Question 1

A dispute has arisen between business entities with a lengthy relationship, and each would suffer economically if the relationship were to suddenly end. What procedure should first be employed to attempt to maintain the relationship and quickly resolve the dispute?

Accepted Answer

Attempting to negotiate a direct resolution is typically the first step recommended in resolving any dispute, especially between businesses with a long-standing relationship. This allows the parties to potentially save money and maintain their business connection. If negotiations are not successful, further legal action may be required. Conversely, options A and D do not address the dispute directly or attempt to resolve it, while option B prematurely ends the business relationship without attempting to resolve the issue.

Question 2

What was the outcome of U.S. government reluctance to regulate the activities of its banks, financial institutions, and markets?

Accepted Answer

The outcome of U.S. government reluctance to regulate the activities of its banks, financial institutions, and markets was severe destabilization of global markets and economies. This was evidenced by the 2008 global financial crisis which was largely caused by risky lending practices in the U.S. housing market and inadequate regulation and oversight of the financial industry.

Question 3

What law regulates the use of tanning beds in Nova Scotia?

Accepted Answer

The Tanning Beds Act is a law specifically regulating the use of tanning beds in Nova Scotia. The other options listed are either federal or international laws that may have some relevance to tanning bed use, but are not the primary regulatory framework in the province.

Question 4

How does a legal contract contribute to a business relationship?

Accepted Answer

A legal contract provides structure, predictability, and security to the business relationship. It establishes clear expectations and obligations for each party, and outlines how disputes will be resolved. This reduces the risk of misunderstandings and disagreements, and helps to build trust between the parties involved.

Question 5

Risk managers were keen to use unregulated, derivative mortgage products to shift risk off their balance sheets. What is the consequence of failing to regulate investment business activities in a free-market environment?

Accepted Answer

Failing to regulate investment business activities in a free-market environment can lead to unscrupulous participants exploiting the opportunities to act in their own self-interest without regard for the consequences to others. This can result in market failures, such as the 2008 financial crisis, which had a global impact.

Question 6

I'mNottaSoSmart Inc. overlooked the proper registration of its patent for a unique relay component used in its new software before release for public sale. A year later it discovered a competitor had used the component in its just-released patented software. Which of the following best describes the consequences to the competitor for its actions?

Accepted Answer

The answer of I'mNottaSoSmart Inc. overlooked the proper registration of...

Question 7

Organic Veggies'4'U Inc. has entered into a one-year, extendable supplier contract with EcoWise Fertilizers Ltd. for the delivery of 1.5-ton pallets of worm castings fertilizer at a price of $2,000 per ton in March and June. What type of role do contract law and its contributions to the establishment of this business relationship have?

Accepted Answer

Contract law plays a facilitating role by providing definition, context, and certainty to the business relationship between Organic Veggies'4'U Inc. and EcoWise Fertilizers Ltd. The contract sets out the terms and conditions of the agreement, such as the quantity, price, and delivery schedule, which provide a clear framework for both parties to operate within.

Question 8

What are the commonly used alternative dispute resolution methods for avoiding litigation?

Accepted Answer

The answer of What are the commonly used alternative dispute...

Question 9

Which of the following best defines business law?

Accepted Answer

Business law is a broad term that refers to the body of legal rules that govern commercial relationships and the enforcement of rights in a business setting. These rules cover a wide range of areas, including contract law, property law, tort law, labor law, and intellectual property law. The purpose of business law is to provide a framework within which businesses can operate effectively and fairly, while protecting the rights of all parties involved.

Question 10

Which of the following matches the reality that contracts cannot recite or provide for all contingencies, leaving some issues unstated?

Accepted Answer

Contracts cannot possibly anticipate or provide for every possible contingency that may arise during the course of a business relationship. As a result, there is always the potential for uncertainty and unforeseen events that may not be explicitly addressed in the contact. Therefore, the degree of certainty established in a contract is not entirely absolute.

Question 11

Which of the following best exemplifies some of the most important contributions the law provides when facilitating commercial activities?

Accepted Answer

The law provides structure by establishing rules and regulations that govern commercial activities. It also provides certainty by ensuring that these rules are predictable and can be relied upon by businesses. Additionally, it helps prevent disputes and facilitates transactions by providing a clear framework for parties to conduct their dealings.

Question 12

Novel Swings Inc. has a contract to begin construction of a school's swing set on June 15th and work is to be completed by August 1st. After weeks of wet weather, the ground was unsuitable for work to begin in June and Novel will not meet the completion deadline. Which of the following best describes the legal statutes of the contractual relationship between Novel Swings and the school?

Accepted Answer

Novel Swings has breached the contract by not completing the work by the agreed upon deadline. However, if there is a force majeure clause in the contract, Novel may have a defense against the breach due to the weather conditions. In any case, the parties may need to renegotiate the terms of the contract to account for the delay and resulting non-performance.

Question 13

What is the purpose of contract law?

Accepted Answer

The purpose of contract law is to enforce expectations and facilitate planning between parties entering into a contractual agreement. It provides a framework for agreements to be formed, sets out the obligations and rights of each party, and provides remedies if one party breaches the contract. Contract law is focused on enforcing agreements and ensuring that both parties are held to their obligations. While litigation may occur as a result of contractual breaches, it is not the primary purpose of contract law. Principles and values for use in society are established through legal and ethical frameworks, not just contract law. And while contract law may determine right and wrong in specific situations, its primary purpose is to provide a reliable and predictable framework for agreements between parties.

Question 14

Mortgage Plus Inc. made outstanding profits selling derivative, asset-backed investments based on subprime mortgage products. What was the incentive for mortgage lenders to bundle derivative investment products with subprime mortgage loans?

Accepted Answer

The answer of Mortgage Plus Inc. made outstanding profits selling...

Question 15

What is the primary asset needed to maximize protection of entrepreneurs and the entire business enterprise?

Accepted Answer

Knowledge of business law is the primary asset needed to maximize protection of entrepreneurs and the entire business enterprise. Without a proper understanding of the legal framework governing business operations, entrepreneurs and business owners risk exposing themselves to legal liabilities and financial losses. By having a solid comprehension of business laws, entrepreneurs can better protect themselves, their assets, and their businesses from legal disputes and other potential risks. While inventory tracking software, accounting software, and surveillance cameras can all be valuable tools for managing a business, they are not the primary asset needed to maximize business protection.

Question 16

Jim has retained a lawyer to file a lawsuit claiming economic loss due to theft of business revenues by his partner. What form of dispute resolution has Jim undertaken?

Accepted Answer

Jim has retained a lawyer to file a lawsuit, which means he has undertaken litigation as a form of dispute resolution.

Question 17

Which of the following situations best exemplifies how the law protects members of society?

Accepted Answer

Evelyn being awarded compensation for wrongful dismissal exemplifies how the law protects members of society by ensuring that individuals are not unfairly treated by their employers and are compensated for any wrongful actions taken against them.

Question 18

Windy Energy Inc. recovered most of its property stolen by a former employee. The employee was placed on probation and ordered to pay restitution. What type of law determined the employee's punishment?

Accepted Answer

The punishment of probation and restitution indicates that this was a criminal case. Employment law deals with relationships between employers and employees, business law deals with legal issues related to businesses, and contract law deals with agreements and obligations between parties.

Question 19

Which of the following is a distinguishing characteristic of the influence of law on the business environment?

Accepted Answer

The influence of law on the business environment does not necessarily have to be exacting and literal. Laws can be open to interpretation and may have exceptions or grey areas. Businesses can also use legal strategies to shape their operations in a way that complies with the law while still allowing them to pursue their objectives.

Question 20

A small group of entrepreneurs undertaking a business venture have agreed on the roles each will assume in the business, but they must now determine the form of business structure for the enterprise. What does the law facilitate by offering entrepreneurs different business structure options?

Accepted Answer

The law offers entrepreneurs different business structure options that allow them to choose the degree of exposure to liability for business risks. For example, a sole proprietorship exposes the owner to unlimited liability, while a corporation limits liability to the assets of the corporation. Therefore, entrepreneurs can choose the business structure that best suits their risk tolerance and protects their personal assets.

Quiz 1: Knowledge of Law As a Business Asset