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Test your basic knowledge |
Business Law Fundamentals
Start Test
Study First
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. An interest either in a person's life or well-being or in property that is sufficiently substantial that insuring against injury to (or the death of) the person or against damage to the property does not amount to a mere wagering (betting) contract.
articles of organization
insurable interest
specific performance
proxy
2. The principle that the holder of a negotiable instrument who cannot qualify as a holder in due course (HDC) - but who derives his or her title through an HDC - acquires the rights of an HDC.
installment contract
identification
shelter principle
joint tenancy
3. A transaction in which an owner of goods (the consignor) delivers the goods to another (the consignee) for the consignee to sell. The consignee pays the consignor only for the goods that are sold by the consignee.
consignment
bilateral mistake
bond
policy
4. A firm that requires all workers - once employed - to become union members within a specified period of time as a condition of their continued employment.
union shop
binder
abandoned property
scienter
5. A relationship between two parties in which one party (the agent) agrees to represent or act for the other (the principal).
gift causa mortis
mirror image rule
intestate
agency
6. A person who receives inside information.
liquidated debt
gift
default
tippee
7. The mixing together of goods belonging to two or more owners so that the separately owned goods cannot be identified.
penalty
homestead exemption
retained earnings
confusion
8. A negotiable instrument that is payable 'to the order of an identified person' or 'to an identified person or order.'
ethics
alternative dispute resolution (ADR)
order instrument
bearer
9. A person in possession of an instrument payable to bearer or indorsed in blank.
search warrant
bearer
misdemeanor
grand jury
10. A decision-making technique that involves weighing the costs of a given action against the benefits of that action.
cost-benefit analysis
confusion
deficiency judgment
reply
11. Ownership rights in property - including the right to possess and control the property.
bounty payment
forum-selection clause
frustration of purpose
dominion
12. The process by which a criminal defendant and the prosecutor in a criminal case work out a mutually satisfactory disposition of the case - subject to court approval; usually involves the defendant's pleading guilty to a lesser offense in return for a
express warranty
plea bargaining
negotiable instrument
attachment
13. The formal disbanding of a partnership or a corporation. It can take place by (1) acts of the partners or - in a corporation - acts of the shareholders and board of directors; (2) the subsequent illegality of the firm's business; (3) the expiration o
surety
devisee
dissolution
stored-value card
14. A negotiable instrument is dishonored when payment or acceptance of the instrument - whichever is required - is refused even though the instrument is presented in a timely and proper manner.
extension clause
dishonor
constructive eviction
special warranty deed
15. A contractual promise of one party to refrain from conducting business similar to that of another party for a certain period of time and within a specified geographic area. Courts commonly enforce such covenants if they are reasonable in terms of tim
liquidation
covenant not to compete
tangible property
exclusive distributorship
16. Generally - stock certificates - bonds - notes - debentures - warrants - or other documents given as evidence of an ownership interest in a corporation or as a promise of repayment by a corporation.
community property
securities
scienter
executor
17. Property that has physical existence and can be distinguished by the senses of touch or sight. A car is tangible property; a patent right is intangible property.
draft
check
bounty payment
tangible property
18. A deed in which the grantor assures (warrants to) the grantee that the grantor has title to the property conveyed in the deed - that there are no encumbrances on the property other than what the grantor has represented - and that the grantee will enj
mailbox rule
larceny
warranty deed
taking
19. A contract that is formed electronically.
principle of rights
hot-cargo agreement
franchisor
e-contract
20. In a given state - a corporation that does business in the state without being incorporated therein.
tariff
unreasonably dangerous product
after-acquired property
foreign corporation
21. An agreement to substitute a contractual obligation for some other type of legal action based on a valid claim.
covenant not to sue
predominant-factor test
winding up
workers' compensation laws
22. The purchase or sale of securities on the basis of inside information (information that has not been made available to the public).
secured transaction
vesting
insider trading
record
23. The term used to designate a person who has an ownership interest in a limited liability company.
member
dominion
codicil
free-writing prospectus
24. An agreement that grants the owner the option to buy a given number of shares of stock - usually within a set time period.
unilateral contract
independent contractor
limited liability limited partnership (LLLP)
stock options
25. The substitution - by agreement - of a new contract for an old one - with the rights under the old one being terminated. Typically - novation involves the substitution of a new person who is responsible for the contract and the removal of the origina
breach of contract
stock options
novation
whistleblowing
26. Any interest in personal property or fixtures that secures payment or performance of an obligation.
drawer
lease
long arm statute
security interest
27. A provision in a contract stipulating that certain unforeseen events
collecting bank
profit
mortgagee
force majeure clause
28. A network that can be used by persons located (distributed) around the country or the globe to share computer files.
security
mortgagor
S corporation
distributed network
29. A written document - which is usually notarized - authorizing another to act as one's agent; can be special (permitting the agent to do specified acts only) or general (permitting the agent to transact all business for the principal).
artisan's lien
answer
power of attorney
Totten trust
30. A designation in the United States for a corporation formed in another country but doing business in the United States.
summary jury trial (SJT)
shrink-wrap agreement
alien corporation
adverse possession
31. 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.
check
partnership
purchase-money security interest (PMSI)
mortgagee
32. The image and overall appearance of a product
stop-payment order
digital cash
shrink-wrap agreement
trade dress
33. A worldwide system in which foreign currencies are bought and sold.
foreign exchange market
litigation
family limited liability partnership (FLLP)
long arm statute
34. A theory of sharing liability among all firms that manufactured and distributed a particular product during a certain period of time. This form of liability sharing is used only in some jurisdictions and only when the true source of the harmful produ
tender
market-share liability
constructive eviction
tangible property
35. One to whom goods are entrusted by a bailor.
debtor in possession (DIP)
tangible property
requirements contract
bailee
36. The right of a co-surety who pays more than her or his proportionate share on a debtor's default to recover the excess paid from other co-sureties.
right of contribution
insurable interest
shareholder's derivative suit
sovereign immunity
37. A clause that releases a contractual party from liability in the event of monetary or physical injury - no matter who is at fault.
venue
stock warrant
executed contract
exculpatory clause
38. The minimum degree of ethical behavior expected of a business firm - which is usually defined as compliance with the law.
moral minimum
parol evidence rule
minimum wage
partnering agreement
39. Reasonable grounds for believing that a person should be arrested or searched.
certification mark
automatic stay
suretyship
probable cause
40. A merger between a subsidiary corporation and a parent corporation that owns at least 90 percent of the outstanding shares of each class of stock issued by the subsidiary corporation. Short-form mergers can be accomplished without the approval of the
short-form merger
generally accepted auditing standards (GAAS)
tenancy in common
mens rea
41. Nonviolent crime committed by individuals or corporations to obtain a personal or business advantage.
white-collar crime
winding up
maker
cost-benefit analysis
42. A statutory lien on the real property of another - created to ensure payment for work performed and materials furnished in the repair or improvement of real property - such as a building.
43. The second of two stages in the termination of a partnership or corporation. Once the firm is dissolved - it continues to exist legally until the process of winding up all business affairs (collecting and distributing the firm's assets) is complete.
winding up
attachment
payee
predominant-factor test
44. Under Article 9 of the UCC - the property subject to a security interest - including accounts and chattel paper that have been sold.
right of reimbursement
security agreement
collateral
objective theory of contracts
45. A method of settling disputes outside of court by using the services of a neutral third party - who acts as a communicating agent between the parties and assists them in negotiating a settlement.
consequential damages
insider trading
small claims court
mediation
46. Mistake that occurs when one party to a contract is mistaken as to a material fact; the contract normally is enforceable.
garnishment
unilateral mistake
security interest
implied warranty of fitness for a particular purpose
47. A person who makes an offer.
offeror
risk management
hacker
e-evidence
48. A security interest that arises when a seller or lender extends credit for part or all of the purchase price of goods purchased by a buyer.
community property
purchase-money security interest (PMSI)
condemnation
consideration
49. In a lawsuit - an issue involving the application or interpretation of a law. Only a judge - not a jury - can rule on questions of law.
constructive discharge
lessor
question of law
inside director
50. Under Article 9 of the UCC - whatever is received when collateral is sold or otherwise disposed of - such as by exchange.
rescission
proceeds
principle of rights
self-defense