Introduction to Business Law
Exam Answer Key
Course Introduction
Introduction to Business Law provides students with a foundational understanding of the legal principles and frameworks that govern business activities. The course explores key topics such as the nature and sources of law, the formation and enforcement of contracts, torts, agency relationships, and the structure of the U.S. court system. Students also examine issues surrounding business organization, property law, and regulatory compliance, gaining insight into how legal concepts affect real-world business decision-making. This course is essential for anyone planning to pursue a career in business or entrepreneurship, as it equips learners with the knowledge to recognize and address legal issues in a commercial context.
Recommended Textbook Business Law 9th Edition by Andy Gibson
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Chapter 1: Legal Foundations
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Q1) In Australia, the law is derived from several sources. Which of the following are the two main sources of the law in Australia?
A) Private and Public law.
B) Common law and Statute law.
C) International law and Treaties.
D) All of the above.
Answer: B
Q2) Which is the best definition of Civil Law as a legal system?
A) Laws based on the Koran.
B) Codified laws.
C) Laws based on the Bible.
D) Laws made by sovereigns.
Answer: B
Q3) Which of the following are examples of the types of law that would be litigated by individuals in State Courts?
A) Contract law.
B) Tort law.
C) Property law.
D) All of the above.
Answer: D
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Chapter 2: Origins of Australian Law
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Q1) The reason <i>Terra Nullius</i> is important to the doctrine of reception is because:
A) English law could apply from the date of settlement.
B) The occupants had no land rights.
C) There was nobody to negotiate a treaty with.
D) All of the above.
Answer: D
Q2) Which section of the Australian Constitution vests Judicial Power in the High Court of Australia?
A) Section 71 of the Constitution.
B) Section 51 of the Constitution.
C) Section 1 of the Constitution.
D) Section 61 of the Constitution.
Answer: A
Q3) When a Commonwealth act clashes with a State act, the State act must be followed.
A)True
B)False
Answer: False
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4
Chapter 3: Legal Systems
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Q1) 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
Q2) What is the meaning of the term 'court hierarchy'?
A) A tiered court system within each particular jurisdiction.
B) The horizontal arrangement of courts within Australia.
C) A vertical system of appellate courts.
D) The supreme courts of the various states and territories.
Answer: A
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Chapter 4: How Law Is Made: Precedentstatute Law
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Q1) Which of the following is NOT one of the main sources of law in Australia?
A) International treaties.
B) Delegated legislation.
C) Statute law.
D) Case law.
Q2) Explain fully the importance of the doctrine of <i>ratio decidendi</i> and <i>obiter dicta.</i>
Q3) Which of the following statements is NOT an advantage of the doctrine of precedent?
A) It is fairer and more equitable to follow precedent than to not follow precedent.
B) The use of precedent promotes consistency in the law.
C) The use of precedent promotes certainty in the law.
D) Precedent may not be relevant to today's circumstances but still has to be followed.
Q4) Delegated legislation cannot be subject to review in the courts.
A)True
B)False
Q5) Explain the doctrine of <i>res judicata.</i>
Q6) List some of the advantages and disadvantages of the doctrine of precedent.
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Chapter 5: Civil Liability: The Law of Torts and Negligence
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Q1) A defendant will be found to have breached their duty of care if:
A) A reasonable person in the same circumstances would have taken precautions.
B) The risk of injury was foreseeable.
C) The risk of injury was significant.
D) All of the above.
Q2) If the defence of contributory negligence applies, the Civil Liability Act 2001 (NSW) allows a court to reduce the amount of compensation by up to:
A) 10%.
B) 50%.
C) 100%.
D) 75%.
Q3) Describe the difference between tort law and contract law.
Q4) The function of the law of tort is to determine when a remedy will be available to a plaintiff.
A)True
B)False
Q5) The modern law of negligence was established by the Ipp Report.
A)True
B)False
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Chapter 6: Applications of Negligence to Business
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Q1) In <i>Deatons v Flew</i> (1949) 79 CLR 370, why was the hotelier NOT liable to the injured customer?
A) Because the barmaid lost her temper.
B) Because the injured customer had provoked the barmaid and was contributorily negligent.
C) Because the barmaid's actions were outside the scope of her employment.
D) Because the barmaid was not an employee.
Q2) Following the decision in <i>Esanda Finance Corporation v Peat Marwick Hungerfords</i> (1997) 71 ALJR 448, to whom does an auditor owe a duty of care?
A) Anyone who reads the report.
B) Only to the company who commissioned the report.
C) Anyone who they know will rely on the report.
D) Anyone who buys shares in the audited company.
Q3) Vicarious liability can make a person liable for the wrongful acts of another if certain criteria are satisfied.
A)True
B)False
Q4) What is a non-delegable duty of care?
Q5) What is occupier's liability?
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Chapter 7: Introduction to Contracts
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Q1) For the creation of an apparent simple contract, intention, agreement and consideration must be shown to be present.
A)True
B)False
Q2) What are the elements that are necessary for the creation of a valid simple contract?
Q3) Which of the following statements is correct in respect to the nature of a contract?
A) All agreements are legally enforceable contracts.
B) Not all contracts are agreements.
C) The terms 'contract' and 'agreement' mean the same thing.
D) A contract is a type of agreement.
Q4) Which of the following statements is the best definition of a 'formal contract'?
A) A contract that does not require a special form but must have consideration present.
B) A contract created by conduct or the actions of parties.
C) A contract created by written or oral words.
D) A contract that requires a special form or method of creation.
Q5) What is a quasi-contract?
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Page 9
Chapter 8: Agreement Between the Parties
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Q1) In Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, the advertisement placed by the company was:
A) An offer.
B) A statement of intention.
C) An invitation to treat.
D) None of the above.
Q2) An offer may be made to the world at large.
A)True
B)False
Q3) 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.
Q4) In order to be contractually binding on the parties, an agreement:
A) May arise by implication as a result of the conduct of the parties.
B) Must be expressed in writing and signed.
C) Must be expressed in writing but need not be signed in all cases.
D) Must be either expressed in writing or expressed verbally.
Q5) List the ways in which an offer may be terminated.
Page 10
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Chapter 9: Intention to Create Legal Relations
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Q1) Why did the decision in Banque Brussels Lambert SA v ANI Ltd (1989) 21 NSWLR 502 differ from the decision in Kleinwort Benson Ltd v Malaysian Mining Corporation [1988] 1 WLR 799?
A) Kleinwort Benson was an English case.
B) The words used in the Banque Brussels case were promissory in nature.
C) The Banque Brussels case involved a subsidiary.
D) The Kleinwort Benson case involved a subsidiary.
Q2) In which of the following cases did the court decide that a volunteer worker injured while working was not entitled to worker's compensation?
A) Teen Ranch Pty Ltd v Brown (1995) 38 AILR 5-036.
B) Balfour v Balfour [1919] 2 KB 571.
C) Wakeling v Ripley (1951) SR(NSW) 183.
D) Simpkins v Pays [1955] 1 WLR 975.
Q3) In a non-commercial agreement, the onus is on the plaintiff to demonstrate intention.
A)True
B)False
Q4) What is a letter of comfort?
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Page 11
Chapter 10: Consideration
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Q1) Which of the following is NOT one of the reasons for the decision in Lampleigh v Braithwait (1615) Hob 105; 80 ER 255?
A) The request and promise to pay were treated as a normal business transaction.
B) There was an implied promise to pay at the time of the request.
C) The request and the promise to pay were treated as part of the same transaction.
D) The services were performed at Braithwait's request.
Q2) Estoppel was rejected Easts Van Villages v Minister Administering the National Parks and Wildlife [2001] NSWSC 559 because:
A) The plaintiff had not suffered any detriment.
B) The defendant's statement was not unambiguous.
C) Estoppel was not rejected.
D) The parties had equal bargaining power.
Q3) Future consideration is also known as executed consideration.
A)True
B)False
Q4) Estoppel results in a suspension of the promisor's legal rights.
A)True
B)False
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Page 12
Chapter 11: Capacity of the Parties
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Q1) A contract entered into by a corporation is enforceable:
A) Against the corporation as an artificial person.
B) Against the shareholders of the corporation.
C) Only if the contract is consistent with the corporation's constitution.
D) Against the directors of the corporation.
Q2) In Blomley v Ryan (1956) 99 CLR 362:
A) The court held that it would be unfair to enforce the contract against the farmer.
B) The court granted an order for specific performance against the farmer.
C) The court held that the farmer although drunk, still understood what he was doing and therefore the contract was valid.
D) The court held that the farmer was so drunk that his judgment was affected and this was known to Blomley.
Q3) Which of the following is NOT relevant to the validity of a beneficial contract of service with a minor?
A) The whole of the terms of the contract.
B) Whether the balance is in the minor's favour.
C) The nature of the employment.
D) Any harsh or onerous terms.
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Chapter 12: Genuine Consent
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Q1) A misrepresentation is a false statement of fact or opinion.
A)True
B)False
Q2) Which of the following situations appears to involve 'unconscionability'?
A) A woman gave all of her property to the religious order of which she was a member.
B) A man induced another to sign a contract by telling him that if he did not, he would report his son to the police for committing a criminal offence.
C) A property developer promised their accountant a share in a business venture in return for a reduction in their bill.
D) An elderly Italian couple sign a mortgage in favour of a bank guaranteeing their son's debts; the bank manager knows the couple are unaware of the son's financial difficulties.
Q3) Explain the difference between duress and undue influence.
Q4) A contract induced by fraud is void.
A)True
B)False
Q5) Explain the difference between innocent and fraudulent misrepresentation.
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Page 14
Chapter 13: Is the Contract Legal
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Q1) Which of the following is NOT a factor to consider in determining the validity of a restraint of trade clause?
A) The type of business involved.
B) The geographic extent of the restraint.
C) The relative bargaining powers of the parties.
D) The amount of consideration paid.
Q2) The decision in A Schroeder Music Publishing Co Ltd v Macauley [1974] 1 WLR 1308 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.
Q3) Contracts that are binding in honour only but attempt to oust the jurisdiction of the Courts are valid.
A)True
B)False
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Page 15
Chapter 14: Terms of the Contract
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Q1) Explain how the courts decide between a mere representation and a term.
Q2) Breach of condition allows the injured party to only sue for damages.
A)True
B)False
Q3) Which of the following statements is the best description of a 'warranty'?
A) A term in a contract which provides that the contract will terminate on the happening of a particular event.
B) A less important term in a contract, non-performance of which entitles the plaintiff to damages only.
C) A term which must be satisfied before a contract can come into existence.
D) A term in a contract, non-performance of which may result in rescission of the contract and/or damages to the plaintiff.
Q4) Which of the following is NOT a remedy for breach of the consumer guarantees under the Australian Consumer Law?
A) Damages in the case of a major failure that cannot be remedied.
B) Damages for breach of conditions implied into the contract.
C) An appropriate remedy for any breach that is not a major failure.
D) Refund or replacement of goods for any breach that is a major failure.
Q5) Explain and distinguish between a condition and a warranty.
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Chapter 15: Rights and Liabilities of the Parties, Discharge and Remedies
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Q1) The decision of the court in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 was:
A) That the manufacturer of the machine which was being built to meet the order of the purchaser could not recover the cost of manufacturing the machine because the frustrating event had intervened to terminate the contract.
B) That the purchaser of the machine could recover the deposit which it had paid.
C) That the contract was terminated by frustration.
D) All of the above.
Q2) Which of the following statements is the best description of discharge by novation?
A) One party leads the other to reasonably believe that strict performance will not be insisted upon.
B) A new agreement is substituted for the old by the parties.
C) Both parties abandon their original agreement while it is still executory.
D) A party who has already performed their obligation agrees to relieve the other party from performing their obligation in return for their doing something different.
Q3) Explain the meaning of novation and what does it create.
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Page 17
Chapter 16: Remedies in Contract
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Q1) Which of the following statements is the best description of 'liquidated' damages?
A) An amount not fixed in the contract and left for the court to determine.
B) An amount awarded to compensate the innocent party for the loss suffered as a result of the breach of contract.
C) An amount based upon a genuine pre-estimate of actual loss flowing from the breach of contract.
D) An amount awarded to punish the party in breach of the contract.
Q2) Which of the following statements is the best description of the duty of the injured party to 'mitigate' their loss?
A) They must take all reasonable steps to minimise their loss.
B) They must take all reasonable steps to prevent the breach.
C) They must take all reasonable steps to report the breach to the court.
D) They must take all reasonable steps to transfer the loss to the party in breach.
Q3) Rescission is a remedy for breach of contract.
A)True
B)False
Q4) What is the purpose of rescission?
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18
Chapter 17: Statutory Consumer Guarantees and the Australian Consumer Law
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Q1) Do you consider that the remedies now available to consumers under the Australian Consumer Law are adequate?
Q2) Which of the following signs is unlawful under s 64 of the Australian Consumer Law?
A) We replace but do not refund.
B) No refunds.
C) No refund if you change your mind.
D) We repair or replace but do not refund.
Q3) Which of the following will NOT protect a manufacturer from liability for a breach of the consumer guarantee of fitness for purpose?
A) If the consumer did not rely on the skill or judgment of the manufacturer.
B) If it was caused by something outside human control after it left the manufacturer.
C) If it was cause by something outside human control during manufacture.
D) If it was caused by someone else.
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
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Chapter 18: General and Specific Consumer Protections
Under the Acl
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Q1) In relation to 'conduct' under s 18 of the ACL, Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367 is authority for the principle that:
A) Pre-contractual representations can constitute misleading and deceptive conduct.
B) An advertisement which compared a competitor's products unfavourably with the advertiser's products can constitute misleading and deceptive conduct.
C) Silence can constitute misleading and deceptive conduct where there is a duty to disclose relevant facts.
D) The act of making a contract containing a false warranty is sufficient to constitute misleading and deceptive conduct.
Q2) In which case did the court set out the guidelines for determining if conduct is misleading or deceptive within the meaning of s 18 of the Australian Consumer Law?
A) McDonald's System of Australia Pty Ltd v McWilliams Wines Pty Ltd (1980) 33 ALR 394.
B) Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191.
C) Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) ATPR 40-303.
D) Pacific Dunlop v Hogan (1989) 23 FCR 553.
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Page 20
Chapter 19: Agency
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Q1) The decision in the case of: Tooth & Co v Laws (1888) 9 LR (NSW) 154 was based on the fact that:
A) The dealings of the secretary appeared to be within the scope of their authority even though they lacked actual authority.
B) The defendant's previous conduct in paying for the jewellery amounted to a representation of the agent's authority.
C) The defendant's failure to notify the suppliers of the sale of business prohibited him from denying that the purchasers were his agents.
D) Buying and selling cars was a normal practice of that kind of business.
Q2) Ratification by a principal of an unauthorised act by an agent can bind the third party retrospectively.
A)True
B)False
Q3) 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
Q4) Describe how an agency relationship can be terminated.
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Page 21
Chapter 20: Introduction to Companies and Incorporated
Associations
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Q1) Which of the following statements about a debenture holder is NOT true?
A) A debenture holder has the same rights as a shareholder of the company.
B) A debenture holder is a secured creditor of the company.
C) A debenture holder can sue the company for unpaid interest.
D) A debenture holder can take action to have the company wound up.
Q2) Committee members of an unincorporated association owe a fiduciary duty to the association.
A)True
B)False
Q3) Which of the following types of company are required to have the letters 'Ltd' after their name, either alone or with other letters?
A) No-liability companies.
B) Companies limited by shares.
C) Unlimited liability companies.
D) Companies limited by guarantee.
Q4) The term 'allotment' is used to describe the process of:
A) Transferring shares from one member to another.
B) Inviting members of the public to subscribe for shares in a company.
C) Allocating shares to members of the public who have applied for them.
D) None of the above.
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Chapter 21: Partnerships
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Q1) 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
Q2) What are the three factors that determine whether a partnership exists?
Q3) Which of the following statements about partner's rights is true?
A) A partner who incurs liabilities at any time is entitled to indemnity from the other partners.
B) Any partner may access the partnership books in order to inspect and copy them.
C) Partners share in any profits and losses of the business in proportion to their investment in the business.
D) The consent of a majority of the partners is needed to introduce a new partner to the partnership.
Q4) Which of the following is NOT an element of apparent authority?
A) The third party was not aware that the person lacked authority.
B) The transaction was business of the kind carried on by the firm.
C) The transaction was not carried out in the usual way.
D) The third party knew or reasonably believed the person to be a partner.
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Page 23
Chapter 22: Choosing a Business Entity
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Q1) The purpose of business name registration is to prevent consumers being confused.
A)True
B)False
Q2) Which of the following statements about business names is NOT true?
A) Registration grants monopoly rights but not proprietary rights.
B) A business name must be registered in every state the business trades in.
C) Registration provides a registry so that business owners can be identified.
D) Registration is not necessary if the entity is a registered company trading in the company name.
Q3) A partnership is the relationship that exists between persons carrying on a business in common with a view to profit.
A)True
B)False
Q4) 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.
Q5) What is a trust?
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Chapter 23: Other Business-Related Torts
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Q1) The case of Lumley v Wagner (1852) 42 ER 687 is an example of the tort of:
A) Defamation.
B) Nuisance.
C) Interference with contractual relations.
D) Intimidation.
Q2) Which of the following statements is the LEAST likely to be defamatory in nature?
A) A statement which insults and offends the plaintiff.
B) A statement which is likely to injure the plaintiff's professional reputation.
C) A statement which lowers the plaintiff's reputation in the community.
D) A statement which is likely to induce others to ridicule the plaintiff.
Q3) Explain the meaning of private nuisance and what the plaintiff must prove to succeed.
Q4) Which of the following is NOT a defence in respect to the tort of defamation?
A) Triviality.
B) Contextual truth.
C) Fair reporting of matters of public concern.
D) Apology or offer to make amends.
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Chapter 24: Insurance
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Q1) Subrogation applies to all contracts of insurance.
A)True
B)False
Q2) In the case of goods insured at market value, their value is assessed:
A) At the date the goods were lost or destroyed.
B) At the date the goods were purchased.
C) At the date of the claim.
D) At the date the contract of insurance commenced.
Q3) Which of the following is NOT a material fact requiring disclosure by an applicant to an insurer?
A) The health of the applicant.
B) Whether the applicant has a criminal record.
C) Whether the applicant has had financial problems in the past.
D) A fact that reduces the risk.
Q4) Sophie over-insures her car, worth $10,000, for $12,000. If the car is written off, how much would she receive under an indemnity policy?
A) $10,000.
B) $12,000.
C) $2,000.
D) $0.
Page 26
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Chapter 25: Sale of Goods
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Q1) Now that the Competition and Consumer Act 2010 (Cth) contains the major consumer protection provisions, what do you perceive to be the major benefits in a contract for the sale of goods of the various state Sale of Goods acts?
Q2) The general rule under sale of goods legislation is that any damage or loss to the goods before property passes to the buyer is carried by the seller.
A)True
B)False
Q3) 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.
Q4) Which of the following is NOT an element of a contract for the sale of goods?
A) Consideration.
B) Agreement to sell.
C) Transfer of property.
D) Goods.
Q5) Define the term 'goods.'
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Chapter 26: Electronic commerce
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Q1) What is an electronic communication?
Q2) 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?
Q3) Which of the following is NOT included in the definition of Electronic Funds Transfer?
A) Paying bills by BPAY.
B) Using a card to withdraw money from an ATM or EFTPOS terminal.
C) Transferring money between two bank accounts via the internet.
D) Purchasing goods in a shop using a credit card.
Q4) A person is not bound by an electronic communication unless the communication was sent by, or with their authority.
A)True
B)False
Q5) A procedure which prevents a customer from proceeding with a transaction until they have clicked an acknowledgement of the terms and conditions is called a 'Clickwrap Agreement.'
A)True
B)False
Q6) What is 'Cybersquatting'?
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Chapter 27: Property and mortgages
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Q1) If there are several mortgages over one parcel of land how is priority determined?
A) Priority is determined by the date of creation.
B) It is not possible to have several mortgages over one parcel of land.
C) An equitable mortgage takes priority over a legal mortgage.
D) A legal mortgage takes priority over an equitable mortgage.
Q2) Describe the three main types of property.
Q3) Which of the following is an equitable, rather than a legal mortgage?
A) A registered mortgage of Torrens title land.
B) A conveyance of common law system land to the mortgagee.
C) An unregistered mortgage of Torrens title land.
D) None of the above.
Q4) According to the Mabo case, which form of land ownership will extinguish native title?
A) Vacant Crown land.
B) Beaches.
C) Freehold title.
D) National parks.
Q5) The Torrens system of title has a number of advantages over the old common law system of title. What are they?
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Chapter 28: Intellectual propert
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Q1) A trade mark is used to indicate a connection between:
A) A product and a particular location.
B) Manufacturers and retailers.
C) A manufacturer and a particular location.
D) A business and their product.
Q2) The artistic nature of some designs enables them to be protected under both the Designs Act and the Copyright Act.
A)True
B)False
Q3) Contrast an infringement of a registered trademark with an action in passing off.
Q4) An infringement under the Designs Act will occur if a person, without authority:
A) Destroys a design.
B) Includes the article in a television program.
C) Applies the design to any article in respect of which the design applies.
D) All of the above.
Q5) Where does copyright exist?
Q6) Unless a trade mark is registered, the owner has no protection.
A)True
B)False
30
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Chapter 29: Ethics and business practice
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Q1) Which of the following would be an example of a conflict of interest in a business context?
A) The director of a company votes in favour of a contract for services to be provided by his family company.
B) A real estate agent regularly refers clients to a firm of solicitors of which his wife is the principal solicitor.
C) The purchasing officer for a business accepts a commission to place orders exclusively with a particular company.
D) All of the above.
Q2) Ethical investment involves investing in companies in order to make them behave ethically.
A)True
B)False
Q3) Ethical considerations involve going beyond self-interest in reaching a decision. A)True
B)False
Q4) Describe the ethical considerations and duties of businesses in today's society?
Q5) 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) Which of the following statements about criminal procedure is NOT correct?
A) An indictable offence is heard by a judge and jury.
B) Criminal proceedings are commenced either by summons or by the arrest of a person.
C) A summary offence is heard by a magistrate and jury.
D) An indictable offence will first be heard by a magistrate in a committal hearing.
Q2) What is the penalty for breach of the restrictive trade practices provisions of the Competition and Consumer Act 2010 (Cth)?
A) A fine of $10 million.
B) A fine of 10 per cent of the turnover of the preceding 12 months.
C) A fine of three times the illegal benefit obtained.
D) Any of the above.
Q3) Which of the following is NOT an advantage for an accused having a criminal matter dealt with summarily?
A) The matter will be dealt with more quickly.
B) The penalty imposed may be lower.
C) An acquittal by the magistrate cannot be appealed by the Crown.
D) It is cheaper to have the matter dealt with in a lower court.
Q4) What is the difference between an indictable offence and a summary offence?
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Chapter 31: Restrictive trade practices
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Q1) Which of the following types of prohibited conduct can NOT be authorised by the ACCC?
A) Mergers.
B) Boycotts.
C) Exclusive dealings.
D) Monopolisation.
Q2) Describe how the concepts of market and competition are linked and important in respect to trade in Australia.
Q3) A voluntary industry code only applies to those who agree to opt in.
A)True
B)False
Q4) 'Vertical price fixing' includes an agreement to fix, control or maintain price, made between:
A) Competing businesses at the same level of business activity.
B) Manufacturer or wholesaler and retailer.
C) Retailer and retailer.
D) Buyers.
Q5) How can the restrictive trade practices provisions of the Competition and Consumer Act 2010 (Cth) be reconciled with the liberal notion of a free market?
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Chapter 32: Negotiable instruments
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Q1) An instrument that does not comply with the statutory requirements for a bill of exchange may still be enforceable as a contract.
A)True
B)False
Q2) If a cheque is paid after being stolen from the payee, the drawer can claim that the debt to the payee has been discharged.
A)True
B)False
Q3) The basic duty of a collecting bank is to credit the drawer's account.
A)True
B)False
Q4) Crossing a cheque means that the cheque cannot be:
A) Transferred.
B) Negotiated.
C) Cashed over the counter.
D) Paid into an account.
Q5) What is the difference between a cheque crossed as 'Not Negotiable' and a cheque with a general crossing?
Q6) What is a cheque?
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Chapter 33: Insolvency and Debt Recovery
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Q1) Which of the following is NOT one of the aims of bankruptcy legislation?
A) To give the debtor a chance to have a new start.
B) To distribute the debtor's assets equitably.
C) To ensure all of the debtor's creditors are treated fairly.
D) To punish the debtor.
Q2) Which of the following is NOT a method of liquidation of an insolvent company?
A) Administrator's voluntary winding up.
B) Creditors voluntary winding up.
C) Compulsory winding up due to insolvency.
D) Members voluntary winding up.
Q3) How much of a bankrupt's income is required to be given to the trustee in bankruptcy?
A) Half of the amount in excess of a specified threshold.
B) All of it.
C) Half of it.
D) The amount in excess of a specified threshold.
Q4) What are the three main aims of the Bankruptcy Act 1966 (Cth)?
Q5) The most common act of bankruptcy is failure to comply with a bankruptcy notice. A)True B)False
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Chapter 34: The Work Environment and the Employment Relationship
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Q1) The employment relationship in Australia is regulated by:
A) Federal and state awards or industrial agreements.
B) Federal and state legislation.
C) The law of contract.
D) All of the above.
Q2) Which of the following duties of an employee continue after the employment has ceased?
A) The duty to account for all money or property received in the course of their employment.
B) The duty to hand over inventions made during the course of their employment.
C) The duty to disclose information relevant to the employer.
D) The duty to obey the employer's lawful, reasonable and safe commands.
Q3) Equal opportunity of employment in the workplace:
A) Sets targets for the representation of members of disadvantaged groups in employment.
B) Is seen as the genuine application of the merit principle in employment.
C) Is a program of positive and practical steps aimed at achieving equality in the workplace.
D) All of the above.
Q4) What are the aims of Occupational Health and Safety Legislation?
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Chapter 35: Consumer Credit and Privacy
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Q1) Which of the following is NOT an exception to the National Credit Code?
A) Loans to natural persons for investment purposes.
B) Payment of insurance premiums by instalments.
C) Short term loans.
D) A housing loan.
Q2) Which of the following information is NOT collected as part of the borrower's Repayment History Information?
A) The dates on which payments are due and payable.
B) The amount of any missed payments.
C) Whether an individual has previously met their obligations when due and payable.
D) The date of any late payments.
Q3) When a borrower makes an application for credit by filling in a form online, this is known as a 'low-doc loan.'
A)True
B)False
Q4) A hire purchase agreement is a contract that involves a minimum of three parties.
A)True
B)False
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Chapter 36: Ethics and Regulations in Marketing and Advertising
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Q1) Problems which could potentially be faced by the marketer when promoting a new product include:
A) Legal action by competitors to protect their reputation or intellectual property.
B) Possible breaches of consumer protection legislation.
C) Legal action by consumers for fraudulent or negligent misrepresentation.
D) All of the above.
Q2) 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
Q3) Which of the following is the best description of 'bait advertising'?
A) Advertising goods or services that they do not intend to supply.
B) Advertising a product or service at a cheap price only to tell customers it is no longer available and offering another at a higher price.
C) Accepting payment for goods or services that are different from those which were ordered.
D) All of the above.
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