Entrepreneurship and the Law
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Course Introduction
Entrepreneurship and the Law explores the critical legal concepts and frameworks that shape entrepreneurial ventures from inception to growth. This course examines foundational topics such as intellectual property rights, business formation and structure, contracts, financing and securities regulation, employment law, and regulatory compliance. Students gain practical insights into how legal considerations influence decision-making, risk management, and innovation in the entrepreneurial process. Through real-world case studies and interactive projects, participants develop the ability to identify and address potential legal challenges, equipping them with essential tools to launch and sustain successful businesses.
Recommended Textbook
Business Law 9th Edition by Andy Gibson
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36 Chapters
1525 Verified Questions
1525 Flashcards
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Page 2
Chapter 1: Legal Foundations
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Sample Questions
Q1) Which of the following statements is true?
A) The law of Equity applies to all civil disputes.
B) The law of Equity only applies to criminal matters.
C) The law of Equity does not apply to all criminal matters.
D) The law of Equity does not apply to all civil disputes.
Answer: D
Q2) How would you describe the law?
Answer: Law is a set of rules developed over a long period of time regulating people's interactions with each other and which sets standards of conduct between individuals and other individuals and individuals and the government.
Q3) The main function of the Australian Parliament is to:
A) Determine State government policies.
B) Protect the rights of the citizens.
C) Inform the citizens of their rights.
D) Enact laws according to the Australian Constitution.
Answer: D
Q4) Roman law, Canon law and Merchant law are major sources of English law.
A)True
B)False
Answer: False
Page 3
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Chapter 2: Origins of Australian Law
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Sample Questions
Q1) The supreme law making power in Australia is exercised by:
A) The Parliament.
B) The High Court.
C) The Government.
D) The Ministers in the Cabinet.
Answer: A
Q2) The case of <i>Mabo v Queensland (No. 2)</i> (1992) 175 CLR 1 is significant because it:
A) Determined that Australia had been peacefully settled.
B) Established the Native Title Act (1993) (Cth).
C) Granted native title rights to the Aboriginal people.
D) Recognised the pre-existing rights of the Aboriginal people.
Answer: D
Q3) Native title is a grant or right created by government.
A)True
B)False
Answer: False
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Chapter 3: Legal Systems
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Q1) In NSW, a complaint about racial discrimination would be dealt with in the Civil and Administrative Tribunal.
A)True
B)False
Answer: True
Q2) Which of the following is NOT one of the differences between Tribunals and Courts?
A) The jurisdiction of a court is usually restricted to a narrow area, whereas the jurisdiction of a tribunal is more general.
B) The decision of a court can usually be appealed, whereas the decision of a tribunal is usually final.
C) Courts generally allow legal representation, whereas tribunals generally restrict legal representation.
D) Tribunals are less formal and less intimidating than courts.
Answer: A
Q3) The term jurisdiction refers to the types of cases a particular court can hear.
A)True
B)False
Answer: True
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Chapter 4: How Law Is Made: Precedentstatute Law
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Q1) Obiter dictum can never be a binding precedent.
A)True
B)False
Q2) Which of the following best describes the literal rule of statutory interpretation?
A) The meaning and intention of language used in the Act is clear and it is the court's duty to apply it.
B) The meaning and intention of language used in the Act is unclear so it is necessary to look at the law before the statute was passed.
C) The meaning and intention of language used in the Act is unclear so it is necessary to read the act in its entirety and ask 'What mischief is this statute intended to remedy?'.
D) The meaning and intention of language used in the Act is clear and it is the court's duty to apply it unless that would result in absurdity, injustice or repugnance.
Q3) The use of the word: 'means' in legislation indicates that a word has an exact meaning.
A)True
B)False
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Chapter 5: Civil Liability: The Law of Torts and Negligence
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Q1) As an alternative to bringing an action in tort, a victim may choose to seek compensation by way of:
A) A criminal injuries compensation scheme.
B) A workers' compensation scheme.
C) A motor accident compensation scheme.
D) Any of the above.
Q2) Which of the following is NOT a factor a court will take into account when assessing the relevant standard of duty?
A) The seriousness of the consequences if an injury occurs.
B) The probability of the risk of injury.
C) The level of remorse expressed by the defendant.
D) The opportunities for, and cost of, eliminating the risk.
Q3) The test to determine the standard of care:
A) Is a question of law for the judge.
B) Is an objective test of the reasonable person.
C) Will vary with the circumstances.
D) All of the above.
Q4) What is the name of the test that the courts use in determining the existence of a duty of care in any given circumstance?
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Chapter 6: Applications of Negligence to Business
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Q1) For an occupier, where the risk is obvious, the duty is minimal.
A)True
B)False
Q2) Under common law, an occupier owes a duty of care to all people coming onto their premises, including trespassers. Why do you think the courts extended this duty of care to trespassers? Do you think that the courts' approach was justified?
Q3) What is meant by the term 'vicarious liability'?
Q4) Do you think it appropriate that volunteers and 'Good Samaritans' be protected from the consequences of their carelessness? Explain your answer.
Q5) In <i>Grant v Australian Knitting Mills</i> [1936] AC 85, the manufacturer:
A) Was liable to the customer under the product liability law.
B) Was not liable to the customer for breach of an implied term in the contract.
C) Was not liable because the customer had the opportunity to inspect the product.
D) Was liable for breach of duty of care owed to the customer.
Q6) Pure economic loss means there is no physical damage or injury.
A)True
B)False
Q7) What is occupier's liability?
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Chapter 7: Introduction to Contracts
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Sample Questions
Q1) A contract for the sale of land that is not evidenced in writing will be:
A) Void.
B) Unenforceable.
C) Voidable.
D) Executory.
Q2) In the context of contract law, which of the following best describes the element of 'intention'?
A) Something of value passing from one party to another in return for a promise to do something.
B) An offer by one party and an acceptance by the other.
C) The parties must intend that their promises create legally enforceable obligations.
D) All of the above.
Q3) Which of the following is an essential element in determining the validity of a simple contract?
A) Genuine consent.
B) Consideration.
C) Legality of purpose and form.
D) Legal capacity.
Q4) What is a quasi-contract?
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Chapter 8: Agreement Between the Parties
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Q1) According to the postal rule:
A) An acceptance will only be effective it is sent by post.
B) Revocation of an offer is effective as soon as it is posted.
C) Offer and acceptance are only effective when received.
D) An acceptance will be effective if it is sent by post or a faster method.
Q2) It is important to identify when parties have reached agreement because:
A) A contract comes into existence once agreement is reached.
B) The terms and conditions agreed to create legally enforceable rights.
C) It helps to determine the time and place of the contract.
D) All of the above.
Q3) In respect to a purported contract an offer made to a person is ineffective if:
A) It is made to a group of people without specifying who in the group can accept the offer.
B) It is not brought to the notice of the person to whom it is directed.
C) It is made to the whole world.
D) It is not made in writing.
Q4) Explain the difference between an offer and an invitation to treat.
Q5) If an offer and acceptance cannot be identified, there can never be a contract. A)True B)False
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Chapter 9: Intention to Create Legal Relations
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Sample Questions
Q1) In commercial agreements, the courts presume that the parties did intend to create legal relations.
A)True B)False
Q2) In a non-commercial agreement, the onus is on the plaintiff to demonstrate intention.
A)True B)False
Q3) A volunteer intends to create legal relations.
A)True
B)False
Q4) What is a letter of comfort?
Q5) In which of the following cases did the court decide that a husband's promise to his wife to pay her maintenance while they were forced to live apart was not contractually binding?
A) Balfour v Balfour [1919] 2 KB 571.
B) Wakeling v Ripley (1951) SR(NSW) 183.
C) Simpkins v Pays [1955] 1 WLR 975.
D) Shortall v White [2007] NSWCA 272.
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Chapter 10: Consideration
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Sample Questions
Q1) The rule in Foakes v Beer was not applied in Hirachand Punamchand v Temple [1911] 2
KB 330 because:
A) The payment was accepted by the creditor.
B) The debt was paid by a third party.
C) The debt was paid with interest.
D) The debt was paid in full.
Q2) Explain what is meant by the expression 'valuable consideration.'
Q3) Consideration must be present or future, it cannot be past.
A)True
B)False
Q4) Which of the following is the best example of past consideration?
A) A pays B $10.00 today in return for B giving A a book today.
B) A promises to pay B $10.00 tomorrow in return for B giving A a book tomorrow.
C) A promises to pay B $10.00 tomorrow in return for B giving A a book yesterday.
D) All of the above.
Q5) A promise to accept a lesser sum in satisfaction of a greater sum will be enforceable if it is contained in a deed.
A)True
B)False
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Chapter 11: Capacity of the Parties
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Q1) A contract with a minor which the minor has a right to repudiate is called:
A) A good contract.
B) A void contract.
C) A valid contract.
D) A voidable contract.
Q2) A person who becomes bankrupt is prohibited from entering contracts.
A)True
B)False
Q3) In NSW, a contract will be binding on a minor provided:
A) It is for the minor's benefit.
B) It satisfies the definition of a 'civil act.'
C) The minor is old enough to understand it.
D) All of the above.
Q4) Under the NSW Act, which of the following factors is NOT important when considering what is for the minors benefit?
A) The type of transaction.
B) The fairness of the bargain.
C) How the minor pays for their good or service.
D) The age of the infant.
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Chapter 12: Genuine Consent
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Q1) Only mistakes of law can render a contract void.
A)True
B)False
Q2) Explain the difference between innocent and fraudulent misrepresentation.
Q3) A common mistake involves genuine agreement between the parties.
A)True
B)False
Q4) Which of the following statements is the best description of 'common mistake'?
A) Both parties have made the same mistake about the existence or identity of the subject matter of the contract.
B) One of the parties is mistaken as to the nature of the document which they have signed.
C) Both parties are mistaken about a material fact that is important to the subject matter of the contract.
D) One of the parties is mistaken about a material fact regarding the subject matter of the contract, and the other party takes advantage of this mistake.
Q5) In order to succeed in an action in negligent misrepresentation, what must the plaintiff establish in a court?
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Chapter 13: Is the Contract Legal
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Sample Questions
Q1) The decision in Atwood v Lamont [1920] 3 KB 571 was based on the fact that:
A) The restraint of trade clause was an unreasonable exercise of the employer's superior bargaining power.
B) The restraint of trade clause was a reasonable protection of the employer's proprietary interest.
C) The restraint of trade clause was imposed merely to restrict competition.
D) Arms length bargaining with legal advice on both sides meant there was no inequality of bargaining power.
Q2) When a contract is legal at its creation but subsequently becomes illegal:
A) Remedies are never available to the guilty party.
B) Remedies are available to the guilty party as long as the innocent party receives their remedies first.
C) Remedies are sometimes available to the guilty party.
D) Remedies are always available to the guilty party.
Q3) A contract deemed illegal when it is formed will be:
A) Valid and enforceable.
B) Valid but unenforceable.
C) Valid but voidable.
D) Void and unenforceable.
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Page 15
Chapter 14: Terms of the Contract
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Q1) Which of the exceptions to the parol evidence rule is illustrated by the case of Van Den Esschert v Chappell [1960] WAR 114?
A) To prove a trade custom.
B) Where the court is of the opinion that the written document contains only part of the agreement.
C) To clarify ambiguous language used in the contract.
D) To demonstrate that a description is false.
Q2) Which of the following is NOT a reason a court will imply a term into a contract?
A) That the term follows a well-known trade custom in a particular industry.
B) That by implying the term it would cure an obvious omission and give the contract business efficacy.
C) The term is required by statute.
D) That by implying the term it would make a fairer bargain.
Q3) What is the court's rationale for distinguishing between 'representations' and 'terms'? Do you agree with this rationale?
Q4) Breach of condition allows the injured party to only sue for damages.
A)True
B)False
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Page 16
Chapter 15: Rights and Liabilities of the Parties, Discharge and Remedies
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Q1) A contract for personal services can not be assigned.
A)True
B)False
Q2) Only a party to an insurance policy can obtain an indemnity under it.
A)True
B)False
Q3) Using case law examples, demonstrate how the doctrine of frustration has evolved over the last 200 years.
Q4) Which of the following involves the discharge of a contract by performance?
A) One of the parties becomes bankrupt.
B) Each party discharges the obligation of the other to perform the contract.
C) The parties carry out exactly the terms of the contract.
D) Performance of the contract becomes impossible due to the occurrence of an unforeseen event.
Q5) Which of the following is NOT an example of an assignment of rights by operation of law?
A) Rights against a manufacturer under the Australian Consumer Law.
B) Executor of a deceased estate.
C) Bankruptcy.
D) Assignments under the state property law statutes.
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Chapter 16: Remedies in Contract
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Q1) Rescission is a remedy for breach of contract.
A)True B)False
Q2) To recover special damages under the rule in Hadley v Baxendale (1854) 9 Ex 341 the plaintiff must make known to the other party the special circumstances at the time the contract is entered into.
A)True B)False
Q3) What is a penalty?
Q4) Which of the following is the best description of an 'interlocutory' injunction?
A) A court order restraining the defendant from removing or disposing of assets until the court makes a decision.
B) A court order requiring the person to perform some contractual obligation.
C) A court order preventing a breach of contract.
D) A court order which freezes the status quo between the parties until the dispute can be heard by the court.
Q5) Nominal damages are the usual remedy in contract law.
A)True B)False
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Chapter 17: Statutory Consumer Guarantees and the Australian Consumer Law
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Q1) Which of the following services are NOT covered by the consumer guarantees in the Australian Consumer Law?
A) Telecommunications.
B) Electricity.
C) Gas.
D) All of the above.
Q2) In Grant v Australian Knitting Mills [1936] AC 85, why was Grant entitled to sue the retailer under Sale of Goods legislation?
Q3) When will a buyer of defective goods NOT be protected under the Australian Consumer Law?
A) If the defect was brought to their attention by the supplier.
B) If the buyer caused the damage to the goods.
C) If the buyer examines the goods and fails to discover an obvious defect.
D) All of the above.
Q4) Section 64 of the Australian Consumer Law prevents a consumer from agreeing to exclude, restrict or modify their consumer guarantee rights in any way.
A)True
B)False
Q5) What is the difference between a sale by sample and a sale by description?
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Chapter 18: General and Specific Consumer Protections
Under the Acl
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Q1) The Australian Consumer Law in ss 20 to 22 provides remedies for:
A) Unconscionable conduct when supplying goods or services to a person (other than a listed public company).
B) Unconscionable conduct at common law by a person in the course of trade or commerce.
C) Unconscionable conduct when acquiring goods or services from a person (other than a listed public company).
D) All of the above.
Q2) Accepting payment without intending to supply is not an offence under the ACL but rather an offence under the Crimes Act 1901.
A)True
B)False
Q3) The consumer protection provisions of the Australian Consumer Law can only be enforced by the Commonwealth.
A)True
B)False
Q4) Section 18 is often used by businesses to take action against competitors.
A)True
B)False
20
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Chapter 19: Agency
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Q1) When an agent negotiates a contract between a principal and a third party, the agent acquires no rights or duties under the contract.
A)True
B)False
Q2) Which of the following is an example of an agency created by ratification?
A) Adam is entrusted with Peter's property and finds it necessary to do something with it in order to preserve it.
B) Peter retrospectively affirms the authority of Adam.
C) Adam and Peter become partners in a partnership.
D) Peter appoints Adam under a general power of attorney to carry out a particular transaction on his behalf.
Q3) Death of one of the parties will terminate an agency agreement.
A)True
B)False
Q4) A del credere agent is a general agent who buys and sells without having possession or control of the goods or their documents.
A)True
B)False
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21
Chapter 20: Introduction to Companies and Incorporated
Associations
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Q1) The term: 'lifting the corporate veil' refers to giving rights and obligations to persons who would otherwise be protected by the separate legal entity principle.
A)True
B)False
Q2) The case of Salomon v Salomon & Co Ltd [1897] AC 22 is authority for the principal that:
A) The debts of a company are the debts of its shareholders.
B) A company is a legal entity separate from its shareholders.
C) Debenture holders take precedence over unsecured creditors.
D) Companies must have more than one director.
Q3) The decision in ASIC v Gallagher (1993) 11 ACLC 286 was that non-executive directors of a company:
A) May rely on other directors providing them with important information.
B) Have a duty to inform themselves so that they can make independent judgments.
C) Must investigate all matters requiring their approval when they have been put upon enquiry.
D) All of the above.
Q4) What is meant by the term 'share capital'?
Q5) What is a prospectus?
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Chapter 21: Partnerships
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Q1) If two parties enter into a share farm agreement in which one provides the land and the other provides the labour, this is most likely to be a:
A) Partnership.
B) Employment relationship.
C) Joint venture.
D) Tenancy in common.
Q2) Conducting an isolated transaction together suggests a joint venture rather than a partnership.
A)True
B)False
Q3) The existence of a partnership is to be determined from what the parties do rather than what the parties call themselves.
A)True
B)False
Q4) Partnerships must be associations formed with a view to profit.
A)True
B)False
Q5) Is it necessary for a partnership to advise customers when a partner retires?
Q6) What are the three factors that determine whether a partnership exists?
Page 23
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Chapter 22: Choosing a Business Entity
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Q1) A trustee is a person who benefits under the trust.
A)True
B)False
Q2) Which of the following statements about a sole trader is NOT true?
A) Most small businesses fail within the first five years of their establishment.
B) The death of the sole trader usually means the death of the business.
C) The degree of personal involvement by the sole trader can make the business difficult to sell.
D) Sole traders have limited liability for the debts of the business.
Q3) Which of the following statements about a trust is true?
A) A trust is administered and controlled by a trustee.
B) The trust is the most complex of business structures.
C) A trust is a creation of equity.
D) All of the above.
Q4) A franchisor is liable for the debts of a franchisee.
A)True
B)False
Q5) What is a sole trader?
Q6) What is a trust?
Page 24
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Chapter 23: Other Business-Related Torts
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Q1) In which of the following States have assault and battery been merged into the single crime of 'Assault'?
A) Western Australia.
B) South Australia.
C) New South Wales.
D) Victoria.
Q2) In relation to internet defamation cases, Dow Jones & Company Inc v Gutnick [2002] HCA 56 is authority for the principle that the cause of action will arise:
A) In the jurisdiction in which the company publishing the material is registered.
B) In the jurisdiction in which the publisher's server is located.
C) In the first jurisdiction in which the material is published in hard copy.
D) In the jurisdiction that the material is read.
Q3) Describe the differences between absolute privilege and qualified privilege in an action in defamation.
Q4) False imprisonment involves a total restraint of the plaintiff by the defendant to move about.
A)True
B)False
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25
Chapter 24: Insurance
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Q1) Which of the following is an example of an insurable interest?
A) Mortgagees and mortgagors.
B) Landlords and tenants.
C) A creditor against a debtor's insolvency.
D) All of the above.
Q2) The object of insurance is to spread the risk amongst all the insured.
A)True
B)False
Q3) Insurable interest means that the insured must suffer a pecuniary or financial loss.
A)True
B)False
Q4) Which of the following statements about subrogation is NOT correct?
A) Subrogation only applies to contracts of indemnity.
B) For subrogation to apply it must be agreed to by the parties as a term of the contract.
C) Subrogation gives the insurer all the rights of the insured against a third party who caused the loss.
D) Subrogation applies only after the insurer has paid the insured for their loss.
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Chapter 25: Sale of Goods
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Q1) A Romalpa clause is designed to:
A) Permit the seller to retake possession of the goods if the buyer defaults or goes into receivership or liquidation.
B) Protect the buyer of goods from delivery of unmerchantable or unacceptable goods.
C) Protect the seller of goods from failure of the buyer to pay for the goods.
D) Permit the buyer of goods to retain them against a claim by the holder of security over the goods.
Q2) Why was the purchaser entitled to rescind the contract in Hammer & Barrow v Coca-Cola [1962] NZLR 723?
A) The shortfall was insignificant.
B) More than 80% of the goods were defective.
C) The purchaser was not entitled to rescind the contract.
D) Delivery by instalments had not been agreed to.
Q3) The term caveat emptor means:
A) The buyer must beware.
B) The buyer must be protected.
C) The buyer must be blamed.
D) The buyer must be warned.
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Chapter 26: Electronic commerce
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Q1) Which of the following is the best definition of a 'firewall'?
A) Technology used to protect computer systems from unauthorised interaction.
B) Technology used by browsers to scramble personal information before it is sent over the Internet.
C) Technology involving use of data encryption and digital identification to ensure integrity of online communications.
D) The method used to identify a particular Internet address.
Q2) Which of the following is NOT one of the rules applied in the allocation of domain names?
A) Domain names are generally allocated to the first person or organisation to apply for the name.
B) The name must be derived from a registered Australian business or company name controlled by the applicant.
C) The applicant must prove past use of the name.
D) Ownership of a trademark does not entitle the trademark owner to incorporate that trademark in a domain name.
Q3) Locate the terms and conditions of a website which you frequently visit. Do those terms and conditions cover all of the issues listed on page 672 of the text?
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Chapter 27: Property and mortgages
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Q1) According to the Native Title Act 1993 (Cth), a person wishing to explore or mine land subject to a native title claim:
A) Must first obtain the consent of the claimants.
B) Must first notify the claimants.
C) Must first negotiate with the claimants.
D) Cannot proceed to mine until the claim is resolved.
Q2) Which of the following statements about strata title is NOT correct?
A) The strata title is vested in the owner's corporation.
B) A strata title is evidence of the horizontal subdivision of the land and/or airspace.
C) The owner's corporation is responsible for management, control and administration of the building.
D) A strata plan can only be registered over Torrens Title land.
Q3) What is the meaning of the term 'survivorship' in respect to interests in land?
Q4) A fixture is classified as:
A) Real property.
B) A chose in possession.
C) A chattel real.
D) A chose in action.
Q5) Describe the three main types of property.
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Chapter 28: Intellectual propert
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Q1) Which of the following is the best definition of 'confidential information'?
A) Information having a commercial value such as commercial, industrial or scientific information that is confidential to a particular business.
B) Information having a commercial value such as trade secrets.
C) Information having no commercial value, such as personal secrets and public or government secrets, the disclosure of which could cause distress.
D) All of the above.
Q2) What was the reason for the decision in Francesco Cinzano and Cia (Aust) Pty Ltd v Ruggiero (No. 2) (1980) 25 SASR 341?
A) Simply using the brand name or trade mark of another business is not sufficient to establish the tort of passing off.
B) There was no reasonable possibility of the public being deceived by the use of the plaintiff's name.
C) The difference in the nature of the two businesses was substantial.
D) All of the above.
Q3) What constitutes fair dealing?
Q4) Where does copyright exist?
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Chapter 29: Ethics and business practice
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Q1) Ethical investment involves investing in companies in order to make them behave ethically.
A)True
B)False
Q2) Why might a business choose to behave in an ethical manner?
A) To avoid legislative intervention by government to protect consumers or the market.
B) To avoid a community backlash and adverse consequences in the market.
C) To avoid adverse and damaging publicity.
D) All of the above.
Q3) Why is insider trading unethical?
A) Because the buyer of shares who is acting on inside information has effectively stolen the increase in share price from the seller.
B) Because it is unconscionable for the person with inside information to keep that information to themselves.
C) Because the person who sells their shares to a buyer acting on inside information has not done so willingly.
D) Because it is illegal.
Q4) What are some of the benefits to business in acting ethically?
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Chapter 30: Criminal law in a business context
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Q1) 'Chain of responsibility' legislation means that any person in a position of control in a transport operation can be held personally liable for breaches of road laws.
A)True
B)False
Q2) Which of the following is NOT an example of white collar crime?
A) Insider trading.
B) Gross negligence.
C) Environmental vandalism.
D) Misappropriation of funds.
Q3) When will company directors and managers be found criminally liable for breach of duties imposed by the Corporations Act 2001 (Cth)?
A) If they fail to act in good faith and in the best interests of the company.
B) If the breach is recklessly or intentionally dishonest.
C) There is no criminal liability for breach of duties under the Act.
D) If it is a civil penalty provision.
Q4) Failure to prevent insolvent trading (s 588G) can result in both civil and criminal penalties.
A)True
B)False
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Chapter 31: Restrictive trade practices
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Q1) Only the Australian Competition Tribunal can make authorisations.
A)True
B)False
Q2) A seller who supplies goods on condition that the buyer will not re-supply them to a third party is engaged in the practice of exclusive dealing.
A)True
B)False
Q3) 'Deeming' means the effect of the conduct is taken to exist without the need to prove it.
A)True
B)False
Q4) The concepts of 'market' and 'competition' are essential to the effective operation of the Competition and Consumer Act 2010 (Cth).
A)True
B)False
Q5) A supplier who supplies goods to a retailer is allowed to recommend a selling price for those goods.
A)True
B)False
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Chapter 32: Negotiable instruments
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Q1) Adam writes a cheque in favour of Bruce on a cheque form issued by CitiBank. In this situation who is Citibank?
A) The drawee.
B) The drawer.
C) The payee.
D) None of the above.
Q2) What is the relationship between cheques and bills of exchange?
A) Cheques and bills of exchange are both types of payment order.
B) A cheque and a bill of exchange are the same thing.
C) A bill of exchange is a type of cheque.
D) A cheque is a type of bill of exchange.
Q3) Which of the following statements about a cheque that has been crossed 'not negotiable' is NOT correct?
A) The cheque cannot be cashed over the counter.
B) The cheque cannot be negotiated.
C) The transferee cannot take a better title than the transferor.
D) The cheque cannot be transferred.
Q4) Both a cheque and a bill of exchange must be drawn on a bank account.
A)True
B)False
Page 34
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Chapter 33: Insolvency and Debt Recovery
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Q1) A bankrupt may be examined by the court upon the application of the trustee or a creditor.
A)True
B)False
Q2) Bankruptcy is a remedy of secured creditors.
A)True
B)False
Q3) Which of the following is NOT a step to commence bankruptcy proceedings?
A) Creditor serves a bankruptcy notice.
B) Meeting of creditors.
C) Creditor files a petition with court.
D) Debtor commits an act of bankruptcy.
Q4) In the context of debt recovery proceedings, which of the following is NOT a consideration when establishing a cause of action?
A) The balance of legal costs against the amount of the debt.
B) Evidence of breach of the contract.
C) The existence of a contract.
D) Calculation of the loss suffered.
Q5) What are the three main aims of the Bankruptcy Act 1966 (Cth)?
Q6) What are the ways in which a person can become bankrupt?
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Chapter 34: The Work Environment and the Employment Relationship
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Q1) What was the reason for the decision of the court in the case of Hollis v Vabu Pty Ltd [2001] HCA 44?
A) The worker did not provide labour that required qualifications or skill.
B) The worker could not refuse work.
C) The worker was required to wear the company uniform and was presented as a representative of the company.
D) All of the above.
Q2) When a business is sold, all existing contracts of employment carry forward to the new employer.
A)True
B)False
Q3) Where unsafe work conditions are created in a situation that is beyond the control of the employer, the employer must:
A) Take steps to ensure that all employees vacate the premises within a reasonable period.
B) Take all reasonable steps to eliminate the risk of injury.
C) Take all reasonable steps to minimise the risk of injury.
D) Take steps to ensure that all employees vacate the premises immediately.
Q4) Outline the duties of the employer and employee.
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Chapter 35: Consumer Credit and Privacy
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Q1) Which of the following is the best definition of a 'continuing credit contract'?
A) A credit contract entered into to pay for goods or services provided by a supplier who referred the borrower to the credit provider.
B) A credit contract in which multiple advances of credit are contemplated and the amount of available credit increases as the debt is reduced.
C) A credit contract whereby the borrower gives the credit provider rights to assets owned by the borrower to secure repayment under a credit contract.
D) A credit contract in which the credit provider is the borrower's employer and the loan is tied to the borrower's continued employment.
Q2) A person who promises to pay the full amount of the debt if the borrower defaults is called a:
A) Related borrower.
B) Linked borrower.
C) Judgment debtor.
D) Guarantor.
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Chapter 36: Ethics and Regulations in Marketing and Advertising
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Q1) Which of the following is a reason a business might choose to act ethically?
A) To avoid government regulation.
B) To avoid adverse market reaction.
C) To increase public confidence in the business.
D) All of the above
Q2) Which of the following is NOT protected by the law of copyright?
A) People and their images.
B) Concepts, techniques and slogans.
C) Ideas and information.
D) All of the above.
Q3) The question of ethics in a business context is relevant to:
A) Identifying the boundaries between acceptable and unacceptable behavior.
B) Avoiding liability for breach of the law.
C) Delivering a profit to shareholders.
D) All of the above.
Q4) The National Measurement Institute is the sole trade measurement authority in Australia.
A)True
B)False
38
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