Legal Aspects of Business Exam
Materials
Course Introduction
Legal Aspects of Business provides an essential overview of the legal environment in which businesses operate. This course introduces students to the fundamental principles of business law, including contracts, agency, partnership, companies, intellectual property, and consumer protection. Emphasis is placed on understanding the legal regulations and ethical considerations that affect commercial transactions and organizational decision-making. Through real-life case studies and practical examples, students will learn to identify legal issues, analyze risks, and apply relevant laws to ensure compliance and responsible business conduct in various organizational scenarios.
Recommended Textbook
Legal Environment of Business and Online Commerce 7th Edition by Henry R. Cheeseman
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26 Chapters
2561 Verified Questions
2561 Flashcards
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Page 2
Chapter 1: Legal Heritage and the Digital Age
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80 Verified Questions
80 Flashcards
Source URL: https://quizplus.com/quiz/10944
Sample Questions
Q1) What function of the law is being served when passing laws that protect the U.S. government from the risk of being forcefully overthrown?
A) maintaining the status quo
B) shaping moral standards
C) facilitating orderly change
D) promoting social justice
Answer: A
Q2) The adoption of the English common law led to precedence being an important feature of the American legal system.
A)True
B)False
Answer: True
Q3) Equitable orders and remedies of the Court of Chancery took precedence over the legal decisions and remedies of the law courts.
A)True
B)False
Answer: True
Q4) The ________ branch of the government has the power to enact laws. Answer: legislative
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Chapter 2: Ethics and Social Responsibility of Business
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80 Verified Questions
80 Flashcards
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Sample Questions
Q1) Kant believed that people owe moral duties that are based on universal rules.
A)True
B)False
Answer: True
Q2) The theory of moral minimum emphasizes correcting social injuries caused by a business.
A)True
B)False
Answer: True
Q3) Consistency is one of the two important principles of ________ upon which its universal laws are based.
A) utilitarianism
B) Kantian ethics
C) Rawls's social justice theory
D) moral relativism
Answer: B
Q4) Rawl's social justice theory is based on the ________ theory of morality proposed by John Locke and Jean-Jacques Rousseau.
Answer: social contract
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Chapter 3: Courts, Jurisdiction, and Administrative Agencies
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87 Verified Questions
87 Flashcards
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Sample Questions
Q1) ________ are courts that hear cases of a general nature that are not within the jurisdiction of limited-jurisdiction trial courts.
A) Courts of record
B) Intermediate appellate courts
C) Inferior trial courts
D) State supreme courts
Answer: A
Q2) The decisions handed down by the general jurisdiction trial courts are appealable to an intermediate appellate court or the state supreme court.
A)True
B)False
Answer: True
Q3) Intermediate appellate courts review new evidence or testimony that was not seen or heard in the lower courts.
A)True
B)False
Answer: False
Q4) ________ refers to a court that hears appeals from trial courts.
Answer: Intermediate appellate court
Page 5
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Chapter 4: Judicial, Alternative, and E-Dispute Resolution
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81 Verified Questions
81 Flashcards
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Sample Questions
Q1) Negotiation is a procedure whereby the parties choose an impartial third party to hear and decide the dispute.
A)True
B)False
Q2) In a litigation process, the party who files a complaint is called the ________.
A) bailiff
B) plaintiff
C) prosecutor
D) defendant
Q3) The ________ is the party who files a complaint.
Q4) Differentiate between trials with and without jury.
Q5) Only the ________ can appeal in a criminal case.
Q6) A deposition is oral testimony given by a party or witness during the trial.
A)True
B)False
Q7) Interventions are written questions submitted by one party to a lawsuit to the other party.
A)True
B)False
Q8) Briefly explain the steps involved in the pretrial litigation process.
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Chapter 5: Constitutional Law for Business and
E-Commerce
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82 Verified Questions
82 Flashcards
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Sample Questions
Q1) The United States considers Native American tribes as "domestic dependent" nations with limited sovereignty.
A)True
B)False
Q2) The ________ is responsible for making federal law.
A) President
B) state government
C) legislative branch
D) Supreme Court
Q3) Which of the following statements is true about the freedom of speech guaranteed by the Bill of Rights?
A) The Freedom of Speech Clause was added to the Constitution in the third amendment.
B) The Freedom of Speech Clause protects speech only, not conduct.
C) There is no provision for fully protected speech in the Constitution.
D) Burning the American flag in protest to a federal government military action is in violation of the Freedom of Speech Clause.
Q4) Distinguish between limited protected speech and unprotected speech, as divided by the U.S. Supreme Court.
Page 7
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Chapter 6: Torts and Strict Liability
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Sample Questions
Q1) Disparagement refers to the liability of a professional who breaches his or her duty of ordinary care.
A)True
B)False
Q2) A bystander who suffers severe emotional distress on witnessing a heinous crime can claim damages for intentional infliction of emotional distress.
A)True
B)False
Q3) Which of the following actions would make Sarah liable for battery?
A) She publishes an article calling for the current U.S. President to quit because she thinks he is not doing a good job.
B) She extends the boundary of her plot of land encroaching two feet of her neighbor's plot.
C) She smuggles marijuana into the country.
D) She slaps her ex-husband because he denied her alimony.
Q4) Actual physical contact is not necessary for a tort to be considered an assault.
A)True
B)False
Q5) How is assault different from battery?
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Chapter 7: Criminal Law and Cyber Crimes
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98 Verified Questions
98 Flashcards
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Sample Questions
Q1) In a criminal case, the government is represented by the ________.
Q2) ________ crimes are prone to being committed by businesspersons, and usually involve cunning and deceit rather than physical force.
Q3) In the United States, what recourse does an accused person have in case he cannot afford a private defense lawyer?
A) He will have to spend his time in jail till he can collect enough money to afford one.
B) A public defender will be appointed to the accused by the government for a nominal fee.
C) He will have to defend himself when the trial starts.
D) The government will provide an attorney for the accused free of charge.
Q4) The attorney-client privilege can only be raised by the defendant.
A)True
B)False
Q5) In a criminal lawsuit, the government is represented by a lawyer called defense attorney.
A)True
B)False
Q6) Discuss mail fraud and wire fraud.
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Chapter 8: Intellectual Property and Cyber Piracy
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82 Verified Questions
82 Flashcards
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Sample Questions
Q1) After the copyright period runs out, the work enters the public domain.
A)True
B)False
Q2) A party has to be a member of an organization to use a certification mark.
A)True
B)False
Q3) What is acquiring secondary meaning in trademark terms?
A) when a mark that resembles a mark already registered with the federal PTO is used for a new product or service
B) when ordinary words establish new meaning due to its attachment to a product or service
C) when a distinctive mark or design is created for a new product or service
D) when descriptive words are used that have no direct relevance to a product or service
Q4) A ________ is a patent that protects the functionality of a patent.
A) utility patent
B) method patent
C) design patent
D) process patent
Q5) Give an account of trademark dilution.
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Chapter 9: Formation of Traditional and E-Contracts
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95 Verified Questions
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Sample Questions
Q1) Which of the following is true for an auction without reserve?
A) The bidder is considered the offeror.
B) The seller need not accept the highest bid.
C) The goods on sale cannot be withdrawn.
D) The auctioneer is not allowed to set a minimum bid.
Q2) Stella is injured in a motor accident and is brought to the hospital by a passerby. Stella subsequently passes into a coma. The doctors and other staff perform the necessary medical procedures to save her life. Stella comes out of her coma after two months and is released from the hospital after the doctors are satisfied by her recovery. Under the doctrine of ________ contract, Stella has to pay the hospital for its services.
A) implied-in-fact contract
B) express contract
C) quasi-contract
D) formal contract
Q3) Any contract entered into by a person who has been adjudged insane is void.
A)True
B)False
Q4) A(n)________ contract is only valid once the offeree performs the requested act.
Q5) What is legal insanity?
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Chapter 10: Performance and Breach of Traditional and E-Contracts
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80 Verified Questions
80 Flashcards
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Sample Questions
Q1) The agreement whereby the parties agree to accept something different in satisfaction of the original contract is called restitution.
A)True
B)False
Q2) Explain the creation and working of guaranty contracts.
Q3) Which of the following is true of discharge of performance by agreement?
A) A partially executed contract cannot be rescinded.
B) Mutual rescission requires parties to enter into a second agreement that expressly terminates the first one.
C) A party is allowed to rescind a contract without the consent of the other party.
D) Unilateral rescission is not regarded as breach of contract.
Q4) ________ is an event that occurs when one person consciously decides to induce another person to rely and act on a misrepresentation.
A) Fraudulent misrepresentation
B) Unilateral mistake
C) Bilateral mistake
D) Erroneous misrepresentation
Q5) Intentional misrepresentation is commonly referred to as ________.
Page 12
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Chapter 11: E-Commerce and Digital Law
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80 Verified Questions
80 Flashcards
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Sample Questions
Q1) Registering a domain name of another party's trademarked name or famous person's name is called cybersquatting.
A)True
B)False
Q2) A(n)________ grants the licensee exclusive rights to use informational rights for a specified duration.
Q3) KCube Multimedia launches a new game. It permits Ken to download, install and play the game for three months. This is an instance of ________.
A) e-license
B) contract
C) domain name registration
D) digital signature
Q4) The CAN-SPAM Act requires spammers to label sexually oriented e-mail as such.
A)True
B)False
Q5) The ________ gives an e-signature the same force and effect as a pen-inscribed signature on paper.
Q6) Explain in brief the working of an e-license.
Q7) What measures has Congress taken to regulate spam e-mail?
Page 13
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Chapter 12: UCC Sales and Lease Contracts and Warranties
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) Which of the following describes a mixed sale?
A) a sale that involves two or more intangible goods
B) a sale that involves the passing of title of goods from a seller to a buyer for a price
C) a sale that involves the possession and use of named goods for a set
D) a sale that involves the provision of a service and a good in the same transaction
Q2) The firm offer rule allows the offeror to revoke an offer at any point of time prior to the acceptance.
A)True
B)False
Q3) A finance lease involves a lessor leasing money to a lessee. A)True
B)False
Q4) The ________ refers to a model act that includes comprehensive laws that cover most aspects of commercial transactions
Q5) ________ are damages that will be paid upon a breach of contract that are established in advance.
Q6) Article 2 of the UCC governs ________.
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Page 14
Chapter 13: Credit, Secured Transactions, and Bankruptcy
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80 Verified Questions
80 Flashcards
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Sample Questions
Q1) An arrangement in which a third party promises to be primarily liable with the borrower for the payment of the borrower's debt is referred to as ________.
A) garnishment
B) accommodation
C) surety arrangement
D) guaranty arrangement
Q2) A(n)________ is a statutory lien given to workers on personal property to which they furnish services or materials in the ordinary course of business.
A) super-priority lien
B) floating lien
C) artisan's lien
D) judgment lien
Q3) The deficiency judgment protects the mortgagor from being recovered further in case there is a foreclosure sale deficiency.
A)True
B)False
Q4) In a(n)________ arrangement, a third party promises to be primarily liable with the borrower for the payment of the borrower's debt.
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15
Chapter 14: Small Business and General and Limited Partnerships
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97 Verified Questions
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Sample Questions
Q1) Which of the following best describes an entrepreneur?
A) a person who forms and operates a business
B) a person who invests in an existing business
C) a person who lends capital to a new business
D) a person who derives a profit from a new or an existing business
Q2) According to the RULPA, what liability does a corporation have if it is a general partner to a limited partnership?
A) unlimited personal liability
B) liability restricted to debts up to its capital contributions
C) liability of termination as partner
D) unlimited organizational capital liability
Q3) General partners have unlimited personal liability for the debts and obligations of the partnership.
A)True
B)False
Q4) A third party who sues to recover on a partnership contract need not name all the general partners in the lawsuit.
A)True
B)False
16
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Chapter 15: Limited Liability Companies, Limited Liability
Partnerships, and Special Forms of Business
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114 Verified Questions
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Sample Questions
Q1) An LLC is taxed at the entity level.
A)True
B)False
Q2) A member's distributional interest in an LLC is ________ and may be transferred in whole or in part.
A) a vote
B) a proxy
C) personal property
D) an authority in management
Q3) Which of the following is true of the management of an LLC?
A) Members cannot become managers of an LLC.
B) A manager-managed LLC shares management powers between members and managers.
C) A nonmember can become a manager of an LLC.
D) An LLC can be both member-managed and manager-managed simultaneously.
Q4) A franchisee acquires a(n)________ from a franchisor which allows the franchisee to use the franchisor's trademarks, service marks, trade names, and other intellectual property in the distribution of goods, services, software, and digital information.
Q5) Explain in brief the four basic types of franchises.
Q6) A member's ownership interest in an LLC is known as a ________. Page 17
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Page 18
Chapter 16: Corporations and the Sarbanes-Oxley Act
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134 Verified Questions
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Sample Questions
Q1) Any corporation with more than 100 shareholders is automatically considered a C corporation for federal income tax purposes.
A)True
B)False
Q2) ________ is a type of equity security that represents the residual value of a corporation.
A) Common stock
B) Preferred stock
C) Cumulative preferred stock
D) Participating preferred stock
Q3) Authorized shares that have been sold by the corporation are called issued shares.
A)True
B)False
Q4) The articles of incorporation must contain the name and address of every incorporator.
A)True
B)False
Q5) What is a common stock? What are its features?
Q6) What is the CEO and CFO provision laid out by the Sarbanes-Oxley Act of 2002?
Page 19
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Chapter 17: Investor Protection, E-Securities, and Wall Street Reform
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Sample Questions
Q1) An accredited investor is defined as a person who does not understand the risks involved in securities investment and will suffer considerable financial damage if the investment fails.
A)True
B)False
Q2) The ________ is a federal statute that primarily regulates the issue of securities by companies and other businesses.
Q3) A(n)________ is an exemption from registration which states that securities transactions not made by an issuer, an underwriter, or a dealer do not have to be registered with the SEC.
A) intrastate offering exemption
B) private placement exemption
C) regulation A offering
D) nonissuer exemption
Q4) It is legal for a company employee to make a profit by personally purchasing shares of the corporation prior to public release of favorable information.
A)True
B)False
Page 20
Q5) List the securities exempt from registration with the SEC.
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Chapter 18: Agency Law
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Sample Questions
Q1) Constructive notices are not valid against strangers who assert claims of apparent agency.
A)True
B)False
Q2) What role does Chris perform?
A) independent contractor
B) agent
C) principal
D) trustee
Q3) The coming and going rule says that a principal is generally not liable for injuries caused by its agents and employees while they are on their way to or from work.
A)True
B)False
Q4) Dual agency occurs when an agent acts for two or more different principals in the same transaction.
A)True
B)False
Q5) If a person employs an architect to design the layout of his or her own home, it would constitute a(n)________ relationship.
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Chapter 19: Equal Opportunity in Employment
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Sample Questions
Q1) The ADA is a federal statute that imposes obligations on employers and providers of public transportation, telecommunications, and public accommodations to accommodate individuals with disabilities.
A)True
B)False
Q2) Employers are obligated to provide reasonable accommodations to physically challenged employee if they do not incur significant difficulty or expense for the employers.
A)True
B)False
Q3) The U.S. Supreme Court has held that sexual harassment that creates a hostile work environment violates ________.
A) Title VII of the Civil Rights Act
B) Fair Employment Practices Act
C) Title II of GINA
D) Title I of the ADA
Q4) ________ is the federal statute that prohibits job discrimination based on the race, color, religion, sex, or national origin of the job applicant.
Q5) Distinguish between disparate-treatment and disparate-impact discrimination.
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Chapter 20: Employment Law and Worker Protection
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Sample Questions
Q1) Under common law, employees who were injured on the job could not sue their employers for negligence.
A)True
B)False
Q2) Under the FLSA, an employer cannot require nonexempt employees to work more than 40 hours per week unless they are paid ________ of one-and-a-half times their regular pay for each hour worked in excess of 40 hours that week.
Q3) Jorge, a fork-lift truck operator for retail chain Hansridges, was injured when the fork-lift he was operating toppled over. The fork-lift truck was manufactured and maintained by Ionic Machines Inc. As he was covered by workers' compensation insurance, he could recover workers' compensation benefits. However, it was later found that the fork-lift truck was not designed to be used to lift as much weight as Ionic Machines claimed it could. Which of the following legal rights is Jorge entitled to?
A) sue Hansridges for injuries suffered during employment
B) sue Hansridges for hazardous work environment
C) sue Ionic Machines for damages
D) not sue anyone as he has already received workers' compensation
Q4) What is the Family and Medical Leave Act? How is an employee covered under it?
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Page 23
Chapter 21: Labor Law and Immigration Law
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Sample Questions
Q1) ________ Act, also known as the labor's "bill of rights," gives each union member equal rights and privileges to nominate candidates for union office, vote in elections, and participate in membership meetings.
Q2) When individual union members go on strike without proper authorization from the union it is referred to as a(n)________ strike.
Q3) Which of the following is a compulsory subject during collective bargaining?
A) health benefits
B) discrimination
C) corporate reorganization
D) location of workplace
Q4) The group that a union is seeking to represent is called the ________ unit, and it must be defined before the union can petition for an election.
Q5) The NLRB oversees union elections, prevents employers and unions from engaging in illegal and unfair labor practices.
A)True
B)False
Q6) How does the Landrum-Griffin Act regulate internal affairs of unions? Can unions discipline their members? Elaborate.
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Chapter 22: Antitrust Law and Unfair Trade Practices
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Sample Questions
Q1) Treble damages are allowed in an FTC Act violation.
A)True
B)False
Q2) Which of the following is true with regard to price fixing?
A) Price fixing is a reasonable violation of Section 1 of the Sherman Act.
B) Price fixing is a process seen exclusively among sellers of goods and services.
C) Price fixing is permissible as it helps consumers or protects competitors from ruinous competition.
D) Price fixing also involves fixing the quantity of a product or service to be produced or provided.
Q3) The ________ rule is a rule that is applicable to restraints of trade considered inherently anticompetitive. Once this determination is made about a restraint of trade, the court will not permit any defenses or justifications to save it.
Q4) ________ are vertical trade restraints that involve the seller's refusal to sell a product, the tying item, to a customer unless the customer purchases a second product.
Q5) The exemption of railroads from antitrust laws is an example of a(n)________ exemption.
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Chapter 23: Consumer Protection
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Sample Questions
Q1) The Health Care Reform Act prohibits insurers from establishing an annual spending cap for benefit payments.
A)True
B)False
Q2) "Rapid Rise" is a health drink targeted at teenagers and advertised with the claim that regular consumption of the drink over a two-month period leads to a four-inch rise in height. This claim is not grounded in laboratory research and has not been seen in most of its users. This act of making scientifically unsubstantiated health claims about one's product is likely to be a violation of the ________.
A) Health Care Reform Act
B) Nutrition Labeling and Education Act
C) Consumer Product Safety Act
D) Patient Protection and Affordable Care Act
Q3) List out the new protections that are available under the Health Care Reform Act of 2010.
Q4) Firearms represent an example of consumer products which do not come under the CPSC rules.
A)True
B)False
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Chapter 24: Environmental Protection
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Q1) The ________ Act provides for the creation of a government fund to finance the cleanup of hazardous waste sites.
A) Resource Conservation and Recovery
B) Toxic Substances Control
C) Comprehensive Environmental Response, Compensation, and Liability
D) National Environmental Policy
Q2) Describe any two legislations that have been implemented to minimize the damage caused by oil spills.
Q3) The Endangered Species Act applies only to private parties.
A)True
B)False
Q4) Sources of thermal pollution are subject to the provisions of the Clean Water Act and the regulations adopted by the EPA.
A)True
B)False
Q5) The Clear Water Act extends its protections to the oceans.
A)True
B)False
Q6) Explain the nature and enforcement of the NAAQS?
Page 27
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Chapter 25: Land Use Regulation and Real Property
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Sample Questions
Q1) Plant life that is severed from the land is considered ________.
A) intangible property
B) immovable property
C) real property
D) personal property
Q2) A deed can only be used to transfer a fee simple absolute interest in real property.
A)True
B)False
Q3) Carmen, Westbrook, and Ashton are concurrent owners of a large commercial building. Ashton executes a will that leaves all his property to his son in the event of his death. But after Ashton passes away, his ownership interest in the building was acquired by the two remaining tenants of the building. Which of the following kinds of concurrent ownership would allow such a passage of title?
A) a tenancy by entirety
B) a community property
C) a joint tenancy
D) a tenancy in common
Q4) Give an account of concurrent ownerships in multiple-dwelling building.
Q5) What is a life estate?
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Chapter 26: International and World Trade Law
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Sample Questions
Q1) Classical Hindu law heavily rests on civil codes adopted during the reigns of different kings.
A)True
B)False
Q2) The Treaty Clause of the U.S. Constitution designates the president of the United States as its agent to deal with foreign affairs.
A)True
B)False
Q3) An agreement between two or more nations that is formally signed by an authorized representative of each nation and ratified by each nation is defined as a(n)________.
A) statute
B) charter
C) treaty
D) arraignment
Q4) The ________ doctrine is based on the principle that a country has absolute authority over what transpires within its own territory. The doctrine states that judges of one country cannot question the validity of an act committed by another country within that other country's borders.
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