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Test your basic knowledge |
Business Law Fundamentals
Start Test
Study First
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. A contractual and statutory process in which two or more corporations join to become a completely new corporation. The original corporations cease to exist - and the new corporation acquires all their assets and liabilities.
novation
estopped
consolidation
personal defenses
2. A person who transfers the right to the possession and use of goods to another in exchange for rental payments.
junior lienholder
lessor
moral minimum
discharge
3. An action in which a court disregards the corporate entity and holds the shareholders personally liable for corporate debts and obligations.
testamentary trust
trade dress
restitution
piercing the corporate veil
4. The failure - without legal excuse - of a promisor to perform the obligations of a contract.
check
discharge
eminent domain
breach of contract
5. In a limited liability company - an agreement in which the members set forth the details of how the business will be managed and operated. State statutes typically give the members wide latitude in deciding for themselves the rules that will govern t
implied warranty of fitness for a particular purpose
copyright
piercing the corporate veil
operating agreement
6. A meeting of two or more minds in regard to the terms of a contract; usually broken down into two events
floating lien
civil law system
consequential damages
agreement
7. A crime
brief
felony
warranty deed
risk management
8. A required standard of care that certain professionals - such as accountants - must meet to avoid liability for securities violations.
nuncupative will
notary public
operating agreement
due diligence
9. Goods that are alike by physical nature - by agreement - or by trade usage (for example - wheat - oil - and wine that are identical in type and quality). When owners of fungible goods hold the goods as tenants in common - title and risk can pass with
probable cause
exclusive distributorship
fungible goods
stored-value card
10. The simplest form of business organization - in which the owner is the business. The owner reports business income on his or her personal income tax return and is legally responsible for all debts and obligations incurred by the business.
risk management
sole proprietorship
copyright
consignment
11. 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.
utilitarianism
I-9 verification
payor bank
larceny
12. 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
dishonor
preemptive rights
double jeopardy
forum-selection clause
13. 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.
good faith purchaser
articles of organization
assignee
charitable trust
14. In real property law - the right to enter onto and remove things from the property of another (for example - the right to enter onto a person's land and remove sand and gravel).
agency
exculpatory clause
probable cause
profit
15. A deed in which the grantor assures (warrants to) the grantee that the grantor has title to the property conveyed in the deed - that there are no encumbrances on the property other than what the grantor has represented - and that the grantee will enj
legatee
profit
warranty deed
exculpatory clause
16. A security interest that arises when a seller or lender extends credit for part or all of the purchase price of goods purchased by a buyer.
release
secured party
stop-payment order
objective theory of contracts
17. The wrongful taking and carrying away of another person's personal property with the intent to permanently deprive the owner of the property. Some states classify larceny as either grand or petit - depending on the property's value.
formal contract
condemnation
larceny
warranty deed
18. An old French phrase meaning 'to speak the truth.' In legal terms - it refers to the process in which the attorneys question prospective jurors to learn about their backgrounds - attitudes - biases - and other characteristics that may affect their ab
voir dire
petty offense
sublease
alternative dispute resolution (ADR)
19. Property that is movable; any property that is not real property.
litigation
personal property
default
quitclaim deed
20. Mistake that occurs when both parties to a contract are mistaken about the same material fact and the mistake is one that a reasonable person would make; either party can rescind the contract.
commercial impracticability
preferred creditor
bilateral mistake
ratification
21. The conduct that occurs under the terms of a particular agreement. Such conduct indicates what the parties to an agreement intended it to mean.
negotiable instrument
course of performance
grand jury
brief
22. In a lawsuit - an issue that involves only disputed facts - and not what the law is on a given point. Questions of fact are decided by the jury in a jury trial (by the judge if there is no jury).
question of fact
international law
prima facie case
collective mark
23. A Latin term meaning 'by the roots.' In estate law - a method of distributing an intestate's estate so that each heir in a certain class (such as grandchildren) takes the share to which her or his deceased ancestor (such as a mother or father) would
per stirpes
security agreement
risk
holding company
24. In a given state - a corporation that does business in the state without being incorporated therein.
foreign corporation
condemnation
insider trading
venue
25. Statements made by the plaintiff and the defendant in a lawsuit that detail the facts - charges - and defenses involved in the litigation. The complaint and answer are part of the pleadings.
pleadings
consumer-debtor
hot-cargo agreement
forum-selection clause
26. A provision in a contract stipulating that certain unforeseen events
mirror image rule
agreement
watered stock
force majeure clause
27. A person to whom an offer is made.
offeree
self-incrimination
performance
dissolution
28. 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.
property
bilateral contract
lease agreement
I-551 Alien Registration Receipt
29. The act of stealing another's identifying information
cyber mark
insolvent
identity theft
smart card
30. A company that acts on behalf of many smaller shareholders/owners by buying a large portfolio of securities and professionally managing that portfolio.
investment company
guarantor
burglary
security interest
31. A contract between an employer and an employee in which the terms and conditions of employment are stated.
insider trading
cost-benefit analysis
bilateral contract
employment contract
32. The document filed with the appropriate governmental agency - usually the secretary of state - when a business is incorporated. State statutes usually prescribe what kind of information must be contained in the articles of incorporation.
informal contract
usage of trade
articles of incorporation
interrogatories
33. 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.
copyright
working papers
adverse possession
motion for judgment on the pleadings
34. The substitution - by agreement - of a new contract for an old one - with the rights under the old one being terminated. Typically - novation involves the substitution of a new person who is responsible for the contract and the removal of the origina
novation
bailment
distribution agreement
sexual harassment
35. The bank on which a check is drawn (the drawee bank).
civil law system
covenant not to sue
payor bank
document of title
36. A party to whom contractual obligations are transferred - or delegated.
delegatee
impossibility of performance
operating agreement
stock
37. 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.
generally accepted accounting principles (GAAP)
employment contract
act of state doctrine
defalcation
38. An absolute form of property ownership entitling the property owner to use - possess - or dispose of the property as he or she chooses during his or her lifetime. On death - the interest in the property descends to the owner's heirs.
agreement
seasonably
fee simple
common stock
39. A contract or clause that is void on the basis of public policy because one party - as a result of disproportionate bargaining power - is forced to accept terms that are unfairly burdensome and that unfairly benefit the dominating party.
distributed network
consent
unconscionable contract or clause
gift inter vivos
40. The purchase or sale of securities on the basis of inside information (information that has not been made available to the public).
constructive discharge
penalty
assignor
insider trading
41. 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.
stop-payment order
fee simple
tariff
seniority system
42. Any bank to which an item is transferred in the course of collection - except the depositary or payor bank.
stock warrant
intermediary bank
general partner
suretyship
43. A purchaser who buys without notice of any circumstance that would cause a person of ordinary prudence to inquire as to whether the seller has valid title to the goods being sold.
assignment
Statute of Frauds
good faith purchaser
output contract
44. The conventions - rules - and procedures that define accepted accounting practices at a particular time. The source of the principles is the Financial Accounting Standards Board.
dissociation
generally accepted accounting principles (GAAP)
misdemeanor
penalty
45. A contract that results when the elements necessary for contract formation (agreement - consideration - legal purpose - and contractual capacity) are present.
binder
concurrent ownership
protected class
valid contract
46. Any interest in personal property or fixtures that secures payment or performance of an obligation.
bailment
normal trade relations (NTR) status
security interest
negotiation
47. The acquisition of control over a corporation through the purchase of a substantial number of the voting shares of the corporation.
condition subsequent
takeover
blue laws
white-collar crime
48. A written document - required by securities laws - that describes the security being sold - the financial operations of the issuing corporation - and the investment or risk attaching to the security. It is designed to provide sufficient information t
computer crime
prospectus
family limited liability partnership (FLLP)
shrink-wrap agreement
49. One receiving a license to use another's (the franchisor's) trademark - trade name - or copyright in the sale of goods and services.
writ of execution
franchisee
policy
collateral
50. A contract for the sale of goods in which the seller is required or authorized to ship the goods by carrier. The seller assumes liability for any losses or damage to the goods until they are delivered to the carrier.
shipment contract
ratification
lease agreement
alternative dispute resolution (ADR)