WGU D341: Business Law for Accountants - Master Study Guide
This guide covers the core competencies for the D341 exam, focusing on the American
legal system, contracts, sales agreements, debtor-creditor relationships, business
structures, agency law, and property.
Module 1: Foundations of the Legal Environment
1. What are the primary sources of law in the U.S.?
ANSWER ✓ The primary sources are:
Constitutional Law: The foundational law from the U.S. and state constitutions.
Statutory Law: Laws enacted by legislative bodies (e.g., Congress, state legislatures).
The Uniform Commercial Code (UCC) is a critical example.
Administrative Law: Rules, regulations, and orders from governmental agencies (e.g.,
SEC, IRS).
Case Law (Common Law): The body of law developed from judicial decisions and
precedents.
2. What is the difference between common law and statutory law?
ANSWER ✓ Common law is judge-made law based on precedent from previous court
rulings. Statutory law is written law created and enacted by a legislative body.
3. What is the function of the Uniform Commercial Code (UCC)?
ANSWER ✓ The UCC facilitates commerce by providing a uniform and consistent set of
rules to govern commercial transactions, particularly the sale of goods (Article 2) and
negotiable instruments (Article 3).
4. What are the four primary stages of litigation?
ANSWER ✓
,1. Pleadings: Complaint and Answer.
2. Discovery: Exchange of information and evidence (depositions, interrogatories).
3. Trial: Presentation of evidence and arguments to a judge or jury.
4. Appeal: Review of the trial court's proceedings by a higher court.
5. What are the three forms of Alternative Dispute Resolution (ADR)?
ANSWER ✓
1. Negotiation: Parties communicate directly to reach a settlement.
2. Mediation: A neutral third party (mediator) facilitates negotiation but does not impose
a solution.
3. Arbitration: A neutral third party (arbitrator) hears arguments and evidence and then
imposes a legally binding decision.
6. What is the difference between mediation and arbitration?
ANSWER ✓ Mediation is non-binding and focused on facilitation, while arbitration is
typically binding and results in a decision imposed by the arbitrator.
Module 2: Contracts and Sales Agreements
7. What are the four essential elements required for a valid common law contract?
ANSWER ✓
1. Agreement (Offer and Acceptance)
2. Consideration (Something of value exchanged)
3. Contractual Capacity (Legal ability to enter a contract)
4. Legality (Purpose of the contract must be legal)
8. What is the difference between a bilateral and a unilateral contract?
ANSWER ✓ A bilateral contract is a promise for a promise (e.g., "I promise to pay you
$500 if you promise to paint my house"). A unilateral contract is a promise for an act
, (e.g., "I promise a $100 reward for the return of my lost dog"—the act of returning the
dog accepts the offer).
9. What is the mirror image rule?
ANSWER ✓ At common law, the acceptance must mirror the terms of the offer exactly.
Any change or addition in the acceptance acts as a counteroffer, rejecting the original
offer.
10. How does the UCC Article 2 change the mirror image rule for sales contracts?
ANSWER ✓ The UCC is more flexible. A definite expression of acceptance can create a
contract even if it includes additional or different terms, unless the terms materially alter
the contract.
11. What is consideration?
ANSWER ✓ Consideration is the value given in exchange for a promise. It can be a
promise to do something, an act, a forbearance (not doing something you have a legal
right to do), or property.
12. What is an illusory promise, and why is it not valid consideration?
ANSWER ✓ An illusory promise is a statement that appears to be a promise but doesn't
actually commit to anything (e.g., "I will buy from you all the shirts I may need"). It lacks
mutuality of obligation and is not valid consideration.
13. What is the pre-existing duty rule?
ANSWER ✓ Performing or promising to perform an act or duty you are already legally
obligated to do is not valid consideration for a new contract.
14. Who lacks contractual capacity?
ANSWER ✓ Minors (can disaffirm contracts), intoxicated persons (if unable to
understand consequences), and mentally incompetent persons.
This guide covers the core competencies for the D341 exam, focusing on the American
legal system, contracts, sales agreements, debtor-creditor relationships, business
structures, agency law, and property.
Module 1: Foundations of the Legal Environment
1. What are the primary sources of law in the U.S.?
ANSWER ✓ The primary sources are:
Constitutional Law: The foundational law from the U.S. and state constitutions.
Statutory Law: Laws enacted by legislative bodies (e.g., Congress, state legislatures).
The Uniform Commercial Code (UCC) is a critical example.
Administrative Law: Rules, regulations, and orders from governmental agencies (e.g.,
SEC, IRS).
Case Law (Common Law): The body of law developed from judicial decisions and
precedents.
2. What is the difference between common law and statutory law?
ANSWER ✓ Common law is judge-made law based on precedent from previous court
rulings. Statutory law is written law created and enacted by a legislative body.
3. What is the function of the Uniform Commercial Code (UCC)?
ANSWER ✓ The UCC facilitates commerce by providing a uniform and consistent set of
rules to govern commercial transactions, particularly the sale of goods (Article 2) and
negotiable instruments (Article 3).
4. What are the four primary stages of litigation?
ANSWER ✓
,1. Pleadings: Complaint and Answer.
2. Discovery: Exchange of information and evidence (depositions, interrogatories).
3. Trial: Presentation of evidence and arguments to a judge or jury.
4. Appeal: Review of the trial court's proceedings by a higher court.
5. What are the three forms of Alternative Dispute Resolution (ADR)?
ANSWER ✓
1. Negotiation: Parties communicate directly to reach a settlement.
2. Mediation: A neutral third party (mediator) facilitates negotiation but does not impose
a solution.
3. Arbitration: A neutral third party (arbitrator) hears arguments and evidence and then
imposes a legally binding decision.
6. What is the difference between mediation and arbitration?
ANSWER ✓ Mediation is non-binding and focused on facilitation, while arbitration is
typically binding and results in a decision imposed by the arbitrator.
Module 2: Contracts and Sales Agreements
7. What are the four essential elements required for a valid common law contract?
ANSWER ✓
1. Agreement (Offer and Acceptance)
2. Consideration (Something of value exchanged)
3. Contractual Capacity (Legal ability to enter a contract)
4. Legality (Purpose of the contract must be legal)
8. What is the difference between a bilateral and a unilateral contract?
ANSWER ✓ A bilateral contract is a promise for a promise (e.g., "I promise to pay you
$500 if you promise to paint my house"). A unilateral contract is a promise for an act
, (e.g., "I promise a $100 reward for the return of my lost dog"—the act of returning the
dog accepts the offer).
9. What is the mirror image rule?
ANSWER ✓ At common law, the acceptance must mirror the terms of the offer exactly.
Any change or addition in the acceptance acts as a counteroffer, rejecting the original
offer.
10. How does the UCC Article 2 change the mirror image rule for sales contracts?
ANSWER ✓ The UCC is more flexible. A definite expression of acceptance can create a
contract even if it includes additional or different terms, unless the terms materially alter
the contract.
11. What is consideration?
ANSWER ✓ Consideration is the value given in exchange for a promise. It can be a
promise to do something, an act, a forbearance (not doing something you have a legal
right to do), or property.
12. What is an illusory promise, and why is it not valid consideration?
ANSWER ✓ An illusory promise is a statement that appears to be a promise but doesn't
actually commit to anything (e.g., "I will buy from you all the shirts I may need"). It lacks
mutuality of obligation and is not valid consideration.
13. What is the pre-existing duty rule?
ANSWER ✓ Performing or promising to perform an act or duty you are already legally
obligated to do is not valid consideration for a new contract.
14. Who lacks contractual capacity?
ANSWER ✓ Minors (can disaffirm contracts), intoxicated persons (if unable to
understand consequences), and mentally incompetent persons.
