Future Business Leaders of America (FBLA) Business Law Practice Exam

What does reimbursement refer to in legal terms?

1. Payment for damages caused by negligence

2. Compensation for a breach of contract

3. Payment made for expenses incurred on behalf of another

4. Refund of registration fees

The correct answer is: Payment made for expenses incurred on behalf of another

Reimbursement in legal terms specifically refers to the payment made for expenses incurred on behalf of another party. This concept arises in various legal contexts, including contracts and agency relationships, where one party may incur costs that another party is obliged to cover. For instance, if an employee uses their own funds to purchase supplies for their employer, the employer has a legal duty to reimburse that employee for the expenses. The other options describe different financial compensations in legal contexts but do not accurately capture the concept of reimbursement. Payment for damages caused by negligence relates to tort law and seeks to rectify harm suffered due to another’s wrongful act. Compensation for a breach of contract pertains to fulfilling contractual obligations when they are not met, but it does not imply covering another's expenses. A refund of registration fees addresses a return of funds for fees paid, which is distinctly different from the reimbursement of incurred expenses.