Title: Legal Environment
Course: Question Banks

Q: ________ are conduct approved and enforced by the government of and over a certain territory.
- Moral standards
- Social rules
- Resolutions
- Laws
A: Laws

Q: Law is a body of rules defined by ________.
- the collective vote of the people being ruled.
- the Supreme Court.
- the prime minister or president of a nation.
- legal force and effect, prescribed, recognized, and enforced by a controlling authority.
A: legal force and effect, prescribed, recognized, and enforced by a controlling authority.

Q: Laws are intended to:
- preserve historical precedent.
- express the intent of the “founding fathers.”
- support a changing society.
- protect the fundamental rights and liberties of citizens.
A: protect the fundamental rights and liberties of citizens.

Q: What are four main purposes for law?
- imposing fines, restricting property lines, resolving family disputes, and keeping borders secure
- ruling the government, electing the Supreme Court, bearing arms, and changing the legal speed limit
- keeping borders secure, imposing fines, ruling the government, and maintaining order
- establishing standards, maintaining order, resolving disputes, and protecting liberties and rights
A: establishing standards, maintaining order, resolving disputes, and protecting liberties and rights

Q: Most roads in the United States have a stated speed limit. This is an example of what purpose of law?
- protecting individual rights and liberties
- establishing standards
- resolving disputes
- maintaining order
A: maintaining order

Q: The United States Constitution sets limits on the branches of government. This is an example of what purpose of law?
- maintaining order
- establishing standards
- resolving disputes
- protecting individual rights and liberties
A: protecting individual rights and liberties

Q: ________ is a principle under which all persons, institutions, and entities are accountable to laws that are publicly promulgated, equally enforced, independently adjudicated, and consistent with international human rights principles.
- Common law
- Equal protection
- Common cause
- Rule of law
A: Rule of law

Q: ________ is a principle under which there are four aspects: due process, separation of powers, an open and transparent system of making laws, and predictable and uniform application of the laws.
- Common law
- Equal protection
- Common cause
- Rule of law
A: Rule of law

Q: ________ is effective because the majority of citizens recognize the importance of adhering to the law.
- The constitution
- Second Amendment
- Common Law
- Rule of Law
A: Rule of Law

Q: The body of law resulting from laws passed by legislature is ________
- State law
- Constitutional amendment
- Federal law
- Statutory law
A: Statutory law

Q: Laws that are based on an act of Congress are ________.
- common law
- property law
- tort law
- statutory law
A: statutory law

Q: The legal age for purchase of alcoholic beverages is defined by ________.
- your parents
- your driver’s license
- local laws
- statutory law
A: statutory law

Q: Common law is based on ________.
- instinct
- legislation
- citizen input
- precedent
A: precedent

Q: Stare decisis refers to ________.
- the disbarring of a judge
- Acts of Congress
- decisions made by the executive branch
- precedent established by prior court rulings in similar cases
A: precedent established by prior court rulings in similar cases

Q: Precedent means that future cases are decided by similar previous cases unless ________.
- common law changes
- the courts rule otherwise
- the president disagrees with a precedent
- new precedent is established
A: new precedent is established

Q: A tort ________.
- Is a wrong that causes the government to file suit.
- covers the full scope of both legal and moral wrongs.
- typically results in jail sentences for accused parties.
- is a wrong that creates a legal liability.
A: is a wrong that creates a legal liability.

Q: Which is an examples of a tort suit?
- an employee who is always late for work
- an individual who is arrested for loitering.
- two spectators at an event who get involved in a physical altercation
- a tenant who damages a landlord’s property
A: a tenant who damages a landlord’s property

Q: Tort law is different from criminal law in that ________.
- torts are always criminal acts.
- criminal law requires a jury.
- torts require less legal fees than criminal lawsuits
- tort lawsuits have a lower burden of proof.
A: tort lawsuits have a lower burden of proof.

Q: After mopping up a spill, store employees forget to put "Caution: Wet Floor" signs in the area. Soon afterwards, a shopper slips on the wet floor and injures herself. What is this is an example of?
- strict liability
- intentional tort
- injury tort
- negligence tort
A: negligence tort

Q: To establish negligence a plaintiff must prove the defendant:
- did not do what they said they would.
- had injuries that prevented them from preventing harm.
- did not intend harm to occur.
- failed to take actions and that this failure caused harm.
A: failed to take actions and that this failure caused harm.

Q: Negligence may result in:
- bad judgement.
- a broken promise.
- criminal actions.
- emotional, economic, or reputational damage.
A: emotional, economic, or reputational damage.

Q: Strict liability ________.
- encourages companies to experiment with volatile materials.
- requires proof of negligence on the part of the manufacturer or seller.
- Allows consumers to be held liable for interfering with commerce.
- acknowledges that some products are inherently dangerous.
A: acknowledges that some products are inherently dangerous.

Q: If the wholesaler and retailer both exercise due care, which of the following parties can be held liable in a negligence suit about a defective product?
- the wholesaler
- the retailer
- the wholesaler and retailer
- the manufacturer
A: the manufacturer

Q: Most states have evolved product liability negligence into:
- manufacturing requirements
- tighter gun control
- stricter business regulations
- strict liability tort law
A: strict liability tort law

Q: Product liability claims are based on the following:
- Tort Law, Common Law, Federal Law
- local law, state law, federal law
- business and consumer negligence
- manufacturing defects, design defects, and/or failure-to-warn defects
A: manufacturing defects, design defects, and/or failure-to-warn defects

Q: Which of the following is NOT a claim for a product liability case?
- a design defect
- a manufacturing defect
- a failure-to-warn defect
- a breach of contract
A: a breach of contract

Q: Strict product liability does not require:
- a product defect
- a sale
- evidence of harm
- unreasonable conduct
A: unreasonable conduct

Q: ________ damages are intended to compensate a victim, while ________ damages are intended to punish a defendant.
- Punitive: compensatory
- Punitive: litigious
- Compensatory : litigious
- Compensatory : punitive
A: Compensatory : punitive

Q: Examples of compensatory damages include ________.
- payment for working
- payment to punish wrongdoing.
- payment for overtime hours
- payment for mental anguish.
A: payment for mental anguish.

Q: A landlord fails to make improvements to keep the balconies of his apartment building at a level of repair that meets the city code. After several warnings from the city, one of the balconies falls and smashes the furniture and barbecue of one of the tenants. Another tenant is near the balcony when it falls but no one sustains physical injuries. Compensatory damages may include ________.
- costs associated with rent for the apartment
- a fee for repeated and extreme non-compliance to a city code.
- costs to repair the balconies
- payment for damaged property and/or mental suffering.
A: payment for damaged property and/or mental suffering.

Q: Intellectual property law governs the protection of ________.
- physical possessions
- financial possessions
- consumer rights
- ideas
A: ideas

Q: Intellectual property is intangible. How would you best describe its value to businesses?
- It can be valued, but rarely generates significant value.
- It cannot be valued because it is not a physical asset.
- It cannot be valued because there are no laws protecting it.
- It can be a company’s most significant asset.
A: It can be a company’s most significant asset.

Q: Patents, trademarks and ________ are three main ways to protect intellectual property.
- licenses
- legal documents
- franchise agreements
- copyrights
A: copyrights

Q: ________ awards the inventor with the exclusive right to make and sell an invention for a period of time.
- Copyright
- Trademark
- Licensing agreement
- Patent
A: Patent

Q: A programmer hacks software code to understand how it works. Then she writes a program that replicates the implementation of a solution that has already been granted intellectual property protection. This is an example of a ________.
- trademark violation
- copyright infringement
- plagiarism
- patent violation
A: patent violation

Q: An auto mechanic has an idea to make a tool that will make his job easier. He has a machinist friend make a prototype of it. To protect his idea he needs a ________.
- trademark
- copyright
- licensing agreement
- patent
A: patent

Q: ________ is a form of protection provided to the authors of “original works of authorship,” including literary, dramatic, musical, artistic, and certain other intellectual works.
- Patent
- Trademark
- Licensing agreement
- Copyright
A: Copyright

Q: A young author writes a novel that is based on the story of Harry Potter, including Harry and several of the other characters in his new story. This is an example of a ________.
- trademark violation
- legal and correct use
- patent violation
- copyright infringement
A: copyright infringement

Q: Which type of intellectual property protection is available to both published and unpublished works?
- trademark
- patent
- registered material
- copyright
A: copyright

Q: A ________ gives the owner the right to prevent others from using a company’s product name or logo.
- patent
- copyright
- registered material
- trademark
A: trademark

Q: An independent designer creates a t-shirt that encourages struggling students to “Just Do It,” mimicking Nike’s slogan. This is an example of a ________.
- copyright infringement
- patent violation
- licensing infringement
- trademark violation
A: trademark violation

Q: Nike uses a “swoosh” on their apparel. This is an example of a:
- patent
- copyright
- registered material
- trademark
A: trademark

Q: A ________ is a guarantee that a product meets certain standards of performance.
- contract
- tort
- product agreement
- warranty
A: warranty

Q: A ________ is a guarantee or promise that provides assurance by one party to another party that specific facts or conditions are true or will happen.
- contract
- tort
- non-compete agreement
- warranty
A: warranty

Q: Many people buy a product based upon the ________ provided by the manufacturer.
- availability
- price
- product agreement
- warranty
A: warranty

Q: Sylvania claims that their light bulbs “last 10 times longer and use 75% less energy than standard bulbs.” This is an example of a(n) ________.
- implied warranty
- purchase liability
- implied warranty of fitness
- express warranty
A: express warranty

Q: The Targus adjustable pedestal is designed to act as an adjustable stand for computer monitors. The reseller specifically states that the stand holds up to 100 pounds. This is an example of an:
- implied warranty of merchantability.
- implied warranty of fitness.
- implied warranty of quality
- express warranty.
A: express warranty.

Q: Kiowa is looking to get a new pair of bluetooth headphones. The pair at the top of his list are stated to have a battery life of 20 hours. This is an example of an:
- implied warranty of merchantability.
- implied warranty of fitness.
- implied warranty of quality
- express warranty.
A: express warranty.

Q: Under an/the ________, a product must do what its supposed to do.
- express warranty
- implied warranty of fitness
- implied warranty of quality
- implied warranty of merchantability
A: implied warranty of merchantability

Q: Sylvania provides light bulbs that, one might assume, are safe to use and will last for a reasonable period of time. This is an example of a(n):
- express warranty
- product liability
- guaranteed warranty
- implied warranty
A: implied warranty

Q: CTEK markets its MUS Polar Battery Charger for use in extreme cold conditions. This is an example of ________.
- express warranty.
- implied warranty of merchantability.
- extended warranty
- implied warranty of fitness.
A: implied warranty of fitness.

Q: Dell’s Rugged Extreme laptop is marketed for use in rugged conditions, including extreme heat and moisture. This is an example of an ________.
- express warranty.
- implied warranty of merchantability.
- extended warranty
- implied warranty of fitness
A: implied warranty of fitness

Q: An ________ assures that a product is reasonably fit for ordinary use.
- express warranty
- implied warranty of fitness
- extended warranty
- implied warranty of merchantability
A: implied warranty of merchantability

Q: An implied warranty of merchantability assures that a product is a reasonably fit for ________.
- rugged use
- extreme conditions
- unanticipated uses
- ordinary use
A: ordinary use

Q: The Uniform Commercial Code provides that the warranty of merchantability and warranty of fitness are ________.
- express
- as is
- clearly stated
- implied
A: implied

Q: What is a contract?
- a written agreement that is signed and notarized by both parties
- copyright violation
- an unofficial agreement between two parties
- an agreement that is enforceable by law
A: an agreement that is enforceable by law

Q: The ________ in a contract describe the details of what the parties commit to do or not do.
- representations
- conditions
- terms
- covenants
A: covenants

Q: ________ is a legally enforceable agreement.
- A covenant
- A written agreement
- A deal
- A contract
A: A contract

Q: A contract is a promise between two parties. However, in order for the contract to be legally enforceable it must meet certain criteria, such as:
- it must be written down and then witnessed by a third party.
- there must have been an offer and counteroffer
- it must be signed by a lawyer
- the parties must agree to exchange something of value
A: the parties must agree to exchange something of value

Q: Kate and Felice have come to an agreement. Kate will sell Felice a specific number of her prescription pills for a set dollar amount. This is not a legal contract because it fails to meet which requirement(s) of a contract:
- agreement
- consideration
- mutuality of obligation
- legality
A: legality

Q: Antoine and David are 12 years old when they agree that if either one of them ever earns more than $200,000 in one year he will buy the other one a new car. After college, Antoine starts a company that provides transportation to senior citizens who cannot drive. When David reads in the newspaper that Antoine’s business has been purchased by a healthcare provider for $5 million, David believes that he is owed a new car. The agreement for the new car between Antoine and David was not a legal contract because it fails to meet which requirement(s) of a contract?
- agreement
- legality
- an offer
- contractual capacity
A: contractual capacity

Q: ________ is the failure of a party to fulfill their obligations under the contract.
- offer and acceptance
- refusal to perform
- denial of responsibility
- breach of contract
A: breach of contract

Q: A breach of contract is when a party in a contract fails to ________.
- offer and accept
- give consideration
- sign all parts of the contract
- fulfill their obligations
A: fulfill their obligations

Q: An enforceable contract creates legal obligations, and failure to comply with them creates a ________.
- refusal to perform
- offer and acceptance
- denial of responsibility
- breach of contract
A: breach of contract

Q: ________ refers to the circumstance where a court orders a party to carry out their duties under the contract.
- General damages
- Consequential damages
- Punitive damages
- Specific performance
A: Specific performance

Q: When both parties are relieved of their obligations under the contract, the courts may issue a ________.
- duty to mitigate
- refusal of delivery
- release from liability
- discharge of duties
A: discharge of duties

Q: Specific performance refers to the circumstance where a court orders a party to carry out their duties under the ________.
- law
- rules
- agreement
- contract
A: contract

Q: This group makes up the largest economic group:
- producers
- government
- distributors
- consumers
A: consumers

Q: The principle of caveat emptor</em? (“buyer beware”) is ________.
- a way of life
- provides a stable economy
- ensures consumer protection
- insufficient for consumers safety
A: insufficient for consumers safety

Q: David is looking to buy a used kayak through an online auction. He wants some type of protection, however this sale would be covered by the principle of ________.
- express warranty
- implied warranty
- guaranteed warranty
- caveat emptor (“buyer beware”)
A: caveat emptor (“buyer beware”)

Q: Federal consumer protection laws are mainly enforced by ________.
- Federal Department of Agriculture
- Federal Consumer Protection Board
- Federal Reserve
- Federal Trade Commission, Consumer Financial Protection Bureau, FDA & US Department of Justice
A: Federal Trade Commission, Consumer Financial Protection Bureau, FDA & US Department of Justice

Q: The Fair Credit Reporting Act (FCRA) was intended to ________.
- provide credit information to businesses
- eliminate poor credit ratings for consumers
- protect businesses from poor credit ratings
- protect consumers from willful and/or negligent inclusion of information in their credit reports
A: protect consumers from willful and/or negligent inclusion of information in their credit reports

Q: The Fair Credit Reporting Act ________.
- is a set of laws passed by Congress in 1938, giving authority to the FDA
- was originally passed in 1970 and is enforced by the US Federal Trade Commission
- was passed to prevent consumers from manipulating their FICO score amounts of debt
- creates guidelines under which credit reporting agencies may conduct business
A: creates guidelines under which credit reporting agencies may conduct business

Q: One of the basic objectives of antitrust laws is:
- to protect businesses from getting too massive
- to ensure product prices keep up with the market
- to limit competition among businesses
- to create and maintain a competitive market
A: to create and maintain a competitive market

Q: The primary goal of antitrust legislation is:
- to provide consumers an avenue for disputing and obtaining validation of debt information
- guide businesses involved in mergers
- to limit competition among businesses
- to protect businesses and consumers against unfair business practices that limit competition and control prices
A: to protect businesses and consumers against unfair business practices that limit competition and control prices

Q: The merger of large corporations who compete in the same market must pass the scrutiny of:
- Federal Drug Administration
- Fair Credit Reporting Act
- Fair and Accurate Credit Transactions Act
- Antitrust legislation
A: Antitrust legislation

Q: In antitrust legislation, this act deals greatly with “monopolization” ________.
- The Clayton Act
- The Federal Trade Commission Act
- Robinson-Patman Act
- The Sherman Act
A: The Sherman Act

Q: Which of the following is true about an agreement between two individuals to form a partnership that restrains trade, but not unreasonably so?
- The partnership is illegal under the Sherman Act.
- The Sherman Act does not have to do with unreasonable trade.
- The partnership is only sometimes legal under the Sherman Act.
- The partnership is legal under the Sherman Act.
A: The partnership is legal under the Sherman Act.

Q: The unreasonable restraint of trade is a practice prohibited by ________.
- The Clayton Act
- The Federal Trade Commission Act
- Fair Credit Reporting Act
- The Sherman Act
A: The Sherman Act

Q: The Federal Trade Commission Act bans ________.
- direct trade between a U.S. state and another country
- trade imbalances between states
- trade agreements involving multiple parties
- unfair methods of competition
A: unfair methods of competition

Q: The ________ bans unfair or deceptive acts or practices.
- Sherman Act
- Clayton Act
- Fair Credit Reporting Act
- Federal Trade Commission Act
A: Federal Trade Commission Act

Q: Only the ________ brings cases under the Federal Trade Commission Act.
- Department of Justice
- Department of Interior
- Consumer Financial Protection Bureau
- Federal Trade Commission
A: Federal Trade Commission

Q: Which “Act” addresses specific practices, such as mergers and interlocking directorates ________.
- The Sherman Act
- The Federal Trade Commission Act
- The Robinson-Patman Act
- The Clayton Act
A: The Clayton Act

Q: Companies planning large mergers or acquisitions must notify the government in advance to abide by ________.
- The Sherman Act
- The Federal Trade Commission Act
- The Robinson-Patman Act
- The Clayton Act
A: The Clayton Act

Q: The Clayton Act prohibits mergers and acquisitions where the effect ________.
- may create unfair business practices
- may result in fixing prices or rig bids
- may result in changes to the purchasing company’s board of directors
- may be substantially to lessen competition, or to create a monopoly
A: may be substantially to lessen competition, or to create a monopoly