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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. When an offeror terminates his offer before an agreement has been made (can be done through words). It can also be revoked when the offeror takes actions that are inconsistent with the intent to be bound (unless the offeree has paid to keep the offer






2. An error about a fact in existence at the time the contract was make. A contract entered into based on a mistake is voidable






3. The Securities Act defines securities broadly to includes notes - stock - bonds - debentures - stock subscriptions - voting trust certificates - limited partnership interests - investment contracts - and fractional interest in oil/gas/mineral.






4. 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






5. Prohibits institutions from discrimination related to credit applications






6. It is the power to decide the type of case at issue. Federal courts do not have broad subject matter jurisdiction because they can only hear particular types of cases. Therefore - their subject matter jurisdiction results from either diversity jurisd






7. Latin for 'the thing speaks for itself' - when a plaintiff establishes the harm would not ordinarily occur without someone's negligence - the instrument creating the harm was under the sole and complete control of the defendant at the time the harm o






8. Previous decisions made by decisions - by which the current judges must abide by.






9. Securities issued by the federal government - state governments - or any of their subdivision; securities issued by a charitable organization; issued by banks or saving or loan institutions - issued by a receiver or trustee in bankruptcy;. issued wit






10. 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






11. The Constitution makes treaties the 'supreme law of the land'






12. The principle that judges must make decisions consistent with precedent (previous decisions) of their own and higher courts. (Although judges have discretion to overturn their court's previous decisions - the principle of 'stare decisis' encourages t






13. The test of government regulations - of whether it is rationally related to a legitimate government interests. All classifications are subject to a rational basis test.






14. When the debtor voluntarily initiates the bankruptcy proceedings






15. The exchange of promises or an exchange of a promise for a performance.






16. Once a beneficiary's rights have vested - she has enforceable claim against the promisee because the promisee's act was gratuitous. The beneficiary's rights arise from the contract between the promisor and the promisee

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17. It is a duty that a person is already obligated to perform. The promise to perform a pre-existing duty is not a legal detriment. However - a legal detriment will exist if one promises to a performance that is different from the pre-existing duty - o






18. When a contract is presented on a 'take it or leave it' basis - leaving no room for bargaining. The courts qualifies this as procedural unconscionability - making the contract voidable






19. Prohibit agreements among corporations that would unreasonably restrain trade or create monopolization in an industry






20. When the courts' power to hear cases arising under the Constitution - federal laws - or U.S. treatises. Federal question jurisdiction is exclusive.






21. An exemption for offers in which the aggregate offering price is less than $5 million and the number of purchasers in less than 35 - excluding accredited investors






22. Legally recognized injury






23. Treaties entered into between two nations






24. When a party takes back his repudiation and agrees to perform under the contract. Retraction is not valid if the non-repudiating party has materially changed her position in reliance on teh repudiation - or indicated her willingness to treat the repu






25. Required to establish a security interest. Attachment occurs when the parties agree to create a security interest (security agreement) - put it in writing and signed by the debtor - the creditor provides money or some other form of consideration for






26. 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

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27. Regulates stock exchanges - the over-counter market - and individuals who assist investors with trading activities.






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






29. They are the 'Federal Rules' that govern the procedures for filing a civil suit in federal cort. The states have adopted their own rules of procedures - but they generally are parallel to the federal rules.






30. State statues that are aimed at recognizing corporation's right to behave in a socially responsible manner






31. Protection of communications between an attorney and her client. Neither party is compelled to disclose such communications to the court. Only the client can waive the privilege.






32. Obtaining consumer's private financial information under false pretenses






33. 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.






34. A condition that occurs at the same time as performance






35. 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

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36. Discrimination based on race or sex






37. This takes place when a crime has been committed against the state. In this case - there is a prosecution - which writes an indictment and sends it to the grand jury. If the grand jury decides that there is sufficient evidence - it will return the pr






38. The US appeals or appelate court. If a party appeals the district court's decision - it can be brought to the federal court of appeals or the federal court of appeals. It has appellate jurisdiction.






39. A relationship of dominance pursuant to which one party has strong influence over another because there exists a fiduciary or other relationship of trust - or a party is weakened states - and the dominant party unfairly persuades the other party to e






40. The right to hold a security interest on a debtor's property.






41. 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'






42. A contract that is made where two promises are outstanding.






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






44. The defendant intended the product to cause harm or know that it was likely to occur. The defendant's conduct fell below the appropriate standard of care. Qualifies as negligence - because the defendant is a supplier because he has a duty. The defend






45. The UCC defines 'goods' as all things that tare movable at the time of the contract. Article 2 of the says that the UCC governs all transactions for the sale of goods.






46. If the promisee merely intends to confer a gift - the third party is referred to as a donee beneficiary.






47. It is an action to avoid unjust enrichment.






48. It imposes a civil liability on anyone who offers or sells a security in violation of Section 5






49. Negative causation - due diligence defense - ...






50. Earliest form of a system of laws (first seen in Babylon - 1792 BC). It is a system of laws based on an established code. The modern civil law systems are based on the codes founded in the Roman Empire. Civil law systems are used in France - Spain -