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WorksheetsLegal Environment of Business Review
Total questions: 75
Worksheet time: 45mins
Which of the following is NOT a primary function of law in society?
Protecting rights
Maintaining order
Eliminating all conflicts
Resolving disputes
Case law is created by which branch of government?
Executive
Legislative
Judicial
Administrative
Which type of law deals with offenses against society?
Civil Law
Tort Law
Constitutional Law
Criminal Law
A tort is best defined as:
A. A minor crime
B. A civil wrong causing harm
C. A breach of contract
D. A federal offense
Which court is the highest authority in the United States?
Laws that outline how to start, operate, and close a business fall under:
Civil Law
Business Law
Case Law
Tort Law
Which of the following is TRUE about ethics?
Illegal actions are always unethical
Ethics focuses on personal beliefs and values
Ethics and laws always match perfectly
Ethics is only important in private life
Which best describes the prosecution?
The party who is harmed
The party who defends a legal claim
The party bringing charges in a criminal case
The party appealing a decision
Which scenario describes civil law?
A company defrauds the government
A business sues another for breach of contract
A person is arrested for robbery
A state charges someone with tax evasion
Which is an example of unethical but legal behavior?
Which situation BEST shows why business leaders must understand the law?
To memorize legal terms
To avoid lawsuits and make ethical decisions
To compete with other companies
To guarantee profits
A business consistently violates safety laws but increases profits. What is the most accurate conclusion?
Illegal behavior can be justified by financial success
Laws exist to protect society, not profits
Regulations only apply to large companies
Profits override legal obligations
Which describes the relationship between ethics and law?
They always agree
Ethics sets the minimum standards
Laws provide minimum standards; ethics go beyond
Ethics are legally enforceable
A company faces both a civil lawsuit and criminal charges. What does this show?
Only one type of law applies at a time
Civil and criminal laws can overlap
Criminal law covers all business issues
Civil law is more serious
A business wants to avoid ethical issues and legal violations. What is MOST effective?
Follow only federal laws
Rely on employee honesty
Which business structure involves a single owner?
Partnership
Corporation
Sole Proprietorship
LLC
In a partnership, disagreements may arise because:
Partners are not allowed to negotiate roles
A written agreement is optional
Partnerships require no decision-making
One person manages the business
Which owner has unlimited liability?
Shareholder
LLC member
Sole Proprietor
Limited Partner
Which feature is unique to corporations?
One owner
Limited liability
No need for state registration
No taxation
A franchisee must:
Limited Partnerships consist of:
All active partners
Only one owner
Active and passive partners
Government oversight only
Which organization is best for raising large capital?
Corporation
Sole Proprietorship
General Partnership
Franchise
Which entity is known for double taxation?
Sole Proprietorship
Corporation
LLC
Partnership
Nonprofits primarily exist to:
Maximize shareholder profit
Benefit the public
Operate without regulations
Avoid all taxes
LLCs are popular because they:
Eliminate liability fully
Provide liability protection with flexible tax options
Why is a partnership agreement essential?
Helps with advertising
Prevents all lawsuits
Establishes roles & reduces conflict
Dissolves the partnership
Main legal risk for sole proprietors?
Hard to start
Unlimited personal liability
High corporate taxes
Mandatory shareholders
An investor wants no involvement but wants to invest. Best structure?
GP
Corporation
LP
SP
A company wants liability protection and less regulation. Best structure?
LLC
S-Corp
SP
Franchise
A business needs national expansion through a consistent brand. Best structure?
Franchise
SP
GP
LP
A legally enforceable agreement is a:
Tort
Contract
Proposal
Obligation
The person receiving an offer:
Offeror
Offeree
Merchant
Contractor
A counteroffer:
Accepts original terms
Rejects and changes terms
Confirms the agreement
Guarantees payment
UCC regulates:
Services only
Sale of goods
Criminal offenses
Employment disputes
Who CAN legally contract?
Minor
Intoxicated adult
Mentally incompetent person
Sane adult
Consideration means:
Legal purpose only
Something of value exchanged
Duties performed
Written documentation
Capacity means:
Exchange value
Agreement must be genuine
Mentally competent parties
Contract must be written
Breach of contract occurs when:
Parties sign
One party fails to perform
Terms are negotiated
A contract is drafted
A merchant is someone who:
Sells property only
Regularly deals in certain goods
Manages employees
Drafts contracts
Why is a written contract preferred?
Easier to break
Verbal is illegal
Clarifies obligations
Reduces value
Customer pays but service isn't performed:
Genuine agreement
Breach of contract
Counteroffer
Lack of consideration
Purpose of UCC?
Consistent rules for sales
Replace federal laws
Remove contracts
Protect minors
A contract with unclear terms leads to:
Automatic enforcement
Court refusal to enforce
Guaranteed acceptance
Higher sales
Merchant sells defective goods causing loss. Laws apply:
Employment law
UCC + Contract law
Consumer law only
Tort law only
Minor signs for luxury item. Ruling?
Fully enforceable
Voidable by minor
Must pay full price
Merchant protected
Consumer law protects against:
Fair pricing
Accurate info
Unfair business practices
All of the above
Agency for food/drugs?
FTC
FDA
OSHA
SEC
FTC focuses on:
Safety
Deceptive business practices
Discrimination
Contracts
Example of unfair practice:
Good quality
Fair price
Bait and switch
Coupons
Consumers have the right to:
Be informed
Be safe
Choose
All of the above
Consumer laws allow consumers to:
A. Sue for violations
B. Avoid all contracts
C. Break laws
D. Control pricing
False advertising example:
Listing all ingredients
Cures all diseases
Offering refunds
Safety labels
Why must businesses follow consumer law?
Guarantees profit
Protects customers + reduces risk
Allows higher pricing
Replaces contracts
Identity theft is:
Unethical but legal
Criminal act + unfair practice
Workplace dispute
Tort only
Hidden fees after saying “free” is:
Genuine agreement
Deceptive pricing
Contract breach
Misconduct
Defective product injures customer. Laws apply:
Product liability laws apply.
Negligence laws apply.
Contract laws apply.
Criminal laws apply.
To avoid FTC violations:
Investigate competitors
Use honest marketing
Increase profits
Reduce transparency
Mislabeling ingredients investigated by:
FTC
FDA
EEOC
OSHA
False ad but no harm gives right to:
Safety
Choose
Be informed
Sue for criminal charges
Consumer law is essential in e-commerce because:
No contracts used
Higher deception risk
No comparison shopping
Sites must charge more
61. Employment law protects:
Environment
Fair treatment & safety
Ads and marketing
Profits
EEOC enforces:
Contracts
Discrimination laws
Consumer fraud
Payroll taxes
Law for equal pay:
OSHA
Equal Pay Act
FLSA
Title IX
Workers' compensation provides:
Vacation time
Medical + wage benefits after injury
Bonuses
Duties
Workplace safety enforced by:
FTC
OSHA
SEC
FDA
Employees should document discrimination to:
File taxes
Provide evidence to EEOC
Increase benefits
Avoid training
Title VII violation:
Firing for theft
Denying promotion due to race
Being late
Training requirement
Teens injured more often because:
Careless
Lack experience
Earn less
Untrainable
Refusing to hire women violates:
FTC Act
EEO laws
UCC
Consumer laws
No safety guards causing injury involves:
SEC
OSHA + Workers' Comp
FTC
FDA
Employer punishes worker for reporting discrimination:
Legal
Illegal
Required
Optional
Misclassifying workers leads to:
No consequences
Government penalties
Termination
Promotion
Total Rewards helps retention by:
Offering financial + nonfinancial incentives
Double taxation
Removing safety rules
Replacing payroll
Failing to follow antidiscrimination rules:
Non-compliance
Retaliation
Equal Opportunity
OSHA issue
Triangle Shirtwaist Factory led to:
Higher taxes
Workplace safety reforms
No more unions
Removing OSHA
