📘 Introduction to Business Law – Comprehensive
Practice Exam (100 Questions, Answers & Rationales)
Educational Edition 2025–2026 | Covers Foundations · Contracts · Torts · Employment · Agency
· Business Organizations · Property · IP · Ethics & Regulation
Foundations of Law (1 – 15)
1. Q: The supreme source of law in the U.S. is the ______.
A: U.S. Constitution.
Rationale: All other laws derive their validity from it.
2. Q: Stare decisis ensures ______.
A: Courts follow precedent in similar cases.
Rationale: Creates consistency and predictability.
3. Q: Statutory law is created by ______.
A: Legislatures.
Rationale: Congress and state assemblies enact statutes.
4. Q: Administrative agencies primarily ______.
A: Make and enforce regulations.
Rationale: They fill in legislative details.
5. Q: Civil law primarily provides ______.
A: Remedies for private wrongs.
Rationale: Focuses on compensation, not punishment.
6. Q: Criminal law aims to ______.
A: Protect society and punish offenses.
Rationale: It enforces public rights.
7. Q: Ethics in business law means ______.
A: Applying moral principles to legal decisions.
Rationale: Goes beyond minimum legal compliance.
8. Q: The Bill of Rights restricts ______.
A: Governmental, not private, actions.
Rationale: Constitutional rights limit state power.
, 9. Q: Which branch interprets laws?
A: Judicial.
Rationale: Courts determine meaning and constitutionality.
10.Q: Federalism divides power between ______.
A: National and state governments.
Rationale: Shared sovereignty balances authority.
11.Q: A plaintiff initiates a ______.
A: Civil lawsuit.
Rationale: They seek a remedy from the court.
12.Q: The burden of proof in civil cases is ______.
A: Preponderance of the evidence.
Rationale: Lower than “beyond a reasonable doubt.”
13.Q: Mediation is ______.
A: A facilitated negotiation by a neutral party.
Rationale: Non-binding dispute resolution.
14.Q: Arbitration awards are generally ______.
A: Binding and enforceable.
Rationale: Parties agree to finality.
15.Q: Jurisdiction means a court’s ______.
A: Authority to hear and decide a case.
Rationale: Without it, rulings are void.
Contracts (16 – 35)
16.Q: A contract requires offer, acceptance, consideration, and ______.
A: Legal capacity.
Rationale: All four must exist for validity.
17.Q: Consideration refers to ______.
A: Something of value exchanged.
Rationale: Each party must give or promise something.
18.Q: A counteroffer ______.
A: Terminates the original offer.
Practice Exam (100 Questions, Answers & Rationales)
Educational Edition 2025–2026 | Covers Foundations · Contracts · Torts · Employment · Agency
· Business Organizations · Property · IP · Ethics & Regulation
Foundations of Law (1 – 15)
1. Q: The supreme source of law in the U.S. is the ______.
A: U.S. Constitution.
Rationale: All other laws derive their validity from it.
2. Q: Stare decisis ensures ______.
A: Courts follow precedent in similar cases.
Rationale: Creates consistency and predictability.
3. Q: Statutory law is created by ______.
A: Legislatures.
Rationale: Congress and state assemblies enact statutes.
4. Q: Administrative agencies primarily ______.
A: Make and enforce regulations.
Rationale: They fill in legislative details.
5. Q: Civil law primarily provides ______.
A: Remedies for private wrongs.
Rationale: Focuses on compensation, not punishment.
6. Q: Criminal law aims to ______.
A: Protect society and punish offenses.
Rationale: It enforces public rights.
7. Q: Ethics in business law means ______.
A: Applying moral principles to legal decisions.
Rationale: Goes beyond minimum legal compliance.
8. Q: The Bill of Rights restricts ______.
A: Governmental, not private, actions.
Rationale: Constitutional rights limit state power.
, 9. Q: Which branch interprets laws?
A: Judicial.
Rationale: Courts determine meaning and constitutionality.
10.Q: Federalism divides power between ______.
A: National and state governments.
Rationale: Shared sovereignty balances authority.
11.Q: A plaintiff initiates a ______.
A: Civil lawsuit.
Rationale: They seek a remedy from the court.
12.Q: The burden of proof in civil cases is ______.
A: Preponderance of the evidence.
Rationale: Lower than “beyond a reasonable doubt.”
13.Q: Mediation is ______.
A: A facilitated negotiation by a neutral party.
Rationale: Non-binding dispute resolution.
14.Q: Arbitration awards are generally ______.
A: Binding and enforceable.
Rationale: Parties agree to finality.
15.Q: Jurisdiction means a court’s ______.
A: Authority to hear and decide a case.
Rationale: Without it, rulings are void.
Contracts (16 – 35)
16.Q: A contract requires offer, acceptance, consideration, and ______.
A: Legal capacity.
Rationale: All four must exist for validity.
17.Q: Consideration refers to ______.
A: Something of value exchanged.
Rationale: Each party must give or promise something.
18.Q: A counteroffer ______.
A: Terminates the original offer.
