Introduction to Business Law Review
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Course Introduction
Introduction to Business Law provides students with a foundational understanding of the legal principles and frameworks that underpin the modern business environment. The course explores essential topics such as contract formation and enforcement, agency relationships, torts, employment law, business organizations, and regulatory compliance. Through real-world case studies and practical examples, students gain insight into how laws influence business decisions and the importance of ethical conduct in the corporate world. This course equips learners with the legal knowledge and critical thinking skills necessary to identify potential legal issues and navigate the complexities of todays business landscape.
Recommended Textbook Essentials of the Legal Environment 4th Edition by Roger LeRoy Miller
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Page 2
Chapter 1: Business and Its Legal Environment3
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Sample Questions
Q1) Crater Tools Company may be subject to regulations issued by the Occupational Safety and Health Administration (OSHA).Like other administrative agencies, the OSHA affects
A)almost every aspect of a business's operations.
B)almost no aspect of a business's operations.
C)a firm's capital structure and financing, but nothing else.
D)a firm's hiring and firing procedures, but nothing else.
Answer: A
Q2) In Export Co.v.Imports, Inc., there is no precedent on which the court can base a decision.The court can consider
A)neither public policy nor social customs and values.
B)public policy only.
C)public policy or social customs and values.
D)social customs and values only.
Answer: C
Q3) Common law is a term for the law that is known to most of us.
A)True
B)False
Answer: False
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Chapter 2: Shifting Legal Priorites for Business:
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Q1) Jennifer, a sophomore at West High School, posts suggestive-but not pornographic or obscene-photos of herself on Facebook.The images do not identify the school and require "friend" status to be viewed.Jennifer intends the photos to be humorous, and this is how her friends understand them.Under the First Amendment, West can most likely A)suspend or otherwise punish Jennifer for posting the photos.
B)require that Jennifer remove the photos but not punish her.
C)require that Jennifer remove the photos and punish her.
D)not punish Jennifer or restrict her posts.
Answer: D
Q2) Capital Credit Company files a suit against Downtown Developers, Inc., and seeks, as part of discovery, certain electronic documents in Downtown's possession.Responding to this request will most likely be required if the documents contain data that is relevant and
A)accessible.
B)privileged.
C)recoverable.
D)text only.
Answer: A
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Chapter 3: Courts and Alternative Dispute Resolution
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Sample Questions
Q1) Sheila files a suit against Tyler.Before going to trial, the parties, with their attorneys, meet to try to resolve their dispute.A third party helps them to reach an agreement.This is
A)arbitration.
B)litigation.
C)mediation.
D)negotiation.
Answer: C
Q2) A motion for a judgment notwithstanding the verdict seeks to set aside a verdict and enter a new verdict in favor of the non-prevailing party.
A)True
B)False
Answer: True
Q3) Mandatory arbitration clauses in employment contracts are not enforceable. A)True
B)False
Answer: False
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Chapter 4: Ethics and Business Decision Making
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Sample Questions
Q1) Richard suspects his supervisor of unethical accounting practices.However, he does not want to lose his job if he reports the supervisor and the supervisor finds out who reported him.An important feature of online reporting systems like EthicsPoint is
A)the employee reporting the unethical behavior can do so anonymously.
B)the employee reporting the unethical behavior is financially compensated if he loses his job as a result of the report.
C)the employee reporting the unethical behavior must give his full name when making the report.
D)the employee reporting the unethical behavior must have another employee supporting him.
Q2) Duty-based ethical standards often come from religious precepts or through philosophical reasoning.
A)True
B)False
Q3) An ethics seminar can clarify how a firm's ethical policies apply to specific problems.
A)True
B)False
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Chapter 5: Constitutional Authority to Regulate Business
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Sample Questions
Q1) A Massachusetts state statute imposes a prison term, without a trial, on all street performers who operate in certain areas.A court would likely review this statute under the principles of
A)the commerce clause.
B)the equal protection clause.
C)the due process clause.
D)the First Amendment.
Q2) A law that limits only some persons' exercise of a fundamental right is valid under any circumstances.
A)True
B)False
Q3) California enacts a statute to ban advertising in "bad taste." This statute would likely be held by a court to be
A)an unconstitutional restriction of speech.
B)constitutional under the First Amendment.
C)justified by the need to protect individual rights.
D)necessary to protect national interests.
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Chapter 6: Administrative Law
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Q1) Nursing Home Care Company is charged with violating a rule of the Social Security Administration.Most likely, Nursing Home Care will be required to appear at a hearing presided over by
A)a federal appellate court judge.
B)a federal district court judge.
C)an administrative law judge.
D)a U.S Marshal.
Q2) If the meaning of a statute's language is unclear and an agency interprets it, a court must overturn the interpretation.
A)True
B)False
Q3) Frequently, disputes over violations of administrative rules are resolved through informal adjudication proceedings.
A)True
B)False
Q4) Often, an administrative agency itself enforces its rules. A)True
B)False
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Page 8
Chapter 7: Torts and Product Liability
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Sample Questions
Q1) An assumption of risk defense does not require that a risk be voluntarily assumed.
A)True
B)False
Q2) Bella owns a farm in Colorado.Doyle drives his sport utility vehicle off a highway and onto Bella's land.Doyle commits trespass if he
A)does not have Bella's permission to drive on the property.
B)drives onto the property for recreational purposes.
C)harms the property in a material way.
D)harms the property in any way.
Q3) Toyoda Company buys gas pedals and other parts from subcontractors and puts them in its vehicles without changing their composition.If the pedals or other parts are defective, strictly liable for any damage caused by the defects are
A)neither Toyoda nor the subcontractors.
B)Toyoda and the subcontractors.
C)the subcontractors only.
D)Toyoda only.
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Chapter 8: Online Developments:
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Sample Questions
Q1) The Internet Corporation for Assigned Names and Numbers (ICANN)assigns a domain name-NYpotguy.com-to Edward, who then asks a court to change his name to match his domain name.Most likely, the court will
A)deny the request.
B)grant the request.
C)change Edward's name to a name of the court's choosing.
D)punish Edward for his "illegal" request.
Q2) Lauren, a basketball coach at State University, schemes to fraudulently obtain scholarships for her team's players.This is most likely
A)honest-services fraud, a federal crime.
B)a violation of collegiate athletic rules but no crime.
C)a breach of university rules but no civil or criminal wrong.
D)unethical but no crime.
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10
Chapter 9: Criminal Law and Cyber Crime
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Sample Questions
Q1) Cyber fraud is fraud committed over the Internet.
A)True
B)False
Q2) A crime can be committed only against persons.
A)True
B)False
Q3) Mike is arrested at a warehouse in North Industrial Park.A government prosecutor issues a formal charge against Mike for receiving stolen property.This charge is
A)an arraignment.
B)an indictment.
C)an information.
D)an inquisition.
Q4) Phishing occurs when a criminal poses as a member of the rock group Phish.
A)True
B)False
Q5) Criminal liability depends on the performance of a prohibited act.
A)True
B)False
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Chapter 10: Intellectual Property and Internet Law
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Sample Questions
Q1) Copyright protection is automatic-registration is not required.
A)True
B)False
Q2) A list of customers cannot be a trade secret.
A)True
B)False
Q3) Kay and Leo copy and exchange MP3 music files over the Internet without anyone's permission.With respect to songs owned by Natural Recording Company, this is
A)copyright infringement.
B)fair use.
C)licensing.
D)protected expression.
Q4) A party who unintentionally uses the trademark of another is not liable for trademark infringement.
A)True
B)False
Q5) Patent infringement occurs only if an invention is copied in its entirety.
A)True
B)False
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Chapter 11: International Law in a Global Economy
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Sample Questions
Q1) Congresswoman Jones and other politicians want to prohibit the import of certain agricultural products that pose a danger to domestic crops.With respect to these products' import, Congress can
A)do nothing.
B)impose quotas, but not tariffs.
C)impose tariffs, but not quotas.
D)prohibit the imports.
Q2) Diners Corporation, a U.S.firm, signs a contract with Essen, A,G., a German firm, to give Essen the right to use Diners' trademark in restaurants in Germany.This is
A)a distribution agreement.
B)a joint venture.
C)direct exporting.
D)licensing.
Q3) International law is a body of law that governs relations between and among citizens, not nations.
A)True
B)False
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Chapter 12: Business Organizations
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Sample Questions
Q1) Corporate officers can usually be removed by the board of directors without cause.
A)True
B)False
Q2) In certain instances of fraud, a court may "pierce the corporate veil" to hold the shareholders individually liable.
A)True
B)False
Q3) DeFazio's Italian Restaurants, Inc., holds a shareholders' meeting.Corporate business matters are presented at the meeting in the form of A)resolutions.
B)proxies.
C)articles of incorporation.
D)bylaws.
Q4) A director is a fiduciary of a corporation.
A)True
B)False
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Chapter 13: Beyond Our Borders:
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Sample Questions
Q1) Marshal is interested in filing for bankruptcy in the U.S.Bankruptcy Court for the District of New Mexico but does not have an attorney.Marshal and others with questions about bankruptcy can access a chat box via the court's Web site.Downsides to using the box include
A)misunderstanding the response.
B)garbled voice messages.
C)the absence of attorneys and other bankruptcy specialists online.
D)the long wait time for an answer.
Q2) Apex University (AU)offers classes online.AU asks each student enrolling online to agree to submit any dispute to arbitration and to indicate assent by clicking a box.AU claims that it is the cheapest undergraduate program in the United States.Beth enrolls in the program but later charges AU with fraud based on its "cheapest" claim.Beth could pursue her claim
A)in a court.
B)in an arbitration proceeding.
C)nowhere.
D)anywhere.
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Page 15
Chapter 14: Formation of Traditional and E-Contracts
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Sample Questions
Q1) Jane offers to sell Kyle three desks for his Lights & Lamps Company administrative office.Kyle sends a rejection first, then changes his mind and sends an acceptance.Whether they have a contract is determined by A)Kyle's rejection.
B)Kyle's subjective intent.
C)whatever Jane decides.
D)whether Kyle's rejection or acceptance is received first.
Q2) An expression of opinion-"your customers will like this"-is an offer.
A)True
B)False
Q3) A unilateral contract is formed when the one receiving the offer completes the requested act or performance.
A)True
B)False
Q4) The Uniform Electronic Transactions Act gives the same legal effect to electronic documents as is given to paper documents.
A)True
B)False
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Page 16
Chapter 15: Contract Performance, Breach, and Remedies
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Sample Questions
Q1) A contract between Drill-Bit Sharpeners, Inc., and East Oil Mining Corporation contains a clause stating that rights under the contract cannot be assigned.This ordinarily prohibits A)any assignment.
B)no assignment.
C)only an assignment of contract rights to personal services.
D)only an assignment that would change the obligor's risk.
Q2) Dylan enters into a contract to manage the operations of Cash's accounting office for one year, renewable for subsequent one-year terms.If this contract is discharged like most contracts, it will be A)canceled.
B)compromised.
C)altered.
D)performed.
Q3) Refer to Fact Pattern 12-1.With respect to Mutual's duties, Neil's performance most likely
A)discharges Mutual from the contract.
B)has no effect on Mutual's performance.
C)increases Mutual's duties under the contract.
D)suspends Mutual's duty to perform.
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Chapter 16: Sales and Leases
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Sample Questions
Q1) Sally's Sweet Fruits contracts with Fruits to You, Inc.for a delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking, a trucking company with refrigerated trucks.On the day of delivery, the refrigeration units on Keep Kool's trucks are not working.Fruits to You
A)may ship the goods to Sally's using another trucking company with refrigerated trucks.
B)must refund Sally's money and cancel the contract.
C)must wait to ship the strawberries until Keep Kool has fixed its trucks.
D)must ship the goods through a different carrier and pay Sally incidental damages.
Q2) Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, "This is the best car I've ever seen." This statement is
A)an express warranty.
B)an implied warranty.
C)a warranty of title.
D)puffery.
Q3) All oral contracts are enforceable under the UCC.
A)True
B)False
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Page 18
Chapter 17: Creditors Rights and Bankruptcy
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Q1) Lionel files a voluntary petition for bankruptcy under Chapter 7.The court will likely deny a discharge of Lionel's debts if he
A)conceals records of his financial condition with the intent to defraud a creditor.
B)does not have sufficient assets to pay all his secured creditors.
C)filed for bankruptcy twelve years ago.
D)has a criminal record.
Q2) Dana defaults on a debt to Rachel.Rachel will NOT be able to recover the debt from A)the sale of Dana's prize winning pet dog.
B)the sale of Dana's investments in stocks.
C)Dana's wages.
D)Dana's lottery winnings.
Q3) A writ of execution is a writ that puts in force a court decree or judgment. A)True B)False
Q4) Before filing for bankruptcy, a consumer-debtor must receive credit counseling. A)True B)False
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19
Chapter 18: Mortgages Foreclosures After the Recession
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Q1) When an owner is unable to make mortgage payments, a lender may agree to a short sale.
A)True
B)False
Q2) A borrower has a right to rescind a mortgage within three business days.
A)True
B)False
Q3) Consumer Mortgage Loans provides Demi with a mortgage to buy a home.Under the terms, Demi can choose to pay only the interest portion of the monthly payments and forgo paying of the principal for five years.This is
A)a fixed-rate mortgage.
B)an adjustable-rate mortgage.
C)an interest-only mortgage.
D)a violation of the law.
Q4) Under a deed in lieu of foreclosure, the property is conveyed to the lender in satisfaction of the mortgage.
A)True
B)False
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Page 20
Chapter 19: Employment, Immigration, and Labor Law
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Sample Questions
Q1) It is basic tenet of agency law that notice to the agent is notice to the principal.
A)True
B)False
Q2) The employee union at Top Tech Toys decides to go on strike.Their strike will be legal if
A)the strikers form a picket line.
B)the strikers form a massed barrier and deny management and nonunion workers access to Top Tech Toys' plant.
C)the strikers stay in Top Tech Toys' plant without working.
D)the strikers violently attack management.
Q3) Cash is an employee of Drowsy Resort, Inc., covered by federal overtime provisions, which apply only after an employee has worked more than
A)eight hours in a day.
B)forty hours in a week.
C)160 hours in a month.
D)one year for the same employer.
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Chapter 20: Beyond Our Borders:
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Sample Questions
Q1) Roboto Robotics Inc.creates an internal social media network using enterprise social networking software and systems.The advantages of an internal social media network include
A)obtaining real-time information about important issues.
B)mass e-mailings.
C)employees' posts of personal notes.
D)"white noise."
Q2) PowerSoft Corporation creates an internal social media network using enterprise social networking software and systems.Concerns about the use of an internal social media network include how to
A)keep the data safe.
B)make the data public.
C)provide access to all files to all employees.
D)maintain a personal, lively, and entertaining tone.
Q3) Women's groups contend that sexual harassment is viewed with "quiet tolerance" in corporations based in A)Asia.
B)Europe.
C)North America.
D)South America.
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Chapter 21: Employment Discrimination
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Q1) Ruth is a supervisor for Subs & Suds, a restaurant.Tim is a Subs employee.The owner announces that some employees will be discharged.Ruth tells Tim that if he has sex with her, he can keep his job.This is
A)harassment on the basis of sexual orientation.
B)not harassment.
C)quid pro quo harassment.
D)same-gender harassment.
Q2) Svetlana, a fifty-five-year-old member of a racial minority with a disability, believes that she is a victim of employment discrimination.Potentially the most widespread form of discrimination is based on A)age.
B)disability.
C)gender.
D)race.
Q3) Employers can treat their employees more or less favorably based on their religious beliefs or practices.
A)True
B)False
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23
Chapter 22: Environmental Law
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Sample Questions
Q1) Fried Food, Inc., operates a commercial frying plant, discharging pollutants into the air.Greg reports the violations to the Environmental Protection Agency.Greg
A)is not entitled to a payment.
B)may be paid up to any amount.
C)may be paid up to $1,000.
D)may be paid up to $10,000.
Q2) Fabio makes a living by farming near Gastric Combustibles, Inc., which has discharged pollutants into the area's air and water.In a suit by Fabio for an injunction against Gastric on the ground of nuisance, the court is most likely to rule in Gastric's favor if
A)Fabio's operation also pollutes, with pesticides and herbicides.
B)Fabio's operation suffers harm distinct from the general public.
C)Gastric's operation is the core of the local economy.
D)Gastric's operation uses reasonable care to avoid harm to Fabio.
Q3) All environmental law consists of statutes and regulations.
A)True
B)False
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Page 24
Chapter 23: Antitrust Law and Promoting Competition
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Q1) Monopoly power may be proved by evidence that a firm used its power to control prices.
A)True
B)False
Q2) Gulf Air, Inc., is the major wholesale distributor of software in the state of Florida.Its closest competitor is Fluid Systems Company, another Florida firm.The two firms agree that Gulf Air will operate in south Florida and Fluid Systems will operate in north Florida.This is
A)a group boycott.
B)a market division.
C)a joint venture.
D)an exclusive-dealing contract.
Q3) Charging different prices to different buyers for identical goods is price discrimination.
A)True
B)False
Q4) In determining the legality of a merger, a crucial consideration is market concentration.
A)True
B)False
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Chapter 24: Online Developments:
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Q1) Etoile Metrics, S.A., a French software firm, is harmed by an exclusive-dealing scheme engineered by Flash Search, Inc., a U.S.software firm.Compared to U.S.laws, the European Union's laws
A)define less conduct as anticompetitive.
B)define more conduct as anticompetitive.
C)declare the same conduct-not more or less-to be anticompetitive.
D)include less detailed provisions on monopolization.
Q2) Vid Games, Inc., is a U.S.company currently involved in significant innovation and cost and quality competition with its rivals.With respect to the direction and control of Vid and its competitors in the United States and other countries, different models of corporate governance exist, depending on
A)the degree of capitalism in a particular nation.
B)the effect of innovation on the operations of a particular company.
C)the extent of cost efficiency in a particular corporation.
D)the quality of the products and services of a particular firm.
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Chapter 25: Investor Protection, Insider Trading, Corp Gov
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Q1) Willful violations of the Securities Act of 1933 may be subject to civil liability, but not criminal prosecution.
A)True
B)False
Q2) Corporate governance can be defined as the relationship between a corporation and its directors.
A)True
B)False
Q3) Generally, stock offerings that are made in a limited manner during any twelve-month period are exempt from the registration requirement.
A)True
B)False
Q4) Refer to Fact Pattern 20-3.Under the Securities Exchange Act of 1934, Fay is most likely
A)liable for insider trading.
B)not liable because Fay did not prevent others from profiting.
C)not liable because Fay did not solicit information from Dhani.
D)not liable because Fay does not work for Eureka.
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