BUSINESS LAW

True/FalseIndicate whether the sentence or statement is true or false.

____ 1. Administrative agencies do not make their own laws; they enforce laws made by Congress.____ 2. A juvenile, if arrested before reaching age 18, will be tried in a juvenile court even if he or she turns 18 before

the case comes to trial.____ 3. A crime is an offense against the public good.____ 4. A minor may affirm part of a contract while disaffirming another part.____ 5. You have a right to sue a person who breaches a contract made with you.____ 6. The transfer of a duty is called an assignment.____ 7. Third-party beneficiaries do not have standing to sue when a contract is breached.____ 8. Featherbedding is assigning more employees than necessary to a job.____ 9. Certain minors must have a work permit to work.____ 10. A corporation's directors meet and vote to set broad polices.____ 11. Divorce laws are the same in all 50 states.____ 12. When a buyer breaches a sales contract, the seller may cancel the contract.____ 13. A delinquent child is a minor who has committed an act that would not be a crime if committed by an adult.____ 14. Assault and battery are always committed separately.____ 15. The United States is a country of immigrants from a variety of cultures that have the same ethical values.____ 16. Police officers may arrest someone if he or she looks suspicious.____ 17. If both of the parties to an illegal agreement are equally at fault, the court will aid both parties equally.____ 18. The most common type of draft is the check.____ 19. A valid premarital agreement may be oral.____ 20. A person may retire at age 62 and receive full benefits under social security.

Multiple ChoiceIdentify the letter of the choice that best completes the statement or answers the question.

____ 21. The laws of the United States are virtually all based ona. the Roman Code c. common lawb. administrative law d. moral law

____ 22. The heart of the golden rule isa. empathy c. opinionb. greatest good d. constitutional law

____ 23. The unlawful killing of one human being by another, without malice or aforethought, isa. justifiable homicide c. second-degree murderb. first-degree murder d. manslaughter

____ 24. In a criminal proceeding, the government is referred to as thea. defendant c. plaintiffb. offender d. protagonist

____ 25. A false statement made orally to a third party isa. slander c. breach of duty

b. defamation d. libel

____ 26. The negligence defense that might be used by a baseball club that is sued by spectators isa. contributory negligence c. assumption of riskb. comparative negligence d. proximate cause

____ 27. The taking back of an offer by the offeror isa. revocation c. cancellationb. rejection d. consideration

____ 28. A contract that amounts to nothing and has no legal effect isa. unenforceable c. voidb. voidable d. unilateral

____ 29. If a valid offer is met with a valid acceptance, the result isa. misrepresentation c. legalityb. genuine agreement d. capacity

____ 30. Threats of a business nature that cause a person to enter into a contract without real consent would qualify asa. undue influence c. economic duressb. duress d. fraud

____ 31. Charging more than the maximum legal interest rate isa. fraud c. extortionb. usury d. price-fixing

____ 32. Individuals who have made a legally enforceable agreement are said to bea. assignees c. in privity of contractb. in accord and satisfaction d. in specific performance

____ 33. A contract by which ownership of goods is shifted from seller to buyer for a price is aa. bid c. deliveryb. sale d. transfer

____ 34. A business or person who deals regularly in the sale of goods is a(n)a. nonmerchant c. merchantb. agent d. owner

____ 35. The transfer of all goods owned by a business is known as aa. forced sale c. total transferb. shipment contract d. bulk transfer

____ 36. A food or drug with false or misleading labeling or packaging is said to bea. injurious c. misbrandedb. adulterated d. prohibited

____ 37. Standard-form, written contracts prepared by the seller for the buyer to sign are calleda. adjudicatory contracts c. executory contractsb. adhesion contracts d. cohesive contracts

____ 38. A person who wrongfully retains possession of lost property is a(n)a. gratuitous bailor c. tortious baileeb. pledgee d. involuntary bailee

____ 39. A person who has been given authority to perform any act within the scope of a business is aa. special agent c. statutory agentb. general agent d. would-be agent

____ 40. An agent's obligation to deal honestly with another party isa. mutual agreement c. habeas corpusb. good faith d. implied authority

____ 41. The party who buys goods on credit or borrows money is called thea. secured party c. debtorb. creditor d. loanee

____ 42. Charge accounts are examples ofa. usury c. secured loansb. open-end credit d. closed-end credit

____ 43. A draft that is payable upon presentation to the drawee is a(n)a. time draft c. sight draftb. accepted draft d. immediate draft

____ 44. A check that is more than six months old is aa. void check c. voidable checkb. stale check d. bad check

____ 45. Most partnership law is set forth in thea. Articles of Partnership c. Uniform Partnership Actb. Uniform Commercial Code d. Tenancy in Partnership Act

____ 46. A corporation organized for the purpose of making money is a(n)a. stock corporation c. public corporationb. profit corporation d. nonprofit corporation

____ 47. All corporations issuea. preferred stock c. common stockb. par value stock d. no-par value stock

____ 48. Shareholders who want to control the election of the board of directors by buying a majority of the shares in a corporation but are unable to, may try to obtain aa. pooling agreement c. shareholder proposalb. proxy d. voting trust

____ 49. A marriage in which the parties simply agree that they are married, without benefit of a formal ceremony, is aa. void marriage c. bigamous marriageb. common-law marriage d. proxy marriage

____ 50. A person who has three or more spouses at the same time is guilty ofa. bigamy c. polygamyb. affinity d. monogamy

____ 51. The agreement that creates the landlord-tenant relationship is aa. covenant c. tenancyb. lease d. mortgage

____ 52. An oral or written statement verifying insurance coverage before the regular policy is issued is a

a. binder c. riskb. premium d. grace period

____ 53. The ability to transfer benefits from one job to another is known asa. participation c. vestingb. portability d. funding

____ 54. A supplemental clause added to an existing will is a(n)a. dower c. intestateb. curtesy d. codicil

____ 55. Breaking and entering with the intent to commit a felony isa. burglary c. larcenyb. robbery d. embezzlement

____ 56. The taking back of an offer by the offeror isa. revocation c. cancellationb. rejection d. consideration

____ 57. A consumer who wishes to cancel a contract with a door-to-door salesperson must do so withina. three days c. 24 hoursb. three weeks d. two days

____ 58. Insurance that protects the insured's car from acts of nature, vandalism, or theft isa. comprehensive insurance c. collision insuranceb. property damage liability insurance d. no-fault insurance

____ 59. When the law creates an agency relationship by circumstance, it is calleda. special agency c. agency by estoppelb. general agency d. would-be agency

____ 60. Making false statements under oath in court isa. perjury c. breach of evidenceb. usury d. jeopardy

____ 61. Fulfilling all terms of a contract properly and totally is calleda. satisfactory performance c. complete performanceb. substantial performance d. tender of performance

____ 62. Caveat venditor meansa. let the buyer beware c. let privity standb. let the seller beware d. vindicate the seller

____ 63. A low down payment and smaller monthly payments are advantages ofa. buying c. leasingb. financing d. loaning

____ 64. Failure to exercise the degree of care a reasonable person would exercise isa. strict liability c. nuisanceb. negligence d. intentional tort

____ 65. The U.S. Supreme Court decides which cases it will hear by a vote of itsa. 7 justices c. 11 justicesb. 9 justices d. 13 justices

____ 66. Most contracts end bya. agreement c. operation of lawb. performance d. impossibility of performance

____ 67. Goods that presently exist and are the subject matter of a particular contract area. specific goods c. tangible goodsb. real goods d. identified goods

____ 68. Third parties are entitled to notice of an agency'sa. liability c. estoppelb. termination d. indemnification

____ 69. Women who perform the same job as men must receive the same rate of pay according to thea. Workers' Compensation Act c. equal-pay ruleb. fellow servant rule d. Equal Rights Amendment

____ 70. Credit extended for a specific amount of money isa. closed-end credit c. open-end creditb. discounted credit d. limited credit

____ 71. A written notice filed by creditors in a public office that a security interest exists is aa. security agreement c. secured loanb. financing statement d. disclosure statement

____ 72. A draft that is not payable until the lapse of the particular period stated on the draft is a(n)a. trade acceptance c. accepted draftb. sight draft d. time draft

____ 73. A check drawn by a bank against funds that the bank has on deposit with another bank is aa. cashier's check c. traveler's checkb. certified check d. bank draft

____ 74. Shareholders transfer their voting rights to a trustee under the terms of aa. pooling agreement c. shareholder proposalb. proxy d. voting trust

____ 75. The detailed view of a stock offering that must be filed with the SEC is known as aa. prospectus c. financial statementb. registration statement d. commerce clause

____ 76. The corporation being taken over is known as thea. target c. subsidiaryb. acquisition d. suitor

____ 77. Persons related by blood are said to be related bya. affinity c. common lawb. bigamy d. consanguinity

____ 78. A marriage in which someone legally authorized to do so represents the bride and/or groom is known as a(n)a. common-law marriage c. ceremonial marriageb. proxy marriage d. absentee marriage

____ 79. The written contract between a person buying insurance and the insurance company selling it is thea. premium c. insurance plan

b. binder d. policy

____ 80. A mortgage with a fixed interest rate and increasing monthly payments is aa. fixed-rate mortgage c. graduated-payment mortgageb. balloon mortgage d. variable-rate mortgage

Matching

Match each term with its definition.a. crime f. breach of dutyb. tort g. proximate causec. nuisance h. contributory negligenced. defamation i. comparative negligencee. negligence j. assumption of risk

____ 81. Anything that interferes with the enjoyment of life or property.

____ 82. Negligence of each party is compared, and the amount of the plaintiff's recovery is reduced by the percent of his or her negligence.

____ 83. Behavior by the plaintiff that helps cause injuries.

____ 84. Plaintiff's knowledge and acceptance of risk.

____ 85. The legal connection between unreasonable conduct and the resulting harm.

Match each term with its definition.a. annulment f. desertionb. legal separation g. residencec. divorce h. alimonyd. no-fault divorce i. sole custodye. adultery j. joint custody

____ 86. A declaration by a court that a valid marriage has come to an end.

____ 87. A declaration by the court that a marriage was never effective, that it was void from the beginning.

____ 88. An allowance made to a divorced person by a former spouse for support and maintenance.

____ 89. A place where a person actually lives or resides.

____ 90. In divorce, the awarding of all parental rights, duties, and powers to one parent.

____ 91. A court judgment ending the right to cohabitation.

____ 92. The unjustified, voluntary separation of one spouse for the other, with the intent of not returning, for a period of time set by law.

Match each term with its definition.a. forgery i. alimonyb. special endorsement j. trade fixturesc. presentment k. binderd. sole proprietorship l. consideratione. corporation m. unilateral mistake

f. shareholder n. titleg. merger o. adulteratedh. premarital agreement

____ 93. The act of falsely making or materially altering a document with intent to defraud.

____ 94. In contracts, a benefit received by the promiser or a detriment suffered by the promisee.

____ 95. A body formed and authorized by law to act as a single person, distinct from its members or owners.

____ 96. The exhibition of a note and demand for payment.

____ 97. An indorsement made by first writing on the back of a negotiable instrument an order to pay to a specified person and then signing the instrument.

____ 98. A mistake made by one of the parties to a contract.

____ 99. Food or drug that contains any substance mixed or packed with it to reduce its quality or strength below the prescribed minimum standards.

____ 100. An oral or written statement putting insurance into force until the regular insurance policy can be issued.

BUSINESS LAW Answer Section

TRUE/FALSE

1. ANS: F2. ANS: F3. ANS: T4. ANS: F5. ANS: T6. ANS: F7. ANS: F8. ANS: T9. ANS: T

10. ANS: T11. ANS: F12. ANS: T13. ANS: F14. ANS: F15. ANS: T16. ANS: F17. ANS: F18. ANS: T19. ANS: F20. ANS: F

MULTIPLE CHOICE

21. ANS: C22. ANS: A23. ANS: D24. ANS: C25. ANS: A26. ANS: C27. ANS: A28. ANS: C29. ANS: B30. ANS: C31. ANS: B32. ANS: C33. ANS: B34. ANS: C35. ANS: D36. ANS: C

37. ANS: B38. ANS: C39. ANS: B40. ANS: B41. ANS: C42. ANS: B43. ANS: C44. ANS: B45. ANS: C46. ANS: B47. ANS: C48. ANS: B49. ANS: B50. ANS: C51. ANS: B52. ANS: A53. ANS: B54. ANS: D55. ANS: A56. ANS: A57. ANS: A58. ANS: A59. ANS: C60. ANS: A61. ANS: C62. ANS: B63. ANS: C64. ANS: B65. ANS: B66. ANS: B67. ANS: D68. ANS: B69. ANS: C70. ANS: A71. ANS: B72. ANS: D73. ANS: D74. ANS: D75. ANS: A76. ANS: A77. ANS: D78. ANS: B79. ANS: D80. ANS: C

MATCHING

81. ANS: C82. ANS: I83. ANS: H84. ANS: J85. ANS: G

86. ANS: C87. ANS: A88. ANS: H89. ANS: G90. ANS: I91. ANS: B92. ANS: F

93. ANS: A94. ANS: L95. ANS: E96. ANS: C97. ANS: B98. ANS: M99. ANS: O

100. ANS: K