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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. Defenses that can be used to avoid payment to an ordinary holder of a negotiable instrument but not a holder in due course (HDC) or a holder with the rights of an HDC.






2. The party that is ordered to pay a draft or check. With a check - a bank or a financial institution is always the drawee.






3. 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.






4. 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.






5. The relationship that exists between the promisor and the promisee of a contract.






6. The process by which a court decides on the constitutionality of legislative enactments and actions of the executive branch.






7. A legal process used by a creditor to collect a debt by seizing property of the debtor (such as wages) that is being held by a third party (such as the debtor's employer).






8. Jurisdiction that exists when a case can be heard only in a particular court or type of court.






9. 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






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






11. A person - such as a cosigner on a note - who agrees to be primarily responsible for the debt of another.






12. The party that initiates a draft (such as a check) - thereby ordering the drawee to pay.






13. To put funds or goods together into one mass so that they are so mixed that they no longer have separate identities. In corporate law - if personal and corporate interests are commingled to the extent that the corporation has no separate identity - a






14. Under the Uniform Commercial Code Section 2-403(2) - a rule stating that if goods are entrusted to a merchant who deals in goods of that kind - the merchant has the power to transfer those goods and all rights to them to a buyer in the ordinary cours






15. 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.






16. A party who transfers (delegates) her or his obligations under a contract to another party (called the delegatee).






17. A written instrument giving a creditor an interest in (lien on) the debtor's real property as security for payment of a debt.






18. A contract having no legal force or binding effect.






19. A term that is used to indicate part or all of a business's name and that is directly related to the business's reputation and goodwill. Trade names are protected under the common law (and under trademark law - if the name is the same as the firm's t






20. The process of proving and validating a will and settling all matters pertaining to an estate.






21. A state statute under which certain types of contracts must be in writing to be enforceable.






22. An administrative or judicial order prohibiting a person or business firm from conducting activities that an agency or court has deemed illegal.






23. 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






24. A gift of personal property by will (from the verb to bequeath).






25. A clause that releases a contractual party from liability in the event of monetary or physical injury - no matter who is at fault.






26. A certificate that evidences a corporate (or government) debt. It is a security that involves no ownership interest in the issuing entity.






27. In a given state - a corporation that does business in the state without being incorporated therein.






28. The act of refraining from an action that one has a legal right to undertake.






29. A party to whom the rights under a contract are transferred - or assigned.






30. 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.






31. A contract under which the offeror cannot revoke the offer for a stipulated time period. During this period - the offeree can accept or reject the offer without fear that the offer will be made to another person. The offeree must give consideration f






32. A note issued by a bank in which the bank acknowledges the receipt of funds from a party and promises to repay that amount - with interest - to the party on a certain date.






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






34. A merger of companies in which one company (the parent corporation) owns most of the stock of the other corporation (the subsidiary corporation). A parent-subsidiary merger (short-form merger) can use a simplified procedure when the parent corporatio






35. 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.






36. A written agreement that sets forth each partner's rights and obligations with respect to the partnership.






37. A person who is engaged in the purchase and sale of goods. Under the UCC - a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods bein






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






39. A provision in a contract stipulating that certain unforeseen events






40. Nonviolent crime committed by individuals or corporations to obtain a personal or business advantage.






41. 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.






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






43. Any membership group that operates across national borders. These organizations can be governmental organizations - such as the United Nations - or nongovernmental organizations (NGOs) - such as the Red Cross.






44. A concept developed by the philosopher Immanuel Kant as an ethical guideline for behavior. In deciding whether an action is right or wrong - or desirable or undesirable - a person should evaluate the action in terms of what would happen if everybody






45. 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






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






47. The law that governs relations among nations. National laws - customs - treaties - and international conferences and organizations are generally considered to be the most important sources of international law.






48. An agreement that arises when a buyer - engaging in a transaction on a computer - indicates assent to be bound by the terms of an offer by clicking on a button that says - for example - 'I agree'; sometimes referred to as a click-on license or a clic






49. Any arrangement in which the owner of a trademark - trade name - or copyright licenses another to use that trademark - trade name - or copyright in the selling of goods or services.






50. Property resulting from intellectual - creative processes.