Complete Verified Test Bank for
Business Law: Text and Cases 16th
Edition (Clarkson & Miller) – Exam
Questions & Answers 2025
Prepared for Academic Use
2025 Edition
Based on Business Law: Text and Cases, 16th Edition by Kenneth W.
Clarkson and Roger LeRoy Miller
,Contents
1 Unit I: The Legal Environment of Business . . . . . . . . . . . . . . . . 2
1.1 Chapter 1: Law and Legal Reasoning . . . . . . . . . . . . . . . . . . . . 2
1.1.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Chapter 2: Business and the Constitution . . . . . . . . . . . . . . . . . 5
1.2.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 5
1.3 Chapter 3: Ethics in Business . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 7
2 Unit II: Torts and Crimes . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Chapter 6: Tort Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 8
3 Unit III: Contracts and E-Contracts . . . . . . . . . . . . . . . . . . . . 9
3.1 Chapter 11: Nature and Terminology . . . . . . . . . . . . . . . . . . . . 9
3.1.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 9
4 Unit IV: Domestic and International Sales and Lease Contracts . . . 10
4.1 Chapter 20: Sales and Lease Contracts . . . . . . . . . . . . . . . . . . . 10
4.1.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 11
5 Unit V: Negotiable Instruments . . . . . . . . . . . . . . . . . . . . . . . 12
5.1 Chapter 25: Negotiable Instruments . . . . . . . . . . . . . . . . . . . . . 12
5.1.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.1.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 12
6 Additional Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.1 Legal Environment and Ethics . . . . . . . . . . . . . . . . . . . . . . . . 13
6.2 Torts and Crimes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.3 Contracts and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.4 Business Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.5 Property and Employment Law . . . . . . . . . . . . . . . . . . . . . . . 22
6.6 Agency and Creditor-Debtor Relations . . . . . . . . . . . . . . . . . . . 24
1
, Business Law: Text and Cases, 16th Edition Test Bank
1 Unit I: The Legal Environment of Business
1.1 Chapter 1: Law and Legal Reasoning
1.1.1 True/False Questions
1. In the case citation, Badawi v. Albin, 311 Neb. 603, 973 N.W.2d 714 (2022), the
opinion for this case can be found in Volume 311 of the Nebraska Reports on page
603. Answer: True
Explanation: The citation indicates the case is located in Volume 311 of the
Nebraska Reports on page 603.
2. A constitution is a secondary source of law. Answer: False
Explanation: A constitution is a primary source, forming the basis of legal au-
thority.
3. Controlling precedents are binding authorities. Answer: True
Explanation: Binding precedents from higher courts must be followed by lower
courts.
4. There is one right answer to every legal question. Answer: False
Explanation: Legal questions can have varied interpretations based on context.
5. The stability of the law is critical for business planning. Answer: True
Explanation: Predictable laws allow businesses to operate with confidence.
6. A state constitution is supreme within its borders, even if it conflicts with the U.S.
Constitution. Answer: False
Explanation: The U.S. Constitution overrides conflicting state laws.
7. Federal regulations take precedence over conflicting state regulations. Answer:
True
Explanation: Federal supremacy ensures federal regulations prevail.
8. A case of first impression is a binding authority. Answer: False
Explanation: Such cases lack precedent and are persuasive, not binding.
9. Cyberlaw governs internet-based transactions. Answer: True
Explanation: Cyberlaw addresses legal issues in digital environments.
10. Courts grant equitable remedies when legal remedies are adequate. Answer: False
Explanation: Equitable remedies apply only when legal remedies are insufficient.
1.1.2 Multiple Choice Questions
1. The primary role of business law is to:
a) Limit competition
b) Ensure fairness in economic transactions
c) Resolve all disputes
d) Enforce criminal penalties
2 of 26
Business Law: Text and Cases 16th
Edition (Clarkson & Miller) – Exam
Questions & Answers 2025
Prepared for Academic Use
2025 Edition
Based on Business Law: Text and Cases, 16th Edition by Kenneth W.
Clarkson and Roger LeRoy Miller
,Contents
1 Unit I: The Legal Environment of Business . . . . . . . . . . . . . . . . 2
1.1 Chapter 1: Law and Legal Reasoning . . . . . . . . . . . . . . . . . . . . 2
1.1.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Chapter 2: Business and the Constitution . . . . . . . . . . . . . . . . . 5
1.2.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 5
1.3 Chapter 3: Ethics in Business . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 7
2 Unit II: Torts and Crimes . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Chapter 6: Tort Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 8
3 Unit III: Contracts and E-Contracts . . . . . . . . . . . . . . . . . . . . 9
3.1 Chapter 11: Nature and Terminology . . . . . . . . . . . . . . . . . . . . 9
3.1.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 9
4 Unit IV: Domestic and International Sales and Lease Contracts . . . 10
4.1 Chapter 20: Sales and Lease Contracts . . . . . . . . . . . . . . . . . . . 10
4.1.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 11
5 Unit V: Negotiable Instruments . . . . . . . . . . . . . . . . . . . . . . . 12
5.1 Chapter 25: Negotiable Instruments . . . . . . . . . . . . . . . . . . . . . 12
5.1.1 True/False Questions . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.1.2 Multiple Choice Questions . . . . . . . . . . . . . . . . . . . . . . 12
6 Additional Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.1 Legal Environment and Ethics . . . . . . . . . . . . . . . . . . . . . . . . 13
6.2 Torts and Crimes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.3 Contracts and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.4 Business Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.5 Property and Employment Law . . . . . . . . . . . . . . . . . . . . . . . 22
6.6 Agency and Creditor-Debtor Relations . . . . . . . . . . . . . . . . . . . 24
1
, Business Law: Text and Cases, 16th Edition Test Bank
1 Unit I: The Legal Environment of Business
1.1 Chapter 1: Law and Legal Reasoning
1.1.1 True/False Questions
1. In the case citation, Badawi v. Albin, 311 Neb. 603, 973 N.W.2d 714 (2022), the
opinion for this case can be found in Volume 311 of the Nebraska Reports on page
603. Answer: True
Explanation: The citation indicates the case is located in Volume 311 of the
Nebraska Reports on page 603.
2. A constitution is a secondary source of law. Answer: False
Explanation: A constitution is a primary source, forming the basis of legal au-
thority.
3. Controlling precedents are binding authorities. Answer: True
Explanation: Binding precedents from higher courts must be followed by lower
courts.
4. There is one right answer to every legal question. Answer: False
Explanation: Legal questions can have varied interpretations based on context.
5. The stability of the law is critical for business planning. Answer: True
Explanation: Predictable laws allow businesses to operate with confidence.
6. A state constitution is supreme within its borders, even if it conflicts with the U.S.
Constitution. Answer: False
Explanation: The U.S. Constitution overrides conflicting state laws.
7. Federal regulations take precedence over conflicting state regulations. Answer:
True
Explanation: Federal supremacy ensures federal regulations prevail.
8. A case of first impression is a binding authority. Answer: False
Explanation: Such cases lack precedent and are persuasive, not binding.
9. Cyberlaw governs internet-based transactions. Answer: True
Explanation: Cyberlaw addresses legal issues in digital environments.
10. Courts grant equitable remedies when legal remedies are adequate. Answer: False
Explanation: Equitable remedies apply only when legal remedies are insufficient.
1.1.2 Multiple Choice Questions
1. The primary role of business law is to:
a) Limit competition
b) Ensure fairness in economic transactions
c) Resolve all disputes
d) Enforce criminal penalties
2 of 26
