Business Law - Final Exam Study Guide
Chapters 1, 2, 3, 4, 5, 6, Scroll down below to see the answers. “REF” is the page number in the text the answer is on. All answers to the short answer questions are in your notes.
True/False
Indicate whether the statement is true or false.
____1.The three branches of the U.S. government are known as the legislative, executive, and administrative branches.
____2.The U.S. Supreme Court justices are selected by the states.
____3.Courts can make laws by deciding whether or not laws conflict with the Constitution.
____4.When unethical business practices are discovered, new laws are often created to hold all businesses more accountable.
____5.The duties and requirements for serving in state and local governments are determined by the federal government.
____6.The main sources of the law include constitutional law, commerce law, statutes, and civil law.
____7.The 19th Amendment gave women the right to vote.
____8.Everyone in the United States must follow any treaty that the United States has signed.
____9.Civil law is enacted to govern the relationships between two parties and usually involves the government.
____10.Civil litigation usually begins with pleadings and a pretrial hearing.
____11.A crime is an offense against the public good.
____12.Motive plays no part in proving criminal liability.
____13.A person claiming self-defense must retreat before resorting to force.
____14.It is first-degree murder if someone is killed while the accused is committing another serious crime.
____15.Robbery is the wrongful and violent taking of personal property.
____16.Embezzlement is what criminals do when they need to hide large amounts of money illegally.
____17.Aiding and comforting enemies of the United States is called treason and is illegal.
____18.The person accused of a crime is called the plaintiff.
____19.The American legal system is a dual system made up of the federal court system and the state court system.
____20.The purpose of the International Criminal Court (ICC) is to provide free attorney services to U.S. citizens arrested overseas.
____21.A tort is a wrong committed against an individual.
____22.Public officials must prove actual malice to succeed in a defamation lawsuit.
____23.Invasion of privacy is an unintentional tort.
____24.Even the most careless conduct will not result in liability for negligence unless there is actual harm.
____25.The main difference between intentional torts and negligence is that one is deliberate, while the other is usually caused by carelessness.
____26.Although the reasonable person test is very subjective, it is used primarily in intentional tort cases.
____27.The tortfeasor is the plaintiff in a lawsuit.
____28.Mexican tort law does not provide for compensation for pain and suffering.
____29.Current tort reform legislation includes survival statutes and wrongful death statutes.
____30.If you are driving your car too fast on a rainy evening and have an accident, you might have committed an intentional tort.
____31.An oral contract is not enforceable by law.
____32.A valid contract must contain at least four of the six elements of a contract.
____33.Consideration is the legal ability to enter a contract.
____34.When a bilateral contract is made, one person makes a promise to do something if and when another person does something.
____35.Contracts for clothing and motor vehicles are examples of exceptions to the mirror image rule.
____36.According to common law, when you send an acceptance over long distances, it is effective three days after it is sent.
____37.A contract that is void has no legal effect.
____38.The Statute of Frauds requires that both parties involved in the contract be honest with each other.
____39.Advertisements in newspapers, price tags, and signs in store windows are treated by the law as invitations to negotiate.
____40.An offer must always be made seriously for it to be legal.
____41.A minor has an absolute right to avoid a contract.
____42.A minor may affirm part of a contract while disaffirming another part.
____43.An emancipated minor is a child who is no longer under the legal control of his or her own parents.
____44.Refraining from doing something illegal is a type of detriment.
____45.Parents have certain rights under the law regarding their minor children, including the right to discipline and the right to manage their children’s property.
____46.Minors who have signed a military enlistment agreement can legally get out of it based on their age.
____47.Capacity rules allow minors, people with mental impairments, and people under the influence of drugs and alcohol to disaffirm a contract.
____48.One of the characteristics of consideration is that it must involve something of value.
____49.For a contract to be considered unconscionable, there must be equal power between the parties involved.
____50.Minors are not allowed to enter into any contracts.
____51.The court will not rule on when a contract must be completed if time for performance is unspecified.
____52.The doctrine of substantial performance is often applied to construction contracts.
____53.Ending a contract by mutual release is not allowed by law.
____54.The destruction of the subject matter needed to perform the contract, through no fault of either party, discharges that contract.
____55.You have a right to sue a person who breaches a contract made with you.
____56.A person may win a lawsuit for fraud even if no loss is suffered.
____57.When actual physical force is used to cause another person to enter a contract, the contract is void.
____58.When a bilateral mistake is made, neither party may void the contract.
____59.A legal means for enforcing a right or correcting a wrong is called a remedy.
____60.When you win a lawsuit and collect thousands of dollars beyond what you actually lost, you have received bilateral damages.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____71.A set of laws made by the courts based on the customs and traditions of the people is called
a. / the Roman Code. / c. / common law.b. / administrative law. / d. / moral law.
____72.Decisions made by the highest court of any state follow the law of
a. / original jurisdiction. / c. / citation.b. / prosecution. / d. / precedent.
____73.One difference between criminal and civil procedure is
a. / the judge can decide who has the right to due process and who does not.b. / in civil cases the procedures must be followed exactly, while in criminal cases they do not.
c. / in civil cases the defendants have the right to due process, but in criminal cases they do not.
d. / in criminal cases the procedures must be followed exactly, while in civil cases they do not.
____74.Young people who appear before a juvenile court have
a. / the right to an open trial in front of the jury.b. / the right to request to be tried as an adult.
c. / no right to a trial and no right to be released on bail.
d. / a right to a trial and a right to be released on bail.
____75.An appeal in a civil case can
a. / be based only on the arguments made during arraignment.b. / be based only on a legal mistake by the judge.
c. / lead to a retrial at the appellate level.
d. / lead to fines or imprisonment.
____76.A case that has been decided by a state supreme court may be appealed to the
a. / general trial court. / c. / U.S. Supreme Court.b. / specialU.S. court. / d. / intermediate appellate court.
____77.Statutory laws are signed by the President or Governor after they are passed by the
a. / judges. / c. / legislators.b. / commerce board. / d. / regulatory agencies.
____78.The unlawful killing of one human being by another, without malice aforethought, is
a. / justifiable homicide. / c. / second-degree murder.b. / first-degree murder. / d. / manslaughter.
____79.In a criminal proceeding, the government is referred to as the
a. / defendant. / c. / plaintiff.b. / offender. / d. / protagonist.
____80.If a law enforcement officer induces a law-abiding citizen to commit a crime, the accused may claim
a. / self-defense. / c. / endangerment.b. / entrapment. / d. / insanity.
____81.Threatening a person at gunpoint is called
a. / kidnapping. / c. / torture.b. / aggravated assault. / d. / larceny by false pretenses.
____82.The wrongful taking of another's property by a person who has been entrusted with that property is
a. / extortion. / c. / larceny.b. / robbery. / d. / embezzlement.
____83.Crimes are categorized into crimes against people, property, motor vehicles, and
a. / murder, manslaughter, and rape.b. / assault, battery, and arson.
c. / business, government, and society.
d. / kidnapping, domestic violence, and vandalism.
____84.When you lie under oath during a court process, you are committing
a. / disorderly conduct. / c. / bribery.b. / perjury. / d. / treason.
____85.A minor offense that is usually punishable by a fine rather than jail time is called
a. / a misdemeanor. / c. / entrapment.b. / a felony. / d. / an infraction.
____86.A wrongful injury to, or interference with, the property of another is
a. / nuisance. / c. / trespass.b. / defamation. / d. / invasion of privacy.
____87.A false statement made orally to a third party is
a. / slander. / c. / breach of duty.b. / defamation. / d. / libel.
____88.People who are engaged in extremely dangerous activities may be held liable even without negligence or malice; this is known as the doctrine of
a. / assumption of risk. / c. / unintentional liability.b. / strict liability. / d. / dangerous liability.
____89.To determine if the defendant's conduct was the proximate cause of the plaintiff's injury, the court applies the
a. / proximate cause test. / c. / forensic test.b. / actual cause test. / d. / foreseeability test.
____90.The negligence defense that might be used by a baseball club that is sued by spectators is
a. / contributory negligence. / c. / assumption of risk.b. / comparative negligence. / d. / proximate cause.
____91.The difference between a crime and a tort is that a crime is committed against the public good, while a tort
a. / is committed against a particular person or property.b. / is caused when someone is being threatened.
c. / is considered a wrong against all of society.
d. / hurts all members of the community.
____92.Using explosives and keeping alligators as pets are examples of
a. / survival statutes. / c. / conversion.b. / negligence. / d. / strict liability.
____93.The remedies available in tort law usually include
a. / a public apology by the tortfeasor printed in the local newspaper.b. / prison time for the tortfeasor.
c. / financial compensation to the victim for injuries caused by the tortfeasor.
d. / financial compensation for the victim and prison time for the tortfeasor.
____94.The taking back of an offer by the offeror is
a. / revocation. / c. / cancellation.b. / rejection. / d. / consideration.
____95.A contract that amounts to nothing and has no legal effect is
a. / unenforceable. / c. / void.b. / voidable. / d. / unilateral.
____96.A contract that contains a promise by both parties is
a. / express. / c. / bilateral.b. / implied. / d. / unilateral.
____97.To be effective, an offer must be communicated to the
a. / attorney. / c. / lender.b. / offeree. / d. / offeror.
____98.In order for the acceptance to be legally binding, it must be
a. / made in person and in writing by the offeree.b. / unconditional and in writing by the offeror and offeree.
c. / made in person and follow the rules regarding the method of acceptance.
d. / unconditional and follow the rules regarding the method of acceptance.
____99.In China, when people sign a contract, it means
a. / all parties know what to do and by when.b. / they are ready to fulfill the contract.
c. / that everyone will complete the requirements of the contract.
d. / they simply want to do business with each other.
____100.In contract law, consideration can be defined as
a. / the thing of value promised in exchange for something else of value.b. / anyone who enters into a legal contract has the ability to do so.
c. / contracts that involve illegal acts are not allowed.
d. / both parties communicating clearly when entering into a contract.
____101.Invitations to deal, trade, or make an offer by the seller are considered invitations
a. / of legality. / c. / to make a counteroffer.b. / to negotiate. / d. / for consideration.
____102.The age of majority in most states is
a. / 16. / c. / 20.b. / 18. / d. / 21.
____103.A minor who claims to be over the age of majority commits
a. / fraud. / c. / extortion.b. / misrepresentation. / d. / larceny by false pretenses.
____104.When a minor disaffirms a contract, the merchandise received upon entering the contract should be
a. / undamaged. / c. / paid for.b. / returned. / d. / ratified.
____105.A minor is held responsible for the fair value of
a. / athletic shoes. / c. / medical care.b. / CDs. / d. / video games.
____106.When a guardian is appointed by the court for a mentally impaired person, that person’s contracts are then declared
a. / voidable. / c. / void.b. / binding. / d. / disaffirmed.
____107.Giving up something that one has a legal right to do is a type of
a. / benefit. / c. / detriment.b. / forbearance. / d. / obligation.
____108.A court may refuse to enforce a contract that it finds
a. / fair. / c. / inadequate.b. / illusory. / d. / unconscionable.
____109.When a contract ends, it is said to be
a. / discharged. / c. / tendered.b. / released. / d. / avoided.
____110.An offer to do what you have agreed to do under a contract is called
a. / substantial performance. / c. / tender of performance.b. / accord and satisfaction. / d. / satisfactory performance.
____111.Specific performance asks the court to order the other party in a contract to
a. / pay the contract in full. / c. / stop doing what the contract says.b. / obey all injunctions immediately. / d. / do what he or she has agreed to do.
____112.Wrongful acts of one of the parties may discharge a contract by
a. / the Wrongful Act Statute. / c. / operation of law.b. / the statute of limitations. / d. / mutual release.
____113.The legal transfer of a right under contract is called a(n)
a. / alteration. / c. / novation.b. / assignment. / d. / delegation.
____114.Threats of a business nature that cause a person to enter into a contract without real consent would qualify as
a. / undue influence. / c. / economic duress.b. / duress. / d. / fraud.
____115.A deliberate deception to secure unfair or unlawful gain is called
a. / misrepresentation. / c. / a unilateral mistake.b. / libel. / d. / fraud.
____116.Which of the following is NOT a remedy for a breach of contract?
a. / You may request the contract be continued.b. / You may accept the breach.
c. / You may sue for damages.
d. / You may ask the court for a remedy.
Completion
Complete each statement.
125.The heart of the ______is empathy, which means putting yourself in another’s situation.
126.The first amendments to the U.S. Constitution, which protect our individual freedom, are called the ______.
127.______are laws specifically passed by a governing body created for that purpose.
128.According to the principle of ______a person cannot be tried twice for the same crime in the same court.
129.In a civil case there are two types of ______: one is a payment of money and the other is some other action by the defendant.
130.The person being tried for a crime is called the ______.
131.A crime that is less serious and has a less severe penalty than a felony is a(n) ______.
132.A father who uses force to save his child from an attack may claim ______.
133.Killing someone without intending to do so is ______.
134.The removal or restraint of a person against that person's will is ______.
135.Shoplifting is a form of ______.
136.The willful and malicious burning of a house or building is ______.
137.Some states classify lesser crimes as minor misdemeanors or ______.
138.If you signed a false signature on a check intending to deceive someone, you would be committing ______.
139.When one person interferes with another's rights, either intentionally or negligently, a(n) ______is committed.
140.Loud noises late at night, noxious odors, and fumes coming from a nearby house are all examples of ______.
141.The wrongful act of injuring another person's reputation by making false statements is known as ______.
142.If a wrongdoer has injured another party, a court will usually award ______to the injured party.
143.______consists of lies about objects.
144.In a product liability case, both the seller and the ______of the item are liable for injuries caused by the product.
145.Entering another person's land or property without permission is called ______.
146.Any agreement enforceable by law is a(n) ______.
147.People sometimes enter into ______contracts without exchanging a word.
148.The offeree's refusal, or ______, of an offer ends that offer.
149.A contract is ______if it can be canceled by one of the parties.
150.A(n) ______contract is stated in words and may be either oral or written.
151.An offer must be definite, communicated to the offeree, and ______.
152.To fully understand the nature of contracts, we must understand the ______that make up a contract.
153.After reaching the age of majority, a person may ______a contract made during minority by using, selling, or keeping the item, or by making payments.
154.Contracts made by a mentally ill person who has been declared insane by a court action are ______.
155.Consideration is the exchange of ______and detriments by the parties to an agreement.
156.A contract in which one party has much more power than another is considered ______.
157.Minors must understand that driving is a(n) ______, not a right, and it must be earned.
158.Blake and Philip decide to legally settle their contractual dispute by having Blake accept as full payment $100 less than the amount in the original contract. This is called ______.
159.For valid ______, each party must give up something in order to get something in exchange.
160.As long as all terms have been carried out properly and completely, the contract is discharged by ______.
161.A(n) ______is an agreement between two parties to end an agreement.
162.If the time for performance is not mentioned in a contract, the court will say the contract must be completed in a time that is suitable and fair, or in ______.
163.A(n) ______mistake is an error on the part of one of the parties to a contract.
164.A person who intentionally fails to reveal an important fact is committing the fraud of ______.
165.When actual physical force is used to cause another to enter a contract, the contract is ______.
Matching
Match each term with its definition.
a. / substantive law / f. / general trial courtsb. / appellate court / g. / ethical
c. / alternative dispute resolution / h. / procedural law
d. / constitution / i. / jurisdiction
e. / precedent / j. / administrative law
____175.A document that spells out the principles by which the country’s, state’s, or local government operates
____176.Rules and procedures established by regulatory agencies
____177.Has two major divisions: civil and criminal
____178.Tells us what the law is, not how the law works
____179.State courts located in each county handling criminal and civil cases
____180.A requirement for a judge to follow an earlier court decision when deciding a case with similar circumstances
____181.Courts that review cases from lower courts
____182.Changes in these standards often lead to new laws
____183.Federal courts have this over patent and copyright cases
____184.A substitute for a lawsuit used to resolve disagreements outside the court system
Match each term with its definition.
a. / crime / f. / prosecutorb. / insanity / g. / battery
c. / infractions / h. / felonies
d. / plaintiff / i. / manslaughter
e. / self-defense / j. / misdemeanor
____185.In court, the party that accuses a person of a crime
____186.A type of defense for people who believe they were in danger and had no other choice but to use force to protect themselves