Business Law MCQ Online Test
Business Law MCQ Online Test Assignment for your amity mba bba courses, ignou mba, imt cdl, smu and upes management program. This is important online mcq question answer for various distance learning program.
Q1: Which of the following circumstances always produces a lack of contractual capacity
A) mental retardation
B) brain damage
C) drinking
D) appointment of a guardian
Answer: D) appointment of a guardianAnswer
Q2: Vonnie appeared normal but in fact is mentally incompetent. If she decides to disaffirm a contract, Vonnie___
A) has no obligation beyond disaffirming
B) must return all consideration received
C) must pay a reasonable price for any goods or services she received
D) must petition a court for permission to disaffirm
Answer: B) must return all consideration receivedAnswer
Q3: Determining whether or not the parties entered an agreement freely___
A) depends on the motives of each party
B) deals only with an agreement
C) will not enforce an outcome
D) is the underlying objective of contract law
Answer: D) is the underlying objective of contract lawAnswer
Q4: The law presumes that anyone entering a contract has___
A) nothing better to do
B) legally surrendered negotiation
C) the legal capacity to do so
D) something to gain or receive
Answer: C) the legal capacity to do soAnswer
Q5: Maria offers to pay Alsad USD100 if he makes and A in his business law class. While the business law class is in progress, Maria’s promise is___
A) unilateral and executed
B) unilateral and executor
C) bilateral and executed
D) bilateral and executory
Answer: B) unilateral and executorAnswer
Q6: Betty is awarded USD10,000 damages against Ethyl in a damage suit arising from an auto accident. Betty and Ethyl agree to the payment of this judgment at USD100 per month. This payment agreement is confirmed by the court and recorded. Betty and Ethyl now have a___
A) contract under seal
B) formal contract
C) contract of record
D) contract to contract
Answer: C) contract of recordAnswer
Q7: Phillip needs money and decides to paint Donna’s house while she is out of town and bill her for the work. Donna refuses to pay Phillip and Phillip sues. A court___
A) will not apply quasi contract doctrine
B) will apply quasi contract doctrine
C) might apply quasi contract doctrine if the painting were done very well
D) cannot apply quasi contract doctrine since Phillip and Donna did not have a written contract
Answer: A) will not apply quasi contract doctrineAnswer
Q8: Avia silently takes one candy bar each day from Jerry’s candy store and pays for them at the end of the week. On this particular day, Avia silently takes two candy bars from Jerry’s candy store. At the end of the week Avia only wants to pay for one candy bar since she believed that she should get one free for being a good customer. A court will___
A) apply Avia’s belief in resolving this dispute
B) be unable to resolve the dispute unless the parties agree
C) create a contract since no words were spoken
D) view Avia’s actions as a reasonable person would have
Answer: D) view Avia’s actions as a reasonable person would haveAnswer
Q9: Sarah purchases a car when she is a 15-year-old from OK Motors Inc. Sarah’s contract is___
A) valid
B) void
C) Voidable
D) unenforceable
Answer: C) VoidableAnswer
Q10: Karaya contracts with Lance to have him mow her yard every two weeks while she spends the summer in India. Lance only mows every four weeks and Karaya’s yard looks very ugly. Karalya’s neighbor, Zaya, sues Lance for his failure to maintain Karaya’s yard properly. A court will___
A) allow Zaya to sue since she sees the ugly yard next door
B) dismiss Zaya’s suit since privity is lacking
C) allow Zaya to sue as an intended beneficiary
D) allow Zaya to sue as an incidental beneficiary
Answer: B) dismiss Zaya’s suit since privity is lackingAnswer
Q11: This theory of contract law focuses on the outward actions and the words of the parties
A) will
B) equal value
C) good faith
D) Formalistic
Answer: D) FormalisticAnswer
Q12: Jared, age 18, agrees not to smoke when his uncle Brandon, age 40, promises to pay him USD1,000 for not smoking until age 22. Will a court compel uncle Brandon to pay Jared USD1,000 if Jared does not smoke
A) No, because Jared has better health for having not smoked
B) No, because uncle Brandon did not benefit from Jared’s action
C) Yes, because Jared and uncle Brandon are adults
D) Yes, because Jared gave up a legal right
Answer: D) Yes, because Jared gave up a legal rightAnswer
Q13: Charlie tells Bo that he is looking for a new car. Bo says that he will sell Charlie his car for USD12,000. Charlie says he wants to think it over. In what stage of contract formation are Charlie and Bo
A) Negotiation
B) intention
C) acceptance
D) contract
Answer: A) NegotiationAnswer
Q14: How certain and definite must an offer be
A) absolutely
B) somewhat
C) convencienly
D) Reasonably
Answer: D) ReasonablyAnswer
Q15: Alpha Inc. offers to purchase all the coal it needs from Mountain Mining Inc. Alpha and Mountain have what type of agreement
A) output
B) Requirement
C) illusory
D) cost-plus
Answer: B) RequirementAnswer
Q16: Janet promises to pay Roberto USD20 to wash her car. Roberto may accept Janet’s offer by___
A) promising to wash the car
B) specifying to wash the car
C) preparing to wash the car
D) washing the car
Answer: D) washing the carAnswer
Q17: Norm offers to sell his horse to Gary for USD1,000. Gary states that he accepts the offer provided Norm includes a month of riding lessons. What is the legal status of Gary’s statement
A) Counteroffer
B) acceptance
C) offer
D) implied acceptance
Answer: A) CounterofferAnswer
Q18: Cindi receives via FedEx a new DVD player that she did not order. What is Cindi’s legal obligation
A) none
B) hold the DVD player for a reasonable time
C) promptly return the DVD player
D) pay for the DVD player
Answer: B) hold the DVD player for a reasonable timeAnswer
Q19: Grandma Jones offers by mail to sell her house to Allen for USD80,000. She dies unexpectedly. Allen sends his acceptance the next day after her death. Is there an enforceable contract
A) Yes, if Allen did not know of the death
B) No, the death terminated the offer
C) Yes, if Allen responded in a reasonable time
D) No, since the death was unexpected
Answer: B) No, the death terminated the offerAnswer
Q20: Dexter is considering purchasing from Lisa a vacant lot and opening a fast food restaurant. However, he heeds a month to obtain his financing. How may Dexter secure an enforceable offer to purchase the lot
A) requirement contract
B) firm offer contract
C) option contract
D) security contract
Answer: C) option contractAnswer
Q21: Which of the following contains rules regarding cybercontract law
A) The Uniform Electronic Transactions Act
B) The C-Sign Act
C) The Internet Contract Act
D) The Cyberspace Transactions Act
Answer: A) The Uniform Electronic Transactions ActAnswer
Q22: A cyberofferor should include the following terms in their offer
A) payment criteria
B) liability disclaimer
C) return procedures
D) all of the above
The CORRECT answer for each question is indicated by a
Answer: D) all of the aboveAnswer
Q23: Rico offers to sell Jose his boat. Rico is the offeror
A) True
B) False
Answer: Correct – TrueAnswer
Q24: An offer to sell must be absolutely definite to be legally enforceable
A) True
B) False
Answer: Wrong – FalseAnswer
Q25: Delta Manufacturing Inc. agrees to sell to Floor Supply Co. all the vinyl flooring made in its Cleveland, Ohio, plant in the next five years. This is an illusory agreement since the quantity is undetermined
A) True
B) False
Answer: Wrong – FalseAnswer
Q26: Pennysavers advertises a grand opening sale stating that “the first person in the door” may purchase a TV for USD5.00. This is an invitation to trade
A) True
B) False
Answer: Wrong – FalseAnswer
Q27: Amanda offers USD100 to Alice if Alice will clean her apartment. If Alice does the cleaning a unilateral contract is created
A) True
B) False
Answer: Correct – TrueAnswer
Q28: The NCCUSL is made up of legal experts, including attorneys, judges, and law professors
A) True
B) False
Answer: Correct – TrueAnswer
Q29: When unordered goods are delivered by non-post office agencies, the common law rule is usually followed
A) True
B) False
Answer: Correct – TrueAnswer
Q30: Omar offers to sell his car to Betty for USD10,000. Betty says she will pay USD8,000. Omar says no, he wants USD12,000 now. Betty says she will pay USD10,000. Omar must sell for USD10,000 since he made that offer
A) True
B) False
Answer: Wrong – FalseAnswer
Q31: In a signed writing, Import Motors Inc. offers to sell 40 cars to Car Sales Inc. for USD10,000 each. Import promises to keep this offer open for 30 days. This offer is a firm offer
A) True
B) False
Answer: Correct – TrueAnswer
Q32: There is no federal cybercontract law
A) True
B) False
Answer: Wrong – FalseAnswer
Q33: In the granting of mutual assent, a “meeting of the minds” means that___
A) there were lengthy negotiations
B) there is a complete understanding of all aspects of the agreement
C) both parties know the terms and have willingly agreed to be bound by them
D) both parties know the terms, have willingly agreed to be bound by them, and have had a face-to-face meeting
Answer: C) both parties know the terms and have willingly agreed to be bound by themAnswer
Q34: Eva intentionally and falsely states that an old ring that she is selling to Julia was made in France. Julia, a collector of French jewelry, pays USD3,000 for the ring based upon these statements. Julia later learns that the ring was made in Poland and is worth USD6,000. May Julia successfully sue Eva for fraud
A) No, because Julia has not suffered a loss
B) Yes, because where the ring was made was a material fact to Julia
C) No, because Julia was free to inspect the ring before purchasing it
D) Yes, because Eva intentionally and falsely misstated a material fact
Answer: A) No, because Julia has not suffered a lossAnswer
Q35: Ichi covers the rust damage to a car he is selling to Henry with a new paint job. Henry does not ask about rust damage. Has Ichi committed fraud
A) No, because Henry didn’t ask about rust
B) Yes, because Henry cannot be expected to discover the rust
C) No, because rusting is a natural process that Henry should understand
D) Yes, because Ichi made the car look nicer than it really was
Answer: B) Yes, because Henry cannot be expected to discover the rustAnswer
Q36: In a case involving innocent misrepresentation, the court will allow___
A) damages
B) rescission and damages
C) Rescission
D) rescission, damages, and an injunction
Answer: C) RescissionAnswer
Q37: Beth contracts to sell Minda merchandise stored in a warehouse. Unknown to either person, the warehouse burned the night before the contract was made, totally destroying the merchandise. In this situation, Minda___
A) is bound to the contract
B) may successfully assert fraud
C) may successfully assert fraud and cancel the contract
D) may cancel the contract
Answer: D) may cancel the contractAnswer
Q38: Duress is characterized by___while undue influence is characterized by___. What word goes in each blank in order
A) threats, pressure
B) pressure, threats
C) emotional appeals, mistaken beliefs
D) confusion, indecision
Answer: A) threats, pressureAnswer
Q39: James operates the only gasoline station along a one hundred mile stretch of desert road and charges four times the normal price for gasoline. A motorist purchasing gasoline from James___
A) experiences wrongful economic duress
B) experiences wrongful emotional duress
C) experiences wrongful undue influence
D) experiences no duress or undue influence
Answer: D) experiences no duress or undue influenceAnswer
Q40: Bethany is an exceptionally persuasive sales representative. After signing a contract, customers frequently feel that they were swept along without a meanful way to say no. Bethany has engaged in___
A) undue influence
B) duress
C) both undue influence and duress
D) neither undue influence or duress
Answer: D) neither undue influence or duressAnswer
Q41: A fiduciary relationship involves___
A) trust
B) dependence
C) trust and dependence
D) trust, dependence, and domination
Answer: C) trust and dependenceAnswer
Q42: Aza and Ersaid both believe that a particular horse descended from a Kentucky Derby winner when in fact the horse descended from a horse that came in last in the Kentucky Derby. This is most clearly an example of___
A) mistake as to existence
B) mistake as to value
C) mistake as to description
D) mistake of law
Answer: C) mistake as to descriptionAnswer
Q43: If the subject matter of a contract was destroyed before the agreement was made, the agreement may be rescinded
A) True
B) False
Answer: Correct – TrueAnswer
Q44: Charles agrees to sell his business to John so that John will not hurt Charles’ children. Charles has experienced undue influence
A) True
B) False
Answer: Wrong – FalseAnswer
Q45: The seller of a house keeping silent about termite damage that the buyer cannot see would be an example of passive fraud
A) True
B) False
Answer: Correct – TrueAnswer
Q46: A member of a company’s board of directors is in a fiduciary relationship to customers of that company
A) True
B) False
Answer: Wrong – FalseAnswer
Q47: Ceja does not see the statement “not responsible for theft” printed on the back of the claim stub when she checks her mink coat at the theatre. Ceja may not sue the threatre for theft if the coat is stolen
A) True
B) False
Answer: Wrong – FalseAnswer
Q48: Marek mistakenly believes that the lawn mower he is selling to Evza has a three horsepower engine and so informs Evza. Evza may not successfully sue Marek for fraud
A) True
B) False
Answer: Correct – TrueAnswer
Q49: A unilateral mistake will not allow one to rescind a contract
A) True
B) False
Answer: Correct – TrueAnswer
Q50: The general rule today is that ignorance of the law is no excuse
A) True
B) False
Answer: Correct – TrueAnswer
Q51: Rapid Repair, Inc. disassembled Jose’s truck transmission to provide a “free” repair estimate but then insisted that Jose pay USD700 in order to have it reassembled. Jose is being subjected to emotional distress
A) True
B) False
Answer: Wrong – FalseAnswer
Q52: A mutual mistake as to value is a mistake that allows a contract to be rescinded
A) True
B) False
Answer: Wrong – FalseAnswer
Q53: Jill, age 16, purchases a USD500 video game playing center. She may not disaffirm after opening and using the equipment and games
A) True
B) False
Answer: Wrong – FalseAnswer
Q54: All states except Louisiana have fixed the age of majority to eighteen
A) True
B) False
Answer: Wrong – FalseAnswer
Q55: In some states, Jack legally becomes an adult on the day before his eighteenth birthday
A) True
B) False
Answer: Correct – TrueAnswer
Q56: An emancipated minor has not abandoned the usual legal protections provided him or her
A) True
B) False
Answer: Wrong – FalseAnswer
Q57: Only a minority of states prohibit a minor who has misrepresented his or her age from disaffirming a contract
A) True
B) False
Answer: Correct – TrueAnswer
Q58: An adult who contracts with a minor may not disaffirm the contract
A) True
B) False
Answer: Correct – TrueAnswer
Q59: Cam Brel, a 16-year old resident of Alaska, orders a USD300 winter coat in July. In August, before the coast has been delivered, she may not disaffirm the contract
A) True
B) False
Answer: Wrong – FalseAnswer
Q60: Richard, age 16, sells his stamp collection to Stamp Unlimited, Inc. who in turn resells the collection to a collector. Richard may not recover the stamps when disaffirming the sale
A) True
B) False
Answer: Correct – TrueAnswer
Q61: Olson, age 35, has been declared insane and had a guardian appointed. Olson’s contracts are voidable
A) True
B) False
Answer: Wrong – FalseAnswer
Q62: Patricia was drunk when she agreed to sell her dog Dusty to Marcos. Patricia may affirm the contract when sober
A) True
B) False
Answer: Correct – TrueAnswer
Q63: Woody promised to leave his twelve-year old niece, Matilda, a sufficient amount of money in his will to enable her to attend college for four years. Matilda studied hard and dreamed of college life. However, when Woody died, his will did not mention Matilda. What legal remedies, if any, does Matilda have
A) She may sue Woody’s estate for breach of contract
B) She may sue Woody’s estate under a quasi contract doctrine
C) She may sue Woody’s estate for a violation of public policy
D) She may not sue
Answer: D) She may not sueAnswer
Q64: Grandise advertised a USD100 reward for the return of her lost high school ring that had her name engraved on it. Mike found the ring at the city library and returned it to Grandise without knowing of the reward. Grandise gave Mike nothing when he returned the ring but Mike sees the advertisement later that day. What are Mike’s legal rights
A) Mike may collect the reward since he met the terms of the advertisement
B) Mike provided past consideration and may not collect the reward
C) Mike may collect the reward based upon promissory estoppel
D) Mike did not have a written contract and may not collect the reward
Answer: B) Mike provided past consideration and may not collect the rewardAnswer
Q65: Tisha promises to pay the apartment rent due under her current lease if the landlord constructs covered parking for her car. The landlord agrees. Tisha’s promise to pay rent___
A) provides consideration for the landlord’s agreement
B) is not consideration for the landlord’s agreement
C) provides consideration only to the extent that the landlord has begun construction
D) is not consideration but rather a firm offer under the UCC
Answer: B) is not consideration for the landlord’s agreementAnswer
Q66: Who makes a firm offer under the UCC
A) any seller
B) any buyer
C) any merchant making an offer
D) any merchant making an acceptance
Answer: C) any merchant making an offerAnswer
Q67: Promissory estoppel involves___
A) principles of justice and fairness
B) an analysis of the terms of the contract between the parties
C) an analysis application of what is customary
D) an analysis application of federal legislation
Answer: A) principles of justice and fairnessAnswer
Q68: Dorinda’s debt has been discharged by bankruptcy. When is Dorinda legally obligated to pay the debt
A) Never
B) When state law provides the obligation to repay
C) When a court imposes the debt
D) When reaffirmation occurs as provided by federal law
Answer: D) When reaffirmation occurs as provided by federal lawAnswer
Q69: Historically, a contract under seal___
A) required no consideration
B) required monetary consideration only
C) required equal value consideration
D) required all parties to swear to perform the contract
Answer: A) required no considerationAnswer
Q70: An accord and satisfaction may be created___
A) if any partial payment is accepted by a creditor
B) if the debt is honesty in dispute
C) if the debt exceeds USD500 and is evidenced by a written contract
D) if the debt is past due
Answer: B) if the debt is honesty in disputeAnswer
Q71: The equal value exchange theory___
A) is still applied today to all contracts
B) is still applied today to contracts under seal
C) ended with the Industrial Revolution
D) allows the parties to determine what is equal value
Answer: C) ended with the Industrial RevolutionAnswer
Q72: The legal term used to describe the gain that each party to a contract experiences is___
A) legal detriment
B) legal full faith and credit
C) legal benefit
D) legal standing
Answer: C) legal benefitAnswer
Q73: Melinda promises not to use cocaine in exchange for USD10,000. Melinda has provided a legal detriment in exchange for the money
A) True
B) False
Answer: Wrong – FalseAnswer
Q74: Jorge purchases a USD1,000 freezer under a rent-to-own contract whose payments total USD10,000. This contract is unconscionable
A) True
B) False
Answer: Correct – TrueAnswer
Q75: Elaine has a legal right to work for USD1.00 per hour if that is her free and competent decision
A) True
B) False
Answer: Wrong – FalseAnswer
Q76: Barter agreements must be informal since they do not contain valid consideration
A) True
B) False
Answer: Wrong – FalseAnswer
Q77: A promise not to sue is commonly called a release
A) True
B) False
Answer: Correct – TrueAnswer
Q78: Charitable pledges may be enforced under promissory estoppel or public policy
A) True
B) False
Answer: Correct – TrueAnswer
Q79: Gary and Alhambra Plumbing Co. are in a dispute over a plumbing bill. If Alhambra accepts a check from Gary that is marked payment in full, an accord and satisfaction has occurred
A) True
B) False
Answer: Correct – TrueAnswer
Q80: Hanson decides that he has promised to pay too much when he sees the same goods advertised for USD100 less. Hanson may legally pay the lesser amount
A) True
B) False
Answer: Wrong – FalseAnswer
Q81: The time allowed for the collection of a debt is determined by federal law
A) True
B) False
Answer: Wrong – FalseAnswer
Q82: Thomas promises to buy all the trucks that he “might desire” from Titan Trucks Sales Inc. Thomas has made an illusory promise
A) True
B) False
Answer: Correct – TrueAnswer
Q83: Ordinarily, the court will leave the parties to an illegal agreement where they placed themselves
A) True
B) False
Answer: Correct – TrueAnswer
Q84: Payday loans typically have a moderate interest rate
A) True
B) False
Answer: Wrong – FalseAnswer
Q85: An agreement is contrary to public policy if it would hurt the entire social structure if enforced
A) True
B) False
Answer: Correct – TrueAnswer
Q86: Kala’s contract with Orion Inc. states that Orion will not be liable for any injury caused by Kala’s use of Orion’s products. This is an exculpatory clause
A) True
B) False
Answer: Correct – TrueAnswer
Q87: Ryan copies part of a copyrighted story for a class report. This is fair use
A) True
B) False
Answer: Correct – TrueAnswer
Q88: Eloise sells her business to Celeste and agrees not to ever engage in that type of business again. This agreement is enforceable
A) True
B) False
Answer: Wrong – FalseAnswer
Q89: Ida agrees not to reveal the pizza dough formula as a condition of employment with Blue Dot Pizza. This agreement is an unenforceable restraint of trade
A) True
B) False
Answer: Wrong – FalseAnswer
Q90: The Racketeer Influences and Corrupt Organizations Act only applied to organized crime
A) True
B) False
Answer: Wrong – FalseAnswer
Q91: An agreement to buy 100 boxes of bananas and 200 kilos of cocaine is a divisible contract
A) True
B) False
Answer: Correct – TrueAnswer
Q92: An agreement to pay USD300 to Gilbert to destroy the yard signs of a political candidate would be enforceable by Gilbert since the yard signs are in a yard that is open to the public
A) True
B) False
Answer: Wrong – FalseAnswer
Q93: Frankie and Johnie agree to rob banks and equally divide the proceeds. Frankie dies in a robbery shootout and Frankie’s heirs sue Johnie to force a division of the robbery proceeds. A court will___
A) enforce the agreement since the heirs are innocent of any wrong doing
B) only enforce the agreement to the extent of meeting any enforceable contracts that Frankie had with his heirs
C) not enforce the agreement
D) not enforce the agreement above USD500 of proceeds
Answer: C) not enforce the agreementAnswer
Q94: If Clifford borrows USD1,000 to cover his gambling debts and agrees to repay USD2,000 one week later,___
A) the agreement is enforceable if Clifford were not coerced
B) the agreement is usurious
C) the agreement is unconscionable if Clifford does not understand it
D) the agreement is void for vagueness
Answer: B) the agreement is usuriousAnswer
Q95: If Chester does not have a real estate license in Tennessee, Chester___
A) nevertheless, may collect a commission for selling a house in Tennessee
B) may collect a commission for selling a house in Tennessee if the seller knew Chester was unlicensed
C) may not collect a commission for selling a house in Tennessee
D) may not collect a commission for selling a house in Tennessee for more than the average market price
Answer: C) may not collect a commission for selling a house in TennesseeAnswer
Q96: Laws prohibiting contracts being made of Sunday are___
A) uniform throughout the U.S
B) determined by the federal Congress
C) subject to local option in some states
D) nonexistent today
Answer: C) subject to local option in some statesAnswer
Q97: Which of the following is not an agreement to obstruct justice
A) Paying an official to grant a pardon
B) Paying a witness to give false testimony
C) Paying a potential witness to move to Europe
D) Paying a police officer to lose damaging evidence
Answer: A) Paying an official to grant a pardonAnswer
Q98: Helen, who is broke, gives all her remaining property to her grandson, William, and then Helen files for bankruptcy. What, if anything, may Helen’s creditors do
A) Nothing
B) Ask the court to void the transfer of property
C) Seize the property from William
D) File criminal charges against William
Answer: B) Ask the court to void the transfer of propertyAnswer
Q99: Martha pays Hector USD10,000 with a signed agreement so that Hector will not purchase and open a fast food franchise during the next three years within two miles of Martha’s restaurant. This agreement is___
A) enforceable
B) enforceable if considered reasonable
C) enforceable only if there are other restaurants currently open within two miles of Martha’s restaurant
D) not enforceable
Answer: D) not enforceableAnswer
Q100: Omar, who is angry with the entertainment industry, purchases state-of-the-art copying equipment and freely allows anyone to use the equipment to make copies of movies, music, and video games. Omar___
A) is guilty of contributory copyright infringement
B) is not guilty of violation since he did not personally make the copies
C) is exercising his right to fair use
D) is producing legal derivative works
Answer: A) is guilty of contributory copyright infringementAnswer
