Business Law-Contracts, Entities, Quiz

What is a contract?

• A. An agreement between two parties that creates an obligation. A legal document that outlines the rights and duties of both parties.

• B. Something of value must be exchanged between parties.

• C. Participants are called owners, and they are no obligated to follow through with the agreement.

• D. Special agreement or consideration between the law and the government.

Which element of a contract refers to the promise to do something in exchange for something in return?

• A. Offer

• B. Acceptance

• C. Consideration

• D. Legal purpose

What is an oral contract?

• A. A contract that is enforceable under the law and is still valid and binding

• B. A personal asset used in a business

• C. Protects a person from identifying marks of products and companies

• D. A contract that is not legally binding

What are the differences between express and implied contracts?

• A. Express contracts are written, while implied contracts are verbal

• B. Express contracts have all terms expressed in words, while implied contracts have some terms not expressed in words

• C. Express contracts are legally binding, while implied contracts are not

• D. Express contracts require consideration, while implied contracts do not

What are the two different kinds of implied contracts?

• A. Implied-in-fact and implied-in-law

• B. Implied-by-law and implied-by-contract

• C. Implied-in-writing and implied-in-oral

• D. Implied-by-contract and implied-by-agreement

Which of the following best describes a sole proprietorship?

• A. Business is owned and run by one person, Business ends upon owner's death

• B. Strict legal requirements when a person wants to leave ownership

• C. Combines parts of partnerships and corporations

• D. Can sell shares to raise funds

Which of the following best describes a partnership?

• A. Business is owned and run by one person, remains stable even if owners change

• B. Strict legal requirements when a person wants to leave ownership, owners are called members

• C. Business ends when one owner leaves, owners are personally liable for business debts

• D. Can sell shares to raise funds, most expensive

Which of the following best describes a Limited Liability Company (LLC)?

• A. Business is owned and run by one person, most expensive

• B. Strict legal requirements when a person wants to leave ownership, Owners are called members, Owners pay business taxes at personal rate

• C. Most common and least expensive, remains stable even if the owner leaves

• D. Simplest, least expensive multi-owner entity, owners are personally liable for the debt of business

Which of the following best describes a Corporation?

• A. Strick legal requirements when a person leaves the business, Owners are called members, pays taxes at personal rate.

• B. Strict legal requirements when a person wants to leave ownership, combines parts of partnership and corporations.

• C. Can sell shares to raise funds, most expensive, personal assets are protected, remains stable even if owners change.

• D. Combines parts of partnerships and corporations, simplest, least expensive multi-owner entity.

What is eminent domain?

• A. Laws that control ownership rights for real property, personal and intellectual property

• B. The process of acquiring privately owned land for public use

• C. Laws that deal with situations where a person's actions have caused someone else to suffer a loss or harm

• D. Laws that allow one person to authorize another to act on his or her behalf