(UMGC) BMGT 380 Business Law I Comprehensive Midterm Exam Guide Q & A 2024

BMGT 380 Business Law I Comprehensive Midterm Exam Guide Q & A 2024 1. Multiple Choice: Which principle dictates that an agreement without consideration is void? a) Principle of Estoppel b) Principle of Perpetuity c) Principle of Consideration d) Principle of Capacity Correct Answer : c) Principle of Consideration Rationale: The principle of consideration is a fundamental concept in contract law wh ich states that for an agreement to be legally binding, there must be something of value exchanged between the parties. 2. True/False: The doctrine of 'ultra vires' applies to the actions taken by a company's directors that are beyond the powers granted t o them by the company's constitution. Answer : True Rationale: 'Ultra vires' is a Latin term meaning 'beyond the powers'. In corporate law, if a company's directors undertake an activity that is beyond the scope of the powers granted to them by the co mpany's constitution, it is considered 'ultra vires'. 3. Fill -in-the-Blank: The legal term "_________" refers to the failure to perform an obligation resulting from a party's own act, and not due to external causes. Correct Answer : Self -induced frustra tion Rationale: Self -induced frustration occurs when a contractual obligation cannot be fulfilled due to the actions of the party that is responsible for the performance, as opposed to external factors that are not within the party's control. 4. Multip le Choice: In the context of business law, 'mens rea' refers to: a) The intention to engage in a lawful act b) The intention to engage in an act that is forbidden by law c) A mutual agreement between two parties d) The physical act of committin g a crime Correct Answer : b) The intention to engage in an act that is forbidden by law Rationale: 'Mens rea' is a legal principle that refers to the mental state of a person who commits a crime. It is the intention or knowledge of wrongdoing that co nstitutes part of a crime, as opposed to the action or conduct of the accused. 5. True/False: In a contract of sale, the ownership of goods is transferred from the seller to the buyer immediately upon the execution of the contract. Answer : False Rationale: Ownership of goods in a contract of sale is transferred from the seller to the buyer according to the terms of the contract, which may not necessarily be immediate and can be subject to certain conditions being met.