Fundamentals of Business Law Final
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Course Introduction
Fundamentals of Business Law provides a comprehensive overview of the legal principles and frameworks governing business activities. The course covers key topics such as contract law, agency, sales, negotiable instruments, business organization structures, and regulatory compliance. Students will learn how legal concepts influence business decisions, mitigate risks, and ensure ethical practices within a commercial environment. Through case studies and real-world examples, the course empowers learners with the foundational knowledge required to navigate legal challenges in the business world effectively.
Recommended Textbook
Business Law Text Cases An Accelerated Course 14th Edition by Roger LeRoy Miller
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Page 2
Chapter 1: Law and Legal Reasoning
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Sample Questions
Q1) Reba is a state court judge. In her court, legal and equitable remedies have merged. In these circumstances, distinguishing between these types of remedies is
A) not important because legal remedies cannot be granted today.
B) not important because equitable remedies cannot be granted today.
C) important so that statistical data on the remedies can be compiled.
D) important so that the proper remedy can be requested.
Answer: D
Q2) Larry enters into a contract with Motivational Education Services to host a panel discussion at a sales conference. When the conference is postponed indefinitely, Larry asks a court to cancel the contract and return the parties to the positions that they held before its formation. This request involves
A) specific performance.
B) an injunction.
C) rescission.
D) an action that the court cannot order.
Answer: C
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3
Chapter 2: Business and the Constitution
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Sample Questions
Q1) Rodrick, the chief executive officer of Social Post Host Inc., claims that certain actions by the state of Texas infringe on rights guaranteed by the Bill of Rights. Most of these guarantees have been held to limit
A) federal actions only.
B) federal and state actions.
C) federal and state actions, and actions by nongovernment entities.
D) actions by nongovernment entities only.
Answer: B
Q2) The Alternative Energy Association would like a certain law enacted, administered, interpreted, and enforced in the best interest of its members, which include solar power companies. Under the Constitution, Congress
A) administers the laws.
B) enforces the laws.
C) interprets the laws.
D) enacts the laws.
Answer: D
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4
Chapter 3: Courts and Alternative Dispute Resolution
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Sample Questions
Q1) State courts are superior to federal courts.
A)True
B)False
Answer: False
Q2) A choice-of-law clause is a provision in a contract that excuses a party from liability for nonperformance due to "acts of God."
A)True
B)False
Answer: False
Q3) Service Employees International Union and Timberline Products, Inc., have their dispute resolved in arbitration. The arbitrator arbitrates issues that the parties did not agree to submit to arbitration. This is a ground for a court to
A) none of the choices.
B) review the merits of the dispute.
C) review the sufficiency of the evidence.
D) set aside the award.
Answer: D
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Page 5
Chapter 4: Tort Law
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Sample Questions
Q1) Data Analytics, Inc., and eProducts Corporation market competing software products. Data Analytics launches an advertising campaign claiming that eProducts, instead of testing software before it is marketed, has customers "test" the software by using it. eProducts knows this is not true but begins to lose sales to Data Analytics. On what ground could eProducts sue Data Analytics for injury to eProducts' reputation?
Q2) Robin is a spectator at State Tennis Tournament, an athletic competition. Regarding the risk of injury, Robin assumes the risks A) attributable to the tournament in any way.
B) different from the risks normally associated with the tournament. C) greater than the risks normally associated with the tournament. D) normally associated with the tournament.
Q3) Jon wants to buy Kim's land, but she refuses to sell. Jon begins using subpoenas, court orders, and other formal legal procedures in an unrelenting effort to force Kim to sell. This is A) abuse of process. B) appropriation. C) wrongful interference with a contractual relationship. D) not a tort.
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Chapter 5: Criminal Law and Cyber Crime
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Sample Questions
Q1) One purpose of criminal sanctions is to deter others from committing similar crimes in the future.
A)True
B)False
Q2) Via the Internet, Rocco sabotages the computer system of Quik Chik'n Inc., a food manufacturer, with the purpose of altering the levels of ingredients of the company's products so that consumers of the food become ill. Rocco is
A) a cyberterrorist.
B) a network employee.
C) an entrapper.
D) a prosecutor.
Q3) Mia offers Nevin, a building inspector, money to overlook the violations in her new warehouse. Nevin accepts the money and overlooks the violations. Mia is charged with the crime of bribery. The crime occurred when
A) Mia decided to offer the bribe.
B) Mia offered the bribe.
C) Nevin accepted the bribe.
D) Nevin overlooked the violations.
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7
Chapter 6: Business Ethics
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Sample Questions
Q1) Any decision by the management of Fast-Food Franchise Corporation may significantly affect its
A) operators only.
B) operators, owners, suppliers, the community, or society as a whole.
C) owners only.
D) suppliers, the community, or society as a whole only.
Q2) Recreation & Sports Equipment Corporation sells a product that is capable of seriously injuring consumers who misuse it in a foreseeable way. Does the firm owe an ethical duty to take this product off the market? What conflicts might arise if the firm stops selling this product?
Q3) Brick & Mortar Construction & Masonry Corporation's ethics committee is asked a question: Should the firm bid low to obtain a contract that it knows it can fulfill only at a higher price? A practical method of investigating and answering this question involves all of the following steps except A) absolution.
B) decision.
C) inquiry.
D) justification.
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8
Chapter 7: Nature and Terminology
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Sample Questions
Q1) Francie drives into Gage's Auto Service and asks Gage to replace a tire on her car. After Gage replaces the tire, but before Francie pays for it, any contract between them is A) executed.
B) executory.
C) void.
D) unenforceable.
Q2) Informal contracts are usually based on their substance rather than their form. A)True B)False
Q3) On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil says that he has changed his mind. These parties had
A) an expired contract when Neil said that he had changed his mind.
B) a quasi contract when Neil said that he would pay for certain work.
C) a unilateral contract as soon as Outdoor began to perform.
D) no contract.
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Chapter 8: Agreement in Traditional and E-Contracts
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Sample Questions
Q1) An acceptance can materially change or add to the terms of the original offer without rejecting it.
A)True B)False
Q2) Business Properties, Inc. (BPI), offers to sell a cold storage warehouse to Corporate Investments. Corporate says that it will pay BPI $100 to hold the offer open for three business days. This
A) creates an illegal contract by adding a clause to BPI's offer.
B) makes the offer irrevocable for three days if BPI accepts.
C) negates BPI's offer by changing the price term.
D) voids BPI's offer by extending the time term.
Q3) The first requirement for an effective offer is a serious intent on the part of the offeror.
A)True B)False
Q4) If no time for acceptance is specified in an offer, the offer terminates after a reasonable length of time.
A)True B)False
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Chapter 9: Consideration, Capacity, and Legality
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Sample Questions
Q1) If a promise is made, it will be enforced.
A)True
B)False
Q2) A contract to commit a tortious act is unenforceable.
A)True
B)False
Q3) Ordinarily, minors can disaffirm contracts even when they have misrepresented their age.
A)True
B)False
Q4) To be legally sufficient, consideration must be evidenced by something tangible.
A)True
B)False
Q5) Jenny promises to pay Kay $500 because "she does not have as much money as other people." Jenny's promise is
A) enforceable because society wants people to keep their promises.
B) enforceable because the redistribution of wealth is a valid social goal.
C) not enforceable because Jenny could have paid Kyle more.
D) not enforceable because Kay has not given consideration in return.
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Chapter 10: Defenses to Contract Enforceability
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Sample Questions
Q1) Refer to Fact Pattern 10-3. Between Grain and Hearty, there is A) an oral contract only.
B) a pre-contract only.
C) a written contract.
D) no contract.
Q2) Ray agrees to buy one hundred pounds of almonds from Sol. To be enforceable, the agreement must be in writing if the almonds cost at least
A) $50.
B) $250.
C) $499.
D) $500.
Q3) Reliance on a misrepresentation is justified if the misrepresentation is an obviously extravagant statement.
A)True
B)False
Q4) For a party to a contract to receive relief from a mistake, the mistake must involve a material fact.
A)True B)False
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Chapter 11: Third Party Rights and Discharge
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Sample Questions
Q1) Delany & Sons, Inc., owes Evermore Bank $50,000. Delany enters into a contract with Floyd under which Delany promises to manage and oversee Floyd's Seaside Marina. Under the contract, Floyd promises to pay Evermore the amount that will be due Delany until his debt to Evermore is paid. Delany performs as promised, but Floyd does not pay the bank. Can Evermore succeed in a suit against Floyd? Why or why not?
Q2) Ann offers to buy Beth's land only if an appraiser estimates that its current value is more than a certain price. Later, the appraiser deems the worth of the land to be less than Beth's price. Ann and Beth's obligations
A) must still be performed.
B) must now be renegotiated.
C) are on "hold."
D) are discharged.
Q3) Anything less than complete performance is a material breach of contract. A)True B)False
Q4) In most cases, a contract that prohibits its assignment cannot be assigned. A)True B)False
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Page 13
Chapter 12: Breach of Contract and Remedies
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Sample Questions
Q1) Porches & Verandas, Inc., agrees to build a screen porch for Quinn, but fails to complete the job. Quinn hires Ramadas, Inc., to finish the project. Quinn may recover from Porches & Verandas
A) the contract price less costs of materials and labor.
B) the contract price.
C) the costs needed to complete construction.
D) profits plus the costs incurred up to the time of the breach.
Q2) The standard measure of compensatory damages is the value of breaching party's promised performance.
A)True
B)False
Q3) Dry Gulch Farms hires Elliot to repair its irrigation system on site on a certain date for $2,500, but Elliot does not show up as agreed. Dry Gulch hires Fernando to do the job for $2,000. Dry Gulch may recover from Elliot
A) nothing.
B) compensatory damages.
C) consequential damages.
D) nominal damages.
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Chapter 13: Intellectual Property Rights
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Sample Questions
Q1) An arbitrary use of ordinary words may not be trademarked.
A)True
B)False
Q2) In 2017, Kelly writes Like the Wind, a novel about marathoners and ultra marathoners. Kelly does not register the work with the appropriate government office. Under federal copyright law, Kelly's work is protected
A) for ten years.
B) for twenty years.
C) for the life of the author plus seventy years.
D) until a revised or updated edition is issued.
Q3) A person can reproduce copyrighted material for purposes such as teaching, including multiple copies for classroom use, without paying royalties.
A)True
B)False
Q4) A license permits the use of intellectual property for certain limited purposes.
A)True
B)False
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Chapter 14: Internet Law, Social Media, and Privacy
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Sample Questions
Q1) "Dawn" is a song included in the sound track of "eDay," a movie produced and distributed by FasTrac Corporation. The song features a digital sampling of a few seconds of the guitar solo of one of George Harrison's copyrighted sound recordings without permission. Does this digital sampling constitute copyright infringement on the part of FasTrac? Explain.
Q2) In some states, an unsolicited e-mail must include a toll-free phone number that the recipient can use to ask the sender to send no more unsolicited e-mail.
A)True
B)False
Q3) Basso includes in his song "Chords" a few seconds of Dante's copyrighted sound recording "Etudes" without permission. Some federal courts have found that such digital sampling is
A) a violation of copyright law.
B) a "fair use" exception to the provisions of the act.
C) not a "fair use" exception to the provisions of the act.
D) all of the choices.
Q4) A social media post cannot be used to invalidate a settlement agreement.
A)True
B)False
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Chapter 15: The Formation of Sales and Lease Contracts
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Sample Questions
Q1) A course of performance is the conduct that occurs under the terms of a particular agreement.
A)True
B)False
Q2) Dian, an agent for Expo Motors, Inc., writes a letter to Flynn on November 1 stating that she will sell him a 2017 Subaru Outback for $25,000 between November 1 and December 31. Dian's letter to Flynn is
A) a merchant's firm offer.
B) an acceptance.
C) an option contract.
D) none of the choices.
Q3) The UCC requires that the mirror image rule be followed for all acceptances.
A)True
B)False
Q4) Under the UCC, an offeree can accept an offer to buy goods by a prompt shipment of conforming goods.
A)True
B)False
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Chapter 16: Performance, Breach, and Warranties of Sales and Lease Contracts
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Sample Questions
Q1) In contracts involving a carrier, a seller can complete performance through a shipment contract or a destination contract.
A)True
B)False
Q2) Statements of opinion and value usually create express warranties.
A)True
B)False
Q3) Acceptance of goods precludes the buyer or lessee from exercising the right of rejection.
A)True
B)False
Q4) Under the UCC, a seller's tender of goods that do not conform in every way to a contract is still a valid tender.
A)True B)False
Q5) An installment contract is breached if a seller tenders any nonconforming goods. A)True
B)False
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Chapter 17: Agency Relationships in Business
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Sample Questions
Q1) Ben manages a warehouse and its inventory for Coffee Shops, Inc. To operate this part of the business, Ben's authority can be inferred
A) from the position Ben occupies.
B) by a reasonable party with whom Coffee Shops does business.
C) to contradict Ben's express authority.
D) under no circumstances.
Q2) Mirena serves in a representative capacity for Netanya. Orla is injured through Mirena's negligence. Netanya may be liable to Orla if Mirena's conduct occurred A) due to a propensity Netanya was not and could not have been aware of.
B) during normal working hours.
C) in the course and scope of Mirena's employment.
D) outside the parties' employment relationship.
Q3) Rod is an employee of Savers Bank. In deciding whether Rod acts within the scope of his employment when he commits a tort against Tracy, a court will not consider whether A) Rod indicated that he was acting on behalf of Savers Bank.
B) Savers Bank authorized the act.
C) Savers Bank furnished the means by which the injury was inflicted.
D) the act is one commonly performed by employees for their employers.
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Chapter 18: Small Businesses and Limited Liability Companies
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Sample Questions
Q1) A sole proprietor does not own the entire business.
A)True
B)False
Q2) Ford is the sole proprietor of Go, a game app subscription service. As a sole proprietor, on the business's profits, Ford pays
A) no income taxes.
B) only personal income taxes.
C) only business income taxes.
D) both personal and business income taxes.
Q3) Any suit against the business or its employees can lead to unlimited personal liability for the owner of a sole proprietorship.
A)True
B)False
Q4) Home Healthcare, LLC's owners are Inez and Jan. For purposes of entering into contracts, Home Healthcare is
A) an aggregate of its owners.
B) a non-entity
C) a legal entity apart from its owners.
D) a non-participating third party.
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Chapter 19: Corporations
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Sample Questions
Q1) Sean is the incorporator of Twisty Pretzels Corporation. Ross is a shareholder, Phyllis is a director, and Velma is an officer. The day-to-day operations of Twisty are overseen by A) Velma.
B) Ross.
C) Sean.
D) Phyllis.
Q2) Wings2Go Corporation fails to hold an organizational meeting. In this circumstance, Wings2Go is most likely
A) a corporation by estoppel.
B) a de facto corporation.
C) a de jure corporation.
D) ultra vires.
Q3) If a corporation has S corporation status, it must pay income taxes at the corporate level.
A)True
B)False
Q4) Directors can delegate work to corporate officers and employees.
A)True
B)False
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