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: Harriet and Jane agree to engage in an illegal agreement to avoid paying sales tax. Harriet and Jane will be said to be___
A) not in pari delicto
B) not in pari delicto if the sales tax rate is immeasurable
C) not in pari delicto if they gave the savings to charity
D) in pari delicto 

Answer

Answer: D) in pari delicto

Q2: A restrictive employment must be reasonable as to___
A) time
B) geographic area
C) both time and geographic area
D) neither time nor geographic area 

Answer

Answer: C) both time and geographic area

Q3: Lata leases an apartment for fifteen months. Lata’s lease contract___
A) must be written
B) need not be written since there is not a sale of land
C) must be written only if the rent exceeds USD500 per month
D) need not be written if Lata pays rent monthly 

Answer

Answer: A) must be written

Q4: Martin agrees to build a pipeline for Henry to pipe water from Henry’s windmill to Henry’s house, one hundred yards away. This agreement___
A) involves a transfer of real property rights
B) involves specially manufactured goods
C) does not involve a transfer of real property rights but does involve specially manufactured goods
D) does not involve a transfer of land nor specially manufactured goods 

Answer

Answer: D) does not involve a transfer of land nor specially manufactured goods

Q5: Deepti, an executor of his deceased uncle’s estate, orally agrees to pay his uncle’s debts to protect the honor of the family. Deepti___
A) is bound by his oral agreement
B) is not bound by his oral agreement
C) is bound by his oral agreement to pay debts that are less than USD500
D) is not bound by his oral agreement if his work as an executor takes longer than one year 

Answer

Answer: B) is not bound by his oral agreement

Q6: When a customer makes an order for items he does not have available in his store, Omar writes up an invoice and has the customer sign it. The invoice___
A) will be a sufficient writing to satisfy the Statute of Frauds
B) will not be a sufficient writing to satisfy the Statute of Frauds
C) will be sufficient writing to satisfy the Statute of Frauds only if this is customary in Omar’s line of business
D) will not be a sufficient writing to satisfy the Statute of Frauds unless the customer’s signature is acknowledged 

Answer

Answer: A) will be a sufficient writing to satisfy the Statute of Frauds

Q7: The standard construction rule___
A) only applies to real estate contracts
B) only applies to sale of goods contracts
C) applies to all contracts
D) applies to all contracts only when the contract price exceeds USD500 

Answer

Answer: C) applies to all contracts

Q8: Fatima signed a written contract because she was threatened with death if she did not sign. The Parol Evidence Rule___
A) does not allow testimony concerning duress
B) does allow testimony concerning duress
C) requires Fatima to have witnesses to the threats that she says constitutes duress
D) requires the contract to exceed USD500 before testimony concerning duress may be given 

Answer

Answer: B) does allow testimony concerning duress

Q9: Sue orally agrees to sell Sam USD350 of computer cables. Subsequently they agree to modify the sale to USD575 of computer cables. Which of the following statements is false
A) The original oral agreement is enforceable
B) There can be evidence of the modification introduced in court
C) There can be more than one modification to a contract
D) The modification need not be written 

Answer

Answer: D) The modification need not be written

Q10: The Best Evidence Rule requires___
A) testimony by the original parties to a contract
B) testimony by the notary who acknowledged the signatures on a contract
C) the original of a writing be introduced into evidence
D) a witness to the signatures to testify in court 

Answer

Answer: C) the original of a writing be introduced into evidence

Q11: Facsimile signatures on a contract are___
A) never valid
B) always valid
C) valid or not depending on federal law
D) valid or not depending on state law 

Answer

Answer: D) valid or not depending on state law

Q12: In some states today a seal___
A) furnishes consideration in a contract
B) is used when a formal contract is signed
C) both furnishes consideration in a contract and is used when a formal contract is signed
D) is required whenever a minor enters into a contract 

Answer

Answer: C) both furnishes consideration in a contract and is used when a formal contract is signed

Q13: Allelah’s contract entered into on May 1 to be a Chef at Kusum’s hotel until the following April 1 need not be written to be legally enforceable
A) True
B) False 

Answer

Answer: Correct – True

Q14: Part performance is an exception to the rule that contracts for the sale of land must be in writing
A) True
B) False 

Answer

Answer: Correct – True

Q15: Ed, a merchant, sends a written confirmation of an oral contract involving USD1,000 of goods to Jessica, a consumer buyer. The written confirmation makes the contract enforceable against Jessica
A) True
B) False 

Answer

Answer: Wrong – False

Q16: A collateral contract involves a cosigner
A) True
B) False 

Answer

Answer: Correct – True

Q17: A prenuptial agreement creates binding obligations beyond the marriage vows
A) True
B) False 

Answer

Answer: Correct – True

Q18: Words on a check can satisfy the requirements of a written memorandum only if the check is for more that USD500
A) True
B) False 

Answer

Answer: Wrong – False

Q19: Randy and Cheryl discussed a September 1 delivery date but their subsequent written contract listed the delivery date as September 15. Either Randy or Cheryl may introduce in court evidence of their September 1 discussions
A) True
B) False 

Answer

Answer: Wrong – False

Q20: Joseph agrees to purchase Ann’s truck when Joseph sells his current car. This is an example of a condition subsequent
A) True
B) False 

Answer

Answer: Wrong – False

Q21: A person who lacks the ability to read or write is not obligated to sign contracts
A) True
B) False 

Answer

Answer: Wrong – False

Q22: The Uniform Electronic Transactions Act (UETA) defines an electronic signature
A) True
B) False 

Answer

Answer: Correct – True

Q23: A person who must perform under a contract is a a(n)___
A) assignor
B) assignee
C) obligor
D) beneficiary 

Answer

Answer: C) obligor

Q24: Ichi names a friend, Myra, as a___beneficiary on his life insurance policy
A) creditor
B) done
C) incidental
D) death 

Answer

Answer: B) done

Q25: Who has the legal responsibility to give notice of an assignment
A) assignor
B) Assignee
C) obligator
D) obligatee 

Answer

Answer: B) Assignee

Q26: Omar, a world-famous cricket player, contracts to give cricket lessons to Alan. Omar attempts to delegate his duties under the contract to Cedrick, a competent, but not world-famous, cricket player. This delegation of duties will___
A) be valid
B) be valid only if Alan is a beginning cricket player
C) not be valid if Alan and Cedrick cannot get along
D) not be valid due to Omar’s unique skills 

Answer

Answer: D) not be valid due to Omar’s unique skills

Q27: Tom’s promise to repair Samantha’s truck in exchange for Samantha’s promise to baby sit for Tom’s cousin Jane creates___
A) an assignment
B) a delegation
C) a third party beneficiary contract
D) an unconscionable contract 

Answer

Answer: C) a third party beneficiary contract

Q28: A contract is typically not assignable if it involves___
A) personal services
B) the sale of goods
C) the sale of land
D) an oral contract 

Answer

Answer: A) personal services

Q29: Jason rented Janice’s apartment under a one year lease. Six months into the lease Jason is transferred to another city but his friend Patricia needs an apartment and is willing to assume Jason’s lease. What process will release Jason from any further liability under his lease with Janice
A) An assignment by Jason to Patricia
B) A delegation by Jason to Patricia
C) A novation involving Jason, Patricia, and Janice
D) Jason is liable under the end of his lease under all circumstances 

Answer

Answer: C) A novation involving Jason, Patricia, and Janice

Q30: Tammy borrows money from Big Bank to purchase a house. She then sells the house to Felix who agrees to make the payments to Big Bank. Which of the following statements is true
A) Tammy’s agreement with Felix releases her from liability to Big Bank
B) Big Bank may validly object to the agreement between Tammy and Felix
C) Big Bank is a creditor beneficiary of the agreement between Tammy and Felix
D) Tammy cannot sell the house as long as she owes Big Bank 

Answer

Answer: C) Big Bank is a creditor beneficiary of the agreement between Tammy and Felix

Q31: When a contract is assigned___
A) consideration is required
B) no person may object
C) the assignment creates a new contract
D) if there is no consideration the assignor may repudiate the agreement prior to its execution 

Answer

Answer: D) if there is no consideration the assignor may repudiate the agreement prior to its execution

Q32: An assignment is valid___
A) at the time it is made
B) only when in writing
C) only when notice of the assignment is given to the obligor
D) only when the obligor consents to the assignment 

Answer

Answer: A) at the time it is made

Q33: In a life insurance contract the beneficiary is either a donee or creditor beneficiary
A) True
B) False 

Answer

Answer: Correct – True

Q34: A baseball fan is disappointed that construction under the construction contract between the city and a construction company is behind schedule. The baseball fan may sue the construction company
A) True
B) False 

Answer

Answer: Wrong – False

Q35: An assignment is a transfer of a contract duty
A) True
B) False 

Answer

Answer: Wrong – False

Q36: The assignee is the party to whom an assignment is made
A) True
B) False 

Answer

Answer: Correct – True

Q37: Joe has a written contract to sell sports equipment to Aqua Sports Inc. Aqua Sports may orally transfer its rights under contract
A) True
B) False 

Answer

Answer: Wrong – False

Q38: Only the assignee may give notice of assignment
A) True
B) False 

Answer

Answer: Wrong – False

Q39: In case of multiple assignments of the same rights, a majority of states hold that the first assignee has superior rights even if the later assignee gives notice first
A) True
B) False 

Answer

Answer: Correct – True

Q40: Joe transfers his responsibility to repair Susan’s auto to Emilio. Joe makes an implied warranty to Susan that Emilio will properly make the repairs
A) True
B) False 

Answer

Answer: Correct – True

Q41: Parties to a contract may include an enforceable provision that prohibits assignemt
A) True
B) False 

Answer

Answer: Correct – True

Q42: A novation will release another obligated party without the consent of all parties
A) True
B) False
 

Answer

Answer: Wrong – False

Q43: Tana agreed to repair the foundation of Marcus’ house for USD5,000 but failed to do the job and Marcus found someone else who charged USD7,000 to do the work. If Marcus sues Tana a court will likely award him___
A) actual damages in the amount of USD7,000
B) compensatory damages in the amount of USD2,000
C) punitive damages in the amount of USD12,000
D) consequential damages in the amount of USD5,000 

Answer

Answer: B) compensatory damages in the amount of USD2,000

Q44: What occurs in a termination by a waiver
A) Both parties give up contractual rights
B) Bother parties agree to replace an existing contract with a new contract
C) One party gives up a contractual right
D) One party terminates his or her contractual obligations 

Answer

Answer: C) One party gives up a contractual right

Q45: Poqisa contracts to sell her antique sports car to Iris for USD50,000 but later decides that she wants to keep the car. Iris wants the car. What legal remedy is available to her
A) specific performance
B) compensatory damages
C) punitive damages
D) liquidated damages 

Answer

Answer: A) specific performance

Q46: After his grandson Bob borrows USD10,000 from Marcus, Marcus wants to completely release Bob from any liability or the debt. Marcus should give Bob a___
A) general release
B) novation
C) termination by terms of the contract
D) tender of obligation 

Answer

Answer: A) general release

Q47: Bailey’s Construction Co., contracted to build a USD12 million building for Friendly Finance Co., but failed to install USD3,000 of wooden cabinets called for by the contract. What legal rights does Friendly have
A) None, as the missing cabinets are a minor detail
B) Friendly may sue for specific performance
C) Friendly may cancel the entire contract
D) Friendly may demand reimbursement to install the cabinets 

Answer

Answer: D) Friendly may demand reimbursement to install the cabinets

Q48: Dorinda accepted a position at an accounting firm with the understanding that she will pass all sections of the CPA exam or the employment offer is withdrawn. What is the legal status of the CPA exam passage requirement
A) condition subsequent
B) condition concurrent
C) condition precedent
D) performance barrier 

Answer

Answer: C) condition precedent

Q49: An opera singer agrees to be a guest performer with a local group provided that her voice is sound. When she gets the flu she cancels her performance. How have her contractual obligations been discharged
A) by mutual recession
B) by terms of the contract
C) by operation law
D) by general release 

Answer

Answer: B) by terms of the contract

Q50: Alfred contracts with Foliage Tours Inc., to take a bus tour of the northeast to see the fall leaves in full color. Due to an early start of the winter and violent storms there are no fall leaves to see. What legal doctrine releases Alfred from his contract
A) commercial impractability
B) abandonment
C) substantial performance
D) frustration-of-purpose 

Answer

Answer: D) frustration-of-purpose

Q51: Zoltan is contractually obligated to deliver merchandise by December 1 for Big Stores Christmas sale but on October 1 Zoltan informs Big Stores that he will not meet that delivery deadline since he can get a better price for the merchandise from another customer. What legal rights does Big Stores have on October 1
A) None, since December 1 is when delivery is to occur
B) Big Stores may sue immediately for breach of contract
C) Big Stores must wait a commercially reasonable time before taking any action
D) Big Stores may seek alternative suppliers but must allow Zoltan to match their terms 

Answer

Answer: B) Big Stores may sue immediately for breach of contract

Q52: Outdoor Adventures contracts to buy ten tents from Tent Manufacturing with a May 1 delivery date. Tent Manufacturing knows that Outdoor Adventures anticipates using the tents on May 15 to take clients mountain climbing but delays delivery until June 1. The contract does not state that “time is of the essence.” What legal remedies are available to Outdoor Adventures if they have to cancel their May 15 client contracts
A) compensatory damages only
B) compensatory and incidental damages only
C) compensatory, incidental, and consequential damages only
D) compensatory, incidental, consequential, and punitive damages 

Answer

Answer: C) compensatory, incidental, and consequential damages only

Q53: A contract for painting a portrait of a company CEO indicated that the work was to be done to the CEO’s personal satisfaction. This agreement is judged by commercial art standards
A) True
B) False 

Answer

Answer: Wrong – False

Q54: Incidental damages are the equivalent of nominal damages
A) True
B) False 

Answer

Answer: Wrong – False

Q55: Statutes of limitations for breach of contract are set by state law
A) True
B) False 

Answer

Answer: Correct – True

Q56: Oldak’s contract with Redrick states that “time is of the essence.” This means that any delay will be a breach of contract
A) True
B) False 

Answer

Answer: Correct – True

Q57: Steve promises to pay Allison USD100 if Allison will help him study for his business law exam. Allison can only accept Steve’s offer by helping him study
A) True
B) False 

Answer

Answer: Wrong – False

Q58: By accepting late delivery of goods a party to a contract may lose the legal right to object to the late deliveries
A) True
B) False 

Answer

Answer: Correct – True

Q59: If Samuel contracts to purchase Paula’s car for USD12,000 but unknown to either of them Paula’s son had wrecked the car the previous day. Samuel would still be obligated under the contract
A) True
B) False 

Answer

Answer: Wrong – False

Q60: An unconscious accident victim is taken to the hospital via ambulance. The victim owes a reasonable amount for the ambulance services rendered
A) True
B) False 

Answer

Answer: Correct – True

Q61: Bankruptcy would create a discharge of contractual obligations by operation of law
A) True
B) False 

Answer

Answer: Correct – True

Q62: The usual remedy for breach of contract is specific performance
A) True
B) False 

Answer

Answer: Wrong – False