Sample Questions: Introductory Business Law
The following Introductory Business Law sample questions aren't used in actual CLEP exams and aren’t presented here as they will be on the test. Use them to get a sense of question format and difficulty level.
Directions
Each of the questions or incomplete statements below is followed by five suggested answers or completions. Select the one that is best in each case.
Questions
- Ed lives in Maine, a state that has a so-called merchant protection statute (or shopkeeper’s privilege). One day Ed goes to the grocery store to shoplift some steaks for dinner. The owner of the grocery store catches Ed red-handed in the act of shoplifting. He and an employee gently restrain Ed in the back room, feeding him gourmet food and wine until the local sheriff finally shows up three days later. If Ed sues the grocer for the tort of false imprisonment, he will win if he can prove that
A. he did not intend to steal the steaks
B. the gourmet food that he was fed was poorly prepared
C. the grocer had no authority from the sheriff to hold him
D. the grocer detained him for a reasonable time after reasonably suspecting him of shoplifting
E. the grocer detained him for an unreasonable time after reasonably suspecting him of shoplifting
- Which of the following is true about the doctrine of commercial speech?
A. It is specifically guaranteed to corporations in the United States Constitution.
B. It holds that commercial speech is entitled to the same protection as political speech.
C. It states that commercial speech is entitled to limited protection.
D. It states that commercial speech is not entitled to any protection under the law
E. It states that commercial speech is entitled to the same protection as obscene speech.
A legal action by a defendant against a plaintiff is known as
A. a counterclaim
B. a complaint
C. an answer
D. a reply
E. a cross-claim- Two days after his daughter was born, Bill decided to take out a life insurance policy so that in the event he dies, there would be enough money to raise his daughter. This life insurance policy is an example of
A. a creditor beneficiary contract
B. a donee beneficiary contract
C. an incidental beneficiary contract
D. an assignment contract
E. a gift
- Primary responsibility for establishing a corporation’s social responsibility standards is exercised by the
A. officers of the corporation
B. board of directors
C. stockholders
D. employees of the corporation
E. customers of the corporation
Jerry purchases flowers for his wife from Flowers Galore. He pays extra to have the flowers delivered to his wife’s office on the day of their anniversary. If Flowers Galore fails to deliver the flowers, what rights, if any, does Jerry’s wife have under the contract?
A. She has no right to enforce the contract
because she is an incidental beneficiary.
B. She is a donee beneficiary and can enforce
the contract.
C. She is a creditor beneficiary and can enforce
the contract.
D. She cannot enforce the contract because
she is not in privity of contract with
Flowers Galore.
E. She can sue Jerry for purchasing flowers
from an unreliable florist, but she has no
rights against Flowers Galore.- Martha hires Janet to work for her as a sales representative. Martha specifically tells Janet that any sale worth over $10,000 and any sale with a discount greater than 8 percent must have Martha’s express approval. Janet signs a contract with a long-standing customer who is aware of the approval requirements that Martha imposes on her sales representatives. The contract calls for an 11 percent discount and is for the purchase of $25,000 worth of goods. Janet did not get Martha’s approval prior to signing. Which of the following is true of this contract?
A. Martha is obligated to honor the contract.
B. Martha is not obligated to honor the
contract.
C. Janet will be liable to the customer for
the contract.
D. The customer has the option of avoiding
the contract.
E. Janet has done nothing improper.
- Griffin offers to pay Jack $200 if Jack locates Griffin’s missing cat and returns the cat to him. After searching for hours, Jack finds the missing cat and delivers the cat to Griffin. Griffin and Jack have formed
A. A unilateral contract
B. A third-party contract
C. A bilateral contract
D. A quasi contract
E. No contract
- Sam was spending his vacation at a local ski resort. While skiing down a groomed run, he noticed an area off to the side that went into the woods. At the entrance to this area, Sam saw two red sticks stuck into the snow in the form of an upright X. Being of a curious nature, Sam skied over and looked into the woods and wondered what was in there. He decided to ski in. After a short distance, he fell into a crevice that was hidden by the snow cover. Sam was found quickly, but he suffered hypothermia and frostbite on his toes. Should Sam sue the resort for his injuries?
A. Yes. He will win because the resort is liable
for injuries to people who pay to use their
facilities.
B. Yes. He will win because the resort should
have had a sign specifically explaining why
the area was dangerous and what would
happen if a person entered the area.
C. No. He will lose based on the defense of
assumption of the risk, since the danger was
obvious, and he decided to proceed anyway.
D. No. He will lose because the resort is a
private recreation facility and is immune
from a lawsuit.
E. No. He will lose based on the insanity
defense, since he had to be insane to go
outside the groomed areas
Answers
1) E 2) C 3) A 4) B 5) B 6) B 7) B 8) A 9) C