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Business Law Fundamentals

Subjects : law, business-law
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Failure to observe a promise or discharge an obligation; commonly used to refer to failure to pay a debt when it is due.






2. A suit brought by a shareholder to enforce a corporate cause of action against a third person.

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3. In bankruptcy proceedings - the suspension of virtually all litigation and other action by creditors against the debtor or the debtor's property. The stay is effective the moment the debtor files a petition in bankruptcy.






4. An implied promise by a landlord that rented residential premises are fit for human habitation






5. An amount - stipulated in a contract - that the parties to the contract believe to be a reasonable estimation of the damages that will occur in the event of a breach.






6. The creation of an absolute or unconditional right or power.






7. One to whom an obligation is owed.






8. Rights held by shareholders that entitle them to purchase newly issued shares of a corporation's stock - equal in percentage to shares already held - before the stock is offered to any outside buyers. Preemptive rights enable shareholders to maintain






9. A clause in a contract designating the law (such as the law of a particular state or nation) that will govern the contract.






10. Capital (funds and other assets) provided by professional - outside investors (venture capitalists - usually groups of wealthy investors and investment banks) to start new business ventures.






11. An agreement in which a seller agrees to sell and a buyer agrees to buy all or up to a stated amount of what the seller produces.






12. An agreement formed between a debtor and his or her creditors in which the creditors agree to accept a lesser sum than that owed by the debtor in full satisfaction of the debt.

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13. A prediction concerning potential loss based on known and unknown factors.






14. A method of settling disputes - used in many federal courts - in which a trial is held - but the jury's verdict is not binding. The verdict acts only as a guide to both sides in reaching an agreement during the mandatory negotiations that immediately






15. An equity (ownership) interest in a corporation - measured in units of shares.






16. A written promise made by one person (the maker) to pay a fixed amount of money to another person (the payee or a subsequent holder) on demand or on a specified date.






17. Joint ownership.






18. A draft drawn by a drawer ordering the drawee bank or financial institution to pay a certain amount of money to the holder on demand.






19. The various documents used and developed by an accountant during an audit - such as notes and computations - that make up the work product of an accountant's services to a client.






20. A special court in which parties may litigate small claims (such as $5 -000 or less). Attorneys are not required in small claims courts and - in some states - are not allowed to represent the parties.






21. A third party who incidentally benefits from a contract but whose benefit was not the reason the contract was formed. An incidental beneficiary has no rights in a contract and cannot sue to have the contract enforced.






22. A theory under which the intent to form a contract will be judged by outward - objective facts (what the party said when entering into the contract - how the party acted or appeared - and the circumstances surrounding the transaction) as interpreted






23. An encumbrance on a property to satisfy a debt or protect a claim for payment of a debt.






24. A tax on imported goods.






25. One designated in a will to receive a gift of personal property.






26. Standards concerning an auditor's professional qualities and the judgment exercised by him or her in the performance of an audit and report. The source of the standards is the American Institute of Certified Public Accountants.






27. A hacker whose purpose is to exploit a target computer for a serious impact - such as corrupting a program to sabotage a business.






28. A person who transfers the right to the possession and use of goods to another in exchange for rental payments.






29. The use of an asset that is not the subject of a loan to collateralize that loan.






30. A court's grant of assistance to a complainant. In bankruptcy proceedings - the order relieves the debtor of the immediate obligation to pay the debts listed in the bankruptcy petition.






31. A contract that does not require a specified form or formality to be valid.






32. A provision of the Bankruptcy Code that allows a court to confirm a debtor's Chapter 11 reorganization plan even though only one class of creditors has accepted it.






33. In a given state - a corporation that does business in - and is organized under the law of - that state.






34. Voluntary agreement to a proposition or an act of another; a concurrence of wills.






35. Any interest in personal property or fixtures that secures payment or performance of an obligation.






36. An estate in realty held by a tenant under a lease. In every leasehold estate - the tenant has a qualified right to possess and/or use the land.






37. In a limited liability company - an agreement in which the members set forth the details of how the business will be managed and operated. State statutes typically give the members wide latitude in deciding for themselves the rules that will govern t






38. The act of transferring to another all or part of one's rights arising under a contract.






39. A hybrid form of business organization that is used mainly by professionals who normally do business in a partnership. Like a partnership - an LLP is a pass-through entity for tax purposes - but the personal liability of the partners is limited.






40. The idea that corporations can and should act ethically and be accountable to society for their actions.






41. Information or processes that give a business an advantage over competitors that do not know the information or processes.






42. A business entity that has no tax liability. The entity's income is passed through to the owners - and the owners pay taxes on the income.






43. Occurs when an individual adds value to personal property by the use of either labor or materials. In some situations - a person may acquire ownership rights in another's property through accession.






44. The seizure by a government of a privately owned business or personal property for a proper public purpose and with just compensation.






45. An interest in land that exists only for the duration of the life of some person - usually the holder of the estate.






46. As a noun - a gift of real property by will; as a verb - to make a gift of real property by will.






47. A person who agrees to satisfy the debt of another (the debtor) only after the principal debtor defaults. Thus - a guarantor's liability is secondary.






48. A secondary promise that is ancillary (subsidiary) to a principal transaction or primary contractual relationship - such as a promise made by one person to pay the debts of another if the latter fails to perform. A collateral promise normally must be






49. A required standard of care that certain professionals - such as accountants - must meet to avoid liability for securities violations.






50. A contract formed in whole or in part from the conduct of the parties (as opposed to an express contract).