Question 1

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

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 2

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

Accepted Answer

The Uniform Commercial Code (UCC) was designed to simplify and standardize the laws affecting businesses involved in interstate trade. The UCC provides uniform laws for commercial transactions across different states in the US.

Question 3

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

Accepted Answer

A breach of contract occurs when one party fails to follow the terms of a contract. This can result in legal action being taken by the other party to seek damages or specific performance. The other choices are not commonly used terms to describe a failure to follow a contract.

Question 4

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

Accepted Answer

Consideration is the requirement that both parties in a legally binding contract must give something of value. Competent parties refer to the individuals in the contract being of legal age and mental capacity to understand and agree to the terms. Mutual acceptance refers to both parties agreeing to the terms of the contract. Legal purpose means the contract must not violate any laws or be against public policy. Therefore, choice C is the correct answer.

Question 5

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

Accepted Answer

Patents give inventors exclusive rights to their inventions for 20 years. Penalties for violating a patent can be severe.

Question 6

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

Accepted Answer

A contract is legally binding when there is mutual acceptance of the terms.

Question 7

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

Accepted Answer

Negotiable instruments, such as checks and promissory notes, are transferable and represent a promise to pay a specified amount to the bearer or the person named on the instrument. Uniform, contract, and express are not relevant terms in this context.

Question 8

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

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 9

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

Accepted Answer

An express warranty is a written or spoken guarantee provided by the seller that assures the buyer that the product is of a certain quality, and the warranty that comes in the box with the iPad is an example of an express warranty.

Question 10

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

Accepted Answer

A trademark is a legally protected name, symbol, or design that identifies the goods or services of one seller and distinguishes them from those of competitors. The Pillsbury Doughboy is an example of a trademark. Louis was sued for using Pillsbury's trademark as his logo or for trademark infringement.

Question 11

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?

Accepted Answer

All states have adopted the Uniform Commercial Code to standardize commercial law. There are, however, sections of Louisiana that have not adopted the Uniform Commercial Code.

Question 12

Which of the following is true of a copyright?

Accepted Answer

A copyright protects a creator's rights to materials such as books, articles, photos, paintings, and cartoons.

Question 13

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?

Accepted Answer

Minors are not considered to be competent to sign contracts; thus the stranger cannot do anything if your brother backs out of the contract.

Question 14

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

Accepted Answer

Duress is a situation where one party uses coercion, blackmail, or force to get the other party to accept the terms of a contract against their will. If duress is present, the contract is considered voidable, meaning the innocent party has the right to rescind or cancel the contract. Therefore, option D would cause a contract to be void.

Question 15

The intent of a patent is to

Accepted Answer

A patent awards inventors exclusive rights to their inventions for 20 years. Patent owners may sell or license the use of the patent to others.

Question 16

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

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 17

A warranty guarantees that

Accepted Answer

A warranty guarantees that the product sold will be adequate for the purpose for which the buyer intends to use it.

Question 18

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

Accepted Answer

Consideration is something of value. A valid contract requires that both parties give consideration.

Question 19

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

Accepted Answer

A contract is an agreement that creates a legally binding obligation or relationship between two or more parties. It can be oral or written, but for it to be legally enforceable, it must contain certain elements, such as offer, acceptance, consideration, and a lawful purpose. A warranty is a type of guarantee that a product is free from defects or will perform as promised, but it is not necessarily a legally enforceable agreement. A negotiable instrument is a document, such as a check or promissory note, that represents a promise to pay a specific amount of money and is transferable from one person to another. A combination is not a relevant option in this context.

Question 20

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

Accepted Answer

A breach of contract occurs when one party fails to follow the terms of the contract.

Quiz 21: Appendix: Working Within the Legal Environment

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

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

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

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

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

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

________ 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.

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

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?

Which of the following is true of a copyright?

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

The intent of a patent is to

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

A warranty guarantees that

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

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

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