APP Business Law, Ethics & International Trade 1 â Questions and Answers
Question 1: Which of the following is a key element required to form a legally binding contract?
- A written agreement
- Consideration (Correct answer)
- Witnesses to the agreement
- An attorneyâs approval
Correct answer: Consideration
A legally binding contract must include an offer, acceptance, consideration, and the intent to create legal obligations. Consideration is essentialâit represents the value exchanged between parties.
Question 2: What is the primary purpose of business ethics in procurement?
- To speed up vendor selection
- To increase company profits
- To ensure fair and responsible purchasing practices (Correct answer)
- To reduce the number of suppliers
Correct answer: To ensure fair and responsible purchasing practices
Business ethics in procurement helps ensure fairness, transparency, and accountability in supplier relationships and decision-making, ultimately supporting long-term success and legal compliance.
Question 3: Which U.S. law prohibits companies from bribing foreign officials to obtain or retain business?
- Sherman Antitrust Act
- Uniform Commercial Code
- Foreign Corrupt Practices Act (Correct answer)
- Trade Expansion Act
Correct answer: Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act (FCPA) makes it illegal for U.S. companies and citizens to bribe foreign government officials, helping combat global corruption in international trade.
Question 4: In international trade, what is a 'tariff'?
- A fee charged by suppliers
- A restriction on product usage
- A licensing requirement
- A tax on imported goods (Correct answer)
Correct answer: A tax on imported goods
A tariff is a tax imposed on imported goods. Governments use tariffs to protect domestic industries or to generate revenue from foreign imports.
Question 5: What is the primary function of the Uniform Commercial Code (UCC)?
- To regulate employee contracts
- To provide federal tax rules
- To govern international trade treaties
- To harmonize commercial law across states (Correct answer)
Correct answer: To harmonize commercial law across states
The UCC standardizes business laws across U.S. states to facilitate consistent and fair commercial transactions, particularly in the sale of goods.
Question 6: Which ethical issue arises when a buyer accepts gifts from a supplier?
- Miscommunication
- Conflict of interest (Correct answer)
- Cost overrun
- Late delivery
Correct answer: Conflict of interest
Accepting gifts from suppliers can create a conflict of interest, leading to biased decision-making and damage to the organizationâs integrity.
APP Business Law, Ethics & International Trade 1
Which of the following is a key element required to form a legally binding contract?