BLAW Exam 2

Dana writes a check to Becky on Dana's account at Community Bank. The bank dishonors the check even though Dana has sufficient funds in her account. The bank is liable to

Dana

A gift is effective whether or not it is accepted.​

False

A tenant can withhold rent for any reason.​

False

States do not have trademark statutes.

False

Ervin signs a check "pay to the order of Felicia" drawn on Ervin's account in Garden Fields Bank. Ervin later orders the bank not to pay the check, but the bank pays it over Ervin's order. Subsequent checks written on Ervin's account "bounce." Most likely liable for the costs to Ervin is

Garden Fields Bank

Hadley, an accountant, accumulates working papers while performing an audit for Ilene. After the audit, these documents belong to

Hadley, with Ilene having a right of access to the papers.

Gus obtains a health insurance policy for his family from Healthway Insurance Company. The policy includes an incontestability clause. Under such a clause, after a policy has been in force for two or three years

Healthways cannot contest Gus's statements in the application.

Marlo publishes a book titled No Equals, which includes a chapter from Paige's copyrighted book Olympic Champions. Marlo's use of the chapter is actionable provided that

Marlo's does not have Paige's permission.

Unsecured creditors do not have a vote to confirm a Chapter 13 plan.

True

When consumer goods are involved, a termination statement must be filed within a month after the debt is paid.​

True

Finance Bank receives a check drawn on the account of Enterprise Industries, Inc., one of the bank's customers, at 3 p.m. Friday. Dora, the presenter of the check, is not one of the bank's customers. The bank uses deferred posting with a 2 p.m. cutoff hour. If it decides to dishonor the check, it must do so by midnight​

Tuesday

Nan asks Otto if she can store her car in his garage while she serves in the U.S. Army. He agrees. This is​

a bailment

Ernie, the owner of Fallow Farm, sells Gus a right to park his RV on Fallow land overnight. Gus's right is​

a license

Lubricant Corporation and Grease, Inc., are the principal suppliers of their product in their market. They agree that Lubricant will sell exclusively to retailers and Grease will sell exclusively to wholesalers. Under antitrust law, this is most likely

a per se violation

The Association of Organic Food Producers, which does not include all organic farmers and ranchers, refuses to deal with any parties who do not carry the products of its members. This group boycott is

a per se violation of antitrust law

Brendan signs a check "pay to the order of City College Bookstore" drawn on his account in Delta Bank to pay for his current semester's textbooks. The bookstore deposits the check in its account in Eagle Bank. Like most checks, this check is

a type of draft.

Sasha's debt to Tully is past due. Tully brings a legal action against Sasha to collect the debt. To ensure that a judgment in Tully's favor will be collectible, he asks the court to order the seizure of Sasha's property. This is a request for

a writ of attachment

Rob's creditors try to force him into involuntary bankruptcy. The creditors will be unsuccessful if Rob

is a farmer.

Home Products, Inc., in its advertisements, makes false claims about its own products and about the products of its competitors. The firm may be subject to sanctions for the false claims about​

its products only

The payment of Mo's debt to Neil is guaranteed by Mo's personal property. This is governed by​

the Uniform Commercial Code

AllforOne Inc. develops a new phone that the company names "OneforAll." AllforOne can obtain trademark protection for​

the name "OneforAll".

Dan defaults on a debt to Rachel. Rachel will not be able to recover the debt from

the sale of Dan's prize-winning pet dog

Creditors hold judgments on overdue debts against Expert Auto Repair when the debtor receives a discharge in bankruptcy. The discharge will

void any creditor's judgement on a discharged debt.

On Monday, Ellery deposits in her account at Fiscal Bank a local check for $500. After 5:00 p.m. on Friday, from these funds, Ellery can withdraw no more than​

$500

Robin's home is in a state that has a $30,000 homestead exemption. Robin de-faults on a $60,000 debt that she owes to Suburban Mortgage Company. Robin's home is sold at auction for $80,000. Suburban Mortgage may recover

50,000

Beck is an accountant who prepares her clients' tax returns. Cole is not an accountant, but he also prepares tax returns for clients. Under the Internal Revenue Code, liability for preparing a false return may be imposed on​

Beck and Cole

General Leasing Company (GLC) buys equipment for use as inventory, borrowing $1 million from Business Finance Corporation for a security interest in the equipment. The next day, GLC borrows $500,000 from Commercial Bank, also for a security interest in the equipment. GLC defaults on the loans. Suppose that two weeks after GLC takes possession of the equipment, Business Finance and Commercial Bank file financing statements, with Interstate filing first. In that circumstance, the party with priority to the equipment is

Commercial Bank only.

A bailment agreement must be express.​

False

A bank is not obligated to pay an uncertified check presented less than six months from its date.

False

A broker is an agent of an insurance company.

False

A business organization cannot obtain insurance on the life of a person, even on the life of an individual who is important to that organization.

False

A consumer who receives an unsolicited credit card can be charged by the company that issued the card for any unauthorized charges.​

False

A credit collection agency may contact a debtor at any time.​

False

A credit-card company may increase the interest rate on a customer's credit-card balance at any time.​

False

A customer can stop payment on a check that has been certified or accepted by a bank.

False

A floating lien cannot apply to the proceeds of the sale of after-acquired property.

False

A forged signature is effective as the signature of a drawer to the extent that is resembles the drawer's actual signature.

False

A gift is a voluntary transfer of property ownership for which consideration is given.​

False

A horizontal merger occurs when a company at one stage of production acquires a company at a higher or lower stage of production.

False

A life insurance policy is not binding until the insured dies.

False

A security interest cannot be perfected without the filing of a financing statement.

False

A security interest is enforceable only if the debtor has title to the collateral.

False

A short sale is a sale of only part of the whole property subject to a mortgage.

False

A substitute check is a paper reproduction of an original check without all of the information required on checks for automated processing.

False

Accountants are exempt from the criminal provisions of federal tax laws.​

False

All aspects of software are protected by copyright law.

False

An assignment of a lease releases the original tenant from the obligation to pay rent should the assignee default.​

False

Any activity that substantially affects interstate commerce falls outside the scope of antitrust laws.

False

Any failure of a bank to honor a check because it would create an overdraft is a wrongful dishonor.

False

Bankruptcy proceedings are held in state courts.

False

Businesses that engage in ultrahazardous activities are not liable for any injuries the activities cause.

False

Check 21 applies in only half of the states

False

Commercial banking practices consider a check that has been outstanding for three months to be a stale check.

False

Counteradvertising occurs when a salesperson lures a consumer into a store by advertising a low-priced item in order to switch the consumer to a more expensive item.​

False

Credit can be denied solely on the basis of marital status.

False

Each bank in a collection chain must pass a check on before midnight of the day of its receipt.

False

Imported foods do not have to meet U.S. safety standards.​

False

In a bailment of fungible goods, the bailee must return the identical goods given by the bailor.​

False

Liquidated debts are debts that are indefinite, or not fixed, in amount.

False

Market power is the ability of a firm to enter a given market.

False

Obvious exaggerations are not permissible in advertising.​

False

On the entry of an order for relief in a reorganization case, the creditors generally take over the operation of the debtor's business.

False

Someone who finds abandoned property acquires title to it and that title is good against the whole world, except the original owner.​

False

The Fair Debt Collection Practices Act attempts to ensure that creditors are always paid by debtors.​

False

The Federal Reserve Board of Governors has issued a regulation that governs credit provisions associated with sales contracts—Regulation Z.​

False

The competency of professionals' service is never an issue.​

False

The death of a customer immediately revokes a bank's authority to pay an item.

False

The first bank to receive a check for payment is the intermediary bank.

False

The incompetence of a customer revokes a bank's authority to pay an item.

False

The possession of monopoly power is the only element needed to establish the offense of monopolization.

False

The primary responsibility for preventing and controlling air pollution rests with the federal government.

False

Traditionally, a professional owed a duty to those with whom the professional had a direct contractual relationship to perform a service and to any third party who relied on that service.​

False

When a bank draws a check on itself, the check is called a certified check.

False

When a bank pays a check on which the drawer's signature is forged, generally the customer suffers the loss.

False

When a customer deposits cash into a checking account, he or she becomes a debtor for the amount deposited.

False

When receiving a stale check for payment, a bank has no option but to refuse to pay the check.

False

EquipLease Company leases a thresher to Farm Harvest, Inc., a firm that contracts with farm owners to harvest their crops. The machine is seriously damaged through Farm Harvest's neglect. Most likely liable for the damage is​

Farm Harvest

Diderot's accountant is Esteban and his attorney is Figaro. All states protect, as privileged information, Diderot's communications with​

Figaro only.

Daisy signs a check "pay to the order of Ewan" drawn on Daisy's account in Finance Bank. Graham forges Ewan's indorsement. Finance Bank pays the check. Most likely

Finance Bank will have to recredit Daisy's account.

Daisy signs a check "pay to the order of Ewan" drawn on Daisy's account in Finance Bank. Graham forges Ewan's indorsement. Finance Bank pays the check. Most likely​

Finance bank will have to recredit Daisy's account

Jones lives in Illinois, but works in Indiana. Jones borrows $1,000 from Heartland Bank, using her car as collateral. To perfect its security interest, the bank must file its financing statement in at least

Illinois

Jones lives in Illinois, but works in Indiana. Jones borrows $1,000 from Heartland Bank, using her car as collateral. To perfect its security interest, the bank must file its financing statement in at least​

Illinois

Lena borrows from Mac and Nicole, using the same collateral for both loans. Only Nicole has a perfected security interest. Lena defaults on both loans. The party with first rights to the collateral is​

Nicole only

Portia owes Bjorn $500 on their roof repair contract, but refuses to pay. To collect, Bjorn files a mechanic's lien. Under a mechanic's lien, security for the debt is represented by

Portia's real estate

Oleg takes a PowerMade-brand rototiller to QuikFix Inc. for repairs. Lacking certain parts, QuikFix ships the rototiller to Repair & Parts Company. While in Repair & Parts's possession, the machine is damaged. QuikFix can recover for the damage from

Repair & Parts

Rob steals a damaged, broken bike that is parked, unlocked, in a bike rack. He repairs, paints, and replaces parts on the bike until it is like new. The original owner, Sue, then claims it. The bike belongs to​

Sue because Rob stole it.

A bank that encodes information on an item after its issue warrants to any subsequent bank that the information is correct.

True

A bank that pays a customer's check bearing a forged indorsement is obligated to recredit the customer's account.

True

A bankruptcy court may deny a discharge based on a debtor's conduct.

True

A bankruptcy estate consists of all the debtor's interests in property currently held, wherever located.

True

A certified check is a check that has been accepted by the bank on which it is drawn.

True

A check is a special type of draft.

True

A customer can escape liability for failing to notify the bank of forged or altered checks when the customer can prove that the bank was negligent

True

A customer can escape liability for failing to notify the bank of forged or altered checks when the customer can prove that the bank was negligent.

True

A customer must examine a bank statement and report any discovered forged signature to recover from the bank for the forgery.

True

A drawer is liable to the holder of a check in a civil suit if the check is dishonored for insufficient funds.

True

A failure to follow generally accepted accounting principles and generally accepted auditing standards is proof of a lack of due diligence.​

True

A fixed-term tenancy is created when property is leased for a specified period of time.​

True

A landlord must comply with state statutes and city ordinances regarding maintenance and repair of buildings.​

True

A person can insure anything in which he or she has an insurable interest.

True

A person can reproduce copyrighted material for purposes such as teaching, including multiple copies for classroom use, without paying royalties.​

True

A seller is prohibited from charging different prices to competing buyers for identical goods or services.

True

A surety cannot assert the principal debtor's bankruptcy as a defense to avoid liability on the debtor's obligation.

True

A surety is primarily liable for the debt of a principal.

True

Accession occurs when someone adds value to an item of personal property by the use of labor or materials.

True

Account numbers on credit-card receipts must be truncated (shortened).​

True

Ads must disclose qualifying information underlying their claims.​

True

An accountant's liability under the Securities Act of 1933 does I require privity of contract with the purchaser of a security.​

True

An agency relationship arises between the customer and the bank when the customer writes a check on his or her account.

True

An artisan's lien is effective only if a creditor has possession of the property.

True

An information label must be attached to every new car to include the fuel economy estimate for the vehicle.​

True

Any local check deposited must be available for withdrawal by check or as cash within one business day from the date of deposit.

True

Attempted monopolization is a violation of antitrust law.

True

Attorneys are required to find relevant law that is applicable to a case and can be discovered through a reasonable amount of research.​

True

Businesses often pay taxes on the personal property they own, use, or lease.​

True

By using another's trademark, a business could lead consumers to believe that its goods were made by the other business.​

True

Federal law governs the use of terms such as fresh on food labels.​

True

Financial institutions that exchange digital images of checks must also send the original paper checks.

True

For individual debtors, the plan in a reorganization case must be completed before a discharge will be granted.

True

If a debtor does not pay a mechanic's lien, the debtor's property can be sold to satisfy the debt.

True

If the bailed property has been lost, a court will presume that the bailee was negligent.

True

In a few states, statutes allow the homestead exemption only if the judgment debtor has a family.

True

In a transaction subject to the Truth-in-Lending Act, the terms of a credit instrument must be fully disclosed.​

True

It is a violation of federal law to destroy or deface any labeling required on a pesticide or herbicide.​

True

Manufacturers are required to report on any products intended for sale if the products have proved to be hazardous.​

True

Many states require a finder of lost property to make a reasonably diligent search to locate the true owner.​

True

Negligence cases against professionals often focus on the standard of care exercised by the professional.​

True

On default, a secured party who chooses not to retain the collateral must dispose of it in a commercially reasonable manner.

True

One of the most important federal consumer protection laws is directed at deceptive trade practices.​

True

Property would have little value if the law did not define the rights of owners to use, sell, dispose of, and control their property.​

True

The Environmental Protection is required to list all hazardous air pollutants (HAPs) on a prioritized schedule.

True

The Federal Reserve System acts as a clearinghouse where banks exchange checks.

True

The Federal Trade Commission was created to prevent unfair and deceptive trade practices.​

True

The Truth-in-Lending Act applies to persons who, in the ordinary course of their business, lend money, sell on credit, or arrange for the extension of credit.​

True

The Uniform Commercial Code regulates checks.

True

The basic duty of a trustee is to collect the debtor's property and reduce it to money for distribution.

True

The delivery of goods to a common carrier creates a bailment relationship between the shipper and the carrier.​

True

The filing of a petition for bankruptcy will automatically stay most legal actions against the debtor.

True

The rights and duties of a bank and its customer are contractual.

True

To terminate a periodic tenancy. a landlord must give at least one period's notice to the tenant.​

True

U.S. antitrust laws may be applied to protect foreign consumers and competitors from violations committed by U.S. business firms.

True

Under rules of professional conduct, state authorities can discipline professionals for misconduct.​

True

Under the covenant of quiet enjoyment, a landlord promises that a tenant's use and enjoyment of the property will not be disturbed by someone with superior title.​

True

Vague generalities are permissible in advertising.​

True

When consumer goods are involved, a termination statement must be filed within a month after the debt is paid.

True

With a tenancy at will, either party can terminate the tenancy without notice.​

True

Harold files a bankruptcy petition. The resulting automatic stay will apply to Harold's payments for

a car.

Harold files a bankruptcy petition. The resulting automatic stay will apply to Harold's payments for​

a car.

Elmore pays First National Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This is​

a cashier's check

An ad for Running Shoes Inc. states that its products are "The Athlete's Choice." Because of this ad, the Federal Trade Commission is most likely to issue​

a cease-and-desist order

Ken presents an instrument that states "pay to the order of Laura" to MegaBank for payment. This instrument is the most common type of negotiable instrument, which is

a check

Ken presents an instrument that states "pay to the order of Laura" to MegaBank for payment. This instrument is the most common type of negotiable instrument, which is​

a check

Lenders Loan Company and Mortgage Service Corporation—Nadya's creditors—contract with Nadya for the discharge of her liquidated debts on payment of a lesser sum. This is

a composition agreement.

Ian buys a phone in Jiffy Mart, using the means that accounts for more retail payments than any other. This means of payment is​

a debit card

Donna goes through an involuntary bankruptcy proceeding. An involuntary bankruptcy occurs when​

a debtor's creditors force the debtor into bankruptcy proceedings.

Harry makes a living by commercial fishing in a river allegedly polluted by Industrial Paint Company. To bring a suit against Industrial Paint on the ground of private nuisance, Harry must allege that he suffers from

a distinct harm separate from that affecting the general public

Lawncare Company and Mowers, Inc. make yard tools. Both companies use only steel produced in the United States. Lawncare's ad claims, "We use only U.S. steel, while our competitors use inferior foreign steel!" This statement is​

a false claim about a competitor's product

Bess wishes to appeal a decision of a bankruptcy court. Bess may appeal to​

a federal district court.

Frank owns GuestHouse Hotel. His ownership rights include the right to sell or give away the property without restriction, as well as the right to commit waste, if he chooses. Frank's ownership interest is​

a fee simple absolute

Hernando, an accountant, helps Industrial Equipment & Supplies Company prepare and file a false federal corporate income tax return. Under the Internal Revenue Code, this is​

a felony punishable by a fine and imprisonment

Countryside Bank provides Dhani with a standard mortgage with an unchanging rate of interest to buy a home. Payments on the loan remain the same for the duration of the mortgage. This is

a fixed-rate mortgage.

Fund Credit Corporation asks Gro-Sales Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired property. This is

a floating lien.

Denise borrows $90,000 from Clear Lake Credit Union to buy a home. Denise loses her job and fails to make payments on the mortgage, but assures Clear Lake Credit that she will soon secure a new job. The lender agrees to postpone the payments. This is

a forbearance.

Rico borrows $110,000 from Sterling Bank to buy a home. If he fails to make payments on the mortgage, the bank has the right to repossess and auction off the property securing the loan. This is

a foreclosure.

Gas, Inc., and Energy Company refine and sell natural gas. To limit the supply of natural gas on the market and thereby raise prices, Gas, Inc. and Energy Company agree to buy excess supplies from dealers and dispose of it. The agreement between Natural Gas and Olio Energy is

a horizontal restraint

Metro Movers Miami Corporation allows Metro Movers Milwaukee Company to use Metro Movers' trademark as part of its company advertising. This is

a license

Rod possesses five hundred acres of forested property. He has the right to use the land, including cutting its timber, for life. He also has the right to lease the land for a period not to exceed his life. This ownership interest is​

a life estate

Lindsay operates a sole proprietorship, a corporation, and a partnership. She wants to obtain relief for her individual debts and the debts of her corporation and partnership. For each of these, she may file a petition in bankruptcy for relief through​

a liquidation.

George borrows funds from Hometown Credit Union (HCU) to buy real property. George signs a written instrument that gives HCU an interest in the property as security for the debt's payment. This is

a mortgage.

Office Warehouse Inc. and Paperclips Inc. are the chief competitors in their market. They agree that Office Warehouse will operate only east of the Mississippi River and Paperclips will operate only west of the waterway. Under antitrust law, this is most likely

a per se violation

Gas, Inc., and Energy Company refine and sell natural gas. To limit the supply of natural gas on the market and thereby raise prices, Gas, Inc. and Energy Company agree to buy excess supplies from dealers and dispose of it. This agreement is

a per se violation of antitrust law

Kelly leases an office from Land & Building Company (LBC) for a four-year term with the rent payable monthly. At the end of the term, Kelly retains possession of the office with LBC's consent and continues to pay monthly rent. This is​

a periodic tenancy

Lee leases a house from Megan for a two-year term. To ensure the validity of their lease, it should include​

a provision for the landlord's future interest

On Friday morning, Geoff deposits into his account at Heartland Bank a $500 check from Imelda, who also has an account at Heartland. On that same day, this check is considered​

a provisional credit

On Friday morning, Geoff deposits into his account at Heartland Bank a $500 check from Imelda, who also has an account at Heartland. On that same day, this check is considered

a provisional credit.

Dhani signs a check "pay to the order of Eton" drawn on Dhani's account in Fidelity Guaranty Bank and dates the check "May 1." Eton presents the check to the bank for payment on December 15. This is

a stale check

Brass & Woodwind Instruments, Inc., allows Clifton to keep a professional clarinet that he bought from Brass & Woodwind even though he has not paid the full price. Brass & Woodwind's legally sufficient financing statement in the goods need not include

a statement of the reason for allowing Clifton to take the goods.

Ridgeline Bank creates a paper reproduction of customer Sophie's check with the statement "This is a legal copy of your check. You can use it in the same way you would use the original check." This is

a substitute check

Ridgeline Bank creates a paper reproduction of customer Sophie's check with the statement "This is a legal copy of your check. You can use it in the same way you would use the original check." This is

a substitute check.

Metro City operates its own municipal public drinking water system for which the Environmental Protection Agency has set maximum levels of pollutants. Metro does not use any equipment to meet these standards. With regard to any contamination of the water, under the Safe Drinking Water Act, this is most likely

a violation

Investment Properties Inc. conveys an office building to Jim with a deed that makes the greatest number of warranties and provides the most extensive protection against defects of title. This deed is​

a warranty deed

Lauren owns a 1967 Ford Mustang, which Mike customizes and details to Lauren's specifications. The car earns several awards at regional vehicle customizing competition shows. The result of Mike's efforts is​

accession

Reliant Funds, Inc., files a suit against Saul, an accountant, under the antifraud provisions of the Securities Exchange Act of 1934 and Rule 10b-5 of the Securities and Exchange Commission. To succeed, Reliant Funds must show that Saul​

acted with scienter.

Commerce Insurance, Inc., has a valid reason to cancel a policy issued to DIY Auto Parts Company. In most states, Commerce could cancel the policy on

advance written - not oral - notice

Ken's Auto Sales borrows money from Lenders Finance Corporation under a security agreement. With the money, Ken's buys six Mazda Miatas. The vehicles are​

after-acquired property

Ken's Auto Sales borrows money from Lenders Finance Corporation under a security agreement. With the money, Ken's buys six Mazda Miatas. The vehicles are

after-squired property

Big American Oil Company joins with a foreign cartel to control the price of oil. If the cartel has a substantial effect on U.S. commerce, a suit for violation of U.S. antitrust laws can be brought against

all of the choices

Jon Joans decides to use his personal name for a line of clothing he is developing. Whether or not the name Jon Joans acquires a secondary meaning will depend on​

all of the choices are correct.

Ozzie files a petition in bankruptcy for relief through an individual's repayment plan. He is granted a discharge. Debts that will not be discharged include claims for

allowed claims not provided for by the plan.

Ozzie files a petition in bankruptcy for relief through an individual's repayment plan. He is granted a discharge. Debts that will not be discharged include claims for​

allowed claims not provided for by the plan.

Greg obtains from Hearthstone Insurance Company a policy that provides that Greg has thirty days after a premium's due date to pay it before the policy will be canceled. This is

an antilapse clause.

In the ordinary course of business, Loan2Buy Corporation offers credit to consumers and reports on the loans to credit agencies. Loan2Buy generally does not correct or update its reported information. This is most likely to result in​

an assessment of damages

Meadowland, Inc., owns rural property that it leases to various tenants, including Norm. Norm's transfer of his entire interest in the leased property to Orly is

an assignment

Patty files a petition in bankruptcy. At the moment of filing

an automatic stay goes into effect.

City Manufacturing Corporation conditions shipments of its products to Suburb Stores, Inc., on Suburb s agreement not to buy products from Regional Works Company, City s competitor. This is

an exclusive-dealing contract

Miranda delivers her bridesmaid's dress to Nina for alterations. Nina promises that the dress will be ready within five business days. Miranda agrees to pay the charge when she picks up the dress. This is

an express bailment

One morning, Richard agrees to lend his bike to Sheila, who promises to return it in the evening. This is​

an express bailment.

Brian discovers a boat adrift, and retrieves and anchors it. The boat features a number on its side and other evidence pointing to its owner, Celia. This is

an involuntary bailment.

Dick signs a check "pay to the order of Sally" drawn on Dick's account in Suburban Bank. Dick has $400 in his account but the amount of the check is $500, which the bank pays. This is​

an overdraft

Earth's Bounty Farms arranges to have Fresh Express, Inc., a common carrier, transport a load of almonds from California to Delaware. Greg is Fresh Express's driver. Fresh Express will not be liable to Earth's Bounty for failing to deliver the almonds on time if​

authorities are stopping and searching all trucks leaving California

Hearth & Home Furniture store advertises bedroom suites at a "Special Low Price of $599." When Ilene tries to buy one of the suites, Jill, the salesperson, tells her that they are all sold and no more are obtainable. Jill adds that Hearth & Home has other bedroom suites available for as low as $2,599. This is​

bait-and-switch advertising

Truck & Transfer Inc. agrees to pick up two containers for United Home Products Corporation and store their contents, to be delivered later. While Truck & Transfer un-loads one container, the other disappears from the company's loading dock. Truck & Transfer can avoid liability​

by proof that Truck & Transfer was not negligent.

Joni writes Keizer an uncertified check for $500 drawn on Joni's account at Labor Employees Credit Union. Seven months later, Keizer presents the check for payment. The credit union pays the check in good faith without consulting Joni. The credit union

can charge Joni's account for $500.

State Bank agrees to accept a check by setting aside sufficient funds to cover the amount. This check is considered

certified

State Bank agrees to accept a check by setting aside sufficient funds to cover the amount. This check is considered​

certified

Jo files a voluntary petition for bankruptcy under Chapter 7. The court will likely deny a discharge of her debts if she

conceals records of her financial condition to defraud a creditor.

Dalton presents an uncertified check for payment more than six months after its date. The check was drawn by Emma on her account in First Bank. If the bank follows the usual banking practice in such a case, it will​

consult Emma

Dalton presents an uncertified check for payment more than six months after its date. The check was drawn by Emma on her account in First Bank. If the bank follows the usual banking practice in such a case, it will

consult Emma.

Regulations governing air pollution cover mobile and stationary sources. Those who may be subject to penalties for violations of the Clean Air Act include

corporate officers who knowingly violate the act

Wellness Insurance Company offers health insurance to consumers. Under current federal law, Wellness must not​

deny coverage for preexisting conditions

If, after the loan agreement is signed, Slick agrees to a higher rate of interest without telling Tina, then Tina is

discharged from the agreement.

Pro Motor Company makes cars. Federal law requires Pro to attach a label that includes the Environmental Protection Agency's fuel economy estimate for a vehicle to

every new car

Through careless manufacturing practices, Plastics Company makes and sells products that are unsafe to consumers. This may be subject to sanctions under​

federal and state law

City Bank's financing statement in collateral owned by Delta Corporation will expire in less than a year. Filed timely, a continuation statement could extend the effectiveness of the financing statement for​

five years

Gillis writes a check to Harley as payment for a game player but soon discovers it is broken. He goes to the drawee bank and orally authorizes Ilene, a bank officer, to stop payment on the check. This order is valid for

fourteen days

Gillis writes a check to Harley as payment for a game player but soon discovers it is broken. He goes to the drawee bank and orally authorizes Ilene, a bank officer, to stop payment on the check. This order is valid for​

fourteen days

Bea writes a check for $100 drawn on Savers Credit Union and presents it to Timpani Jewelers for payment. If the check is not backed by sufficient funds, Bea may be prosecuted for​

fraud

Cathy is an accountant with Discount Retail Corporation. Efrem buys Discount Retail stock and loses money on the investment. To recover from Cathy under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, Efrem must prove​

fraud, reliance, materiality, causation, and scienter

Urban Loan Company extends credit to consumers. Urban is subject to the Equal Credit Opportunity Act, which prohibits credit discrimination based on​

gender

Dan applies for a life insurance policy with Equity Insurance Company through Fletch, an agent who works for Equity. Dan pays the initial premium. Fletch writes a binder, which

indicates that a policy is pending and states its essential terms.

Angela is in good health and sound mind when she gives Brianna a quarter horse. Brianna accepts. This is a gift​

inter vivos

Elise and many other consumers complain to the Federal Trade Commission (FTC) that a Faux Diamonds Company ad is deceptive. The FTC's first step is to​

investigate

Kelly takes her car to Auto Repair Service, which repairs the car and bills Kelly for $500. She writes out a check drawn on Choice Bank, but later, believing that Auto Repair did not fix the car properly, issues a stop-payment order. If Choice pays the check, the bank...

is liable for Kelly's loss due to the wrongful payment

Ann rents an apartment from Best Home Properties. The apartment is destroyed in a fire that is not the fault of either party. For the rest of the lease term, Ann​

is no longer obligated to pay any of the rent.

Data Marketing, Inc., registers its trademark as provided by federal law. After the first renewal, this registration

is renewable every ten years

Ricardo, an accountant, contracts to conduct an audit for Sensei Sushi Restaurants. In performing the audit, Ricardo fails to detect certain misconduct. Ricardo is most likely​

liabile if a normal audit would have revealed the misconduct.

Nelson, an accountant, enters into a contract to provide services to Operational Processes, Inc. (OPI). Nelson does not finish the work within the contract's deadline. This causes OPI to fail to meet certain other deadlines owed to Prime Bank, which results in the firm's payment of penalties to the bank. Nelson is...

liable for breach of contract

Gift Company's liabilities exceed its assets. Gift hires Hill & Dale, an accounting firm, to prepare a balance sheet. Through negligent omissions, the sheet shows a net worth. Invest Bank relies on it to make a loan to Gift. When the firm defaults, the bank files a suit against Hill & Dale. Under the Restatement (Third) of Torts, Hill & Dale is most likely

liable if Hill and Dale knew that the bank would rely on the balance sheet.

Inadvertently, Ralph leaves his backpack at Sushi Café when he stops for lunch. The backpack is​

mislaid property

In its ads, Crunchy Inc. makes various claims about its snack products. Crunchy's advertising claims would most likely be deemed deceptive if the claims​

mislead a reasonable consumer

Kelly takes her car to Auto Repair Service, which repairs the car and bills Kelly for $500. She writes out a check drawn on Choice Bank, but later, believing that Auto Repair did not fix the car properly, issues a stop-payment order. Choice...

must stop payment if Choice has a reasonable time to act.

Shane issues a check drawn on Thrifty Bank to Farm Supply Store to pay for a rototiller. Later, Shane discovers a defect in the device and orders Thrifty to stop payment on the check. Shane does not renew the order, and the bank clears the check eight months later. The bank​

need not recredit Shane's account

Shane issues a check drawn on Thrifty Bank to Farm Supply Store to pay for a rototiller. Later, Shane discovers a defect in the device and orders Thrifty to stop payment on the check. Shane does not renew the order, and the bank clears the check eight months later. The bank

need not recredit Shane's account.

Dian takes out a loan from Equity Bank. When she fails to make the scheduled payments, Equity advises her of further action that it will take. This is a violation of​

no federal law

Kip opens an account at Lotsa Goodies, and buys a digital music player and other items, but makes no payments on the account. To collect the debt, a Lotsa Goodies representative contacts Kip's parents. This violates​

no federal law.

Brandy forges Caleb's signature on a check "payable to the order of Brandy" drawn on Caleb's account in Downtown Bank. Caleb's forged signature is

not effective

Marilyn receives an unsolicited credit card in the mail and tosses it on her desk. Without Marilyn's permission, her roommate Nancy uses the card to buy a new laptop for $1,800. Marilyn is​

not liable for any amount.

Ruth obtains a fire insurance policy on her house from Safety Insurance Company. Later, after she moves out and the house is empty, a fire destroys the structure. Most fire insurance policies require that at the time of a loss, the insured premises be

occupied.

Boris can write checks on his account at City Bank. Demi steals the checks, forges Boris's signature, and cashes the checks at City. The bank is excused from any liability if, after receipt of the first forged check, Boris fails to report the forgeries within​

one year

Riley pays State Bank $500 plus a service fee to draw a check on itself payable to Torque Plumbing. The party that is responsible for paying the check is​

only State Bank

Deep Earth Extraction, Inc., operates a facility near Estuary Bay. Discharging waste from the facility into the bay can result in

penalties and damages

Marcy owns land in North Dakota under which deposits of oil shale are discovered. Marcy sells the rights to the shale to Oil Mining Inc. Once the oil in the rock is removed, it will be considered​

personal property

To drive its competitors out of a certain geographic segment of its market, Fryin Potatoes, Inc., sets the prices of its products below cost for the buyers in that area. This is

price discrimination

Carly files a petition in bankruptcy. One of the goals of bankruptcy law with respect to a debtor is to​

provide a fresh start, free from creditors' claims.

Gina buys silver to make jewelry. The finished products are sold to Hand Crafts, a shop that sells these items and others to customers who often present them as gifts. The most common way to acquire personal property is to​

purchase it

Air Power Corporation wants to build a wind plant on private land, for which a federal permit is required. For this action, an environmental impact statement is

required

Mac n' Cheese Company wants to make and market new processed pasta and sauce products. On each product's label, standard nutrition facts are

required.

Spicy Salsa Company complains to the Federal Trade Commission (FTC) about an ad by Tangy Sauces Inc., Spicy's competitor. The FTC investigates and concludes that the ad is deceptive. The FTC's next step is to

send a formal complaint

Odell, an accountant, prepares for Pronto Tacos Corporation a financial statement that omits a material fact. The financial statement is included in Pronto Tacos's registration statement, which Qiana reads. Qiana buys Pronto Tacos stock. Under Section 11 of the Securities Act of 1933, for Odell to be liable for the omission, Qiana must show that she​

suffered a loss on the stock

Vanessa obtains a life insurance policy with no cash surrender value and names her son Winthorp as the beneficiary. This is

term insurance

ChemCo, Inc., makes and sells products containing ingredients potentially hazardous to consumers. The government agency that has the authority to order ChemCo to remove a product from the market is​

the Consumer Product Safety Commission

Logan's application to Metro Bank for a credit card is denied. Logan can obtain information on his credit history in a credit agency's files under​

the Fair Credit Reporting Act

QT Collection Agency calls Rob several times a day, and sometimes in the middle of the night, about an overdue bill that Standard Credit Company turned over to QT for collection. This is a violation of​

the Fair Debt Collection Practices Act

The credit department of Mega-Mart often calls Nora at work about an overdue bill. Nora's employer objects. This is a violation of​

the Fair Debt Collection Practices Act

Corner Market sells groceries. Deli & Drug Store sells groceries and fills prescriptions. The party with the chief responsibility to prevent unsafe food and drugs from being sold is​

the Food and Drug Administration

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances. This transaction is subject to​

the Truth-in-Lending Act

Faye forges Greta's signature on a check "payable to the order of Faye" drawn on Greta's account in Hearthside Bank. Most likely, if the bank pays the check

the bank will have to recredit Greta's account.

Clyde issues a check payable to Discount Mart. Ethel, Discount's cashier, forges the store's indorsement and deposits the check in her bank account. Clyde's bank, Farmers State Bank, pays the check. Clyde can recover from

the bank, which can recover from Ethel.

Bea borrows funds from Credit Union to repair her home and to buy a car. She buys a laptop from Discount Store in a transaction financed by the seller. If these parties are subject to the Truth-in-Lending Act, Regulation Z applies to​

the car loan, the home repair loan, and the retail installment loan

Hal owns a farm in Iowa, with a farmhouse, barn, and other structures permanently attached. Hal grows corn on the property. Land includes​

the corn, the soil, and the structures

Riley owns Sunnyvale Apartments. He promises his tenants that during the lease term, neither he nor anyone with a superior title to the property will disturb the tenants' use and enjoyment of the premises. This is​

the covenant of quiet employment.

Marta has a checking account with Neighbors Bank. Marta signs a check "payable to Olive" drawn on Marta's account. Neighbors Bank is​

the drawee

Drew signs a check "pay to the order of Eastern State University" drawn on Drew's account in Fidelity Bank to pay her tuition. Drew is

the drawer

Drew signs a check "pay to the order of Eastern State University" drawn on Drew's account in Fidelity Bank to pay her tuition. Drew is​

the drawer

When processing a check, Sterling Bank encodes information, such as the amount of the check, on the item. Sterling thereby warrants to any subsequent bank or payor​

the encoded information is correct

Like most successful companies, Pads & Phones, Inc. (P&P), has trade secrets. The law protects those secrets if

the information is unique and has value to a competitor

The operations of Metal Industries, Inc., are major sources of air pollution. These operations must use

the maximum achievable control technology

Franco buys a sound system from Grey at Grey's garage sale. Franco writes Grey a check for $250 to pay for the system. Grey is​

the payee

A lawsuit is filed against DrillBits Corporation, alleging that the firm committed the offense of monopolization. To determine whether DrillBits has monopoly power requires looking at

the relevant market

Smith & Jones P.A. is a business customer of Platinum Bank. Under federal law, Smith & Jones cannot demand​

the return of its original check with its monthly statements

Smith & Jones P.A. is a business customer of Platinum Bank. Under federal law, Smith & Jones cannot demand

the return of its original checks with its monthly statements

Fiona borrows $1,000 from Garden State Bank, using her recreational vehicle (RV), which she purchased at Hugo's RV Sales & Service, as collateral. To perfect its security interest, the bank must file its financing statement with​

the secretary of state

Fiona borrows $1,000 from Garden State Bank, using her recreational vehicle (RV), which she purchased at Hugo's RV Sales & Service, as collateral. To perfect its security interest, the bank must file its financing statement with

the secretary of state.

Disc & Shoe Brakes Corporation, a brake manufacturer, sells its products to Eastside Motors, a retailer, at lower prices than it charges Fast Brake, a competitive retailer. This price discrimination is legal

unless its effect is to substantially lessen competition

Ailing Company's liabilities exceed its assets. Ailing hires Brad, an accountant, to certify a balance sheet showing a positive net worth. Credit Bank relies on the balance sheet to make a loan to Ailing. The firm defaults on the loan. Under the Ultramares rule, Brad is most likely not liable because he​

was not in privity with the bank.