WGU C717 Business Law –
2025 Full Exam Prep With
Verified Correct Answers | A
Grade
Question 1
Under the Uniform Commercial Code (UCC) Article 2, a contract for the sale of
goods over $500 must be in writing to be enforceable. This is known as the:
A. Mirror image rule B. Battle of the forms C. Statute of Frauds D. Parol evidence
rule
C. Statute of Frauds
Rationale: UCC § 2-201 requires a writing for sales contracts over $500 to prevent
fraud, ensuring enforceability; exceptions include specially manufactured goods or
merchant confirmations, aligning with commercial certainty principles.
Question 2
In contract law, consideration must be something of value exchanged between
parties. Which of the following does NOT constitute valid consideration?
A. A promise to perform a pre-existing duty B. A bargained-for exchange of
money for services C. Forbearance from suing in good faith D. A nominal amount
like $1 for a valuable item
A. A promise to perform a pre-existing duty
Rationale: Pre-existing duties do not provide new value, rendering the agreement
illusory under common law; this upholds mutuality of obligation, as seen in cases
like Angel v. Murray.
,Question 3
A company executive makes a decision that benefits shareholders but harms the
environment. This raises an ethical issue under:
A. Fiduciary duty to shareholders B. Corporate social responsibility (CSR) C.
Strict liability D. Negligence per se
B. Corporate social responsibility (CSR)
Rationale: CSR balances profit with societal impact, including environmental
stewardship; ethical frameworks like stakeholder theory (Freeman) guide decisions
beyond shareholder primacy.
Question 4
Under UCC Article 9, a security interest in collateral becomes perfected by:
A. Mere attachment B. Filing a financing statement C. Possession of the collateral
D. B or C
D. B or C
Rationale: Perfection via filing (public notice) or possession (e.g., pledge) protects
against third parties; UCC § 9-310/312 prioritizes method based on collateral type
for priority disputes.
Question 5
In tort law, negligence requires proof of duty, breach, causation, and damages. The
"but for" test applies to:
A. Actual cause (cause-in-fact) B. Proximate cause C. Duty of care D. Standard of
care
A. Actual cause (cause-in-fact)
Rationale: The "but for" test determines if the harm would not have occurred
without the breach; e.g., Palsgraf v. Long Island Railroad Co. illustrates limits.
, Question 6
A bilateral contract is formed when there is:
A. A promise for a performance B. A promise for a promise C. Unilateral
acceptance D. Revocation before acceptance
B. A promise for a promise
Rationale: Bilateral contracts involve mutual promises (e.g., offer to sell,
acceptance to buy); this contrasts with unilateral (promise for act), per Restatement
(Second) of Contracts § 2.
Question 7
Corporate ethics codes are primarily enforced through:
A. Government regulations B. Internal compliance programs and whistleblower
protections C. Shareholder lawsuits only D. External audits
B. Internal compliance programs and whistleblower protections
Rationale: Sarbanes-Oxley Act (2002) mandates ethics programs; whistleblower
provisions (Dodd-Frank) encourage reporting, fostering self-regulation.
Question 8
Under UCC Article 3, negotiable instruments must be:
A. Payable to bearer or order B. Unconditional promise or order to pay C. Both A
and B D. Signed by payee
C. Both A and B
Rationale: UCC § 3-104 defines negotiability for checks/notes; ensures
transferability, with holder in due course protections.
Question 9
Res ipsa loquitur in negligence cases applies when?
2025 Full Exam Prep With
Verified Correct Answers | A
Grade
Question 1
Under the Uniform Commercial Code (UCC) Article 2, a contract for the sale of
goods over $500 must be in writing to be enforceable. This is known as the:
A. Mirror image rule B. Battle of the forms C. Statute of Frauds D. Parol evidence
rule
C. Statute of Frauds
Rationale: UCC § 2-201 requires a writing for sales contracts over $500 to prevent
fraud, ensuring enforceability; exceptions include specially manufactured goods or
merchant confirmations, aligning with commercial certainty principles.
Question 2
In contract law, consideration must be something of value exchanged between
parties. Which of the following does NOT constitute valid consideration?
A. A promise to perform a pre-existing duty B. A bargained-for exchange of
money for services C. Forbearance from suing in good faith D. A nominal amount
like $1 for a valuable item
A. A promise to perform a pre-existing duty
Rationale: Pre-existing duties do not provide new value, rendering the agreement
illusory under common law; this upholds mutuality of obligation, as seen in cases
like Angel v. Murray.
,Question 3
A company executive makes a decision that benefits shareholders but harms the
environment. This raises an ethical issue under:
A. Fiduciary duty to shareholders B. Corporate social responsibility (CSR) C.
Strict liability D. Negligence per se
B. Corporate social responsibility (CSR)
Rationale: CSR balances profit with societal impact, including environmental
stewardship; ethical frameworks like stakeholder theory (Freeman) guide decisions
beyond shareholder primacy.
Question 4
Under UCC Article 9, a security interest in collateral becomes perfected by:
A. Mere attachment B. Filing a financing statement C. Possession of the collateral
D. B or C
D. B or C
Rationale: Perfection via filing (public notice) or possession (e.g., pledge) protects
against third parties; UCC § 9-310/312 prioritizes method based on collateral type
for priority disputes.
Question 5
In tort law, negligence requires proof of duty, breach, causation, and damages. The
"but for" test applies to:
A. Actual cause (cause-in-fact) B. Proximate cause C. Duty of care D. Standard of
care
A. Actual cause (cause-in-fact)
Rationale: The "but for" test determines if the harm would not have occurred
without the breach; e.g., Palsgraf v. Long Island Railroad Co. illustrates limits.
, Question 6
A bilateral contract is formed when there is:
A. A promise for a performance B. A promise for a promise C. Unilateral
acceptance D. Revocation before acceptance
B. A promise for a promise
Rationale: Bilateral contracts involve mutual promises (e.g., offer to sell,
acceptance to buy); this contrasts with unilateral (promise for act), per Restatement
(Second) of Contracts § 2.
Question 7
Corporate ethics codes are primarily enforced through:
A. Government regulations B. Internal compliance programs and whistleblower
protections C. Shareholder lawsuits only D. External audits
B. Internal compliance programs and whistleblower protections
Rationale: Sarbanes-Oxley Act (2002) mandates ethics programs; whistleblower
provisions (Dodd-Frank) encourage reporting, fostering self-regulation.
Question 8
Under UCC Article 3, negotiable instruments must be:
A. Payable to bearer or order B. Unconditional promise or order to pay C. Both A
and B D. Signed by payee
C. Both A and B
Rationale: UCC § 3-104 defines negotiability for checks/notes; ensures
transferability, with holder in due course protections.
Question 9
Res ipsa loquitur in negligence cases applies when?
