FBLA Business Law and Ethics 1 — Questions and Answers
Question 1: What are the four essential elements required for a valid contract?
- Offer, acceptance, consideration, capacity (Correct answer)
- Signature, witness, notary, date
- Payment, delivery, receipt, approval
- Warranty, guarantee, bond, surety
Correct answer: Offer, acceptance, consideration, capacity
A valid contract requires an offer, acceptance of that offer, consideration (something of value exchanged), and legal capacity of the parties.
Question 2: What is 'negligence' in business law?
- Intentional harm to another party
- Failure to exercise reasonable care, resulting in harm (Correct answer)
- Breach of a written contract
- Unauthorized use of intellectual property
Correct answer: Failure to exercise reasonable care, resulting in harm
Negligence occurs when a party fails to act with the care a reasonable person would exercise, and that failure causes harm.
Question 3: What does the term 'intellectual property' refer to?
- Physical assets owned by a business
- Creations of the mind protected by law, such as patents and copyrights (Correct answer)
- A company's customer database
- Trade secrets only
Correct answer: Creations of the mind protected by law, such as patents and copyrights
Intellectual property includes legally protected creations of the intellect, such as inventions, literary works, and trademarks.
Question 4: Which business structure provides owners with limited liability protection while avoiding double taxation?
- Sole proprietorship
- C-Corporation
- Limited Liability Company (LLC) (Correct answer)
- General partnership
Correct answer: Limited Liability Company (LLC)
An LLC combines the liability protection of a corporation with the pass-through taxation of a partnership.
Question 5: What is 'breach of contract'?
- Signing a contract under duress
- Failing to fulfill one's obligations under a valid contract (Correct answer)
- Terminating a contract legally
- Modifying contract terms by mutual agreement
Correct answer: Failing to fulfill one's obligations under a valid contract
A breach of contract occurs when one party fails to perform their agreed-upon obligations without a valid legal excuse.
Question 6: What is the purpose of the Americans with Disabilities Act (ADA) in a business context?
- To regulate minimum wage requirements
- To prohibit discrimination against individuals with disabilities (Correct answer)
- To set safety standards for manufacturing
- To govern international trade agreements
Correct answer: To prohibit discrimination against individuals with disabilities
The ADA prohibits discrimination based on disability in employment and requires reasonable accommodations in the workplace.
FBLA Business Law and Ethics 1
What are the four essential elements required for a valid contract?