Multiple choice

It is important for business people to have a basic understanding of business-related legal principles because:

A. The difference between winning and losing in business often depends upon the ability to make good legal choices.

B. Some business people and customers are also lawyers.

C. It is important to know how to sue your competition to put them out of business.

D. Knowing basic legal principles can help business people to evade their legal responsibilities.

You have drafted a letter accusing an ex-employee of a criminal act, but you realize that this may give your ex-employee grounds for a defamation suit. In relation to the risk management process, you have

A. Avoided the risk.

B. Responded to the risk.

C. Identified the risk.

D. Evaluated the risk

Which one of the following options is NOT a recommended risk management strategy?

A. Avoiding serious risk altogether.

B. Transferring risk to others, where feasible.

C. Accepting low-risk situations as a normal aspect of doing business.

D. Reducing risk by taking reasonable precautions.

You are the manager of a bar where alcohol is served. Which of the following actions is NOT part of a risk-reduction program for the bar?

A. Having all customers sign an agreement stating that the bar is not liable for any injuries caused by excessive drinking.

B. Ensuring that managers will back up the decisions of servers to stop serving alcohol to a customer.

C. Arranging for alternative transportation for customers who may have drunk too much.

D. Requiring all servers to take training on how to recognize and respond to a risk of excessive drinking

Which of the following statements is FALSE?

A. A limitation-of-liability clause may attempt to exclude all risk of liability.

B. A limitation-of-liability clause may attempt to prevent the customer from hiring a lawyer.

C. A limitation-of-liability clause may attempt to exclude liability only for certain acts or types of losses.

D. A limitation-of-liability clause may attempt to limit the amount of compensation available