Business Law Quiz
Questions: 16 · 10 minutes
1. Two businesses sign a fully integrated written contract. One party later seeks to enforce an earlier oral promise that contradicts the final writing. Which doctrine is most relevant?
Respondeat superior
The first-sale doctrine
The parol evidence rule, which may exclude the prior contradictory term
The automatic stay
2. Article 2 of the Uniform Commercial Code primarily governs which transactions?
Transfers of real estate
Sales of movable goods
Employment relationships
Professional service contracts
3. A software company restricts access to a valuable internal process, uses confidentiality agreements, and does not reveal the process publicly. Which fact is most important to maintaining trade-secret protection?
The process has been registered with the Copyright Office
The process is used by a corporation rather than a sole proprietor
The process is guaranteed to remain commercially valuable forever
The company takes reasonable measures to keep the information secret
4. A bakery wants legal protection for the distinctive name and logo customers use to identify its products. Which form of intellectual property is most directly relevant?
Copyright
Trade secret
Patent
Trademark
5. Which set states the elements generally required for a negligence claim?
Duty, breach, causation, and legally recognized harm
Intent, offer, acceptance, and consideration
Ownership, registration, copying, and commercial use
Authority, ratification, disclosure, and profit
6. A consultant offers to perform services for $5,000. The client replies, “I accept, provided you also include six months of support.” Under general common-law contract principles, what is the client's reply?
An unconditional acceptance that forms the original contract
A counteroffer because it changes a material term
A revocation of the consultant's original offer
An enforceable option to purchase the services later
7. What is the usual effect of incorporating a business on its shareholders' liability for corporate debts?
Shareholders become personally responsible for all corporate obligations
Shareholders are liable whenever they vote for the board of directors
Shareholders generally risk their investment but not their personal assets, subject to exceptions
Shareholders and the corporation automatically share every debt equally
8. A company gives an employee the title “Purchasing Manager” and repeatedly allows her to place supplier orders. The company privately withdraws her purchasing authority but does not notify a supplier. She then places another ordinary order. Which doctrine may allow the supplier to bind the company?
Strict liability
Apparent authority
Implied warranty
Promissory estoppel
9. What is the automatic stay in a U.S. bankruptcy case?
A legal pause on many collection actions after the bankruptcy filing
A requirement that the debtor stop operating any business
A permanent cancellation of every debt owed by the debtor
A waiting period before creditors may submit claims
10. A merchant signs a written offer to sell equipment and promises to keep it open for 60 days. The buyer gives no consideration for that promise. Under the UCC firm-offer rule, what is generally true?
The offer is automatically revoked because the buyer gave no consideration
The offer immediately becomes a completed sale
The offer is irrevocable forever unless the buyer rejects it
The offer can remain irrevocable for the stated period, subject to the rule's requirements and time limit
11. A corporate director secretly causes the corporation to hire another company that the director owns, without disclosing the conflict. Which fiduciary duty is most directly implicated?
The duty of loyalty
The duty to preserve attorney-client privilege
The duty to guarantee corporate profits
The duty to register securities
12. A member signs a supply contract solely in the name of a properly formed LLC and gives no personal guarantee. If the LLC cannot pay, what is the general rule?
The LLC is generally liable, while the member's personal assets remain protected subject to exceptions
Every LLC member must pay an equal portion of the debt
The member is liable whenever the contract concerns business operations
The member is automatically liable because an LLC is not a separate legal entity
13. In contract law, what is consideration?
A written explanation of why each party entered the agreement
A bargained-for exchange of something legally valuable between the parties
A court's determination that the agreement is fair to both parties
A payment made before any contractual duties arise
14. What does a utility patent generally protect?
Any business idea once it has been written down
A brand name that distinguishes one seller from another
A qualifying new, useful, and nonobvious invention disclosed to the public
An original creative work fixed in a tangible medium
15. While making a scheduled delivery for an employer, an employee negligently damages another vehicle. Which principle may make the employer liable?
The business judgment rule
The parol evidence rule
Vicarious liability for an employee acting within the scope of employment
The corporate opportunity doctrine
16. A contract sets damages in advance because an expected breach would cause losses that are difficult to calculate. The amount is a reasonable estimate rather than a punishment. How is the clause generally treated?
It is enforceable only if it exceeds the likely actual loss
It is automatically invalid because damages cannot be set before a breach
It is treated as criminal punishment for breaking the contract
It is more likely to be enforced as a valid liquidated-damages clause