Business Law FBLA UPDATED ACTUAL Exam: 2026/2027
QUESTIONS WITH CORRECT ANSWERS
• E-contract -✓✓ Any contract formed electronically such as over the internet
• Buyers select and agree to buy the goods @ sellers store -✓✓ When payment for
goods take place at a later date, the transfer of title takes place when
• The principal & 3rd party -✓✓ Any agreement reached by the representative in an
agency relationship binds
• Bona-fide competition -✓✓ A legitimate defense to wrongful interference
• Agent -✓✓ required to negotiate on behalf of the principal or bring him or her and third
parties into contractual relationship.
• Independent contractor -✓✓ is a natural person, business, or corporation that provides
goods or services to another entity under terms specified in a contract or within a verbal
agreement. Independent contractors are usually paid on a freelance basis. Contractors
often work through a limited company or franchise, which they themselves own, or may
work through an umbrella company.
• Real estate broker/agent -✓✓ a person who acts as an intermediary between sellers
and buyers of real estate/real property and attempts to find sellers who wish to sell and
buyers who wish to buy.
• Bailment -✓✓ describes a legal relationship in common law where physical possession
of personal property, or a chattel, is transferred from one person (the 'bailor') to another
person (the 'bailee') who subsequently has possession of the property. It arises when a
person gives property to someone else for safekeeping, and is a cause of action
independent of contract or tort.
• Trustee -✓✓ is a legal term which, in its broadest sense, can refer to any person who
holds property, authority, or a position of trust or responsibility for the benefit of another,
also can be a person who is allowed to do certain tasks but not able to gain income.
• Sole proprietorships -✓✓ The vast majority of small businesses start out like this.
These firms are owned by one person, usually the individual who has day-to-day
responsibility for running the business. They own all the assets of the business and the
profits generated by it. They also assume complete responsibility for any of its liabilities
or debts.
• Partnership -✓✓ two or more people share ownership of a single business. Like
proprietorships, the law does not distinguish between the business and its owners. They
, should have a legal agreement that sets forth how decisions will be made, profits will be
shared, disputes will be resolved. Many split up at crisis times unless there is defined
process. They must decide how much time and capital each will contribute, etc.
• Corporation -✓✓ chartered by the state in which it is headquartered, is considered by
law to be a unique entity, separate and apart from those who own it. It can be taxed; it
can be sued; it can enter into contractual agreements. The owners are its shareholders.
The shareholders elect a board of directors to oversee the major policies and decisions.
It has a life of its own and does not dissolve when ownership changes.
• Wages & hours -✓✓ It requires employers to pay covered employees who are not
otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-
half-times the regular rate of pay. For nonagricultural operations, it restricts the hours
that children under age 16 can work and forbids the employment of children under age
18 in certain jobs deemed too dangerous. For agricultural operations, it prohibits the
employment of children under age 16 during school hours and in certain jobs deemed
too dangerous.
• Workplace safety & health -✓✓ An administered by the (OSHA). Most private
industries are regulated by OSHA or OSHA-approved state programs, which also cover
public sector employers. Employers covered by the OSH Act must comply with the
regulations and the safety and health standards promulgated by OSHA. Employers also
have a general duty under the OSH Act to provide their employees with work and a
workplace free from recognized, serious hazards. OSHA enforces the Act through
workplace inspections and investigations.
• ADA -✓✓ Americans with disabilities act of 1990
• Flat organization structure -✓✓ Many small companies use this, where very few levels
of management separate executives from analysts, secretaries and lower-level
employees. Best when a company has less than 20 employees, especially if the
company employs one or two employees per department. One advantage of using this
for management is that decisions can be made relatively quickly.
• A functional organizational structure -✓✓ centered on job functions, such as
marketing, research and development and finance. Small companies should use this
when they want to arrange their organizational structure by department. For example, a
small company may have a director, two managers and two analysts in the marketing
department. The director would likely report to the Chief Executive Officer, or CEO, and
both managers would report to the director. In addition, each manager may have an
analyst reporting to them. It works well when small companies are heavily project-
focused.
• Board of directors -✓✓ is a body of elected or appointed members who jointly oversee
the activities of a company or organization. Other names include board of governors,
QUESTIONS WITH CORRECT ANSWERS
• E-contract -✓✓ Any contract formed electronically such as over the internet
• Buyers select and agree to buy the goods @ sellers store -✓✓ When payment for
goods take place at a later date, the transfer of title takes place when
• The principal & 3rd party -✓✓ Any agreement reached by the representative in an
agency relationship binds
• Bona-fide competition -✓✓ A legitimate defense to wrongful interference
• Agent -✓✓ required to negotiate on behalf of the principal or bring him or her and third
parties into contractual relationship.
• Independent contractor -✓✓ is a natural person, business, or corporation that provides
goods or services to another entity under terms specified in a contract or within a verbal
agreement. Independent contractors are usually paid on a freelance basis. Contractors
often work through a limited company or franchise, which they themselves own, or may
work through an umbrella company.
• Real estate broker/agent -✓✓ a person who acts as an intermediary between sellers
and buyers of real estate/real property and attempts to find sellers who wish to sell and
buyers who wish to buy.
• Bailment -✓✓ describes a legal relationship in common law where physical possession
of personal property, or a chattel, is transferred from one person (the 'bailor') to another
person (the 'bailee') who subsequently has possession of the property. It arises when a
person gives property to someone else for safekeeping, and is a cause of action
independent of contract or tort.
• Trustee -✓✓ is a legal term which, in its broadest sense, can refer to any person who
holds property, authority, or a position of trust or responsibility for the benefit of another,
also can be a person who is allowed to do certain tasks but not able to gain income.
• Sole proprietorships -✓✓ The vast majority of small businesses start out like this.
These firms are owned by one person, usually the individual who has day-to-day
responsibility for running the business. They own all the assets of the business and the
profits generated by it. They also assume complete responsibility for any of its liabilities
or debts.
• Partnership -✓✓ two or more people share ownership of a single business. Like
proprietorships, the law does not distinguish between the business and its owners. They
, should have a legal agreement that sets forth how decisions will be made, profits will be
shared, disputes will be resolved. Many split up at crisis times unless there is defined
process. They must decide how much time and capital each will contribute, etc.
• Corporation -✓✓ chartered by the state in which it is headquartered, is considered by
law to be a unique entity, separate and apart from those who own it. It can be taxed; it
can be sued; it can enter into contractual agreements. The owners are its shareholders.
The shareholders elect a board of directors to oversee the major policies and decisions.
It has a life of its own and does not dissolve when ownership changes.
• Wages & hours -✓✓ It requires employers to pay covered employees who are not
otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-
half-times the regular rate of pay. For nonagricultural operations, it restricts the hours
that children under age 16 can work and forbids the employment of children under age
18 in certain jobs deemed too dangerous. For agricultural operations, it prohibits the
employment of children under age 16 during school hours and in certain jobs deemed
too dangerous.
• Workplace safety & health -✓✓ An administered by the (OSHA). Most private
industries are regulated by OSHA or OSHA-approved state programs, which also cover
public sector employers. Employers covered by the OSH Act must comply with the
regulations and the safety and health standards promulgated by OSHA. Employers also
have a general duty under the OSH Act to provide their employees with work and a
workplace free from recognized, serious hazards. OSHA enforces the Act through
workplace inspections and investigations.
• ADA -✓✓ Americans with disabilities act of 1990
• Flat organization structure -✓✓ Many small companies use this, where very few levels
of management separate executives from analysts, secretaries and lower-level
employees. Best when a company has less than 20 employees, especially if the
company employs one or two employees per department. One advantage of using this
for management is that decisions can be made relatively quickly.
• A functional organizational structure -✓✓ centered on job functions, such as
marketing, research and development and finance. Small companies should use this
when they want to arrange their organizational structure by department. For example, a
small company may have a director, two managers and two analysts in the marketing
department. The director would likely report to the Chief Executive Officer, or CEO, and
both managers would report to the director. In addition, each manager may have an
analyst reporting to them. It works well when small companies are heavily project-
focused.
• Board of directors -✓✓ is a body of elected or appointed members who jointly oversee
the activities of a company or organization. Other names include board of governors,
