FBLA Business Law
with correct answers
2025/2026
Absolute liability - correct answersTo be convicted of an ordinary crime, in certain jurisdictions,
a person must not only have committed a criminal action, but also have had a deliberate
intention or guilty mind (mens rea). In a crime of strict liability (criminal) or absolute liability, a
person could be guilty even if there was no intention to commit a crime. The difference
between strict and absolute liability is whether the defence of a mistake of fact is available: in a
crime of absolute liability, a mistake of fact is not a defence. Strict or Absolute Liability- also can
arise from inherently dangerous activities or defective products that are likely to result in a
harm to another, regardless of protection taken. Negligence is not required to be proven.
Example: Owning a pet rattle snake.
active partner - correct answersAn individual who runs the day-to-day operations of a business.
ADA - correct answersAmericans with Disabilities Act of 1990
agency law - correct answersthe large body of common law that governs agency; a mixture of
contract law and tort law
Agency Relationships - correct answersThe _____________ is an area of commercial law dealing
with a set of contractual, quasi-contractual and non-contractual fiduciary relationships that
involve a person, called the agent, that is authorized to act on behalf of another (called the
principal) to create legal relations with a third party.[1] Succinctly, it may be referred to as the
equal relationship between a principal and an agent whereby the principal, expressly or
implicitly, authorizes the agent to work under his or her control and on his or her behalf. The
agent is, thus, required to negotiate on behalf of the principal or bring him or her and third
,parties into contractual relationship. This branch of law separates and regulates the
relationships between:
agents and principals (internal relationship), known as the principal-agent relationship;
agents and the third parties with whom they deal on their principals' behalf (external
relationship); and
principals and the third parties when the agents deal.
Agent - correct answersThe law of agency is an area of commercial law dealing with a set of
contractual, quasi-contractual and non-contractual fiduciary relationships that involve a person,
called the agent, that is authorized to act on behalf of another (called the principal) to create
legal relations with a third party.[1] Succinctly, it may be referred to as the equal relationship
between a principal and an agent whereby the principal, expressly or implicitly, authorizes the
agent to work under his or her control and on his or her behalf. The agent is, thus, required to
negotiate on behalf of the principal or bring him or her and third parties into contractual
relationship. This branch of law separates and regulates the relationships between:
agents and principals (internal relationship), known as the principal-agent relationship;
agents and the third parties with whom they deal on their principals' behalf (external
relationship); and
principals and the third parties when the agents deal.
Authority:
Actual authority can be of two kinds. Either the principal may have expressly conferred
authority on the agent, or authority may be implied. Authority arises by consensual agreement,
and whether it exists is a question of fact. An agent, as a general rule, is only entitled to
indemnity from the principal if he or she has acted within the scope of her actual authority, and
may be in breach of contract, and liable to a third party for breach of the implied warranty of
,authority. In tort, a claimant may not recover from the principal unless the agent is acting within
the scope of employment.
Express actual authority means an agent has been expressly told he or she may act on behalf of
a principal.
Implied actual authority, also called "usual authority", is authority an agent has by virtue of
being reasonably necessary to carry out his expre
Annulment v. Divorce - correct answersThere are two ways to legally end a marriage -
annulment and divorce. An annulment is a legal procedure which cancels a marriage between a
man and a woman. Annulling a marriage is as though it is completely erased - legally, it declares
that the marriage never technically existed and was never valid.
Appellate Courts - correct answersIf the judge made a mistake in the law or the trial procedure,
the parties can appeal the case to the appellate court. It is important to note that courts of
appeal are not set up to re-hear cases in their entirety. Instead, courts of appeal typically
address whether a lower court made serious mistakes of law. Additionally, an appellate court
can usually take cases from courts of special jurisdiction as well.
Arbitration - correct answersArbitration, a form of alternative dispute resolution (ADR), is a
technique for the resolution of disputes outside the courts. The parties to a dispute refer it to
arbitration by one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), and
agree to be bound by the arbitration decision (the "award"). A third party reviews the evidence
in the case and imposes a decision that is legally binding on both sides and enforceable in the
courts.[1]
Assault - correct answersIn common law, assault is the act of creating apprehension of an
imminent harmful or offensive contact with a person. An assault is carried out by a threat of
bodily harm coupled with an apparent, present ability to cause the harm.
, Assignment - correct answersAn assignment (Latin cessio) is a term used with similar meanings
in the law of contracts and in the law of real estate. In both instances, it encompasses the
transfer of rights held by one party—the assignor—to another party—the assignee.[1] The
details of the assignment determines some additional rights and liabilities (or duties).
assumption of risk - correct answersConsent to treatment based on a full understanding of all
possible risks of unpreventable results of that treatment is called
Bailment - correct answersBailment 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.
Bait and switch - correct answersthe action (generally illegal) of advertising goods that are an
apparent bargain, with the intention of substituting inferior or more expensive goods.
Bankruptcy - correct answersBankruptcy is a legal status of a person or other entity that cannot
repay the debts it owes to creditors. In most jurisdictions, bankruptcy is imposed by a court
order, often initiated by the debtor.
Bankruptcy is not the only legal status that an insolvent person or other entity may have, and
the term bankruptcy is therefore not a synonym for insolvency. In some countries, including the
United Kingdom, bankruptcy is limited to individuals, and other forms of insolvency proceedings
(such as liquidation and administration) are applied to companies. In the United States,
bankruptcy is applied more broadly to formal insolvency proceedings.
Battery - correct answersBattery is a criminal offense involving unlawful physical contact,
distinct from assault which is the act of creating apprehension of such contact.
bill of exchange - correct answersA bill of exchange or "draft" is a written order by the drawer to
the drawee to pay money to the payee. A common type of bill of exchange is the cheque (check
with correct answers
2025/2026
Absolute liability - correct answersTo be convicted of an ordinary crime, in certain jurisdictions,
a person must not only have committed a criminal action, but also have had a deliberate
intention or guilty mind (mens rea). In a crime of strict liability (criminal) or absolute liability, a
person could be guilty even if there was no intention to commit a crime. The difference
between strict and absolute liability is whether the defence of a mistake of fact is available: in a
crime of absolute liability, a mistake of fact is not a defence. Strict or Absolute Liability- also can
arise from inherently dangerous activities or defective products that are likely to result in a
harm to another, regardless of protection taken. Negligence is not required to be proven.
Example: Owning a pet rattle snake.
active partner - correct answersAn individual who runs the day-to-day operations of a business.
ADA - correct answersAmericans with Disabilities Act of 1990
agency law - correct answersthe large body of common law that governs agency; a mixture of
contract law and tort law
Agency Relationships - correct answersThe _____________ is an area of commercial law dealing
with a set of contractual, quasi-contractual and non-contractual fiduciary relationships that
involve a person, called the agent, that is authorized to act on behalf of another (called the
principal) to create legal relations with a third party.[1] Succinctly, it may be referred to as the
equal relationship between a principal and an agent whereby the principal, expressly or
implicitly, authorizes the agent to work under his or her control and on his or her behalf. The
agent is, thus, required to negotiate on behalf of the principal or bring him or her and third
,parties into contractual relationship. This branch of law separates and regulates the
relationships between:
agents and principals (internal relationship), known as the principal-agent relationship;
agents and the third parties with whom they deal on their principals' behalf (external
relationship); and
principals and the third parties when the agents deal.
Agent - correct answersThe law of agency is an area of commercial law dealing with a set of
contractual, quasi-contractual and non-contractual fiduciary relationships that involve a person,
called the agent, that is authorized to act on behalf of another (called the principal) to create
legal relations with a third party.[1] Succinctly, it may be referred to as the equal relationship
between a principal and an agent whereby the principal, expressly or implicitly, authorizes the
agent to work under his or her control and on his or her behalf. The agent is, thus, required to
negotiate on behalf of the principal or bring him or her and third parties into contractual
relationship. This branch of law separates and regulates the relationships between:
agents and principals (internal relationship), known as the principal-agent relationship;
agents and the third parties with whom they deal on their principals' behalf (external
relationship); and
principals and the third parties when the agents deal.
Authority:
Actual authority can be of two kinds. Either the principal may have expressly conferred
authority on the agent, or authority may be implied. Authority arises by consensual agreement,
and whether it exists is a question of fact. An agent, as a general rule, is only entitled to
indemnity from the principal if he or she has acted within the scope of her actual authority, and
may be in breach of contract, and liable to a third party for breach of the implied warranty of
,authority. In tort, a claimant may not recover from the principal unless the agent is acting within
the scope of employment.
Express actual authority means an agent has been expressly told he or she may act on behalf of
a principal.
Implied actual authority, also called "usual authority", is authority an agent has by virtue of
being reasonably necessary to carry out his expre
Annulment v. Divorce - correct answersThere are two ways to legally end a marriage -
annulment and divorce. An annulment is a legal procedure which cancels a marriage between a
man and a woman. Annulling a marriage is as though it is completely erased - legally, it declares
that the marriage never technically existed and was never valid.
Appellate Courts - correct answersIf the judge made a mistake in the law or the trial procedure,
the parties can appeal the case to the appellate court. It is important to note that courts of
appeal are not set up to re-hear cases in their entirety. Instead, courts of appeal typically
address whether a lower court made serious mistakes of law. Additionally, an appellate court
can usually take cases from courts of special jurisdiction as well.
Arbitration - correct answersArbitration, a form of alternative dispute resolution (ADR), is a
technique for the resolution of disputes outside the courts. The parties to a dispute refer it to
arbitration by one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), and
agree to be bound by the arbitration decision (the "award"). A third party reviews the evidence
in the case and imposes a decision that is legally binding on both sides and enforceable in the
courts.[1]
Assault - correct answersIn common law, assault is the act of creating apprehension of an
imminent harmful or offensive contact with a person. An assault is carried out by a threat of
bodily harm coupled with an apparent, present ability to cause the harm.
, Assignment - correct answersAn assignment (Latin cessio) is a term used with similar meanings
in the law of contracts and in the law of real estate. In both instances, it encompasses the
transfer of rights held by one party—the assignor—to another party—the assignee.[1] The
details of the assignment determines some additional rights and liabilities (or duties).
assumption of risk - correct answersConsent to treatment based on a full understanding of all
possible risks of unpreventable results of that treatment is called
Bailment - correct answersBailment 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.
Bait and switch - correct answersthe action (generally illegal) of advertising goods that are an
apparent bargain, with the intention of substituting inferior or more expensive goods.
Bankruptcy - correct answersBankruptcy is a legal status of a person or other entity that cannot
repay the debts it owes to creditors. In most jurisdictions, bankruptcy is imposed by a court
order, often initiated by the debtor.
Bankruptcy is not the only legal status that an insolvent person or other entity may have, and
the term bankruptcy is therefore not a synonym for insolvency. In some countries, including the
United Kingdom, bankruptcy is limited to individuals, and other forms of insolvency proceedings
(such as liquidation and administration) are applied to companies. In the United States,
bankruptcy is applied more broadly to formal insolvency proceedings.
Battery - correct answersBattery is a criminal offense involving unlawful physical contact,
distinct from assault which is the act of creating apprehension of such contact.
bill of exchange - correct answersA bill of exchange or "draft" is a written order by the drawer to
the drawee to pay money to the payee. A common type of bill of exchange is the cheque (check
