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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. Planning that is undertaken to protect one's interest should some event threaten to undermine its security. In the context of insurance - risk management involves transferring certain risks from the insured to the insurance company.






2. An agreement that grants the owner the option to buy a given number of shares of stock - usually within a set time period.






3. A thing that was once personal property but has become attached to real property in such a way that it takes on the characteristics of real property and becomes part of that real property.






4. An approach to ethical reasoning that evaluates behavior in light of the consequences of that behavior for those who will be affected by it - rather than on the basis of any absolute ethical or moral values. In utilitarian reasoning - a 'good' decisi






5. Prepaid funds recorded on a computer or a card (such as a smart card or a stored-value card).






6. 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






7. A party that holds a lien that is subordinate to one or more other liens on the same property.






8. A warranty that goods sold or leased are fit for a particular purpose. The warranty arises when any seller or lessor knows the particular purpose for which a buyer or lessee will use the goods and knows that the buyer or lessee is relying on the skil






9. Joint ownership.






10. The first bank to receive a check for payment.






11. Knowledge by the misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.






12. A close business corporation that has met certain requirements set out in the Internal Revenue Code and thus qualifies for special income tax treatment. Essentially - an S corporation is taxed the same as a partnership - but its owners enjoy the priv






13. Property with which the owner has voluntarily parted - with no intention of recovering it.






14. In a sale of goods - the express designation of the goods provided for in the contract.






15. A contract that has not as yet been fully performed.






16. An arrangement in which title to property is held by one person (a trustee) for the benefit of another (a beneficiary).






17. A type of tenancy under which a tenant who - after rightfully being in possession of leased premises - continues (wrongfully) to occupy the property after the lease has terminated. The tenant has no rights to possess the property and occupies it only






18. A person on the board of directors who is also an officer of the corporation.






19. In contract law - the withdrawal of an offer by an offeror. Unless the offer is irrevocable - it can be revoked at any time prior to acceptance without liability.






20. Conditions that must occur or be performed at the same time; they are mutually dependent. No obligations arise until these conditions are simultaneously performed.






21. A condition in a contract that - if not fulfilled - operates to terminate a party's absolute promise to perform.






22. A contractual clause that states that a certain amount of monetary damages will be paid in the event of a future default or breach of contract. The damages are a punishment for a default and not a measure of compensation for the contract's breach. Th






23. A written supplement or modification to a will. A codicil must be executed with the same formalities as a will.






24. An ownership interest in land in which the owner has the greatest possible aggregation of rights - privileges - and power. Ownership in fee simple absolute is limited absolutely to a person and her or his heirs.






25. A provision in a contract designating the court - jurisdiction - or tribunal that will decide any disputes arising under the contract.






26. 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.






27. State statutes that specify how property will be distributed when a person dies intestate (without a valid will); also called statutes of descent and distribution.






28. The resolution of disputes in ways other than those involved in the traditional judicial process. Negotiation - mediation - and arbitration are forms of ADR.






29. State statutes establishing an administrative procedure for compensating workers' injuries that arise out of

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30. Necessities required for life - such as food - shelter - clothing - and medical attention; may include whatever is believed to be necessary to maintain a person's standard of living or financial and social status.






31. An action in which a court disregards the corporate entity and holds the shareholders personally liable for corporate debts and obligations.






32. 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.






33. A hybrid form of business enterprise that offers the limited liability of a corporation and the tax advantages of a partnership.






34. One licensing another (the franchisee) to use the owner's trademark - trade name - or copyright in the selling of goods or services.






35. 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






36. The purchase or sale of securities on the basis of information that has not been made available to the public.






37. All employers must verify the employment eligibility and identity of any worker hired in the United States. To comply with the law - employers must complete an I-9 Employment Eligibility Verification Form for all new hires within three business days.






38. A person on the board of directors who does not hold a management position at the corporation.






39. A government grant that gives an inventor the exclusive right or privilege to make - use - or sell his or her invention for a limited time period.






40. The exclusive right of an author or originator of a literary or artistic production (including computer programs) to publish - print - or sell that production for a statutory period of time.






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

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42. 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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43. A doctrine providing that the judicial branch of one country will not examine the validity of public acts committed by a recognized foreign government within its own territory.






44. In regard to the lease of goods - an agreement in which one person (the lessor) agrees to transfer the right to the possession and use of property to another person (the lessee) in exchange for rental payments.






45. A process in which parties attempt to settle their dispute informally - with or without attorneys to represent them. In the context of negotiable instruments - the transfer of an instrument in such form that the transferee (the person to whom the ins






46. Any bank handling an item for collection - except the payor bank.






47. A court's order - issued after a judgment has been entered against a debtor - directing the sheriff to seize (levy) and sell any of the debtor's nonexempt real or personal property. The proceeds of the sale are used to pay off the judgment - accrued






48. A set of rules issued by the Federal Reserve System's Board of Governors to protect users of electronic fund transfer systems.






49. A pleading in which a defendant asserts that the plaintiff's claim fails to state a cause of action (that is - has no basis in law) or that there are other grounds on which a suit should be dismissed. Although the defendant normally is the party requ






50. A gift made in contemplation of death. If the donor does not die of that ailment - the gift is revoked.







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