Test your basic knowledge |

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. Any instrument drawn on a drawee that orders the drawee to pay a certain sum of money - usually to a third party (the payee) - on demand or at a definite future time.






2. A trust that is created by will and therefore does not take effect until the death of the testator.






3. An encumbrance on a property to satisfy a debt or protect a claim for payment of a debt.






4. Funds contained on computer software - in the form of secure programs stored on microchips and on other computer devices.






5. A card containing a microprocessor that permits storage of funds via security programming - can communicate with other computers - and does not require online authorization for fund transfers.






6. The acquisition of title to real property by occupying it openly - without the consent of the owner - for a period of time specified by a state statute. The occupation must be actual - open - notorious - exclusive - and in opposition to all others -






7. In regard to employment relationships - a system in which those who have worked longest for the employer are first in line for promotions - salary increases - and other benefits. They are also the last to be laid off if the workforce must be reduced.






8. The various documents used and developed by an accountant during an audit - such as notes and computations - that make up the work product of an accountant's services to a client.






9. Terms and conditions of use that are presented to an Internet user at the time certain products - such as software - are being downloaded but that need not be agreed to (by clicking 'I agree -' for example) before the user is able to install or use t






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






11. A clause in a time instrument that allows the instrument's date of maturity to be extended into the future.






12. A person who acquires the right to the possession and use of another's goods in exchange for rental payments.






13. The corporation to be acquired in a corporate takeover; a corporation whose shareholders receive a tender offer.






14. 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






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






16. 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.






17. A motion by either party to a lawsuit at the close of the pleadings requesting the court to decide the issue solely on the pleadings without proceeding to trial. The motion will be granted only if no facts are in dispute.






18. In contract law - a voluntary act by the offeree that shows assent - or agreement - to the terms of an offer; may consist of words or conduct. In negotiable instruments law - the drawee's signed agreement to pay a draft when it is presented.






19. 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.






20. Treating employees or job applicants unequally on the basis of race - color - national origin - religion - gender - age - or disability; prohibited by federal statutes.






21. An interest in land that exists only for the duration of the life of some person - usually the holder of the estate.






22. 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.






23. A system or place where banks exchange checks and drafts drawn on each other and settle daily balances.






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






25. 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






26. 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






27. The act of accepting and giving legal force to an obligation that previously was not enforceable.






28. A clause that allows a payee or other holder of a time instrument to demand payment of the entire amount due - with interest - if a certain event occurs - such as a default in the payment of an installment when due.






29. Under Article III - Section 2 - of the U.S. Constitution - a basis for federal district court jurisdiction over a lawsuit between (1) citizens of different states - (2) a foreign country and citizens of a state or of different states - or (3) citizen






30. A doctrine under which a party may be excused from performing a contract when (1) a contingency occurs - (2) the contingency's occurrence makes performance impracticable - and (3) the nonoccurrence of the contingency was a basic assumption on which t






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






32. Various documents that attempt to dispose of an estate in the same or similar manner as a will - such as trusts or life insurance plans.






33. A check - other than a certified check - that is presented for payment more than six months after its date.






34. A doctrine under which a party to a contract is relieved of her or his duty to perform when performance becomes objectively impossible or totally impracticable (through no fault of either party).






35. In securities law - a transaction in which a person invests in a common enterprise with the reasonable expectation that profits will be derived primarily from the efforts of others.






36. Property with which the owner has involuntarily parted and then cannot find or recover.






37. A written promise made by one person (the maker) to pay a fixed amount of money to another person (the payee or a subsequent holder) on demand or on a specified date.






38. Land and everything attached to it - such as trees and buildings.






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






40. A type of tenancy under which property is leased for a specified period of time - such as a month - a year - or a period of years; also called a tenancy for years.






41. A formal accusation or complaint (without an indictment) issued in certain types of actions (usually criminal actions involving lesser crimes) by a government prosecutor.






42. A corporation whose shareholders are limited to a small group of persons - often including only family members.






43. 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






44. A common law doctrine under which either party may terminate an employment relationship at any time for any reason - unless a contract specifies otherwise.






45. A gift made during one's lifetime and not in contemplation of imminent death - in contrast to a gift causa mortis.






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






47. In most states - a rule stating that express authority given to an agent must be in writing if the contract to be made on behalf of the principal is required to be in writing.






48. One for whose benefit a promise is made in a contract but who is not a party to the contract.






49. A contract in which one party forfeits the right to pursue a legal claim against the other party.






50. A seller's or lessor's oral or written promise or affirmation of fact - ancillary to an underlying sales or lease agreement - as to the quality - description - or performance of the goods being sold or leased.