Question 1

The intent of a patent is to
A) increase competition in the marketplace.
B) reward innovation and hard work of inventors.
C) slow the growth of monopolies.
D) encourage copycat inventions.

Accepted Answer

The intent of a patent is to reward the innovation and hard work of inventors by granting them exclusive rights to their invention for a certain period of time. This encourages innovation and creativity by providing inventors with the assurance that they will be able to profit from their invention without fear of it being copied by competitors.

Question 2

Which of the following describes the requirement that both parties in a legally binding contract must give something of value?
A) competent parties
B) mutual acceptance
C) consideration
D) legal purpose

Accepted Answer

Consideration is the requirement that both parties in a legally binding contract must give something of value. Competent parties refer to the legal capacity of individuals to enter into contracts. Mutual acceptance is the agreement of both parties to the terms of the contract. Legal purpose refers to the requirement that the contract cannot be illegal or against public policy.

Question 3

You verbally promise to pay your sister tomorrow the $25 that you owe her. This promise however, is not a negotiable instrument because
A) it is not in writing.
B) it is not payable at a specific time.
C) it is not a promise to pay a specific amount.
D) it does not contain an unconditional promise.

Accepted Answer

Article 3 of the Uniform Commercial Code states that negotiable instruments must be (1) written and signed by the maker, (2) made payable on demand or at a certain time, (3) made payable to the bearer or to order, and (4) contain an unconditional promise to pay a specified amount of money.

Question 4

The warranty you receive in the box with your new iPad is a(n)
A) implied warranty.
B) express warranty.
C) uniform warranty.
D) commercial warranty.

Accepted Answer

The warranty that comes with the iPad is an express warranty, which is a written or spoken promise from the manufacturer or seller that guarantees that the product will perform a certain way or meet certain standards.

Question 5

Which of the following was designed to simplify and standardize the laws affecting businesses involved in interstate trade?
A) common law
B) statutory law
C) the standardized commerce rules
D) the Uniform Commercial Code

Accepted Answer

The Uniform Commercial Code (UCC) was designed to simplify and standardize the laws affecting businesses involved in interstate trade. It provides a comprehensive set of rules governing commercial transactions of goods and has been adopted in some form by every state in the United States, making business transactions more predictable and uniform across state lines.

Question 6

Louis opened a new bakery. He had always admired the cute, friendly face of the Pillsbury Doughboy so as a tribute to Pillsbury, he decided to use it as his company's logo. Not long after Pillsbury sued him for
A) corporate liability.
B) trademark infringement.
C) profit minimization.
D) patent infringement.

Accepted Answer

Louis used the Pillsbury Doughboy as his company's logo, which is a registered trademark of Pillsbury. Using someone else's trademark without permission is a violation of intellectual property rights and can result in a lawsuit for trademark infringement.

Question 7

A software development firm based in California and conducting business in Wyoming is unsure about the differences in state laws regarding business transactions. What body of laws standardizes interstate business regulations?
A) Uniform Commercial Code
B) Universal Business Regulations
C) National Commercial Rules
D) Unified Commercial Regulations

Accepted Answer

The Uniform Commercial Code (UCC) is a body of laws that standardizes business transactions across state lines. It has been adopted, with some variations, by all 50 states in the US. Therefore, the software development firm can rely on the UCC to understand the regulations governing their business transactions in both California and Wyoming.

Question 8

Without the permission of the inventor, Five Star Automobile Manufacturing copied the engine design of an innovative competitor. What is Five Star guilty of?
A) corporate liability
B) trademark infringement
C) profit minimization
D) patent infringement

Accepted Answer

Five Star is guilty of patent infringement for copying the engine design of an innovative competitor without their permission. A patent is a form of legal protection for new and useful inventions, and it gives the patent holder the exclusive right to make, use, and sell the invention for a certain period of time. Therefore, copying the engine design without permission is a violation of the patent holder's exclusive rights.

Question 9

A ________ is a legally enforceable agreement between two or more parties.
A) warranty
B) negotiable instrument
C) contract
D) combination

Accepted Answer

A contract is a legally enforceable agreement between two or more parties, which creates a personal obligation to perform a certain task or refrain from doing something. A warranty is a guarantee provided by a manufacturer or seller to a customer, while a negotiable instrument is a type of contract that allows for the transfer of monetary value (such as a check or promissory note). Combination is not a relevant term in this context.

Question 10

Which of the following is a requirement for commercial paper to be considered a negotiable instrument?
A) It must be signed in approval by a third party.
B) It must contain a conditional promise to pay.
C) It must be a promise to pay a specified amount of money.
D) It must be an oral agreement between two or more parties.

Accepted Answer

Article 3 of the Uniform Commercial Code states that negotiable instruments must be (1) written and signed by the maker, (2) made payable on demand or at a certain time, (3) made payable to the bearer or to order, and (4) contain an unconditional promise to pay a specified amount of money.

Question 11

Which of the following is a condition required for a legally binding contract?
A) discharge of obligation
B) warranty
C) mutual acceptance
D) duress

Accepted Answer

Mutual acceptance, also known as offer and acceptance, is a necessary condition for a legally binding contract. This means that both parties must agree to the terms and conditions of the contract for it to be valid. Discharge of obligation, warranty, and duress are not necessary conditions for a legally binding contract.

Question 12

Your neighbor agrees to sell you his car for $3,000. You and your neighbor have provided each other
A) duress.
B) consideration.
C) an endorsement.
D) an expressed warranty.

Accepted Answer

Consideration is something of value that each party gives to the other in a contract. In this case, the neighbor is giving the car and the buyer is giving $3,000.

Question 13

________ instruments are forms of commercial paper that are transferable among businesses and individuals that represent a promise to pay a specified amount.
A) Uniform
B) Contract
C) Express
D) Negotiable

Accepted Answer

Negotiable instruments are forms of commercial paper that are transferable among businesses and individuals that represent a promise to pay a specified amount. These can include checks, promissory notes, and bills of exchange. The key factor that makes these instruments negotiable is that they can be transferred from one party to another, making them a useful tool for facilitating commerce and financing.

Question 14

A(n) ________ guarantees that the product you buy will conform to the customary standards of the trade/industry.
A) implied warranty
B) express warranty
C) uniform warranty
D) commercial warranty

Accepted Answer

An implied warranty is a legal term that means the product sold must meet certain minimum standards of quality whereby the basic functionality of the product is guaranteed without being explicitly stated at the time of sale.

Question 15

Which of the following would cause a contract to be void?
A) consideration
B) mutual acceptance
C) competent parties
D) duress

Accepted Answer

Duress is a situation in which one party is forced into the agreement under threats or coercion. As a result, the contract is considered void from the beginning.

Question 16

A(n) ________ occurs when one party fails to follow the terms of a contract.
A) breach of contract
B) discharge of obligation
C) obligation failure of enforcement
D) infringement of contract

Accepted Answer

A breach of contract occurs when one party fails to follow the terms of a contract, which can include failing to perform the agreed-upon action, performing it incorrectly, or not completing it on time. This can result in legal action being taken against the party who breached the contract.

Question 17

A warranty guarantees that
A) the seller will replace or repair the product at no charge if the customer finds a cheaper substitute.
B) the buyer has read and understood the information provided in the owner's manual.
C) consumers will have access to a customer complaint resolution hot line.
D) the product sold will be acceptable for the purpose for which the buyer intends to use it.

Accepted Answer

A warranty guarantees that the product sold will be acceptable for the purpose for which the buyer intends to use it. It is a promise by the seller to the buyer that the product will be free from defects and will work as described. It does not guarantee that the product is the cheapest or that the buyer has read the owner's manual, but it does provide a mechanism for resolving complaints if the product does not meet the warranty.

Question 18

Which of the following is true of a copyright?
A) It is a specific representation that buyers rely on regarding the goods they purchase.
B) It protects a creator's rights to materials such as books, paintings, and cartoons.
C) It is filed with the state legislature.
D) It is good for 20 years.

Accepted Answer

A copyright is a form of legal protection that grants the creator of an original work exclusive rights to its use and distribution. This includes materials such as books, paintings, cartoons, and other creative works. Copyright protection typically lasts for the lifetime of the creator plus a certain number of years (often 70 years) after their death. It is granted automatically upon the creation of a work and does not need to be filed with any government agency, although registration with the U.S. Copyright Office can provide additional benefits.

Question 19

Your 15-year-old brother comes home with the great news that he has decided to buy his first car and has just agreed to give $10,000 to someone on Craig's List. He signed the contract and just needs to pay the seller and pick up the car. Your dad is upset and calls the seller to tell him your brother will not be buying the car. What can the seller do?
A) sue your brother for breach of contract
B) sue your dad for breach of contract
C) sue your brother for specific performance
D) nothing

Accepted Answer

The seller cannot do anything as the contract is voidable because your brother is a minor and therefore lacks capacity to enter into a legally binding contract. Your dad has the authority to intervene and cancel the contract since your brother is a minor.

Question 20

When one party fails to follow the terms of a contract, the party has committed a(n)
A) obligation violation.
B) breach of contract.
C) termination by association.
D) nonperformance endorsement.

Accepted Answer

When one party fails to follow the terms of a contract, it is considered a breach of contract.

Quiz 21: Working Within the Legal Environment

The intent of a patent is to

Which of the following describes the requirement that both parties in a legally binding contract must give something of value?

You verbally promise to pay your sister tomorrow the $25 that you owe her. This promise however, is not a negotiable instrument because

The warranty you receive in the box with your new iPad is a(n)

Which of the following was designed to simplify and standardize the laws affecting businesses involved in interstate trade?

Louis opened a new bakery. He had always admired the cute, friendly face of the Pillsbury Doughboy so as a tribute to Pillsbury, he decided to use it as his company's logo. Not long after Pillsbury sued him for

A software development firm based in California and conducting business in Wyoming is unsure about the differences in state laws regarding business transactions. What body of laws standardizes interstate business regulations?

Without the permission of the inventor, Five Star Automobile Manufacturing copied the engine design of an innovative competitor. What is Five Star guilty of?

A ________ is a legally enforceable agreement between two or more parties.

Which of the following is a requirement for commercial paper to be considered a negotiable instrument?

Which of the following is a condition required for a legally binding contract?

Your neighbor agrees to sell you his car for $3,000. You and your neighbor have provided each other

________ instruments are forms of commercial paper that are transferable among businesses and individuals that represent a promise to pay a specified amount.

A(n) ________ guarantees that the product you buy will conform to the customary standards of the trade/industry.

Which of the following would cause a contract to be void?

A(n) ________ occurs when one party fails to follow the terms of a contract.

A warranty guarantees that

Which of the following is true of a copyright?

When one party fails to follow the terms of a contract, the party has committed a(n)