BUSINESS AND LAW EXAM LEVEL 5 LATEST
2026 VERSION WITH 100 QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+||BRAND
NEW VERSION!!
1. A corporation is said to have a separate legal personality. This means:
A. Shareholders are personally liable for all corporate debts
B. The corporation can sue and be sued in its own name
C. The corporation does not pay taxes
D. Directors are personally liable for contracts
B. The corporation can sue and be sued in its own name
Rationale: Corporations are separate legal entities distinct from their
shareholders, which allows them to enter contracts, sue, and be sued
independently.
2. Which of the following is considered a primary source of law?
A. Newspaper articles
B. Case law
C. Law review articles
D. Encyclopedias
B. Case law
Rationale: Primary sources of law include statutes, regulations, and judicial
decisions (case law), which are legally binding.
3. The principle of “ultra vires” in corporate law refers to:
A. Actions beyond a company’s legal power
B. Contracts within company authority
, C. The duties of shareholders
D. Tax obligations
A. Actions beyond a company’s legal power
Rationale: Ultra vires acts are those performed beyond the scope of the company’s
stated objectives or powers.
4. In a contract, consideration is best defined as:
A. The location where the contract is signed
B. Something of value exchanged between parties
C. The legal advisor’s opinion
D. A signature on a contract
B. Something of value exchanged between parties
Rationale: Consideration is a fundamental element of a valid contract, referring to
a benefit or detriment exchanged.
5. Which of the following is an example of a fiduciary duty?
A. An employee attending a meeting
B. A director acting in the best interest of the company
C. A customer buying products
D. A shareholder voting in an election
B. A director acting in the best interest of the company
Rationale: Fiduciary duties require loyalty and acting in good faith for the benefit
of another party, such as directors toward their company.
6. Which type of contract must be in writing to be enforceable under the
Statute of Frauds?
A. A contract for services under $500
B. A contract for the sale of land
C. An oral employment agreement
D. A verbal lease under one year
B. A contract for the sale of land
Rationale: The Statute of Frauds requires certain contracts, including those for the
sale of land, to be in writing to prevent fraud.
, 7. Which of the following is NOT a requirement for a valid contract?
A. Offer
B. Acceptance
C. Consideration
D. Notarization
D. Notarization
Rationale: While notarization can provide evidence of authenticity, it is not
required for contract validity.
8. In tort law, negligence requires proof of:
A. Intent to harm
B. Breach of a legal duty causing harm
C. A contract
D. Criminal conduct
B. Breach of a legal duty causing harm
Rationale: Negligence arises when a duty of care is breached, resulting in damage
or injury to another.
9. The “mirror image” rule in contract law states that:
A. An offer must be accepted exactly as proposed
B. A counteroffer is identical to the offer
C. Contracts must be signed twice
D. Offers expire after one week
A. An offer must be accepted exactly as proposed
Rationale: Acceptance must match the terms of the offer exactly to form a binding
contract.
10.Which of the following is an equitable remedy?
A. Compensatory damages
B. Specific performance
C. Punitive damages
D. Nominal damages
2026 VERSION WITH 100 QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+||BRAND
NEW VERSION!!
1. A corporation is said to have a separate legal personality. This means:
A. Shareholders are personally liable for all corporate debts
B. The corporation can sue and be sued in its own name
C. The corporation does not pay taxes
D. Directors are personally liable for contracts
B. The corporation can sue and be sued in its own name
Rationale: Corporations are separate legal entities distinct from their
shareholders, which allows them to enter contracts, sue, and be sued
independently.
2. Which of the following is considered a primary source of law?
A. Newspaper articles
B. Case law
C. Law review articles
D. Encyclopedias
B. Case law
Rationale: Primary sources of law include statutes, regulations, and judicial
decisions (case law), which are legally binding.
3. The principle of “ultra vires” in corporate law refers to:
A. Actions beyond a company’s legal power
B. Contracts within company authority
, C. The duties of shareholders
D. Tax obligations
A. Actions beyond a company’s legal power
Rationale: Ultra vires acts are those performed beyond the scope of the company’s
stated objectives or powers.
4. In a contract, consideration is best defined as:
A. The location where the contract is signed
B. Something of value exchanged between parties
C. The legal advisor’s opinion
D. A signature on a contract
B. Something of value exchanged between parties
Rationale: Consideration is a fundamental element of a valid contract, referring to
a benefit or detriment exchanged.
5. Which of the following is an example of a fiduciary duty?
A. An employee attending a meeting
B. A director acting in the best interest of the company
C. A customer buying products
D. A shareholder voting in an election
B. A director acting in the best interest of the company
Rationale: Fiduciary duties require loyalty and acting in good faith for the benefit
of another party, such as directors toward their company.
6. Which type of contract must be in writing to be enforceable under the
Statute of Frauds?
A. A contract for services under $500
B. A contract for the sale of land
C. An oral employment agreement
D. A verbal lease under one year
B. A contract for the sale of land
Rationale: The Statute of Frauds requires certain contracts, including those for the
sale of land, to be in writing to prevent fraud.
, 7. Which of the following is NOT a requirement for a valid contract?
A. Offer
B. Acceptance
C. Consideration
D. Notarization
D. Notarization
Rationale: While notarization can provide evidence of authenticity, it is not
required for contract validity.
8. In tort law, negligence requires proof of:
A. Intent to harm
B. Breach of a legal duty causing harm
C. A contract
D. Criminal conduct
B. Breach of a legal duty causing harm
Rationale: Negligence arises when a duty of care is breached, resulting in damage
or injury to another.
9. The “mirror image” rule in contract law states that:
A. An offer must be accepted exactly as proposed
B. A counteroffer is identical to the offer
C. Contracts must be signed twice
D. Offers expire after one week
A. An offer must be accepted exactly as proposed
Rationale: Acceptance must match the terms of the offer exactly to form a binding
contract.
10.Which of the following is an equitable remedy?
A. Compensatory damages
B. Specific performance
C. Punitive damages
D. Nominal damages
