FBLA Business Law and Ethics 1

Question 1

What are the four essential elements required for a valid contract?

Accepted Answer

Offer, acceptance, consideration, capacity

Answer

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?

Accepted Answer

Failure to exercise reasonable care, resulting in harm

Answer

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?

Accepted Answer

Creations of the mind protected by law, such as patents and copyrights

Answer

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?

Accepted Answer

Limited Liability Company (LLC)

Answer

An LLC combines the liability protection of a corporation with the pass-through taxation of a partnership.

Question 5

What is 'breach of contract'?

Accepted Answer

Failing to fulfill one's obligations under a valid contract

Answer

A breach of contract occurs when one party fails to perform their agreed-upon obligations without a valid legal excuse.

FBLA - Future Business Leaders of America Practice Test