm. ,the New York utility commission ruled that the electric company could not send its customers information in support of nuclear power.The Supreme Court announced a test for such restrictions on information.Which of the following is not a part of the test applied to prohibitions on speech:
A)is it a reasonable time,place or manner restriction
B)does it apply to a for-profit organization
C)does it apply to a permissible subject-matter
D)is it a narrowly tailored way to achieve a compelling state interest
E)all of the other choices are part of the test
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Page 6
Chapter 5: Criminal Law and Business
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330 Flashcards
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Sample Questions
Q1) A felony is generally defined as a crime that:
A)violates the "integrity of the law"
B)may be punished by the possibility of time in prison,not just a fine
C)violates a federal statute punishable by up to life in prison
D)is classified as a class A offense of a state or federal statute
E)none of the other choices are very good
Q2) Most crimes are subject to a statute of limitations that tells how long the government has to prosecute for a crime or that ability expires.
A)True
B)False
Q3) Misdemeanors are less serious crimes generally punishable by less than a year in prison.
A)True
B)False
Q4) Each state has a criminal code and the federal government also has a criminal code.
A)True
B)False
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Chapter 6: Elements of Torts
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Sample Questions
Q1) The fear of immediate bodily harm that occurs for there to be an assault is fear: A)that would be suffered by a reasonable person under the circumstances B)that was suffered by the plaintiff,as demonstrated by the plaintiff's proof,given the plaintiff's mental condition at the time of the event C)that the plaintiff alleges to have suffered,regardless of the circumstances D)that any "sensitive person" would have suffered under similar circumstances E)that the judge instructs the jury has occurred or not,under the circumstances
Q2) The only defense in case of negligence is that of assumption of risk.
A)True
B)False
Q3) In general,if store personnel believe someone may have shoplifted,they have the right to detain the person for a short while and not be liable for false imprisonment.
A)True B)False
Q4) The primary purpose of tort law is to inflict punishment on the wrongdoer.
A)True
B)False
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Chapter 7: Business Torts and Product Liability
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Sample Questions
Q1) In the 19th century,consumers bore more of the cost of product-related injuries.
A)True
B)False
Q2) The Restatement (Third)of Torts on product liability states that the producer of a product may be liable for defect except in which case:
A)the producer failed to use a reasonable alternative design that would have produced greater safety
B)producer failed to provide reasonable instructions of foreseeable risks
C)product contains a defect even if all possible care was used in making the product
D)none of the other choices;those refer to the Restatement (Second)
E)all of the other specific choices are correct
Q3) Strict liability in tort was applied to food and drink first because of the promises of safety made by the sellers on the labels of their products.
A)True
B)False
Q4) About a half-million tort cases are filed each year.
A)True
B)False
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Page 9
Chapter 8: Real and Personal Property
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Sample Questions
Q1) Someone tells you it is ok to hunt on a farmer's property,but in fact it is not.The farmer has a good case against you for trespass to land despite what you were told.
A)True
B)False
Q2) A binding obligation that goes with property when it is transferred to a new owner,who must abide by the obligation,is called a(n):
A)lien
B)estate limitation
C)mortgage
D)possessory
E)none of the other choices are correct
Q3) Servitudes include a large category of positive and negative requirements imposed by an owner upon property.
A)True
B)False
Q4) Trees are a form of real property.
A)True
B)False
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Chapter 9: Intellectual Property
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Sample Questions
Q1) A patent is good for 20 years from:
A)the date a patent reviewer establishes
B)the date the invention reaches the market
C)the date the inventor began work on the invention
D)the date the inventor began the patent filing process
E)none of the other choices are correct
Q2) The World Intellectual Property Organization (WIPO)works for common international standards for patents.
A)True
B)False
Q3) ________________ is property that may be invisible and impossible to hold.
A)intangible property
B)good property
C)real property
D)temporary property
E)actual property
Q4) Counterfeiting of trademarks causes companies to lose money and reputation.
A)True
B)False
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Chapter 10: Contracts
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Sample Questions
Q1) __________ means that the contract basically has been fulfilled and payments must be made.
A)Serious performance
B)Final performance
C)Adequate performance
D)Material fulfillment
E)none of the other choices are correct
Q2) In DCS Sanitary Management v.Castillo,where a company had employees agree not to work for any competitors within 100 miles of any customer of DCS,the appeals court held that the agreement:
A)overly broad and could not be enforced
B)violated public policy and that the company must pay damages to the employees
C)was not enforceable due to lack of consideration
D)was a reasonable restraint on competition that could be enforced
E)was a valid restraint on competition since such agreements are legal unless they violate the antitrust laws
Q3) Termination of an offer can only occur through the operation of law.
A)True
B)False
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Page 12
Chapter 11: Domestic and International Sales
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Sample Questions
Q1) Consequential damages can include lost profits from sales that did not occur due to the breach of a contract.
A)True
B)False
Q2) Warranty of title includes the warrant that:
A)the goods being sold can be sold overseas without any tariff penalties
B)the goods being sold are marketable
C)the goods being sold are capable of being copyrighted
D)the goods being sold might be copyrighted
E)none of the other choices are correct
Q3) Under Article 2,if the offeror does not clearly state a particular method of acceptance,a contract is formed when the offer is accepted in any reasonable manner under the circumstances.
A)True
B)False
Q4) The UCC generally requires that a contract specify in writing a quantity to be purchased.
A)True
B)False
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Chapter 12: Negotiable Instruments, credit, and Bankruptcy
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Sample
Questions
Q1) Although commercial paper may be either negotiable or nonnegotiable,only __________ fall under the UCC.
A)nonnegotiable instruments
B)conditional instruments
C)real instruments
D)unconditional instruments
E)none of the other choices are correct
Q2) Before the UCC,negotiable instruments could not be bought or sold.
A)True
B)False
Q3) The higher the income of a bankrupt,the more likely the debts will be discharged by Chapter 7 bankruptcy rather than by debt repayment over time.
A)True
B)False
Q4) Under the UCC,a secured party may repossess property only upon receipt of a warrant.
A)True
B)False
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Chapter 13: Business Organizations
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Sample
Questions
Q1) Directors are under a _________ to conduct themselves on behalf of the corporation as a reasonably prudent person in the conduct of personal business affairs.
A)duty of reasonability
B)duty of profit
C)duty of management
D)duty of morality
E)none of the other choices are correct
Q2) Under the Uniform Franchise Act,franchisors have the right to terminate franchisees that are found to be in "serious violation" of the terms of the franchise agreement.
A)True
B)False
Q3) A person doing business for herself is a ____________;the business is a
A)partner;partnership
B)general partner;limited partnership
C)member;syndicate
D)shareholder;corporation
E)none of the other choices
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Chapter 14: Agency and the Employment Relationship
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Sample
Questions
Q1) If a payment amount is not specified in the agency agreement,a principal's duty to compensate means that the principal must pay the agent:
A)however much the agent's attorney demands
B)at least half the customary rate
C)for the rational value of the services provided
D)however much the agent demands
E)none of the other choices are correct
Q2) Under the rule of _________ a principal or employer can be liable for the authorized or unauthorized intentional or negligent torts of agents and employees who were acting within the scope of employment.
A)fiduciary duty
B)indemnification
C)agent respondeat
D)third-party rights,duties,and liabilities
E)none of the other choices
Q3) All employee handbooks are held to create binding contractual obligations on the part of employers who use them.
A)True
B)False
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Page 16
Chapter 15: The Regulatory Process
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Sample Questions
Q1) The details of an agency's structure and how it operates internally are covered in:
A)procedural rules
B)agency rules
C)structural rules
D)formal rules
E)interpretative rules
Q2) Administrative agencies are generally created by:
A)a Supreme Court order
B)federal courts to help in areas difficult to regulate by litigation
C)an enabling statute of Congress
D)an executive order of the President
E)a Supreme Court order following an enabling statute of Congress
Q3) A major notable expansion in administrative agencies came during which period:
A)the Good Times Era
B)the Revolutionary War
C)the Civil War
D)the Great Depression
E)none of the other choices
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17
Chapter 16: Employment and Labor Regulations
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Sample Questions
Q1) In Teamsters Local Union No.523 v.National Labor Relations Board,where a sales representative complained of unfair labor practices after he was demoted by the union when his employer consolidated its distribution so that the union would represent all distribution workers,rather than only some,the U.S.Court of Appeals held that:
A)the employee was behind in his agency fee payments,so he had no claim to keeping his position
B)the employee should have to join the union or pay agency fees if he wanted to keep his seniority position
C)the union and employer were discriminating against the employee in a way that encouraged union participation
D)the union and employer were not discriminating against the employee in a way that encouraged union participation
E)the union and employer were discriminating against the employee,but not in a way that encouraged union participation
Q2) The NLRB has jurisdiction over all unionized employees and all government workers.
A)True B)False
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Page 18
Chapter 17: Employment Discrimination
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Sample Questions
Q1) A qualified job applicant is confined to a wheelchair.An employer does not have to hire the person if the bathrooms at the place of employment are not wheelchair accessible.
A)True
B)False
Q2) It does not violate the ADA to ask about problems with drug usage in the past,since drugs are an illegal substance,but it is illegal to ask about past problems with alcohol.
A)True
B)False
Q3) If,at a trial for employment discrimination,the employer offers a job-relevant rationale for the decision that was made that the plaintiff is claiming is in fact discrimination,the plaintiff must show that the employer's rationale is what is called a:
A)prima facie excuse
B)constructive excuse
C)pretext
D)disparate
E)differential
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Chapter 18: Environmental Law
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Sample Questions
Q1) The Williams live on a farm.BG Company has been drilling for oil next to their property.The Williams' water now stinks and contains assorted chemicals.Tests show the water has been tainted with the chemicals used in BG's drilling.If the Williams sue BG for damages for their tainted water well,what theory would they best use?
A)public nuisance
B)fraud
C)conversion
D)strict liability in tort
E)misappropriation
Q2) During the 1960s the public became more concerned about the environment.The concern at that time,was sparked,in part,by:
A)the nuclear disaster at Chernobyl
B)the Exxon Valdez oil spill
C)the publication by Rachel Carson of "Silent Spring"
D)the decline of the elephant herds in Africa
E)all of the other choices
Q3) States are responsible for designating the intended use of all surface water.
A)True
B)False
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Page 20
Chapter 19: Consumer Protection
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Sample Questions
Q1) Which of the following items is not required to be disclosed by a creditor as a part of the statement given a debtor?
A)service,activity,carrying and transaction charges
B)loan fees and points
C)fees for credit reports and appraisals in non-real estate transactions
D)charges for credit life and credit accident and health insurance
E)all of the other choices are required to be disclosed
Q2) Which of the following is NOT a required disclosure under the Consumer Leasing Act:
A)number,amount,and period of the payments and the payment total
B)express warranties offered by the leasing party or the manufacturer of the leased property
C)identification of the party responsible for maintaining the leased property
D)all of the other specific choices are required
E)none of the other specific choices are required
Q3) Consumers who borrow money in the U.S.have,in general,far more rights under the law than is true in other wealthy nations such as Germany and the U.K.
A)True
B)False
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21
Chapter 20: Antitrust Law
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Sample Questions
Q1) The Noerr-Pennington doctrine holds that lobbying members of the legislature to seek special favors for a competitor does not violate the antitrust laws.
A)True
B)False
Q2) Acme produces hamburger at a processing plant.Stores send trucks to pick up the meat.Prince,a large chain of grocery stores,tells Acme it will buy its hamburger if Acme will charge it 5% less than what the grocery stores pay.Acme sells the meat to Prince for less.What violation of the antitrust law may have occurred?
A)illegal resale price maintenance
B)illegal exclusive dealing
C)illegal vertical integration
D)illegal boycott
E)none of the other choices
Q3) Predatory pricing is when a company raises prices and tries to get other sellers to do the same.
A)True
B)False
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22
Chapter 21: Securities Regulation
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Sample Questions
Q1) A corporate debt instrument usually specifies:
A)the length of the debt period
B)the debt repayment method and rate of interest
C)how many shares may be sold to investors
D)the length of the debt period and the debt repayment method and rate of interest
E)the length of the debt period and the debt repayment method and rate of interest and how many shares may be sold to investors
Q2) The rationale behind prohibiting insider trading is that:
A)it gives the public an unfair advantage
B)it puts people with inside information at a competitive disadvantage
C)it gives people in high positions in a company an unfair advantage
D)it reduces the compensation packages of executives
E)it is a perk of the job for executives
Q3) Which of the following is a securities professional:
A)a broker
B)a dealer
C)an adviser
D)all of the other specific choices are correct
E)none of the other specific choices are correct
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Page 23
Chapter 22: The International Legal Environment of Business
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Sample Questions
Q1) The GATT organization was renamed the International Trade Organization.
A)True
B)False
Q2) The World Trade Organization replaced the:
A)the United Trade Organization
B)the International Trading Union
C)the General Agreement on Tariffs and Trade
D)the European Trade Organization
E)the Unified Trade Group
Q3) Burlite contracts to grant a French business access to its patents.The French company is responsible for producing Burlite in France.This agreement is a:
A)licensing agreement
B)joint venture
C)wholly owned subsidiary
D)direct marketing agreement
E)none of the other choices
Q4) When a country expropriates property,it generally violates international law.
A)True
B)False
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