Entrepreneurship Law Test
Questions
Course Introduction
Entrepreneurship Law examines the legal principles and frameworks that impact the formation, operation, and growth of startup ventures and small businesses. The course covers key topics such as business entity selection and formation, intellectual property protection, fundraising and venture capital, employment law considerations, contracts, regulatory compliance, and risk management. Students will learn to identify common legal issues entrepreneurs face and explore strategies for minimizing legal risks while supporting innovation and business growth. Case studies and real-world examples are used to illustrate how legal decisions affect entrepreneurial success.
Recommended Textbook
Introduction to Business Law 4th Edition by Jeffrey F. Beatty
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Page 2
Chapter 1: Introduction to Law
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Sample Questions
Q1) In 1994,the Arizona Supreme Court decided the case of Hernandez v.Arizona Board of Regents and found a duty of care to avoid furnishing alcohol to underage consumers.If in 2008 a Flagstaff,Arizona plaintiff brings a lawsuit against an Arizona university's fraternity for providing alcohol to members under the legal drinking age,the Hernandez v.Arizona Board of Regents case will serve as precedent.
A)True
B)False
Answer: True
Q2) Which of the following would be an example of a civil lawsuit?
A) George is being prosecuted for bank fraud.
B) The government has initiated an action against Jeff for operating a motor vehicle under the influence of alcohol.
C) Gretta hit Rita in a bar during happy hour.Rita is now suing for her injuries.
D) The district attorney is bringing Ali to court for violating the city's keg ordinance.
Answer: C
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3
Chapter 2: Business Ethics and Social Responsibility
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Sample Questions
Q1) Li is the vice president of marketing for Felson,Inc.,a manufacturer of children's clothing Felson is considering building a factory in a developing country,where there are few restrictions on working conditions,wages,or maximum work hours. Which viewpoint: utilitarian or deontological would support this move? Why?
Answer: A utilitarian viewpoint would support building a factory in a developing country because: Felson would save money,enabling them to lower their prices to consumers. Workers in developing countries are willing to work,even under harsh conditions,because they need the money. Industrialization,even with sweatshops,leads to economic growth for a society. Without the factory,the workers in this country may even starve.
Q2) Unethical behavior is a bar to financial success.
A)True
B)False
Answer: False
Q3) Generally,ethical managers have happier,more satisfying lives.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Courts,Litigation and Alterntive Dispute Resolution
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Sample Questions
Q1) Tony fell and injured himself in a Mega Toy Store.Mega Toy Store is incorporated in Delaware.Tony is a resident of Nevada but was injured in a Mega Toy Store located in Arizona.Mega Toy does not do business in Nevada.Tony's damages exceed $100,000.If Tony decides to sue Mega Toy Store:
A) he may file the lawsuit in an Arizona state court.
B) he may file the lawsuit in a federal district court in Arizona.
C) he must file the lawsuit in a federal district court because the federal courts would have diversity jurisdiction in this case.
D) Either a or b
Answer: D
Q2) Emails and their attachments are not subject to pretrial discovery.
A)True
B)False
Answer: False
Q3) In a civil case,the plaintiff must prove the case beyond a reasonable doubt. A)True
B)False
Answer: False
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Chapter 4: Constitutional, Statutory, Administrative, and Common Law
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Sample Questions
Q1) Most new law is created by
A) Stare decises
B) The Supreme Court
C) Statutes
D) Committees
Q2) Judicial review can best be described as the power of federal courts to:
A) review state court decisions.
B) review state executive action.
C) review state and federal legislative and executive action.
D) none of the above.
Q3) Separation of powers allows one of the branches of government to become more powerful over the other two.
A)True
B)False
Q4) The only issue covered in the First Amendment of the Constitution of the United States is free speech.
A)True
B)False
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Q5) Define the common law.Discuss its conflicting goals and the doctrine created to serve one of these goals.
Chapter 5: Intentional Torts and Business Torts
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Q1) A intensely negative opinion cannot be defamation.
A)True
B)False
Q2) Trein,Inc.entered into a one-year,$1 million contract with Mia,a sports celebrity,to promote Trein's products.E-presto Inc.,a competitor of Trein,was interested in having Mia promote its products and knew of her contract with Trein.E-presto offered Mia a three-year,$5 million contract.Mia left Trein and signed with E-presto.Which statement is correct?
A) Trein is liable for tortious interference with a contract.
B) Mia is liable for tortious interference with a contract.
C) E-presto is liable for tortious interference with a contract.
D) Both Mia and E-presto are liable for tortious interference with a contract.
Q3) The amount of money that will restore a person who suffers damages to the position he was in before the injury is called
A) Putative damages
B) Compensatory damages
C) Consequential damages
D) Economic damages
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Chapter 6: Negligence and Strict Liability
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Q1) Which of the following acts resulting in injury would be negligence per se?
A) Janet driving 40 mph over the posted speed limit.
B) Ted keeping explosives in his private,locked garage without complying with state law regulating the storage of such materials.
C) A retailer selling glue containing benzene to a 14-year-old boy in violation of state law.
D) All the above acts are negligence per se.
Q2) Res ipsa loquitur shifts the burden of proof from the plaintiff to the defendant.
A)True
B)False
Q3) A sports fan,injured by a hockey puck that flew into the stands during an NHL game,would be subject to the defense of assumption of the risk in a suit to recover for her injuries.
A)True
B)False
Q4) Discuss the concepts of contributory negligence and comparative negligence.
Q5) In negligence cases the courts often refer to the term "reasonable person." What is meant by this term?
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Chapter 7: Crime
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Sample Questions
Q1) Criminal defendants have the right to a lawyer at all the important stages of the criminal process.
A)True
B)False
Q2) Tina is an undercover police officer.One evening she is posing as a prostitute in a bar.Larry,a salesman who is attending an out-of-state convention,begins talking with Tina.After about ten minutes,Tina suggests going to her room for a good time but points out he will need to "donate" $100 to her.Arriving at Tina's hotel room,Larry asks if she is a policewoman.Tina lies and says she is not.When Larry gives her $100,Tina shows him her identification and arrests him.
A) Larry appears to have been the victim of entrapment since Tina lied about being a police officer.
B) Larry appears to have been the victim of entrapment since Tina was the one who suggested the activity that resulted in Larry's arrest.
C) Both of the above are correct.
D) None of the above is correct.
Q3) Compare and contrast money laundering and embezzlement.Give an example of each.
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Chapter 8: International Law
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Sample Questions
Q1) The United States is the world's largest exporter of agricultural products.
A)True
B)False
Q2) What is a tariff?
A) Selling goods at a cheaper price than they cost to put competition out of business
B) a duty imposed on imports
C) Selling goods at a cheaper unfair price
D) a duty imposed on exports
Q3) The European Union is one of the world's most powerful regional associations with 27 member nations as of 2011.
A)True
B)False
Q4) What is a major difference between a United States lawsuit versus a French lawsuit?
A) In a French civil lawsuit,there is usually no right to a jury trial.
B) The French legal system does not engage in extensive discovery procedures commonly used in the United States.
C) In a French lawsuit,the rules of evidence are more flexible.
D) All of the above are correct.
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Chapter 9: Introduction to Contracts
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Sample Questions
Q1) Which of the following represents a unilateral offer?
A) "I will pay you $50 if you mow my lawn."
B) "I will pay you $50 if you promise to trim that tree."
C) "I will pay you $50 for your CD player."
D) "I will pay you $50 for your backpack."
Q2) In seeking to determine whether there is a meeting of the minds,the courts look to how a reasonable person would objectively view the language or actions of the parties.
A)True
B)False
Q3) Contracts for the sale of fabric,automobiles,computers,furniture,and paper clips would all be governed by Article 2 of the Uniform Commercial Code.
A)True
B)False
Q4) Under a contract,Danielle is required to paint a room with paint chosen by the homeowners,the Flynns.After Danielle paints the room according to the contract requirements,her duties under the contract are discharged.
A)True
B)False
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Page 11
Chapter 10: Contract Impediments
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Sample Questions
Q1) Roger parked his car at a garage that has a large sign at the entrance saying,"This garage is not liable for items stolen from a car." This type of notice is referred to as an exculpatory clause.
A)True
B)False
Q2) Bry,Inc.and Gangl Co.entered into an oral agreement for the sale of 3,000 sweaters.Both parties performed as required under the contract.Bry delivered the sweaters and Gangl accepted and paid for them.Since the contract is fully executed,it makes no difference that it was oral.
A)True
B)False
Q3) Contract rescission can sometimes be based upon a unilateral mistake.
A)True
B)False
Q4) Discuss the effect of the Uniform Commercial Code on the law of sales contracts in the area of open terms.
Q5) Discuss two types of misrepresentation and how they differ.List the three things a party must show to rescind a contract based on misrepresentation.
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Chapter 11: Conclusion to Contracts
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Sample Questions
Q1) Cheryl enters into a contract with Gabe.In this contract,Cheryl asks Gabe to pay the money he owes her from the contract to her friend Leah because Leah is having financial troubles.Leah is:
A) a third party creditor beneficiary.
B) a third party donee beneficiary.
C) a third party incidental beneficiary.
D) the promisee in the contract.
Q2) Wright Company contracted with the city of St.Louis to train and employ disadvantaged youths.If Wright fails to fulfill the contract and is sued by one of the disadvantaged youths,the youth would:
A) win,as he is an intended beneficiary.
B) win,as he is a donor beneficiary.
C) lose,as he is a creditor beneficiary.
D) lose,as he is an incidental beneficiary.
Q3) Generally,the assignment of the obligation to perform personal services is invalid.
A)True
B)False
Q4) Briefly discuss the enforceability of contracts by third parties.
Q5) Discuss the potential liability differences between a delegation and a novation.
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Chapter 12: Practical Contracts
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Sample Questions
Q1) In the case of scrivener's errors (commonly known as typos),a court will usually:
A) reform the contract if it is clear that the mistake is not what the parties intended.
B) instruct the parties to rewrite the contract without the errors.
C) enforce the contract as written.
D) throw out the contract completely.
Q2) Statements of facts about the past and present are called:
A) provisions and terms.
B) promises and covenants.
C) representations and warranties.
D) damages and remedies.
Q3) Some contracting parties are intentionally vague in contract terms.
A)True
B)False
Q4) Ambiguities in contracts are always interpreted in favor of the side that wrote the contract,since they are the ones who know what the provision is supposed to mean.
A)True
B)False
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14
Chapter 13: Introduction to Sales
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Sample Questions
Q1) In which of the following situations is the seller a merchant under Article 2 of the UCC?
A) Paul,a full-time college student,sold his textbooks to State Bookstore.
B) Randall,a part-time college student and full-time father,sold his textbooks to a friend.
C) Zompa Inc.,a toy manufacturer,contracted to sell dolls to TonTon Department Store.
D) In all of the above situations the seller is a merchant.
Q2) Who is a Merchant
A) someone who routinely deals in the particular goods
B) someone who appears to have special knowledge or skill in certain goods,
C) someone who holds a merchant to a higher standard of conduct than a nonmerchant
D) all of the above
Q3) Lian contracted for financial services from E-wise.This contract is governed by Article 2 of the UCC.
A)True
B)False
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Chapter 14: Negotiable Instruments
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Q1) A "holder" of order paper can be described as:
A) the payee.
B) any person in possession of the instrument.
C) any person in possession of the instrument if it is payable to or indorsed to him.
D) the first party to come in contact with a negotiable instrument.
Q2) TriColor purchased an industrial stamping machine from Vicy,Inc.TriColor paid for the machine with a negotiable note.The note was payable to the order of Vicy,Inc.Vicy,Inc.indorsed the note and gave it to CCLoans to satisfy a debt.CCLoans knew nothing about the contract between TriColor and Vicy,Inc.CCLoans indorsed the note and gave it to Great River Youth Club as a charitable donation.When Great River Youth Club presented the note for payment on its due date,TriColor refused to pay,claiming that the stamping machine was defective.
(A)Is Great River Youth Club a holder in due course?
(B)Will TriColor be able to avoid liability to Great River Youth Club on the basis that the machine was defective?
Q3) A draft is always a check,but a check is not always a draft.
A)True
B)False
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16
Chapter 15: Secured Transactions
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Sample Questions
Q1) Pharm-Ace holds a patent on a drug.Pharm-Ace used the patent (evidenced by the patent certificate)to secure a $1 million loan from First Bank.The patent is chattel paper.
A)True
B)False
Q2) Micky,a mechanic,repaired Daphane's Dodge.Daphane failed to pay the repair bill of $595.Since Micky was still had possession of the car,he could therefore give notice of foreclosure on the car.
A)True
B)False
Q3) The initial term for which a financing statement will be effective is:
A) one year.
B) five years.
C) ten years.
D) two years.
Q4) Ken decided to open a retail boat dealership.He expects that many of his sales will be credit sales.What should Ken do to protect his interests in the collateral in the credit sales that he makes?
Q5) Explain the difference between attachment and perfection.
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Chapter 16: Bankruptcy
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Q1) Bankruptcy is regulated by federal law.
A)True
B)False
Q2) Debts that cannot be discharged in bankruptcy include all EXCEPT: A) alimony.
B) income taxes.
C) negligence judgments.
D) fraud judgments.
Q3) Creditor claims are divided into classes and the highest class must be satisfied in full before going to the next category.
A)True
B)False
Q4) Karen has filed for bankruptcy.Who has the authority to confirm or reject a plan of payment,and what factors will be considered when deciding whether to approve a repayment plan under Chapter 13?
Q5) Mark and Cynthia work for Bryson Supply Co.If the company files for Chapter 7 bankruptcy before paying their last month of wages and benefits,will they be able to recover anything from the company?
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Chapter 17: Agency Law
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Q1) Grant is a delivery person for Watkins Furniture.One day,after delivering a chair to Nadine's house,he stopped at a fast food restaurant to get a sandwich at the drive-through window.As he was leaving the parking lot,he accidentally hit the rear of Blanche's car.Discuss the possible liability of Watkins for Grant's accident.Would there be any difference in the potential liability of Watkins if Grant had the accident after driving 30 miles away to visit a friend?
Q2) Barnett was orally hired by Paula to locate desirable real estate that she could use for rental property.She stated she wanted to find a four-plex that could be purchased for under $200,000 that could be rented for at least $1,000 per month per unit (which equates to $4,000 rental per month for the property).Barnett located a four-plex that could be purchased for $160,000 and was renting for $1,200 per unit.It was such a good deal that he purchased it for himself.About two months later he found a second property that was listed for $199,000 and rented for $1,000 per unit.Paula purchased the property.Afterwards,she learned that Barnett had bought the $160,000 four-plex for himself without telling her about it.Paula believes that Barnett has acted improperly.Barnett claims that he did what she asked -- he found a property for under $200,000 that rented for $1,000 per unit.He also claims that since their agreement was oral,he has a legal defense if she pursues the matter in court.Does Paula have any legal recourse against Barnett? Explain.
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Page 19
Chapter 18: Employment Law
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Q1) The Fair Labor Standards Act:
A) wage provisions do not apply to professional or managerial employees.
B) limits the number of hours an employer can require a person to work in any given week.
C) does not apply to children.
D) preempts any state wage regulation.
Q2) Under the Family and Medical Leave Act,an employee can take up to 12 weeks of paid leave each year for certain personal and family illness situations.
A)True
B)False
Q3) The Family and Medical Leave Act applies to:
A) companies with 15 or more full-time workers.
B) companies with 50 or more employees.
C) companies with 100 or more employees.
D) any company engaged in interstate commerce.
Q4) Some courts have held that employee handbooks create binding contract terms.
A)True
B)False
Q5) Discuss the requirements of the Family and Medical Leave Act.
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Chapter 19: Employment Discrimination
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Q1) Discuss what considerations are made when determining what accommodations are reasonable?
Q2) The Age Discrimination in Employment Act would be violated if a company refuses to interview and hire applicants under twenty years of age.
A)True
B)False
Q3) Valid defenses to charges of discrimination include all of the following,except:
A) Merit
B) Seniority
C) Test scores
D) Bona fide occupational qualification
Q4) Which of the following is NOT an available remedy for infractions of Title VII?
A) job reinstatement
B) reasonable attorney fees
C) punitive damages up to $1 million
D) retroactive seniority
Q5) It would be permissible to ask a woman about child care arrangements.
A)True
B)False
Q6) What is the Genetic Information Nondiscrimination Act?
Page 21
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Chapter 20: Labor Law
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Q1) Secondary boycotts:
A) are generally legal provided the boycott is peaceful.
B) are generally legal provided the boycott does not involve public employees such as nurses or school teachers.
C) are not expressly permitted nor prohibited under federal law.
D) are generally illegal.
Q2) A fundamental aim of the National Labor Relations Act is the establishment of industrial peace and the preservation of the flow of commerce.
A)True
B)False
Q3) At one point in American history,American courts regarded any coordinated effort by workers as a criminal conspiracy,and courts convicted workers merely for the act of joining together,even if no strike took place.
A)True
B)False
Q4) The five members of the National Labor Relations Board are appointed by the President.
A)True
B)False
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Chapter 21: Starting a Business: Llcs and Other Option
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Q1) A partnership is a taxable entity,separate from the partners.
A)True
B)False
Q2) Alan,a dentist,and his wife Martha,an attorney,can protect their personal assets with limited liability from their business dealings by creating and operating a professional corporation together.
A)True
B)False
Q3) An S Corporation cannot have more than ____ shareholders.
A) 100
B) 75
C) 50
D) 25
Q4) Limited liability is a major advantage of a partnership as compared to a corporation.
A)True
B)False
Q5) Briefly discuss the limitations on a corporation electing Subchapter "S" status.
Q6) What is a limited liability company? Explain the advantages and disadvantages of this type of business ownership?
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Chapter 22: Life and Death of a Corporation
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Q1) Owners of preferred stock typically have a preference in liquidation.
A)True
B)False
Q2) MegaCorp purchased 10,000 shares of its own stock that had previously been owned by private investors.The stock MegaCorp repurchased is called:
A) authorized and unissued.
B) authorized and issued.
C) treasury stock.
D) repurchased stock.
Q3) The officers of a corporation are:
A) chosen by the board of directors.
B) appointed by the president of the company.
C) elected by shareholders.
D) appointed by the Secretary of State.
Q4) Controlling shareholders have no fiduciary responsibility to minority shareholders.
A)True
B)False
Q5) What are some of the advantages for a business to incorporate in Delaware?
Q6) Discuss how a corporation is terminated.
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Chapter 23: Government Regulation: Securities and Antitrust
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Q1) Which of the following is not an element of a tying agreement under the Clayton Act?
A) The seller requires the buyer to purchase the two products together,
B) The seller is shutting out a significant part of the market for the tied product.
C) The seller has no significant power in the market place.
D) All the above.
Q2) Insiders must turn over to the corporation any profits they make from the purchase and sale or sale and purchase of company securities made within a six-month period.
A)True
B)False
Q3) The Clayton Act prohibits anti-competitive mergers. A)True
B)False
Q4) Per se violations are subject to both civil and criminal penalties. A)True
B)False
Q5) Discuss when monopoly power is not a violation of Section 2 of the Sherman Act.
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Chapter 24: Accountants' Liability
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Q1) Which of the following is not a provision of the Sarbanes-Oxley Act of 2002?
A) Congress established the Public Company Accounting Oversight Board,which has the authority to regulate public accounting firms,establishing audit rules and ethics guidelines.
B) After five years with a client,the lead audit partner must rotate off the account for at least five years.
C) Congress established the American Institute of Certified Public Accountants to develop ethical guidelines in a Code of Professional Conduct.
D) Auditors must communicate regularly and completely with audit committees of their clients and must describe options the firm considers in preparing financial statements.
Q2) Under the Ultramares doctrine,Halbeck will be liable to Great State Bank for its losses on the loan.
A)True
B)False
Q3) An auditor suspects its client is committing illegal acts that will have a material impact on its financial statements.What is the auditor legally required to do and under what circumstances would the auditor directly notify the SEC?
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Chapter 25: Consumer Law
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Q1) Employers must have written permission from job applicants to request a credit report.
A)True
B)False
Q2) The Federal Trade Commission Act considers the terms "deceptive" and "unfair" to be synonymous when determining what practices should be prohibited.
A)True
B)False
Q3) Congress tightened oversight of credit card companies by enforcing the following::
A) cannot increase interest rates on pending balances
B) cannot charge late fees
C) cannot allow a consumer to exceed his or her credit limit.
D) cannot issue a credit card to someone under 21 unless the person is a student.
Q4) The Magnuson-Moss Warranty Act covers all consumer products regardless of their cost.
A)True B)False
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Chapter 26: Environmental Law
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Q1) Discuss the major provisions of the Clean Air Act.
Q2) James owned real estate.He leased the building to two tenants.An insurance agent leased the first floor and a law firm leased the second floor.James later sold the land to Mary,who used the entire building for her business.She discovered that there were underground storage tanks buried in the land.She had to remove the tanks and then sued James and the former tenants for the cost of removing the tanks,even though none of them knew the tanks had been there.
A) James and the two tenants are liable.
B) James is liable to Mary,but the tenants are not.
C) The tenants are liable to Mary,but James is not.
D) Neither James nor the tenants are liable to Mary.
Q3) Fresh Air,a nonprofit environmental organization,believes that Cincy Co.is violating the Clean Air Act.The EPA has not taken any action against Cincy Co.Fresh Air:
A) can file a citizen suit against the EPA.
B) can file an executive order with Cincy Co.
C) cannot file a lawsuit but can ask an administrative law judge to hear its complaint. D) cannot file a lawsuit but can lobby Congress to force the EPA to act.
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Chapter 27: Cyberlaw
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Q1) The CAN-SPAM Act:
A) Applies to virtually all promotional e-mails,whether or not the sender has a pre-existing relationship with the recipient.
B) Provides unavoidable requirements for senders of promotional e-mails.
C) Requires recipients of unsolicited,pornographic e-mails to notify the Justice Department.
D) Requires senders of promotional e-mails to provide a valid return address,which may be a post office box or a specific physical location.
Q2) Explain the difference between an ISP and a Web host,and discuss whether they are treated alike under the Communications Decency Act (CDA).
Q3) Lois receives an e-mail asking her to update her personal information on a website that is an illegal imitation of a legitimate site.This practice:
A) is a crime called phishing.
B) is a tort called information theft.
C) is a breach of contract action known as shilling.
D) may be prosecuted under the GLB Privacy Act.
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Chapter 28: Intellectual Property
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45 Verified Questions
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Sample Questions
Q1) Trademark owner and Famous people have the right to sue to get a their name which has been registered as a domain name which was registered in bad faith.
A)True
B)False
Q2) International copyright protection:
A) is automatic for works created in member countries of the Berne Convention.
B) is granted for the life of the author plus 70 years under the Berne Convention.
C) is not yet available for computer programs.
D) lacks any enforcement capability for overseas infringement of works authored in the United States.
Q3) Which of the following is correct?
A) A copyright can be renewed once it expires.
B) A patent can be renewed once it expires.
C) A trademark can be renewed as long as the mark is still in use.
D) None of the above.
Q4) Derrick buys a CD,but after listening to it,decides he doesn't like the music.May he legally sell the CD to someone else? If he thinks his cousin would enjoy the music,may he legally copy the CD for her?
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Page 30
Chapter 29: Real Property and Tenant: Landlord Law
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45 Verified Questions
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Sample Questions
Q1) The city of Richmond needs land owned by the Neelans to expand a middle school.The Neelans do not want to sell.Discuss what course of action the city can take and the basis for this action.
Q2) Laverne went to visit her best friend and while climbing the front steps to the apartment building she falls because she was leaning on a loose hand rail. Who is liable?
A) Laverne. She should have looked where she was walking and been more careful
B) Both the tenant and landlord if the step are a common area
C) The landlord only.
D) The tenant as she should have reported the loose rail to the landlord.
Q3) Wayne is renting an efficiency upstairs from Fields.Wayne decides to go to Europe for four months and lets his friend,Charlie,live in his apartment while he is away,with the understanding that Charlie will pay the rent.Wayne has:
A) assigned the apartment,but Wayne is still liable for the rent.
B) sublet the apartment,but Wayne is still liable for the rent.
C) assigned the apartment,but is not liable for any unpaid rent during Charlie's occupancy.
D) sublet the apartment,but is not liable for any unpaid rent during Charlie's occupancy.
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Chapter 30: Personal Property and Bailment
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Sample Questions
Q1) Distinguish between a contract and a gift.Give an example of each.
Q2) Which of the following is/are generally subject to a standard of strict liability for bailed goods?
A) Contract carriers and common carriers.
B) Common carriers and innkeepers.
C) Common carriers.
D) Contract carriers.
Q3) Mitch takes his two best suits to Quality Cleaners and receives a ticket as a receipt.Quality tells Mitch his suits will be cleaned and will be ready to be picked up on Monday.Another customer overhears the exchange and early on Monday goes to Quality,convinces the worker he is Mitch but that he has lost his receipt.He identifies and retrieves the suits,which happen to fit him perfectly,too.Quality Cleaners:
A) is strictly liable to Mitch for the suits.
B) is liable to Mitch only if Mitch can prove Quality was grossly negligent.
C) has no liability unless Mitch proves Quality did not use ordinary care.
D) will avoid liability if the receipt contained an exculpatory clause excluding gross negligence.
Q4) Discuss a bailor's liability for defects in the bailed property.
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Page 32
Chapter 31: Estate Planning
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Sample Questions
Q1) Per capita means each heir gets an equal share of an estate.
A)True
B)False
Q2) Which statement is not true of trusts?
A) Legal and beneficial ownership reside in the same entity
B) There are four parties involved: the grantor,the settlor,the donor and the beneficiary
C) A grantor can create a trust after her own death.
D) Trust documents are filed with the county court and are public documents.
Q3) Property of a person who dies without a will is distributed according to intestacy laws.
A)True
B)False
Q4) Mountain Ridge Bank has been named trustee for a $100,000 trust Fred and Martha Betts established for "the living children of the grantors." List the requirements for establishing a trust.Identify the primary obligation of the trustee and discuss the fiduciary duty of the trustee.
Q5) A spouse is entitled to a forced share of a decedent's estate.
A)True
B)False
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Chapter 32: Insurance
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Sample Questions
Q1) Sarah has car insurance.While driving her automobile,Sarah negligently ran a red light and hit Vi's car.Which type of coverage will pay for the damage done to Vi's car?
A) Liability insurance.
B) Comprehensive insurance.
C) Collision insurance.
D) Uninsured motorist insurance.
Q2) Insurance contracts are not required to be in writing because they can be fulfilled in less than one year but some states require they be in writing.
A)True
B)False
Q3) Which of the following insurance policies continue for a stated period of time with the premiums increasing with the age of the insured?
A) Double indemnity.
B) Term insurance.
C) Annuity contract.
D) Whole Life
Q4) Discuss the rules for insurable interests.
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