#106 Business Law 2005 FBLA WRC

WRC 2005--Business Law

True/FalseIndicate whether the sentence or statement is true or false.

____ 1. The golden rule holds that you "Do unto others before they do unto you."

____ 2. A juvenile, if arrested before reaching age 18, will be tried in a juvenile court even if he or she turns 18 before the case comes to trial.

____ 3. Public officials must prove actual malice to succeed in a defamation lawsuit.

____ 4. Even the most careless conduct will not result in liability for negligence unless there is actual harm.

____ 5. A person may win a lawsuit for fraud even if no loss is suffered.

____ 6. A pledge to charity is usually not binding.

____ 7. Legality of a contract refers solely to the way in which it is drafted.

____ 8. A promise to pay another person's debts must be in writing to be enforceable.

____ 9. A contract for the sale of goods for the price of $500 or more must be in writing to be enforceable.

____ 10. The destruction of the subject matter of a contract discharges that contract.

____ 11. You have a right to sue a person who breaches a contract made with you.

____ 12. Auction bids may not be withdrawn.

____ 13. Product liability laws cover defective products that do not cause injury.

____ 14. Federal law regulates advertisements of leases.

____ 15. Vicarious liability is usually limited to negligence rather than intentional tort.

____ 16. General agents are employed to accomplish a specific purpose or to do a particular job.

____ 17. A subagent is an agent lawfully appointed by a principal.

____ 18. Featherbedding is assigning more employees than necessary to a job.

____ 19. Collective bargaining agreements guarantee union employees lifelong employment.

____ 20. If a debtor does not pay, the secured party has the right to repossess the goods.

____ 21. The promise in a note or the order in a draft must be unconditional.

____ 22. The procedure for stopping payment on an electronic fund transfer is the same as that for stopping payment on a check.

____ 23. Infancy is a real defense.

____ 24. A partnership by estoppel is not a real partnership.

____ 25. A secret partner has limited liability for the firm's debts.

____ 26. Paying the filing fee completes the application for incorporation.

____ 27. A person who owns preferred stock has full voting rights.

____ 28. In a pooling agreement, participating shareholders retain control of their own votes.

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#106 Business Law 2005 FBLA WRC

____ 29. A derivative suit is based on an injury to a shareholder.

____ 30. Shareholders who dissent from a merger or consolidation are entitled to payment for their stock if they desire to relinquish their investment in the new corporation.

____ 31. Divorce laws are the same in all 50 states.

____ 32. Habitual intoxication is a ground for divorce in many states.

____ 33. Remarriage of a spouse always ends his or her former spouse's obligation to pay alimony.

____ 34. In a lease the tenant is known as the lessor.

____ 35. Title to real property passes to the buyer when the deed is recorded in the proper public office.

____ 36. When a buyer breaches a sales contract, the seller may cancel the contract.

____ 37. Robbery is the unlawful touching of another person.

____ 38. A unilateral mistake does not void a contract.

____ 39. Each state legislature writes its own statutes to govern the way its residents conduct their business affairs such as usury statutes, gambling statures, licensing statutes, etc.

____ 40. No consideration is needed to change a contract for the sale of goods.

____ 41. When the law creates an agency by circumstance, it is called agency by estoppel.

____ 42. Agents must always be paid for their efforts.

____ 43. Under the equal-pay rule, employers who engage in interstate commerce must pay minors at the same rate as adults performing the same job.

____ 44. A bank may refuse to pay a check that is more than six months old without incurring liability.

____ 45. Indorsements may be written in pencil, in ink, made on a typewriter, or stamped with a rubber stamp.

____ 46. A new sole proprietor should use a thriving business' name to get a successful start.

____ 47. A corporation's income may be taxed more than once.

____ 48. A stock acquisition requires that the suitor buy all of the target's stock.

____ 49. Both parties may be absent from the marriage ceremony if agents represent them in a proxy marriage.

____ 50. The policyholder and the beneficiary are always the same person.

Multiple ChoiceIdentify the letter of the choice that best completes the statement or answers the question.

____ 51. If a law enforcement officer induces a law-abiding citizen to commit a crime, the accused may claima. self-defense c. endangermentb. entrapment d. insanity

____ 52. A contract that contains a promise by both parties isa. express c. bilateralb. implied d. unilateral

____ 53. A contract that at first appears to bind both parties, but really binds no one isa. unconscionable c. gratuitousb. illusory d. promissory estoppel

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#106 Business Law 2005 FBLA WRC

____ 54. The law generally will not enforce a contract in which there is no consideration; the contract isa. fortuitous c. gratuitousb. illusory d. voidable

____ 55. An offer to do what you have agreed to do under a contract isa. substantial performance c. tender of performanceb. accord and satisfaction d. satisfactory performance

____ 56. The party who transfers a right is called thea. assignee c. delegatorb. assignor d. delegatee

____ 57. The transfer of a duty or detriment is calleda. delegation c. novationb. assignment d. relegation

____ 58. The right of ownership to goods is known asa. risk of loss c. identified goodsb. title d. bill of lading

____ 59. The transfer of all goods owned by a business is known as aa. forced sale c. total transferb. shipment contract d. bulk transfer

____ 60. A guarantee that goods are free of financial obligation, or lien, is called aa. limited warranty c. warranty of privityb. warranty of merchantibility d. warranty of title

____ 61. An oral statement of fact or promise constitutesa. no warranty c. an express warrantyb. an implied warranty d. a limited warranty

____ 62. Manufacturers and sellers are accountable for injuries caused by unsafe or defective under the principle ofa. warranty c. fraudulent misrepresentationb. caveat emptor d. product liability

____ 63. Insurance that protects the insured's car from acts of nature, vandalism, or theft isa. comprehensive insurance c. collision insuranceb. property damage liability insurance d. no-fault insurance

____ 64. If you have in your possession something that belongs to someone else, you are aa. donee c. donorb. bailee d. bailor

____ 65. An agency by circumstance, created by law, is calleda. negligent hiring c. independent contractingb. agency by estoppel d. ratification

____ 66. Closed shops were made illegal by thea. Wagner Act c. Landrum-Griffin Actb. Taft-Hartley Act d. Fair Labor Standards Act

____ 67. A check that has been written but not yet returned to the bank for payment is a(n)a. certified check c. outstanding checkb. stale check d. canceled check

____ 68. Negotiation is transfer of an instrument in such a way that the transferee becomes aa. holder c. payeeb. indorser d. drawee

____ 69. Liability to pay only under certain conditions have been met isa. primary liability c. tertiary liabilityb. secondary liability d. surety liability

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#106 Business Law 2005 FBLA WRC

____ 70. A partner who takes no active role, but is known publicly and has unlimited liability is aa. silent partner c. dormant partnerb. secret partner d. limited partner

____ 71. A corporation organized for the purpose of making money is a(n)a. stock corporation c. public corporationb. profit corporation d. nonprofit corporation

____ 72. Shareholders who want to control the election of the board of directors by buying a majority of the shares in a corporation but are unable to, may try to obtain aa. pooling agreement c. shareholder proposalb. proxy d. voting trust

____ 73. A type of co-ownership in which a person's heirs inherit that person's share of a property is known asa. tenancy by the entirety c. joint tenancyb. tenancy in common d. adverse possession

____ 74. A deed that transfers a seller's interest in property but does not warrant that the seller owns any interest is aa. general warranty deed c. quitclaim deedb. mortgage deed d. special warranty deed

____ 75. A signed document providing for the distribution of a person's property at his or her death is known as aa. living will c. suretyb. will d. fiduciary

____ 76. A false statement made orally to a third party isa. slander c. breach of dutyb. defamation d. libel

____ 77. If the members of a grand jury believe that a crime has been committed, they issue a(n)a. verdict c. judgmentb. indictment d. warrant

____ 78. Goods that presently exist and are the subject matter of a particular contract area. specific goods c. tangible goodsb. real goods d. identified goods

____ 79. If a mentally impaired person is declared insane and a guardian appointed, the mentally impaired person's contracts area. voidable c. bindingb. void d. ratified

____ 80. The detriment of not doing something that one has a legal right to do isa. revocation c. forbearanceb. affirmation d. forbiddance

____ 81. When both parties to a contract agree to terminate the contract, there is aa. mutual release c. tender of performanceb. accord and satisfaction d. accord and dissolution

____ 82. Property found in a public place that would indicate it was simply forgotten is considereda. misplaced c. pledgedb. lost d. gratuitous

____ 83. Land, and anything permanently attached to the land, isa. tangible property c. personal propertyb. real property d. genuine property

____ 84. Money that the law recognizes as payment of a debt isa. tender of payment c. tender of performanceb. legal tender d. bank tender

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#106 Business Law 2005 FBLA WRC

____ 85. Persons who are lured into contractual obligations by fraud may sue fora. monetary loss c. malpracticeb. punitive damages d. mental anguish

____ 86. A merchant's written promise to hold open an offer for the sale of goods is a(n)a. firm offer c. legal tenderb. output contract d. bid

____ 87. Property found in a public place that would indicate it was simply forgotten is considereda. misplaced c. pledgedb. lost d. gratuitous

____ 88. Vicarious liability is based on the principal ofa. apparent authority c. respondent superiorb. negligible duty d. scope of employer

____ 89. An agent's duty to handle a principal's money honestly and accurately is his or hera. duty to account c. duty to exercise judgment and skillb. duty of care d. duty to calculate

____ 90. The illegal practice of assigning more employees to a job than necessary is calleda. overloading c. employment-at-willb. collective bargaining d. featherbedding

____ 91. The doctrine stating that an employer can fire an employee at any time for any reason is known asa. wrongful discharge c. collective bargainingb. employment-at-will d. grievance procedure

____ 92. Women who perform the same job as men must receive the same rate of pay according to thea. Workers' Compensation Act c. equal-pay ruleb. fellow servant rule d. Equal Rights Amendment

____ 93. The party who presents a negotiable instrument is entitled to have the instrumenta. signed c. negotiatedb. indorsed d. paid

____ 94. In the event of a lawsuit, all partners must be sued together. They havea. joint liability c. no liabilityb. limited liability d. general liability

____ 95. The first shareholders to be paid are those who holda. preferred stock c. common stockb. par value stock d. no-par value stock

____ 96. The detailed view of a stock offering that must be filed with the SEC is known as aa. prospectus c. financial statementb. registration statement d. commerce clause

____ 97. A marriage in which someone legally authorized to do so represents the bride and/or groom is known as a(n)a. common-law marriage c. ceremonial marriageb. proxy marriage d. absentee marriage

____ 98. The difference between market value and debt in the property is calleda. easement c. interestb. equity d. escrow

____ 99. The written contract between a person buying insurance and the insurance company selling it is thea. premium c. insurance planb. binder d. policy

____ 100. Social security benefits provided to persons who are unable to work due to illness or injury are known asa. retirement benefits c. disability benefitsb. survivors' benefits d. Medicare benefits

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#106 Business Law 2005 FBLA WRC

Answer Key

1. B 26. A 51. B 76. A2. B 27. B 52. C 77. B3. A 28. A 53. B 78. D4. A 29. B 54. C 79. B5. B 30. A 55. C 80. C6. B 31. B 56. B 81. A7. B 32. A 57. A 82. A8. A 33. B 58. B 83. B9. A 34. B 59. D 84. B10. A 35. B 60. D 85. B11. A 36. A 61. C 86. A12. B 37. B 62. D 87. A13. B 38. A 63. A 88. C14. A 39. A 64. B 89. A15. A 40. A 65. B 90. D16. B 41. A 66. B 91. B17. B 42. B 67. C 92. C18. A 43. B 68. A 93. D19. B 44. A 69. B 94. A20. A 45. B 70. A 95. A21. A 46. B 71. B 96. A22. B 47. A 72. B 97. B23. A 48. B 73. B 98. B24. A 49. A 74. C 99. D25. B 50. B 75. B 100. C

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