BUSINESS LAW FINAL EXAM QUESTIONS
AND ANSWERS
A legally binding contract requires 4 elements:
a) Agreement, Conservation, Contract, Legal Object
b) Agreement, Consideration, Capacity, Legal Object
C) Agreement, Element, Capacity, Legal Object - Correct Answers -b) Agreement,
Consideration, Capacity, Legal Object
a promise or set of promises for the breach of which the law gives a remedy or the
performance of which the law in some way recognizes a duty.
a) Capacity
b) Consideration
c) Capacity
d) Contract - Correct Answers -d) contract
consists of an offer by one party, called the offeror, to enter into a contract and an
acceptance of the terms of the offer by the other party, called the offeree
a) Consideration
b) Capacity
c) Agreement
d) Contract - Correct Answers -c) Agreement
Agreeement - Correct Answers -Sarah offers to sell her car to John for $5,000. In this
case, Sarah is making an offer. If John agrees to buy the car for $5,000, he is accepting
the offer. The ______ is formed when John communicates his acceptance to Sarah.
The car itself and the $5,000 are the considerations being exchanged: Sarah agrees to
transfer the car to John, and John agrees to pay Sarah $5,000.
Offeror - Correct Answers -Susan, who owns a house, is interested in selling it. She
offers to sell the house to Tom for $300,000. In this scenario, Susan is the _______ .
She is proposing a specific set of terms (the sale of her house for $300,000) to Tom. It
is now up to Tom, the offeree, to decide whether to accept Susan's offer, make a
counteroffer, or reject it entirely.
Offeree - Correct Answers -AutoWorld, offers to sell a specific car model to a customer,
Linda, for $20,000. In this scenario, AutoWorld is the offeror, as it is making the offer to
sell the car. Linda is the offeree, as the offer is directed towards her, and she has the
power to decide how to respond
Consideration - Correct Answers -Suppose you hire a contractor to renovate your
kitchen. In this contract, the _______ from your side is the payment you agree to make
for the renovation services. From the contractor's side, the _______ is the provision of
labor and materials required for the kitchen renovation. Both parties have something at
, stake: you commit to paying a specified sum, and the contractor commits to completing
the renovation work. This mutual exchange of values (money for services) is what
constitutes _________in this contract. Without such an exchange, the contract would
lack a key element and might not be enforceable in a court of law.
Contractual Capacity - Correct Answers -17-year-old teenager wants to buy a car. In
many jurisdictions, minors (people under 18) are considered to lack the full contractual
capacity to enter into legally binding agreements. If the teenager signs a contract to buy
a car, the law may deem this contract voidable because of the teenager's age. This
means that the teenager has the right to cancel (void) the contract if they choose to.
However, if the contract is for a necessity, like food or clothing, it might still be
enforceable
The objective theory of contracts - Correct Answers -Person A posts a joke on social
media saying, "I will sell my vintage car for $10." Person B, who sees this post, contacts
Person A and agrees to pay $10 for the car. If Person A was joking and had no intention
of selling the car, under the objective theory of contracts, the focus would be on how a
reasonable person would interpret the social media post and subsequent actions. If a
reasonable person would interpret the post and Person A's actions as a serious offer to
sell the car, then a contract may be deemed to exist, and Person A could be legally
obligated to sell the car to Person B for $10, despite Person A's subjective intention of it
being a joke.
bilateral contract - Correct Answers -homeowner hires a contractor to renovate their
kitchen. The homeowner promises to pay the contractor a specified amount of money
for completing the renovation. In return, the contractor promises to complete the kitchen
renovation according to the agreed specifications and within a certain timeframe.
unilateral contract - Correct Answers -a person loses their dog and offers a reward of
$100 to whoever finds and returns the dog. This is a unilateral contract. The person who
has lost the dog (the offeror) is promising to pay $100 to anyone who successfully
returns the dog. However, nobody is legally obliged to search for the dog; the offer is
open to anyone who chooses to undertake the task. If someone finds and returns the
dog, the offeror is legally obligated to pay the $100 reward. In this scenario, only the
person who lost the dog has made a binding promise. If no one returns the dog, the
person who lost the dog has no obligation to pay anyone.
Express contract - Correct Answers -a graphic designer agrees to create a logo for a
business. The business owner and the graphic designer discuss the specifics: the
designer will create a logo, and in exchange, the business owner will pay $500 upon
completion. They decide to formalize this agreement in a written contract, which
explicitly states the work to be done, the deadline, the payment amount, and the
payment terms. Both parties sign this contract.
implied contract - Correct Answers -Imagine you go to a restaurant and order a meal.
Even though you haven't signed a written agreement with the restaurant, your actions
AND ANSWERS
A legally binding contract requires 4 elements:
a) Agreement, Conservation, Contract, Legal Object
b) Agreement, Consideration, Capacity, Legal Object
C) Agreement, Element, Capacity, Legal Object - Correct Answers -b) Agreement,
Consideration, Capacity, Legal Object
a promise or set of promises for the breach of which the law gives a remedy or the
performance of which the law in some way recognizes a duty.
a) Capacity
b) Consideration
c) Capacity
d) Contract - Correct Answers -d) contract
consists of an offer by one party, called the offeror, to enter into a contract and an
acceptance of the terms of the offer by the other party, called the offeree
a) Consideration
b) Capacity
c) Agreement
d) Contract - Correct Answers -c) Agreement
Agreeement - Correct Answers -Sarah offers to sell her car to John for $5,000. In this
case, Sarah is making an offer. If John agrees to buy the car for $5,000, he is accepting
the offer. The ______ is formed when John communicates his acceptance to Sarah.
The car itself and the $5,000 are the considerations being exchanged: Sarah agrees to
transfer the car to John, and John agrees to pay Sarah $5,000.
Offeror - Correct Answers -Susan, who owns a house, is interested in selling it. She
offers to sell the house to Tom for $300,000. In this scenario, Susan is the _______ .
She is proposing a specific set of terms (the sale of her house for $300,000) to Tom. It
is now up to Tom, the offeree, to decide whether to accept Susan's offer, make a
counteroffer, or reject it entirely.
Offeree - Correct Answers -AutoWorld, offers to sell a specific car model to a customer,
Linda, for $20,000. In this scenario, AutoWorld is the offeror, as it is making the offer to
sell the car. Linda is the offeree, as the offer is directed towards her, and she has the
power to decide how to respond
Consideration - Correct Answers -Suppose you hire a contractor to renovate your
kitchen. In this contract, the _______ from your side is the payment you agree to make
for the renovation services. From the contractor's side, the _______ is the provision of
labor and materials required for the kitchen renovation. Both parties have something at
, stake: you commit to paying a specified sum, and the contractor commits to completing
the renovation work. This mutual exchange of values (money for services) is what
constitutes _________in this contract. Without such an exchange, the contract would
lack a key element and might not be enforceable in a court of law.
Contractual Capacity - Correct Answers -17-year-old teenager wants to buy a car. In
many jurisdictions, minors (people under 18) are considered to lack the full contractual
capacity to enter into legally binding agreements. If the teenager signs a contract to buy
a car, the law may deem this contract voidable because of the teenager's age. This
means that the teenager has the right to cancel (void) the contract if they choose to.
However, if the contract is for a necessity, like food or clothing, it might still be
enforceable
The objective theory of contracts - Correct Answers -Person A posts a joke on social
media saying, "I will sell my vintage car for $10." Person B, who sees this post, contacts
Person A and agrees to pay $10 for the car. If Person A was joking and had no intention
of selling the car, under the objective theory of contracts, the focus would be on how a
reasonable person would interpret the social media post and subsequent actions. If a
reasonable person would interpret the post and Person A's actions as a serious offer to
sell the car, then a contract may be deemed to exist, and Person A could be legally
obligated to sell the car to Person B for $10, despite Person A's subjective intention of it
being a joke.
bilateral contract - Correct Answers -homeowner hires a contractor to renovate their
kitchen. The homeowner promises to pay the contractor a specified amount of money
for completing the renovation. In return, the contractor promises to complete the kitchen
renovation according to the agreed specifications and within a certain timeframe.
unilateral contract - Correct Answers -a person loses their dog and offers a reward of
$100 to whoever finds and returns the dog. This is a unilateral contract. The person who
has lost the dog (the offeror) is promising to pay $100 to anyone who successfully
returns the dog. However, nobody is legally obliged to search for the dog; the offer is
open to anyone who chooses to undertake the task. If someone finds and returns the
dog, the offeror is legally obligated to pay the $100 reward. In this scenario, only the
person who lost the dog has made a binding promise. If no one returns the dog, the
person who lost the dog has no obligation to pay anyone.
Express contract - Correct Answers -a graphic designer agrees to create a logo for a
business. The business owner and the graphic designer discuss the specifics: the
designer will create a logo, and in exchange, the business owner will pay $500 upon
completion. They decide to formalize this agreement in a written contract, which
explicitly states the work to be done, the deadline, the payment amount, and the
payment terms. Both parties sign this contract.
implied contract - Correct Answers -Imagine you go to a restaurant and order a meal.
Even though you haven't signed a written agreement with the restaurant, your actions
