Contract Law
What is the primary purpose of a legal business contract?
A) To guarantee that a business will always make a profit
B) To formalize an agreement between parties and protect business interests
C) To eliminate the need to collect state sales taxes
D) To register a company with the Internal Revenue Service
B) To formalize an agreement between parties and protect business interests
Which governmental agency was created by the Federal Trade Commission Act of 1914 to enforce antitrust laws?
A) Internal Revenue Service (IRS)
B) Environmental Protection Agency (EPA)
C) Federal Trade Commission (FTC)
D) Equal Employment Opportunity Commission (EEOC)
C) Federal Trade Commission (FTC)
How do an individual's morals differ fundamentally from the core definition of business ethics?
A) Morals are always enforced by the legal system, while ethics are completely optional
B) Morals focus entirely on corporate financial profits, while ethics reject making money
C) Morals are an individual's ideas of right and wrong, while ethics are based on a group's ideas
D) Morals apply only outside the workplace, while ethics apply only inside the office
C) Morals are an individual's ideas of right and wrong, while ethics are based on a group's ideas
What type of contract is commonly used when two or more individuals establish a new business together?
A) Employment contract
B) Property lease
C) Partnership agreement
D) Sales and service contract
C) Partnership agreement
Which piece of e-commerce legislation specifically protects the personal information of children under 13 years of age online?
A) Electronic Fund Transfer Act
B) CAN-SPAM Act
C) Children's Online Privacy Protection Act (COPPA)
D) US Safe Web Act
C) Children's Online Privacy Protection Act (COPPA)
What do legal experts strongly recommend regarding the format of contracts to ensure they are easily enforceable?
A) All contracts should be in writing
B) All contracts must be spoken aloud and recorded verbally
C) All contracts must be approved directly by the local government
D) All contracts require a personal Social Security Number to be valid
A) All contracts should be in writing
Which bureau of the US Department of Treasury is responsible for enforcing tax laws and collecting employment taxes?
A) Securities and Exchange Commission (SEC)
B) Internal Revenue Service (IRS)
C) Department of Labor (DOL)
D) Federal Trade Commission (FTC)
B) Internal Revenue Service (IRS)
What primary function does a company's code of ethics serve for its business operations?
A) It dictates how business should be conducted and outlines communication channels
B) It sets strict legal guidelines for collecting employee payroll taxes
C) It provides a list of competitive prices for all retail goods
D) It legally excuses employees from signing confidentiality agreements
A) It dictates how business should be conducted and outlines communication channels
Which business types are strictly required by the IRS to obtain an employer identification number (EIN) for tax purposes?
A) Only online e-commerce retail companies
B) Partnerships, corporations, and sole proprietorships with employees
C) Sole proprietorships without any employees
D) Only international maritime shipping corporations
B) Partnerships, corporations, and sole proprietorships with employees
Who originally presented the four basic consumer rights to Congress in 1962, which laid the groundwork for the Consumer Bill of Rights?
A) President Woodrow Wilson
B) The Federal Trade Commission
C) President John F. Kennedy
D) The Consumer Product Safety Commission
C) President John F. Kennedy
Which required contract element means that all parties involved must agree to the terms of the agreement?
A) Offer
B) Acceptance
C) Consideration
D) Capacity
B) Acceptance
Which federal agency enforces regulations regarding human health and the environment, such as air and water pollutant levels?
A) Environmental Protection Agency (EPA)
B) Occupational Safety and Health Administration (OSHA)
C) Internal Revenue Service (IRS)
D) Equal Employment Opportunity Commission (EEOC)
A) Environmental Protection Agency (EPA)
Which term describes the honesty of a person's actions, whether motivated by ethical, moral, or legal decisions?
A) Integrity
B) Morals
C) Philanthropy
D) Confidentiality
A) Integrity
What is the name of the negotiation process where union representatives meet with an employer to discuss workplace terms?
A) Collective bargaining
B) Breach of contract
C) Predatory pricing
D) Capacity evaluation
A) Collective bargaining
Which term refers to any work created by company employees on the job that is legally owned by that company?
A) Proprietary information
B) Trade secret
C) Philanthropy
D) Corporate culture
) Proprietary information
What is required of individuals to satisfy the contract element of capacity?
A) They must possess a registered business partnership
B) They must have a valid electronic signature device
C) They must be of legal age and of sound mind
D) They must be employed by a state or federal agency
C) They must be of legal age and of sound mind
Which federal agency is responsible for enforcing laws that protect job applicants and employees from unfair discrimination?
A) Occupational Safety and Health Administration (OSHA)
B) Equal Employment Opportunity Commission (EEOC)
C) Securities and Exchange Commission (SEC)
D) Federal Trade Commission (FTC)
B) Equal Employment Opportunity Commission (EEOC)
What is the specific name of an internal company handbook that outlines explicit expectations of employee behavior at work?
A) Code of conduct
B) Code of ethics
C) Employment contract
D) Confidentiality agreement
A) Code of conduct
Under Equal Employment Opportunity laws, it is illegal for an employer to discriminate against a worker based on which age bracket?
A) Age 21 and younger
B) Age 40 and older
C) Age 65 and older
D) Age 18 and younger
B) Age 40 and older
What is the legal term for overstating the features and benefits of products or making false claims about them in marketing messages?
A) Breach of contract
B) False advertising
C) Predatory pricing
D) Nonprice competition
B) False advertising
What is the term used to describe a broken promise where one party fails to follow contract terms without a legitimate reason?
A) Breach of contract
B) Sales and service contract
C) Partnership agreement
D) Capacity restriction
: A) Breach of contract
What official action is taken by the Consumer Product Safety Commission (CPSC) if a product on the market is found to be unsafe?
A) Ordering a product recall to remove or repair the item
B) Filing an immediate criminal lawsuit against the consumers
C) Permanently resetting the retail market price of the product
D) Revising the product's nutritional labeling guidelines
A) Ordering a product recall to remove or repair the item
Which term is defined as promoting the welfare of others through actions like donating money, products, or volunteer time?
A) Integrity
B) Morals
C) Philanthropy
D) Confidentiality
C) Philanthropy
What is the core purpose and goal of the Occupational Safety and Health Administration (OSHA)?
A) To assure safe and healthful working conditions for employees by enforcing standards
B) To dictate the federal minimum wage and maximum weekly work hours
C) To protect consumers against financial risks in the stock market
D) To investigate cases of false and misleading retail advertising
A) To assure safe and healthful working conditions for employees by enforcing standards
What is prohibited by fair pricing regulations established under the Robinson-Patman Act?
A) Price discrimination among distributors and sellers
B) Setting lower prices than local competitors
C) Accepting credit card transactions over the internet
D) Charging interest fees on short-term business loans
A) Price discrimination among distributors and sellers