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LEB Exam 3 (2025/2026) – 150+ Questions and Verified Answers | Torts, Business Organizations, Employment Law, Contracts, Discrimination

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This all-inclusive study guide for LEB Exam 3 – Legal Environment of Business contains over 150 well-structured and accurately answered questions, tailored to the 2025/2026 exam format. It extensively covers topics at the intersection of business law, civil liability, discrimination law, and the structure and operation of various business entities. The document is crafted to help students master legal definitions, doctrines, statutes, and real-life application through situational problem-solving. Topics include: Torts: assault, battery, false imprisonment, invasion of privacy, fraud, defamation, malicious prosecution, negligence, strict liability, product liability, and defenses like assumption of risk and contributory negligence Business entities: sole proprietorships, partnerships, corporations, S corps, LLCs, LLPs, benefit corporations Corporate governance: incorporators, shareholders, directors, officers, derivative suits, piercing the corporate veil Employment law: Title VII, sexual harassment, retaliation, disparate impact and treatment, BFOQ, ADA, GINA, Pregnancy Discrimination Act, and the Civil Rights Act (Section 1981) Agency law: principal-agent relationships, authority types, respondeat superior, ratification, independent contractors Contract law fundamentals: intent, offer, acceptance, consideration, and capacity Business torts: interference with contractual relations, trade defamation, injurious falsehood Corporate liability principles: duty, proximate cause, compensatory and punitive damages This exam set is essential for: Undergraduate business law students Pre-law or legal studies majors MBA students covering foundational law CPA exam candidates focusing on business law Anyone reviewing for a legal environment or business ethics course With a mix of theory-based definitions and applied legal reasoning through real-world style questions, this resource offers a complete legal review aligned with the most commonly tested concepts in business law curricula. Keywords: LEB 3, business law, torts, negligence, strict liability, contract law, employment law, Title VII, ADA, BFOQ, retaliation, GINA, agency law, apparent authority, respondeat superior, corporate veil, S corporation, LLC, LLP, derivative suit, compensatory damages, discrimination law, business judgment rule, benefit corporation, assault and battery, fraud, limited partnership

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LEB Exam 3 2025/2026 Exam Questions
and Answers | A+ Score Assured



Assumption of Risk - 🧠ANSWER ✔✔Antonio and Fred are playing soccer

when Fred accidentally kicks Antonio's shin. Antonio is seriously injured

and is unable to play for at least six months. If Antonio sues Fred, which of

the following defenses is Fred most likely to use?


battery - 🧠ANSWER ✔✔Neil has admired Allison all semester, but he has

never talked to her. One day, Neil walks up to Allison after class and gives

her a hug. Allison is angry and decides to sue Neil. Allison would sue Neil

for the tort of __________.


fraud - 🧠ANSWER ✔✔Larry sells a truck to Tim. He does not mention to

Tim that the truck has a faulty engine. The truck breaks down after a week.

Tim has to replace the engine, which costs him $2,000. In this case, Tim

can sue Larry for the tort of __________.

,Contributory negligence - 🧠ANSWER ✔✔Jack injures his ankle and is taken

to a hospital. Airi, a doctor, applies a cast to Jack's injured ankle. Airi warns

Jack not to exert pressure on his injured leg until the cast is removed. Jack

ignores Airi's advice and injures his leg again while playing basketball in

the cast. Jack files a malpractice suit against Airi claiming that she did not

set the cast properly. Which of the following defenses is Airi most likely to

use in this scenario?


conversion - 🧠ANSWER ✔✔John rented a DVD from an online service but,

instead of returning it, he lent it to Sam who accidentally lost it. In this case,

John committed the tort of __________.


true - 🧠ANSWER ✔✔T/F?


The articles of incorporation usually include details about the number of

authorized shares and the initial corporate officials.


only the general partners - 🧠ANSWER ✔✔who may be involved in the

control or operations of a limited partnership?


Bona fide occupational qualification (BFOQ) - 🧠ANSWER ✔✔A qualification

that permits discriminatory practices in employment if a person's religion,

, sex, or national origin is reasonably related to the normal operation of a

particular business.


True - 🧠ANSWER ✔✔T/F?


Some state and local anti-discrimination laws explicitly prohibit employment

discrimination based on weight or height.


sexual harassment - 🧠ANSWER ✔✔Under Title VII, for an employer or

workplace supervisor to promise benefits or threaten loss if an employee

does not give sexual favors.


Hostile work environment - 🧠ANSWER ✔✔Under Title VII, an environment

where co-workers make offensive sexual comments or propositions,

engage in suggestive touching, show nude pictures, or draw sexual graffiti


True - 🧠ANSWER ✔✔T/F?


One advantage of Section 1981 of the Civil Rights Act of 1866 is that it

allows courts to award unlimited compensatory and punitive damages


color - 🧠ANSWER ✔✔Title VII of the Civil Rights Act of 1964 prohibits job

discrimination on the basis of race, religion, sex, national origin, or

_______.



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