Legal Environment of Business Final Exam Study Guide – LAW 2221 – 2026 –
Comprehensive Review
From a(n) _______ approach, consideration is defined as a detriment incurred by the promise. -
ANS✔✔ Benefit-detriment
Ordinarily, a promise to perform an existing legal obligation is: - ANS✔✔ not consideration
A promise that in fact does not impose any obligation on the promisor is known as an elusive
promise. - ANS✔✔ False
A cancellation provision cannot exist in a binding enforceable contract. - ANS✔✔ False
An agreement to pay reasonable additional compensation to a contractor for the performance
of a pre-existing contract when the contractor faces extraordinary circumstances caused by
unforeseen difficulties is called a: - ANS✔✔ good-faith adjustment
One element involved in the determination of unconscionability is: - ANS✔✔ the comparative
bargaining power of the parties.
The validity of a contract is not affected by: - ANS✔✔ the fact that the contract turned out to be
a bad bargain for one of the parties.
Substantive unconscionability has to do with matters of freedom of assent. - ANS✔✔ False
In an employment contract, agreements not to compete are: - ANS✔✔ valid, if the restriction is
reasonable and necessary for the protection of the former employer
, In the absence of a valid restrictive covenant, the seller of a business may compete with an ex-
employee and solicit customers of the former employer. - ANS✔✔ True
If a bailment is for the sole benefit of the bailee, the bailor has no obligation to inform the
bailee of known defects. - ANS✔✔ False
A third person to whom a joint tenant's interest is transferred becomes a: - ANS✔✔ tenant in
common
Personal property is lost when an owner does not know where it is located but intends to find it.
- ANS✔✔ True
A bailee's interest in the bailed property can be characterized as: - ANS✔✔ possession
An ordinary gift made between two living persons is called an inter vivos gift. - ANS✔✔ True
Fungible goods are always homogeneous. - ANS✔✔ True
A consignment sale is treated as a(n) __________ under UCC Article 2, and the dealer-consignee
has full authority to sell the goods for the consignor and can pass title to the goods. - ANS✔✔
Sale or return
In a sale on approval, the buyer's approval must be demonstrated by express words. - ANS✔✔
False
A __________ is a completed sale with an option for the buyer to return the goods. - ANS✔✔
Sale or return
Comprehensive Review
From a(n) _______ approach, consideration is defined as a detriment incurred by the promise. -
ANS✔✔ Benefit-detriment
Ordinarily, a promise to perform an existing legal obligation is: - ANS✔✔ not consideration
A promise that in fact does not impose any obligation on the promisor is known as an elusive
promise. - ANS✔✔ False
A cancellation provision cannot exist in a binding enforceable contract. - ANS✔✔ False
An agreement to pay reasonable additional compensation to a contractor for the performance
of a pre-existing contract when the contractor faces extraordinary circumstances caused by
unforeseen difficulties is called a: - ANS✔✔ good-faith adjustment
One element involved in the determination of unconscionability is: - ANS✔✔ the comparative
bargaining power of the parties.
The validity of a contract is not affected by: - ANS✔✔ the fact that the contract turned out to be
a bad bargain for one of the parties.
Substantive unconscionability has to do with matters of freedom of assent. - ANS✔✔ False
In an employment contract, agreements not to compete are: - ANS✔✔ valid, if the restriction is
reasonable and necessary for the protection of the former employer
, In the absence of a valid restrictive covenant, the seller of a business may compete with an ex-
employee and solicit customers of the former employer. - ANS✔✔ True
If a bailment is for the sole benefit of the bailee, the bailor has no obligation to inform the
bailee of known defects. - ANS✔✔ False
A third person to whom a joint tenant's interest is transferred becomes a: - ANS✔✔ tenant in
common
Personal property is lost when an owner does not know where it is located but intends to find it.
- ANS✔✔ True
A bailee's interest in the bailed property can be characterized as: - ANS✔✔ possession
An ordinary gift made between two living persons is called an inter vivos gift. - ANS✔✔ True
Fungible goods are always homogeneous. - ANS✔✔ True
A consignment sale is treated as a(n) __________ under UCC Article 2, and the dealer-consignee
has full authority to sell the goods for the consignor and can pass title to the goods. - ANS✔✔
Sale or return
In a sale on approval, the buyer's approval must be demonstrated by express words. - ANS✔✔
False
A __________ is a completed sale with an option for the buyer to return the goods. - ANS✔✔
Sale or return
