Business Law Final
_____ is a situation in which a creditor has an enforceable security interest against a debtor and can satisfy the debt out of the designated collateral. A. Attachment B. Abasement C. Denouement D. Rapprochement E. Detachment
A. Attachment
Which of the following is an INCORRECT statement regarding a fully disclosed agency? A. In a fully disclosed agency, the contract is between the agent and the third party. B. In a fully disclosed agency, the agent is not liable on the contract with the third party. C. In a fully disclosed agency, the third party typically relied on the principal's credit and reputation when the contract was made. D. In a fully disclosed agency, the agent's signature must clearly indicate that he or she is acting as an agent for a specifically identified principal. E. A fully disclosed principal is liable on a contract with the third party.
A. In a fully disclosed agency, the contract is between the agent and the third party.
Which of the following is an INCORRECT statement regarding marine insurance? A. Marine insurers do not distinguish between inland marine insurance and ocean marine insurance, since both involve water-related perils. B. Marine insurance is often comprehensive. C. Owners of a vessel can purchase marine insurance to insure against loss or damage to the vessel and its cargo caused by perils on the waters. D. Marine insurance often covers property damage to the vessel or its cargo and liability insurance. E. Shippers can purchase marine insurance to cover the risk of loss to their goods during shipment.
A. Marine insurers do not distinguish between inland marine insurance and ocean marine insurance, since both involve water-related perils.
Which of the following is an INCORRECT statement regarding an insurable interest? A. Mortgagees do not have an insurable interest in property. B. Anyone who would suffer a monetary loss from the destruction of real or personal property has an insurable interest in that property. C. Anyone who would suffer a pecuniary loss from the destruction of real or personal property has an insurable interest in that property. D. Ownership creates an insurable interest. E. If the insured does not have an insurable interest in the property being insured, the contract is treated as a wager and cannot be enforced.
A. Mortgagees do not have an insurable interest in property.
_____ is a seller's commendation of goods that does not create an express warranty. A. Puffing B. Stipulating C. Guaranteeing D. Grifting E. Qualifying
A. Puffing
Which of the following is an INCORRECT statement regarding a corporation's shareholders? A. Shareholders have comprehensive management duties. B. Shareholders have the right to vote regarding fundamental changes in the corporation. C. Shareholders are not agents of the corporation. D. Shareholders have the right to vote in an election of corporate directors. E. A corporation's shareholders own the corporation.
A. Shareholders have comprehensive management duties.
Which of the following is NOT true about the ownership of for-profit corporations? A. They can be owned by the government. B. They can be owned by a small group of family members. C. They can be owned by professionals. D. They can sell their shares on an organized securities market. E. They can be owned by one person.
A. They can be owned by the government.
A(n) _____ is a separate piece of paper attached to an instrument on which an indorsement is written. A. allonge B. parol contract C. addendum D. supplementary contract E. codicil
A. allonge
A(n) _____ clause provides that insurance proceeds are payable only after the insured has paid a certain amount of the damage or loss. A. deductible B. liquidation C. acceleration D. subrogation E. redaction
A. deductible
If the _________________ of a nonnegotiable contract fails to pay it, the ___________ of the contract can sue the nonperforming party for breach of contract. A. maker or drawer; holder B. maker; drawer or holder C. holder; maker or drawer D. drawer; maker E. maker or holder; drawer
A. maker or drawer; holder
With respect to nonnegotiable instruments, because _______________ apply, the ____________ acquires only the rights that the ____________ possessed. A. normal contract principles; assignee; assignor B. the rules of the UCC; assignor; assignee C. the rules of the UCC; assignee; assignor D. normal contract principles; holder; assignor E. the rules of the UCC; holder; assignor
A. normal contract principles; assignee; assignor
A right of first _____ is an agreement that requires a selling shareholder to offer his or her shares for sale to the other parties to the agreement before selling them to anyone else. A. refusal B. inspection C. revocation D. rejoinder E. review
A. refusal
If the right of possession returns to a third party on the expiration of a limited or contingent estate, it is called a _____. A. remainder B. revocation C. reversion D. rescission E. ratification
A. remainder
The goals of the Sarbanes-Oxley Act (SOX) of 2002 include all EXCEPT which of the following? A. replace independent corporate audits with internal audits B. improve corporate governance rules C. eliminate conflicts of interest D. instill confidence in the public that management will run public companies in the best interests of all constituents E. instill confidence in investors that management will run public companies in the best interests of all constituents
A. replace independent corporate audits with internal audits
The board of directors authorizes an action to be taken on behalf of the corporation by adopting ________. A. resolutions B. corporate goals C. preemptive rights D. laws E. rules and guidelines
A. resolutions
Insurance is a contract whereby one party (the insurer or _____________) indemnifies another against the loss, damage, or liability that may arise from some event, distributing the risk of this loss between the parties to the contract. A. underwriter B. insured Your answer is not correct. C. bank D. endorsement E. key-person
A. underwriter
In a(n) _____ agency, a contracting third party does not know of either the existence of the agency or the principal's identity. A. undisclosed B. constructive C. common law D. statutory E. symbolic
A. undisclosed
With the _____, the seller warrants that he or she has valid title to the goods he or she is selling and that the transfer of title is rightful. A. warranty of good title B. full warranty C. warranty of no interference D. limited warranty E. express warranty
A. warranty of good title
When does an umbrella policy make a pay out? A. when primary policy limits on other insurance policies have been exceeded B. when an accident is due to stormy conditions C. only when rain and wind contribute to the loss D. when a claim is due to rain damage E. when no other insurance exists to cover the claims
A. when primary policy limits on other insurance policies have been exceeded
Which of the following is an INCORRECT statement regarding Delaware corporation law? A. The Delaware legislature keeps amending the Delaware General Corporation Law as the demands of big business warrant or need such changes. B. A corporation must do business in Delaware in order to obtain the benefits of Delaware corporation law. C. In total, more than 500,000 business corporations are incorporated in Delaware. D. More than 50 percent of the publicly traded corporations in the United States are incorporated in Delaware. E. The Delaware General Corporation law is particularly written to be of benefit to large corporations.
B. A corporation must do business in Delaware in order to obtain the benefits of Delaware corporation law.
_____ insurance is a form of insurance that insures an automobile from loss or damage due to causes other than collision. A. Casualty B. Comprehensive C. Cooperative D. Liability E. Conglomerate
B. Comprehensive
______________ are not expressly stated in the sales or lease contract but instead are ______________. A. Express warranties; implied by trade usage B. Implied warranties; implied by law C. Implied warranties; written in the addendum D. Express warranties; implied by law E. Express warranties; implied by custom
B. Implied warranties; implied by law
Which of the following is an INCORRECT statement regarding preferred stock? A. Preferred stock can be issued in classes or series. B. Preferred stockholders have unlimited liability for corporate debts and other obligations. C. Preferred stockholders generally are not given the right to vote for the election of directors. D. One class of preferred stock can be given preference over another class of preferred stock. E. Preferences of preferred stock must be set forth in the articles of incorporation.
B. Preferred stockholders have unlimited liability for corporate debts and other obligations.
Interested in a particular email offer, a buyer for a large company sends an acceptance letter to the seller of the goods. However, the post office loses the letter and the seller does not receive the acceptance. Is this still a valid contract? A. No. A contract is only created when the offeror receives the acceptance. B. Yes. The contract was created when the acceptance letter was sent. C. Yes. The contract was created when the seller sent the offer to the buyer. D. No. The seller must respond to the acceptance letter before a contract is created. Your answer is not correct. E. No. The offer was made by email so the acceptance must also be delivered via email.
B. Yes. The contract was created when the acceptance letter was sent.
An indorsement in trust is also known as a(n) _____ indorsement. A. official B. agency C. blank D. testamentary E. special
B. agency
An indorsement may also be written on a separate piece of paper called a(n) _______. A. assignment B. allonge C. virgule D. indorsement E. negotiation
B. allonge
Which of the following is NOT a requirement for creating a negotiable instrument? A. state a fixed amount of money B. be prepared by an attorney C. be an unconditional promise or order to pay D. be in writing E. be signed by the maker or drawer
B. be prepared by an attorney
Which of the following is NOT covered by comprehensive insurance? A. hail B. collision C. explosion D. earthquake E. fire
B. collision
An agent works as a salesperson for a principal who owns an automotive parts business. The agent's job is to sell the principal's automotive parts to auto repair shops and other purchasers. While doing so, the agent also works as a salesperson for a competing seller of automotive parts. This is a violation of the duty of loyalty known as __________________. A. usurping an opportunity B. competing with the principal C. misuse of confidential information D. self-dealing E. dual agency
B. competing with the principal
Two or more persons may own a piece of real property. This is called _____ ownership. A. parallel B. concurrent C. mutually exclusive D. conglomerate E. divergent
B. concurrent
A sight draft is also called a _____ draft. A. statutory B. demand C. reserve D. conditional E. qualified
B. demand
For a workplace injury, workers' compensation is usually a(n) _____ remedy. A. supplemental B. exclusive C. punitive D. non-exclusive E. fault-based
B. exclusive
The Ford Motor Company, a major manufacturer of automobiles and other vehicles, is incorporated in Delaware. It distributes vehicles in Delaware, as well as the other 49 states. The Ford Motor Company is a(n) _____ corporation in the other 49 states. A. domestic B. foreign C. private D. government-owned E. alien
B. foreign
Which of the following is NOT a requirement for HDC status (as determined at the taking of the instrument)? A. for value B. proper assignment or delegation C. without notice that the instrument is overdue D. in good faith E. without notice that the instrument is defective
B. proper assignment or delegation
All of the following are types of indorsements EXCEPT? A. restrictive B. retroactive C. special D. qualified E. blank
B. retroactive
Which of the following is NOT a major provision of the Sarbanes-Oxley Act? A. reimbursement of bonuses B. shareholder liability C. penalties for tampering with evidence D. CEO certification E. prohibition on personal loans
B. shareholder liability
If an _____________warranty is made, it can be limited only if the _________________and the warranty can be reasonably construed with each other. A. implied; warranty disclaimer Your answer is not correct. B. express; warranty disclaimer C. implied; limited warranty D. express; limited warranty E. express; implied warranty
B. express; warranty disclaimer
The most common forms of implied warranties are the implied warranty of________________, the implied warranty of__________________, and the implied warranty of _______________________. A. fitness for human consumption; fitness for a particular purpose; affirmation of fact B. merchantability; fitness for human consumption; fitness for a particular purpose C. merchantability; fitness for human consumption; description D. fitness for human consumption; fitness for a particular purpose; description E. merchantability; fitness for human consumption; affirmation of fact
B. merchantability; fitness for human consumption; fitness for a particular purpose
_____ is a form of ownership in which each spouse owns an equal one-half share of the income of both spouses and the assets acquired during the marriage. A. Fee simple absolute B. Fee simple defeasible C. Community property D. Tenancy in common E. Joint tenancy
C. Community property
Which of the following is NOT a requirement for a corporation to qualify as an S corporation? A. The corporation can have no more than 100 shareholders. B. The corporation cannot be a member of an affiliated group of corporations. C. The corporation must have begun its business operations as either a sole proprietorship or a general partnership. D. The corporation must be a domestic corporation. E. Shareholders must be individuals, estates, or certain trusts.
C. The corporation must have begun its business operations as either a sole proprietorship or a general partnership.
Which of the following is an INCORRECT statement regarding the implied warranty of fitness for a particular purpose? A. The implied warranty of fitness for a particular purpose applies to both merchant and non-merchant sellers and lessors. Your answer is not correct. B. The implied warranty of fitness for a particular purpose is breached if the goods do not meet the buyer's or lessee's expressed needs. C. The implied warranty of fitness for a particular purpose guarantees that sold or leased goods are fit for the ordinary purpose for which they are sold or leased. D. The implied warranty of fitness for a particular purpose attaches to the sale or lease of goods if the seller or lessor has made statements that the goods will meet the buyer's or lessee's needs or purpose. E. The implied warranty of fitness for a particular purpose requires that the buyer or lessee must rely on the seller's or lessor's skill and judgment.
C. The implied warranty of fitness for a particular purpose guarantees that sold or leased goods are fit for the ordinary purpose for which they are sold or leased.
The number of shares provided for in the articles of incorporation are called ________. A. unissued shares B. the par value of stock C. authorized shares D. issued shares E. participating preferred stock
C. authorized shares
When a lessee purchases or leases substitute goods when a lessor fails to make delivery, it is known as _______. A. rejection B. specific performance C. cover D. acceptance E. replevin
C. cover
A merchant is one who ________________. A. does not have to follow the UCC when entering into contracts for the sale of goods B. does not have knowledge of the goods involved in the transaction C. deals in the goods of the kind involved in a transaction, or has knowledge or skill peculiar to the goods involved in the transaction D. does not deal in the goods of the kind involved in a transaction E. is involved in a finance lease
C. deals in the goods of the kind involved in a transaction, or has knowledge or skill peculiar to the goods involved in the transaction
An instrument is ________ when it is presented for payment and payment is refused. A. unauthorized B. overdue C. dishonored D. honored E. defective
C. dishonored
If an instrument is payable to "Shou-Yi Kang/Min-Wer Chen," who may indorse and negotiate the instrument? A. Min-Wer Chen only B. Shou-Yi Kang only C. either Shou-Yi Kang or Min-Wer Chen D. both Shou-Yi Kang and Min-Wer Chen E. neither, the payable clause is ineffective
C. either Shou-Yi Kang or Min-Wer Chen
A college student borrows money from her mother for college expenses. The loan agreement provides that the student will repay the loan five years after graduation from college. The loan agreement contains a(n) ______________ that permits the graduate to add on another two years to the loan if, at the end of five years, she wants extra time to pay the loan. A. default clause B. prepayment penalty C. extension clause D. acceleration clause E. prepayment clause
C. extension clause
The UCC contains an implied warranty of ___________________. This implied warranty attaches to the sale or lease of goods if the seller or lessor has made statements that the goods __________________________. A. title; will meet the buyer's or lessee's needs B. fitness for a particular purpose; are the best in the country C. fitness for a particular purpose; will meet the buyer's or lessee's particular needs D. fitness for human consumption; are the best in the country E. merchantability; will meet the buyer's or lessee's needs
C. fitness for a particular purpose; will meet the buyer's or lessee's particular needs
In a(n) _____ agency, a contracting third party knows that the agent is acting for a principal but does not know the identity of the principal. A. undisclosed B. statutory C. partially disclosed D. fully disclosed E. common law
C. partially disclosed
A(n) _____ is a person who organizes and starts a corporation, negotiates and enters into contracts in advance of its formation, and finds the initial investors to finance the corporation. A. trustee B. administrator C. promoter D. attorney-in-fact E. executor
C. promoter
The UCC incorporates the implied warranty of fitness for human consumption within _____. A. the implied warranty of title B. the implied warranty against encumbrances C. the implied warranty of merchantability D. express warranty theory E. the implied warranty of fitness for a particular purpose
C. the implied warranty of merchantability
An indorsement whereby the indorser promises to pay the holder or any subsequent indorser the amount of the instrument if the maker, drawer, or acceptor defaults on it is a(n) __________ indorsement. A. testamentary B. qualified C. unqualified D. official E. restrictive
C. unqualified
According to the UCC Statute of Frauds, all contracts for the sale of goods priced at _____ or more must be in writing. A. $250 B. $20 C. $500 D. $50 E. $100
C. $500
A negotiable instrument is a special form of contract that satisfies the requirements established by Article _____ of the Uniform _____ Code. A. 1; Constitutional B. 2; Contracts C. 3; Commercial D. 1; Commercial E. 3; Contracts
C. 3; Commercial
A(n) _____ judgment is a judgment of a court that permits a(n) _____ lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan. A. declaratory; commercial B. default; unsecured C. deficiency; secured D. executory; secured E. summary; non-commercial
C. deficiency; secured
Under the _____ test, if the agent's motivation for committing an intentional tort is to promote the _____ business, the principal is liable for any injury caused by the tort. A. captivation; agent's B. motivation; agent's C. motivation; principal's D. captivation; principal's E. motivation; third party's
C. motivation; principal's
Under a system of _____ automobile insurance, a driver's insurance company pays for any injuries or death he or she suffered in an accident, no matter who caused the accident. A. liability B. strict liability C. no-fault D. comprehensive E. collision
C. no-fault
The term electronic _____ recognizes that UCC contracts and other information may be sent or stored by electronic means rather than in _____ writings. A. agent; principle B. agent; intangible C. record; tangible D. record; intangible E. agent; tangible
C. record; tangible
_____ voting is a system in which a shareholder can accumulate all of his or her votes and vote them all for one candidate or split them among several candidates. A. Proxy B. Straight C. Noncumulative D. Cumulative E. Derivative
D. Cumulative
A(n) _____ is a holder who takes a negotiable instrument for value, in good faith, and without notice that it is defective or overdue. A. SPC B. MPC C. DRC D. HDC E. CNC
D. HDC
Which of the following statements about automobile liability insurance is NOT true? A. States often require an insured to carry minimum liability insurance specified by statute. B. Automobile liability insurance covers damages that the insured causes to third parties, including both bodily injury and property damage. C. The limits of liability insurance are usually stated in 3 numbers, such as 100/300/25. D. The minimum legal required liability insurance is usually quite high (e.g., $500,000). E. The limit of the insurer's obligation to pay insurance proceeds arising from an accident is usually up to $100,000 for bodily injury to each injured person, but limited to $300,000 for total bodily injury to all persons injured and up to $25,000 for property damage.
D. The minimum legal required liability insurance is usually quite high (e.g., $500,000).
Which of the following actions does NOT require shareholders' approval? A. sale of substantially all of the corporation's assets outside the course of ordinary business. B. voluntary dissolution of the corporation C. amending the articles of incorporation D. declaring a dividend E. merging with another corporation
D. declaring a dividend
A life estate may be measured by the life of a third party, which is called a(n) _____. A. fee simple absolute B. third party beneficiary contract C. qualified fee D. es estate pour autre vie E. fee simple defeasible
D. es estate pour autre vie
A person's ownership right in real property is called a(n) ________. A. easement B. bailment C. personal property right D. estate in land E. gift
D. estate in land
The UCC's ____________ rule states that a merchant who makes an offer to buy, sell, or lease goods, and assures the other party in a separate writing that the offer will be held open, cannot revoke the offer for the time stated. A. merchant B. course of dealing C. irrevocable offer D. firm offer E. written confirmation
D. firm offer
A(n) _____ instrument is payable: 1) to the order of an identified person; or 2) to an identified person or order. A. holder B. conditional C. non-negotiable D. order E. bearer
D. order
If an officer acts ______________ and enters into a contract with a third person, but the corporation _________________ of the contract, the corporation has ___________ the contract and is bound by it. A. outside the scope of his or her employment, accepts the benefits, repudiated B. within the scope of his or her employment, refuses the benefits, ratified C. outside the scope of his or her employment, refuses the benefits, ratified D. outside the scope of his or her employment, accepts the benefits, ratified E. in competition with the corporation, rejects the benefits, ratified
D. outside the scope of his or her employment, accepts the benefits, ratified
The _____ requirement of negotiable instruments says that they must be able to be easily transported between areas. A. deportability B. permanency C. signature D. portability E. commercial
D. portability
A person borrows money from a bank to purchase a house. The loan is a 30-year loan, with interest and principal to be paid in equal monthly installments. If the borrower can pay off the loan at any time during the 30-year period, the loan agreement contains a(n) _______. A. extension clause B. prepayment penalty C. maker clause D. prepayment clause E. acceleration clause
D. prepayment clause
Written disclaimers must be conspicuously displayed to be valid. The courts construe conspicuous to mean noticeable to a(n) _____ person. A. uneducated B. intelligent C. educated D. reasonable E. unsuspecting
D. reasonable
Adams Company, a manufacturer of machines that make shoes, sells a machine to Smith & Franklin, a shoe manufacturer. Subsequently, Nerdette claims that she has a patent on the machine. Nerdette proves her patent claim in court. Nerdette notifies Smith & Franklin that the machine can no longer be used without her permission and the payment of a fee to her. Smith & Franklin may rescind the sales contract with Adams Company, based on breach of _____. A. the implied warranty of fitness for ordinary use B. the implied warranty of fitness for a particular purpose C. the implied warranty of merchantability D. the implied warranty against infringement E. express warranty
D. the implied warranty against infringement
According to the RMBCA, the articles of incorporation must include which of the following? A. the limitation or regulation of the powers of the corporation B. the purpose or purposes for which the corporation is organized C. regulations of the affairs of the corporation D. the name and address of each incorporator E. the period of duration of the corporation
D. the name and address of each incorporator
Which of the following is NOT a corporate power? A. to make contracts B. to purchase, own, lease, sell, mortgage, or otherwise deal in real and personal property C. to lend money, borrow money, and incur liabilities D. to make excessive contributions to a political campaign E. to issue notes and bonds and other obligations
D. to make excessive contributions to a political campaign
An act by a corporation that is beyond its express or implied powers is called a(n) _____ act. A. ex post facto B. post hoc ergo propter hoc C. res ipsa loquitur D. ultra vires E. esse quam videri
D. ultra vires
The UCC provides that if goods identified in a sales or lease contract are totally destroyed without the fault of either party before the risk of loss passes to the buyer or lessee, the contract is _____. A. nevertheless enforceable B. voidable C. executed D. void E. modified
D. void
The drawee of a check is the party ________. A. who promises to pay the note B. in possession of the instrument C. who writes the check D. who must pay the money stated in a check E. who receives the money from a check
D. who must pay the money stated in a check
Which of the following is an INCORRECT statement regarding a principal's liability for an independent contractor's torts and contracts? A. Principals cannot avoid liability for inherently dangerous activities that they assign to independent contractors. B. If an independent contractor enters into a contract with a third party on behalf of the principal without express or implied authority from the principal to do so, the principal is not liable on the contract. C. The reason a principal is not usually liable for the torts of an independent contractor is because the principal does not control the means by which the independent contractor accomplishes results. D. Generally, a principal is liable for the torts of its independent contractors. E. Principals are bound by the authorized contracts of their independent contractors.
D. Generally, a principal is liable for the torts of its independent contractors.
A _____________________ applies to those who make an express warranty, although it does not require sellers to make an express warranty. A. warranty of no security interest B. warranty against infringement C. warranty of no interference D. Magnuson-Moss warranty E. warranty of good title
D. Magnuson-Moss warranty
A certificate of deposit is a _____ instrument. A. multilateral B. non-negotiable C. single-party D. two-party E. three-party
D. two-party
Which of the following statements about a personal articles floater is NOT true? A. The insurance company will charge an increased premium based on the articles insured. B. Insurance for specific valuable items is known as a personal articles floater, or personal effects floater, and can be added to a homeowners' policy. C. An insured may wish to obtain insurance for specific valuable items (e.g., jewelry, works of art, furs). D. The insured must submit a list of the items he or she wants covered, along with a statement of the value of each item, to the insurance company. E. A personal articles floater does not provide coverage for loss or damage to the articles while traveling.
E. A personal articles floater does not provide coverage for loss or damage to the articles while traveling.
Which of the following is a correct statement regarding an instrument payable jointly using the word and? A. Only the first payee named must indorse the instrument. B. An instrument payable jointly is non-negotiable. C. An instrument payable jointly is neither order paper nor bearer paper. D. Only the second payee named must indorse the instrument. E. If an instrument is payable jointly using the word and, both persons' indorsements are necessary to negotiate the instrument.
E. If an instrument is payable jointly using the word and, both persons' indorsements are necessary to negotiate the instrument.
Under the UCC "taking without notice of defect" requirement, a person cannot qualify as an HDC if he or she has notice that the instrument is defective in all EXCEPT which of the following ways? A. It is overdue. B. It contains an unauthorized signature or has been altered. C. It has been dishonored. D. There is a claim to it by another person. E. It is payable on demand.
E. It is payable on demand.
_____ stock is a type of equity security that is given certain preferences and rights over common stock. A. Dividend B. Par value C. No par value D. Derivative E. Preferred
E. Preferred
Which of the following is an INCORRECT statement regarding the duty of care of directors and officers of a corporation? A. To meet the duty of care, directors and officer must discharge their duties in good faith. B. To meet the duty of care, directors and officer must discharge their duties in a manner they reasonably believe to be in the best interests of the corporation. C. To meet the duty of care, directors and officer must discharge their duties with the care that an ordinary prudent person in a like position would use under similar circumstances. D. The duty of care requires corporate directors and officers to use care and diligence when acting on behalf of the corporation. E. The duty of care is not a fiduciary duty.
E. The duty of care is not a fiduciary duty.
Which of the following is an INCORRECT statement regarding a life estate? A. A life estate may be measured by the life of a third party. B. A life estate may be defeasible. C. A life tenant has the right to possess and use the property except to the extent it would cause permanent waste of the property. D. A life tenant is treated as the owner of the property during the duration of the life estate. E. The person who is given a life estate is called the proprietor.
E. The person who is given a life estate is called the proprietor.
Which of the following is NOT a nonnegotiable instrument? A. a promise or an order to pay a fixed amount of money B. a promise to pay when the Texans win the Super Bowl C. a promise or an order that conspicuously states that it is or is not subject to Article 3 D. a promise to pay $10,000 in gold E. a promise or an order that conspicuously states that it is not negotiable
E. a promise or an order that conspicuously states that it is not negotiable
A(n) _____ is the transfer of rights under a contract. A. offer B. delegation C. stipulation D. proffer E. assignment
E. assignment
A _____ indorsement does not specify a particular indorsee; it may consist of just a signature. A. qualified B. special C. testamentary D. restrictive E. blank
E. blank
Under the _____ test, the implied warranty would be breached if a person were injured by a chicken bone while eating a chicken salad sandwich. A. consumer safeguard B. foreign substance Your answer is not correct. C. express warranty D. reasonable expectation E. consumer expectation
E. consumer expectation
If a customer's data is stolen electronically from a business, the business will file a claim against their _______. A. umbrella insurance B. business interruption insurance C. key person life insurance D. product liability insurance E. cyber insurance policy
E. cyber insurance policy
Bearer paper is negotiated by _____. A. indorsement B. an agent C. assignment and delegation D. a principal E. delivery
E. delivery
Which of the following is NOT a type of real property? A. buildings B. subsurface rights C. plant life D. land E. harvested timber
E. harvested timber
Business _____ insurance reimburses a business for loss of revenue incurred when the business has been damaged or destroyed by fire or some other peril. A. impossibility B. continuation C. liability D. comprehensive E. interruption
E. interruption
Which of the following is NOT a characteristic of a corporation? A. separate legal entity B. free transferability of shares C. perpetual existence D. centralized management E. same identity as owner(s)
E. same identity as owner(s)
A form of co-ownership of real property that can be used only by married couples is known as which of the following? A. an easement B. joint tenancy C. tenancy in common D. a life estate E. tenancy by the entirety
E. tenancy by the entirety
The directors and officers of a corporation must act within the authority conferred upon them by all of the following EXCEPT? A. the corporation's articles of incorporation B. a state corporate code C. the bylaws of the corporation D. resolutions of the board of directors E. the alter ego doctrine
E. the alter ego doctrine
Which of the following is NOT covered by home owners' insurance? A. real and personal risks that fire insurance would cover B. any structures outside the dwelling such as a garage or storage shed C. items stolen from the home while the home owner was on vacation D. real and personal risks that personal liability insurance would cover E. the items of a neighbor destroyed by the owner of the insurance
E. the items of a neighbor destroyed by the owner of the insurance
Zora, Heathcliff, Manuel, and Mohammad own a large commercial building as joint tenants. If Heathcliff executes a will that leaves all of his property to his alma mater university, who owns the property when Heathcliff dies? A. The university owns the entire building in fee simple. B. It will depend on what the probate judge rules. C. Zora, Manuel, Mohammad, and the university each own a one-quarter interest in the building. D. Zora, Manuel, and Mohammad each own a life estate in the building that will go to the university upon their deaths. E. Zora, Manuel, and Mohammad each own a one-third interest in the building.
E. Zora, Manuel, and Mohammad each own a one-third interest in the building.
Personal property includes _____ property such as equipment, vehicles, furniture, and jewelry, as well as _____ property such as securities, patents, trademarks, and copyrights. A. real; physical B. intangible; tangible C. tangible; real D. intangible; physical E. tangible; intangible
E. tangible; intangible
A farmer purchases equipment from a manufacturer. The farmer obtains a loan to purchase the equipment from a bank, which obtains a security interest in the equipment. The equipment manufacturer is paid for the equipment out of the proceeds of the loan. This is a _____________ secured transaction. The manufacturer is the seller, the farmer is the ______________, and the bank is the ______________ creditor. A. two-party; buyer-debtor; seller-lender-unsecured B. two-party; buyer-debtor; seller-lender-secured C. two-party; seller-lender; buyer-debtor-secured D. three-party; seller-lender; buyer-debtor-secured E. three-party; buyer-debtor; lender-secured
E. three-party; buyer-debtor; lender-secured