CNA Business Law and Ethics Flashcards

Under the Uniform Commercial Code (UCC), a contract for the sale of goods valued at $500 or more must generally be:

Answer: In writing to be enforceable

UCC Article 2 requires contracts for the sale of goods worth $500 or more to be evidenced by a written record to satisfy the statute of frauds.

Which ethical framework judges the morality of an action solely by its outcomes or consequences?

Answer: Consequentialism

Consequentialism, including utilitarianism, evaluates actions based on their results — an action is ethical if it produces the greatest good for the greatest number.

An agency relationship in business law requires which of the following elements?

Answer: Consent, control, and action on behalf of another party

An agency relationship exists when one party (agent) consents to act on behalf of another (principal) subject to the principal's control.

The Sarbanes-Oxley Act (SOX) was enacted primarily to address:

Answer: Corporate accounting scandals and enhance financial reporting integrity

SOX was enacted in 2002 in response to accounting fraud at Enron, WorldCom, and others, imposing strict requirements on financial reporting and auditor independence.

Which type of business entity provides its owners with limited liability protection while allowing profits to be taxed only at the owner level?

Answer: Limited liability company (LLC)

An LLC offers limited liability protection similar to a corporation but allows pass-through taxation, avoiding the double taxation of C corporations.

In contract law, consideration is best defined as:

Answer: Something of legal value exchanged by both parties

Consideration is a bargained-for exchange in which each party gives something of legal value, making a contract legally binding.