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Business Law Fundamentals

Subjects : law, business-law
  • Answer 50 questions in 15 minutes.
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  • 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. The legal right of a person to be restored - repaid - or indemnified for costs - expenses - or losses incurred or expended on behalf of another.

2. Ethics in a business context; a consensus as to what constitutes right or wrong behavior in the world of business and the application of moral principles to situations that arise in a business setting.

3. An action to carry into effect the directions in a court decree or judgment.

4. One to whom goods are entrusted by a bailor.

5. 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

6. Prior conduct between the parties to a contract that establishes a common basis for their understanding.

7. A certificate that grants the owner the option to buy a given number of shares of stock - usually within a set time period.

8. An agreement between a debtor and a creditor in which the debtor voluntarily agrees to pay - or reaffirm - a debt dischargeable in bankruptcy. To be enforceable - the agreement must be made before the debtor is granted a discharge.

9. Falsely reporting income that has been obtained through criminal activity as income obtained through a legitimate business enterprise

10. In regard to the sale or lease of goods - a property interest in the goods that is sufficiently substantial to permit a party to insure against damage to the goods. In the context of insurance - an interest either in a person's life or well-being tha

11. A party who transfers (assigns) his or her rights under a contract to another party (called the assignee).

12. A contract for the sale of goods under which the ownership of goods is transferred from a seller to a buyer for a price.

13. A set of governing rules adopted by a corporation or other association.

14. 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

15. 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

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

17. 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.

18. A trust in which the property held by the trustee must be used for a charitable purpose - such as the advancement of health - education - or religion.

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

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

21. All forms of personal property.

22. 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

23. A rule requiring a plaintiff to do whatever is reasonable to minimize the damages caused by the defendant.

24. A document prepared by a secured creditor and filed with the appropriate state or local official - to give notice to the public that the creditor has a security interest in collateral belonging to the debtor named in the statement. Financing statemen

25. A federal court of limited jurisdiction that handles only bankruptcy proceedings - which are governed by federal bankruptcy law.

26. A person to whom an offer is made.

27. A company whose business activity is holding shares in another company.

28. Under the UCC - a contract that requires or authorizes delivery in two or more separate lots to be accepted and paid for separately.

29. 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

30. Legally protected rights and interests in anything with an ascertainable value that is subject to ownership.

31. A common law rule that requires that the terms of the offeree's acceptance adhere exactly to the terms of the offeror's offer for a valid contract to be formed.

32. A contract that may be legally avoided (canceled - or annulled) at the option of one or both of the parties.

33. Under a mortgage agreement - the creditor who takes a security interest in the debtor's property.

34. 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.

35. The process of transferring land out of one's possession (thus 'alienating' the land from oneself).

36. A contract that by law requires a specific form - such as being executed under seal - for its validity.

37. The power of a government to take land from private citizens for public use on the payment of just compensation.

38. The legal avoidance - or setting aside - of a contractual obligation.

39. A group of citizens called to decide - after hearing the state's evidence - whether a reasonable basis (probable cause) exists for believing that a crime has been committed and that a trial ought to be held.

40. 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.

41. The obtaining of funds by legal process through the seizure and sale of nonsecured property - usually done after a writ of execution has been issued.

42. The practice of marking a document with a date that precedes the actual date. Persons who backdate stock options are picking a date when the stock was trading at a lower price than the date of the options grant.

43. A document informing a defendant that a legal action has been commenced against him or her and that the defendant must appear in court on a certain date to answer the plaintiff's complaint.

44. In contract law - the fulfillment of one's duties arising under a contract with another; the normal way of discharging one's contractual obligations.

45. Procedurally - a defendant's response to the plaintiff's complaint.

46. 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

47. An agreement in which a buyer agrees to purchase and the seller agrees to sell all or up to a stated amount of what the buyer needs or requires.

48. 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.

49. 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

50. A type of limited partnership in which the liability of all of the partners - including general partners - is limited to the amount of their investments.