Business Law 1 (GRCC) Exam Review
UPDATED ACTUAL Exam Questions and
CORRECT Answers
How is bailment created? - CORRECT ANSWER - Bailment is created when a relationship is
established when someone entrusts his property temporarily to someone else without intending to
give up title.
What are different types of jurisdictions? - CORRECT ANSWER - Original jurisdiction: the
right to hear cases for the first time (decide guilty or not guilty)
Appellate jurisdiction: the authority of a court to hear a case appealed from a lower court (checks
over 1st jursidiction)
Concurrent jurisdiction: both have jursidiction over both cases
Exclusive jursidiction: have or heard only by federal court
What is covered by a limited warranty? - CORRECT ANSWER - It is LIMITED to what it
covers. It could mean specified parts, certain types of defects, or other conditions.
When does a leasehold estate terminate? - CORRECT ANSWER - A leasehold estate is one
whose termination date is usually known. A one-year lease, for example, will expire precisely at
the time stated in the lease agreement.
When is a landlord liable? - CORRECT ANSWER - The landlord is liable to hidden dangers
known to the landlord, dangers to people off the premises (but still his property), and premises
leased for admitting to the public.
What are the rights and duties of a subtenant? - CORRECT ANSWER - The subtenant is on
the agreement of a SUBLEASE (a transfer of something less than the entire leasehold interest)
, not a ASSIGNMENT (the tenant transfers all interest in the premises and all obligations), and
because of this the subtenants only obligations are to the tenant.
When can a tenant transfer a leasehold interest? - CORRECT ANSWER - The tenant can
transfer a leasehold interest at any time during their lease.
What are the legal requirements for hazardous waste? - CORRECT ANSWER -
What is an easement? - CORRECT ANSWER - A legal right to use another's land for a
specific limited purpose, but the owner still has ownership over the land.
How is an express warranty created? - CORRECT ANSWER - Whenever the seller affirms
that the product will perform in a certain manner.
What is covered under Article III of the Constitution? - CORRECT ANSWER - Article III
creates the federal judiciary, and the Bill of Rights, adopted in 1791, makes clear that individual
rights must be preserved against activities of the federal government.
What is employment at will? - CORRECT ANSWER - That rule holds that in the absence of a
contractual agreement otherwise, an employee is free to leave employment at any time and for
any reason; similarly, an employer is free to fire employees at any time and for any reason.
What are the sanctions for violating TILA? - CORRECT ANSWER - Creditors who violate
the TILA are subject to both criminal and civil sanctions.
What are garnishment, wage assignment, and confession of judgement? - CORRECT
ANSWER - Garnishment: When a court issues an order requiring your employer to withhold a
certain amount of your paycheck and send it directly to the person or institution to whom you
owe money, until your debt is paid off.
Wage Assignment: An agreement between you and and someone you owe money to, called the
creditor, that allows them to take money out of your paycheck to pay for what you owe.
UPDATED ACTUAL Exam Questions and
CORRECT Answers
How is bailment created? - CORRECT ANSWER - Bailment is created when a relationship is
established when someone entrusts his property temporarily to someone else without intending to
give up title.
What are different types of jurisdictions? - CORRECT ANSWER - Original jurisdiction: the
right to hear cases for the first time (decide guilty or not guilty)
Appellate jurisdiction: the authority of a court to hear a case appealed from a lower court (checks
over 1st jursidiction)
Concurrent jurisdiction: both have jursidiction over both cases
Exclusive jursidiction: have or heard only by federal court
What is covered by a limited warranty? - CORRECT ANSWER - It is LIMITED to what it
covers. It could mean specified parts, certain types of defects, or other conditions.
When does a leasehold estate terminate? - CORRECT ANSWER - A leasehold estate is one
whose termination date is usually known. A one-year lease, for example, will expire precisely at
the time stated in the lease agreement.
When is a landlord liable? - CORRECT ANSWER - The landlord is liable to hidden dangers
known to the landlord, dangers to people off the premises (but still his property), and premises
leased for admitting to the public.
What are the rights and duties of a subtenant? - CORRECT ANSWER - The subtenant is on
the agreement of a SUBLEASE (a transfer of something less than the entire leasehold interest)
, not a ASSIGNMENT (the tenant transfers all interest in the premises and all obligations), and
because of this the subtenants only obligations are to the tenant.
When can a tenant transfer a leasehold interest? - CORRECT ANSWER - The tenant can
transfer a leasehold interest at any time during their lease.
What are the legal requirements for hazardous waste? - CORRECT ANSWER -
What is an easement? - CORRECT ANSWER - A legal right to use another's land for a
specific limited purpose, but the owner still has ownership over the land.
How is an express warranty created? - CORRECT ANSWER - Whenever the seller affirms
that the product will perform in a certain manner.
What is covered under Article III of the Constitution? - CORRECT ANSWER - Article III
creates the federal judiciary, and the Bill of Rights, adopted in 1791, makes clear that individual
rights must be preserved against activities of the federal government.
What is employment at will? - CORRECT ANSWER - That rule holds that in the absence of a
contractual agreement otherwise, an employee is free to leave employment at any time and for
any reason; similarly, an employer is free to fire employees at any time and for any reason.
What are the sanctions for violating TILA? - CORRECT ANSWER - Creditors who violate
the TILA are subject to both criminal and civil sanctions.
What are garnishment, wage assignment, and confession of judgement? - CORRECT
ANSWER - Garnishment: When a court issues an order requiring your employer to withhold a
certain amount of your paycheck and send it directly to the person or institution to whom you
owe money, until your debt is paid off.
Wage Assignment: An agreement between you and and someone you owe money to, called the
creditor, that allows them to take money out of your paycheck to pay for what you owe.
