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CLEP Introductory Business Law

Subjects : clep, 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. States allow corporations to make donations - and courts uphold those donations as long as they are reasonable






2. The federal law that governs bankruptcy proceedings - which occur in federal bankruptcy court. A petition must be filed in the court. Bankruptcy helps eliminate or reduce debts. Once a bankruptcy proceeding is initiated - a creditor may not seek to c


3. When a product is incorrectly manufactured that is unreasonably dangerous to consumers. To prove that 'unreasonably dangerous' - the show that an ordinary consumer would see it that way (consumer expectation test).






4. Portions of a registration statement that are not certified by an expert such as financial statements or legal opinions






5. When the breach is so central to the contract that it significantly impairs the contract's value to the promisee. In this case - the promisee cannot terminate the agreement - but he can sue and suspend his performance.






6. Government acts that create an agency - along with establishing it's goals - powers - and the authority to make rules and regulations regarding a specified issue.






7. Only one of the party wants to rescind the contract - which requires legal grounds to do so.






8. Establishes a minimum wage and policies for overtime and prohibits children under 14 from being hired






9. The defendant's response (admit or deny the allegations within the complaint) to a complaint. This can confirm affirmative defenses or counterclaims.






10. They represent the amount of money a party has spent in justifiable reliance on a contract.






11. A party's damage award will be reduced by any loss he did or could have avoided.






12. Created through the Occupational Safety and Health Ac. It is federal administrative agency that works with employers and employees to ensure compliance with workplace safety standards. It requires employers to maintain information on employee acciden






13. It focuses on the clean up of abandoned or historical hazardous waste sites - for which it established a 'Superfund'. The EPA (Environmental Protection Agency) identifies particularly egregious sites and places them on a National Priorities List. The






14. A person is an intended beneficiary if recognition of a right to performance is appropriate to effectuate the intention of the parties - or either the performance of the promise will satisfy the promisee's obligation to pay money to the beneficiary -






15. A situation where one person unfairly benefits from a transaction






16. Where the actual trial occurs - i.e. - where parties present their evidence to a judge or jury.






17. A company subject to the Exchange Act






18. Words or actions an individual may have intended - but did not communicate






19. The state representative in a criminal trial - since a crime is against the state. It bears the burden of proof






20. Rules of ethics that govern the practice of law and the conduct of lawyers






21. Exceptions to the writing contract in the Statute of Frauds. This is when: (a) a party admits in a pleading/testimony in court - that a contract was made - the contract is enforceable against the party to the extent of the admission - (b) performance


22. The power of the Supreme Court to review federal or state law as constitutional or not. It is the result of the 'Marbury v Madison' case.






23. A beneficiary's rights vest when she (a) manifests her assent to the contract - (b) brings suit to enforce the contract - or (c) materially changes her position justifiable reliance on the contract. Once the beneficiary's rights have vested - the con


24. In order for a contract to be enforceable - the terms of the contract must be definite and certain. In order for a contract to be 'definite and certain' - it must contain all the essential terms (names of parties - prince - subject matter - and time


25. Regulates radio - television - and other forms of interstate communications






26. This when the evidence favoring the plaintiff's allegations is stronger than the evidence presented against her position. In a civil case - the jury must decide that the plaintiff proved her case by 'preponderance of evidence'.






27. If a person made a contract when he was a minor - once he is of age - he can affirm or disaffirm the contract (making it void or not) within a reasonable time after reaching majority (of age).






28. Prohibits securities fraud. Liability will be held when misstatement/omission - materiality - connection with a securities transaction - reliance - causation - and damages are proven.






29. Acceptance is effective when the offeree sends it - no matter the type of communication. However - a revocation becomes valid when the offeree receives it. Again - if the offeree changes his mind - and sends two different messages - whichever reaches


30. If a performance has already occurred - or a promise has already been made - then it generally cannot serve as the basis for consideration because it cannot be considered to have induced a bargain. Therefore - 'past consideration' is insufficient.


31. An assignment becomes void when it conflicts with a statute or public policy - materially changes teh obligor's duty - increases the burden or risk imposed by the contract - impairs the obligor's prospects of getting a return performance - or substan






32. When the debtor voluntarily initiates the bankruptcy proceedings






33. Agreements that grant an entity an exclusive right to manufacture a product within a given area. The Clayton Act prohibits such agreements. (vertical agreement)






34. When the act of acceptance is also the act of performance (i.e. - there is only one performance obligation remaining)






35. It is a general rule referring to circumstances in which agreements must be in writing - and by extension when oral agreements will be unenforceable. Basic agreements that are covered by the Statute: 1) A promise by an executor to pay the estate's d






36. Also known as 'gap fillers' - the courts will imply certain terms in order to clarify a contract's meaning. These include: 'implied obligation of good faith' and 'obligation to use reasonable efforts'






37. An order prohibiting a party from engaging in certain conduct. A count will only issue an injunction if the damage remedy is inadequate and the injunction is necessary to prevent irreparable harm to the non-breaching party.






38. A group of between 16 and 23 jurors who decide whether there is sufficient evidence to charge the defendant with a crime. A grand jury is required in the 5th Amendment for all criminal cases. The grand jury has the power to subpoena witnesses and doc






39. Created by the Securities Exchange Act (SEC). Oversees the regulation of these federal security laws






40. It imposes a civil liability for material misstatements or omissions in a prospectus or oral statements that relate to a prospectus.






41. In order for a court to hear a case - it must have both subject matter jurisdiction and personal jurisdiction.






42. An exemption for offers: no limitation on dollars - but less than 35 people (sophisticated) - excluding accredited investors.






43. Defenses that would prevent the plaintiff from holding the defendant liable






44. When both parties are mistaken - the mistake concerns a basic assumption on which the contract was made that has material impact on performance - and the party seeking to avoid performance has not assumed the risk of the mistake. Contract is voidable






45. The person who assigns her rights






46. There is no contract between the employer and employee - and therefore - either the employee or the employer can terminate the employment relationship at any time for any reason.






47. Provides that securities cannot be offered or sold unless they have registered with the SEC (Securities Exchange Commission).






48. If the parties to a contract state that consideration has been given - but it was not - then the statement will be viewed as sham consideration and be legally insufficient.






49. Congress may prohibit speech that has a 'clear and present' danger of inciting violence or other 'substantive evil'.


50. The court reviews the...1) Express words and conduct of the party 2) Course of performance 3) Course of dealing (conduct of parties before the transaction 4) Trade usage