acc351 exam 3
What provides the holder with certain rights during the period covered by the lease? A. Leasehold estate. B. Accession estate. C. Conversion estate. D. Administrator's estates
A. Leasehold estate
As is true for all small firms, the owners of a limited liability company frequently have difficulty in raising: A. additional funds. B. profits. C. insurance. D. losses.
A. additional funds
If the true owner does not come forward and the finder does not wish to claim ownership, title to the property transfers to the state _________. A. after a period specified by statute. B. immediately. C. upon the state filing a claim to title. D. at the owner's direction
A. after a period specified by statute
A principal may not revoke an agency contract if the agent has an interest in the subject matter of the agency in addition to the remuneration that he or she receives for services. Such a contract is called an irrevocable agency, which is also known as: A. agency coupled with an interest. B. agency by revocation. C. agency by ratification. D. apparent authority
A. agency coupled with an interest
For title to fungible goods to pass, it is important that the goods are: A. ascertained. B. not ascertained. C. perishable. D. not perishable
A. ascertained
A bailee in a bailment for work and services is entitled to hold and, if necessary, sell the property if the bailor does not pay for the services or work done. This provision of law is known as a(n): A. bailee's lien. B. equitable lien. C. consignor's lien D. bailor's lien
A. bailee's lien
A transaction in which an owner of tangible personal property transfers the property to another party while still retaining ownership of such property is known as a: A. bailment. B. pledge. C. hypothecation. D. lease
A. bailment
A bailment for the sole benefit of a bailee usually results in a(n): A. borrowing/lending transaction. B. spring transaction. C. declarative transaction. D. autonomous transaction
A. borrowing/lending transaction
Withholding payment for transportation charges enables a carrier to hold goods on the basis of a(n): A. carrier's lien. B. warehouser's lien. C. proprietor's lien. D. equitable lien
A. carrier's lien
A sale, in which contract provisions specify conditions that must be met by one of the parties, is called a(n): A. conditional sale. B. substantial sale. C. premeditated sale. D. altruistic sale
A. conditional sale
The contract for a present sale of goods or for a sale of future goods is a(n): A. contract for sale. B. negotiation for sale. C. accord of sale. D. non-existent contract
A. contract for sale
A contract that gives the buyer title to goods and the opportunity to return them to the seller at a later time is a: A. contract for sale with the right of return. B. sale on approval of the buyer. C. contract to sell. D. trial contract
A. contract for sale with the right of return
. If a person acts as an agent for more than one party with their knowledge, the agent is entitled to receive compensation from: A. each principal. B. each agent. C. his or her first employer. D. his or her last employer
A. each principal
If an employee is required to perform duties for the employer that necessitate the exercise of judgment and discretion and that result in the establishment of a contractual relationship between the employer and a third party, then the employee has the status of an agent even without a: A. formal contract of agency. B. deed of trust. C. stock purchase agreement. D. joinder agreement
A. formal contract of agency
The UCC provides that, in the absence of negligence or fraud, legal action to remedy a breach of sales contract must be started within ________from the breach. A. four years B. two years C. five years D. eight years
A. four years
FOB. is the abbreviated form of: A. free on board. B. freight on board. C. freight on bail. D. freedom on bail
A. free on board
In a bailment for the sole benefit of the bailee, the law generally expects the bailee to exercise ___________ care while in possession of the article. A. great or extraordinary B.reasonable C. little D. absolute
A. great or extraordinary
To create a bailment, the bailee must ______ to possess goods. A. intend B. ask C. have ownership D. desire
A. intend
At times, individuals can become partners for only a short period of time, or for only a single project. This activity is defined as a(n): A. joint venture. B. partnership. C. LLC. D. LLP.
A. joint venture
Property is considered to be mislaid, rather than lost, when the property is intentionally: A. left in a certain place and then forgotten. B. given to a third party. C. offered to an agent. D. discarded and then forgotten
A. left in a certain place and then forgotten
Legal disputes often involve the determination of who holds the title when a(n): A. loss occurs. B. contract commences. C. performance begins. D. illegal activity occurs
A. loss occurs.
Before the hammer falls, a bidder __________________. A. may retract the bid at any time. B. may never retract the bid. C. does not have a valid offer. D. may retract the bid only within five seconds of the bid
A. may retract the bid at any time
The main difference between principal-agent and employer-employee relationships is an employer's power to control the activities of a(n): A. non-agent employee. B. non-employee agent. C. employee. D. third party
A. non-agent employee
In an agency by ratification, a principal cannot accept the benefits of a transaction and refuse to accept the: A. obligations. B. parallel benefits. C. apparent benefits. D. representation
A. obligations
A business owned and operated by two or more persons is a(n): A. partnership. B. sole proprietorship. C. corporation. D. subchapter S corporation
A. partnership
A bill of sale is an example of how a title may be: A. passed. B. eliminated. C. amended. D. shared
A. passed
The major disadvantage of a corporation is the fact that the corporation is required to ___________for any year during which a profit is earned. A. pay separate income taxes B. pay separate dividends C. pay separate interest D. pay separate bonuses
A. pay separate income taxes
A bailment is a special kind of contract that is widely used in business and in: A. personal affairs. B. cultural activities. C. academic research. D. charitable institutions
A. personal affairs
If a third party knows of the agency and knows the identity of the principal, the agent cannot be held ______________ as long as the agent acts within the scope of his or her actual authority. A. personally liable B. in contempt of court C. without bail D. against his or her will
A. personally liable
If an agent makes a fraudulent statement in a contract within the scope of his or her authority, then the: A. principal is responsible. B. agent is responsible. C. principal is not responsible. D. contracting party's agent is responsible
A. principal is responsible
Personal property, such as trees or shrubbery purchased at a nursery, become: A. real property when they are planted. B. tangible property when they are sold. C. real property when they are bought. D. tangible property when they are possessed
A. real property when they are planted
As representatives of the owner of the goods, the individuals who have the right to make legitimate sales are known as): A. remote parties. B. third parties. C. veteran parties. D. amicus retailers
A. remote parties
When the buyer refuses to pay the purchase price and the seller has the possession of the goods, the seller may: A. resell the goods and sue the buyer. B. get the buyer arrested. C. destroy the goods and sue the buyer. D. manhandle the buyer
A. resell the goods and sue the buyer
Ownership is held in ________ when all the rights of ownership in a particular piece of property are held by one person. A. severalty B. tenancy C. defiance D. accession
A. severalty
An agreement in which a man borrows his friend's tuxedo is a bailment for the: A. sole benefit of the bailee. B. sole benefit of the bailor. C. benefit of both the parties. D. benefit of bailee's heirs
A. sole benefit of the bailee
All but one of the following organizational forms have limited liability. This exception is the: A. sole proprietorship. B. corporation. C. subchapter S corporation. D. limited partnership
A. sole proprietorship
A nonnegotiable warehouse receipt is like a: A. straight bill of lading. B. bill of sale. C. bill of purchase. D. slanted bill of lading
A. straight bill of lading
The company must comply with tax regulations, such as the restriction that there are a limited number of shareholders, in order to qualify as a: A. subchapter S corporation. B. sole proprietorship. C. limited partnership. D. joint venture
A. subchapter S corporation
If minors are capable of properly carrying out the duties of an agency relationship: A. then they may be considered to represent other persons as agents. B. they may still not be eligible to enter into a contract with an agent. C. they may still not be considered to represent other persons as agents. D. then they are exempted from representing other persons as agents
A. then they may be considered to represent other persons as agents
A person who finds an article has good title against anyone EXCEPT the: A. true owner. B. future purchaser. C. seller. D. middleman
A. true owner
Anyone who buys an article from someone who has found it must be prepared to surrender the article to the: A. true owner. B. clerk of court. C. county recorder. D. county magistrate
A. true owner
When an agent does not inform the third party that he or she is acting on behalf of another person, the unidentified principal is known as a(n): A. undisclosed principal. B. unaware principal. C. unauthorized principal. D. distinct principal
A. undisclosed principal
A deed in which the grantor asserts that he or she has title and that the property is free of the claims of others is a: A. warranty deed. B. quitclaim deed. C. guarantee deed. D. bargain and sale deed.
A. warranty deed
________ is the right of an owner of property such as plants or animals to increase in the property. The owner of a cow, for example, owns the calves born to the cow. A. Inheritance B. Accession C. Freeholding D. Possession
B. Accession
An agency by agreement appointing an agent for a two year period must comply with the: A. Statute of Limitations. B. Statute of Frauds. C. Statute of Encumbrances. D. Statute of Equitable Tolling
B. Statute of Frauds
The concept of title was crucial in making determinations of the rights and responsibilities of the parties to a contract, prior to the adoption of the: A. Federal Trade Law. B. Uniform Commercial Code. C. United Trade Commission. D. Trivial Trade Laws.
B. Uniform Commercial Code
In a partnership each partner shares in the profits of the business, as well as the ______ of the business. A. stock B. assets C. member units D. shareholder's equity
B. assets
If an agent commits any torts or crimes acting within the scope of his or her _______, then both principal and agent may be held liable. A. mental capacity B. authority C. knowledge D. financial capacity
B. authority
Anyone in possession of goods can create a bailment relationship and become a(n): A. bailee. B. bailor. C. executor. D. administrator
B. bailor
A receipt for goods that are to be shipped is known as a: A. warehouse receipt. B. bill of lading. C. bill of sale. D. bill of purchase
B. bill of lading
A gift given by a living person who expects to die from a known cause is called a(n): A. inter vivos gift. B. causa mortis gift. C. intestate gift. D. anticipatory gift
B. causa mortis gift
Organizational forms that are referred to as not-for-profits may include: A. limited liability corporations. B. charitable organizations. C. joint ventures. D. industrial corporations
B. charitable organizations
A business that is formed as a separate legal entity is a(n): A. partnership. B. corporation. C. joint venture. D. sole proprietorship
B. corporation
The expense associated with forming and maintaining the company in a corporation serves as a(n): A. stepping-stone. B. disadvantage. C. accounting strategy. D. advantage
B. disadvantage
A bill of sale that is handwritten is: A. void B. effective. C. voidable. D. rescindable
B. effective
A legal bar to the use of contradictory words or acts in asserting a claim against another is known as: A. condition. B. estoppel. C. redeeming power. D. restraining order
B. estoppel
Goods that physically exist and are owned by the seller at the time of sale are considered: A. accessible goods. B. existing goods. C. scarce goods. D. profitable goods
B. existing goods
A salesperson of the titleholder of certain merchandise may sell the products of the titleholder because he has ___________ permission of the titleholder. A. only the express B. express or implied C. only the implied D. neither express nor implied
B. express or implied
The law requires that a common carrier must accept all shipments that it is authorized to: A. purchase. B. handle. C. sell. D. lease
B. handle
Whereas an agency agreement brings about a relationship between a principal and a third party that results in a contract, an employee who is not also an agent _______________. A. also has such rights and powers B. has no such rights or powers C. has extensive rights D. has limited rights
B. has no such rights or powers
A sales contract for goods of special design, construction, or manufacture is a contract for: A. specialty goods. B. labor and materials. C. design. D. manufacturing
B. labor and materials
The limited liability company provides all of the owners with: A. licensing authority. B. limited liability. C. limited profits. D. limited reputation
B. limited liability
The not-for-profits organizations include all of the following, EXCEPT: A. universities. B. limited liability partnerships C. political parties. D. social clubs
B. limited liability partnerships
At an auction sale, the seller is the owner of the goods and the buyer is the party: A. conducting the transaction. B. making the offer. C. giving the opinion. D. abstaining from negotiation
B. making the offer
A bailment in which both the bailee and bailor derive some benefit, and, as a result, each has rights and duties, is known as a: A. bailment for the sole benefit of the bailor. B. mutual-benefit bailment. C. bailment for the sole benefit of the bailee. D. constructive bailment
B. mutual-benefit bailment.
Under common law, a hotelkeeper's liability for a property of guests was near absolute, but state statutes today limit a hotel's liability to that of a(n): A. insolvent. B. ordinary bailee. C. mortgagee. D. lessee.
B. ordinary bailee
A principal must reimburse an agent for any loss or damage suffered by the agent in the legitimate: A. ownership of property. B. performance of duties. C. enforcement of rules. D. transfer of power
B. performance of duties
Legally, property other than land, including both tangible property and intangible property, is considered: A. real property. B. personal property. C. static property. D. transient property
B. personal property
The legal document formally creating an agency is called a: A. general contract. B. power of attorney. C. deed. D. guaranty
B. power of attorney
It is often necessary or desirable for a person or firm to be represented by another in business or personal dealings with third parties. This relationship is called a(n): A. employer-employee relationship. B. principal-agency relationship. C. title-agency relationship. D. third party-agent relationship
B. principal-agency relationship
The term _________ includes, in addition to land, both tangible and intangible personal property. A. intestacy B. property C. patent D. joint tenancy
B. property
When goods are sold free on board (f.o.b.) shipping point, title to the goods passes from the seller to the buyer when the carrier ________ the shipment. A. discards B. receives C. deports D. retreats
B. receives
A contract in which title and risk of loss remain with the seller and that provides for the sale subject to the buyer's final decision is a(n): A. endorsement of contract. B. sale on approval. C. contract to sell. D. FOB contract
B. sale on approval
A business owned and operated by one person is called a(n): A. limited partnership B. sole proprietorship. C. LLC. D. 501(c) corporation
B. sole proprietorship
A warehouse receipt is used for goods that are being: A. imported. B. stored. C. exported. D. sold immediately
B. stored
When a sales contract provides that specific conditions must be met after title has passed, it is said to contain a condition: A. that is not legal. B. subsequent. C. simultaneous. D. of no consequence
B. subsequent
The right to extract minerals, such as oil or coal, from land is known as: A. inherited rights. B. subterranean rights. C. substantial rights. D. extensive rights
B. subterranean rights
A form of joint ownership of property by two or more persons in which the ownership interest of any one of the owners can be sold, transferred or inherited is known as: A. tenancy by the entirety. B. tenancy in common. C. joint tenancy. D. co-ownership
B. tenancy in common
A mutual-benefit bailment gives the carrier (the bailee) all of the following, EXCEPT: A. the right to determine and enforce reasonable rules and requirements concerning the operation of its services. B. the right to refuse to accept goods for any reason. C. the right to payment for services provided. D. the right to payment from either the consignor or consignee
B. the right to refuse to accept goods for any reason
If the third party does not know the identity of the principal, the agent can be held personally responsible to the: A. disclosed principal. B. third party. C. identified principal. D. unidentified principal
B. third party
There is a possibility of expensive pieces of property being sold at auction for a pittance simply because no one offered a higher bid. This possibility occurs only at an auction: A. with advertisements. B. without reserve. C. without advertisements. D. with reserve
B. without reserve
Which legal term is used for a person who is appointed as an agent? A. Special Attorney B. Attorney at Law C. Attorney in Fact D. Apparent Attorney
C. Attorney in Fact
Title to land also can be acquired as a result of a person's use of land over a period of time though __________. A. a warranty deed B. a leasehold interest C. adverse possession D. adhesion
C. adverse possession
The authority that a third party may reasonably assume an agent possesses, despite the fact that the agent does not actually possess such authority, is known as: A. unlawful authority. B. ultra vires authority. C. apparent authority. D. delegated responsibility
C. apparent authority
Whenever one person turns over property to another with the understanding that certain work is to be performed on the property, a ___________ for work and services is created. A. promise B. pledge C. bailment D. mortgage
C. bailment
Both individuals and businesses sometimes need to place articles in storage and they, thereby, enter into a bailment known as a: A. constructive bailment. B. common-carrier bailment. C. bailment for storage. D. parking-lot bailment
C. bailment for storage
An agreement reached between a bailor and a bailee is a: A. mortgage. B. bailout. C. bailment. D. codicil
C. bailment.
In a sole proprietorship, the entrepreneur has to obtain a general ____________from his or her local municipality. A. disclosure B. release C. business license D. accounting
C. business license
The company usually has_________, which provide rules for the meetings of the corporation. A. common laws B. articles of incorporation C. bylaws D. statutory laws
C. bylaws
A contract of selling merchandise with the condition that title will remain with the seller until the purchase price has been paid is a: A. provisional purchase. B. qualified sales contract. C. conditional sales contract. D. restrictive purchase contract
C. conditional sales contract
Shareholders vote for __________ who are responsible for managing the overall strategy and operations of the firm over the long term. A. financiers B. coordinators C. directors D. administrators
C. directors
In a business, there may be times when partners disagree on how the business should be run. This serves as a(n): A. lead. B. stepping-stone. C. disadvantage. D. advantage
C. disadvantage
A right or interest in land granted to a party to make beneficial use of the land owned by another is a(n): A. accession. B. precession. C. easement. D. subterranean right.
C. easement.
The term for goods that do not exist at the time of sale, such as crops and unborn livestock, is: A. expected goods. B. nonexistent goods. C. future goods. D. intangible goods
C. future goods
A reputed merchant will agree to a sale or return in order to maintain: A. balance. B. inventory. C. goodwill. D. consignments
C. goodwill
Under common law, ownership of real property extended from the center of the earth to the highest point ________. A. on the land. B. in the county C. in the sky D. in the state
C. in the sky
An agent is liable for losses to the principal resulting from the agent's: A. capital accumulation. B. personal business. C. incompetence. D. explicit agreement
C. incompetence
In entire and divisible contracts, until the whole order is filled, the payment of contract: A. is obligatory. B. is compulsory. C. is not required. D. is mandatory
C. is not required
When two or more persons own equal shares of a property then it is called: A. severalty. B. co-ownership. C. joint tenancy. D. accession
C. joint tenancy
The law concerning bailments provides for certain rights and duties of both bailor and bailee, depending on the: A. amount of the transactions. B. nature of the business. C. kind of bailment. D. financial positions of the parties
C. kind of bailment
A person who holds a freehold estate (ownership interest) only for his or her lifetime is said to hold a(n) _________ in the property. A. leasehold interest B. quite title C. life estate D. indispensable interest
C. life estate
The major advantage of a corporation is the fact of ____________to shareholders. A. restricted authority B. unlimited credibility C. limited liability D. unrestrained reliability
C. limited liability
An agreement in which a suitcase is left with a railroad station checkroom is a: A. bailment for the sole benefit of the bailee. B. bailment for the sole benefit of the bailor. C. mutual-benefit bailment. D. constructive bailment
C. mutual-benefit bailment
For title to pass by estoppel, the purchaser needs to prove all of the following EXCEPT that: A. the purchase was made in good faith. B. the purchase was made from one with rightful possession. C. no consideration or value was given by the buyer. D. the value was given by the buyer for which he now claims ownership
C. no consideration or value was given by the buyer
There are two kinds of bills of lading. While one is a straight bill of lading, the other one is a(n): A. bill of sale. B. flexible bill of lading. C. order bill of lading. D. bill of acknowledgement
C. order bill of lading
The finder of lost property has ________ rights superior to everyone except the true owner. A. exclusive B. limited C. ownership D. infinite
C. ownership
A limited partner will be deemed by the courts to be a general partner if he or she: A. constantly refuses to sign a proxy. B. participates regularly in the duty of loyalty and duty of care. C. participates in the overall management of the business. D. unintentionally violates the duty of care owed to the corporation
C. participates in the overall management of the business
A person who is delegated the authority to act only in a particular kind of transaction, under definite instructions, and with specific limits on the scope of his or her authority, is called a: A. general agent. B. hired agent. C. special agent. D. super-agent.
C. special agent
An agent may perform only those acts that have been authorized by the principal or: A. the spouse of the principal. B. his or her employer. C. the court. D. the government
C. the court
According to the UCC, a sale is: A. a payment for goods. B. a negotiated transaction. C. the passing of title from the seller to the buyer for a price. D. a void transaction
C. the passing of title from the seller to the buyer for a price
The intangible right of ownership is called: A. custody. B. tenure. C. title. D. possession
C. title.
A guest whose stay is relatively uncertain is known as a: A. traveler. B. customer. C. transient. D. trespasser
C. transient
In the event that the intent of the parties with regard to the passage of title is unclear, title passes at the moment when the parties: A. rescind the contract B. petition the court for approval of title passage. C. unconditionally agree to sell. D. conditionally agree to enter into a contract
C. unconditionally agree to sell
When property, such as stolen goods, is transferred without the permission of the owner, then it amounts to: A. rightful possession. B. champerty. C. wrongful possession. D. repossession
C. wrongful possession
Which of the following organizational forms has in place a management team whose members share in the overall control of the business? A. Charitable organization. B. Sole proprietorship. C. Religious organization. D. Limited liability company
D. Limited liability company
When a person sells stolen property to a third party, the owner is estopped from recovering the goods from a: A. third party delegatee. B. third party beneficiary. C. third party seller for value. D. a good faith third party purchaser for value
D. a good faith third party purchaser for value
The sale of goods can be made with the understanding that the purchaser takes title to the goods but has the right to return them within: A. one year. B. a period of one month. C. a period of two months. D. a reasonable time
D. a reasonable time
In general, all of the following are requirements for a bailment, EXCEPT that the: A. bailor must be in possession of goods. B. bailee must intend to possess goods. C. bailee must return identical goods. D. actual ownership of goods is necessary
D. actual ownership of goods is necessary
An agent must keep accurate accounts of his or her transactions conducted as part of the: A. termination clause. B. appointment letter. C. agreement D. agency agreement
D. agency agreement
Rights to land include the ___________. A. airspace above the land to 1000 feet. B. airspace above the land to 500 feet. C. airspace above the land to 300 feet. D. airspace above the land to an indefinite height
D. airspace above the land to an indefinite height
The document that lists the general powers of a corporation is called the: A. memorandum of hierarchy. B. memorandum of association. C. articles of entrepreneurship. D. articles of incorporation
D. articles of incorporation
Camilla agrees to purchase a car for $ 15,000. Camilla and the seller agree that Camilla will return the following day with a license plate to pick up the vehicle. In this case, the title passes: A. when Camilla arrives with the license plates. B. when Camilla takes the vehicle home. C. at the time of purchase. D. at the time of agreement
D. at the time of agreement
A minor who has appointed an agent may ________ the contract of agency in some states A. estop B. modify C. reform D. avoid
D. avoid
A negotiable order bill of lading can be used to ensure that the carrier will not deliver the goods until the receiver surrenders the original copy of the order bill of lading to the: A. importer. B. retailer. C. dealer. D. carrier
D. carrier
An individual or firm in the business of transporting goods between certain points as allowed by the various state commissions that regulate the carriers is known as a: A. business carrier. B. government carrier. C. public carrier. D. common carrier
D. common carrier
The common carrier delivers the goods to the party designated by the shipper, known as the: A. warehouser. B. consignor. C. trustee. D. consignee
D. consignee
The kind of bailment created when a friend inadvertently leaves behind an article of jewelry in your home during a visit is a(n): A. adversarial bailment. B. declarative bailment. C. mutual-benefit bailment. D. constructive bailment
D. constructive bailment
The death or disability of one of the partners in a business causes: A. affirmation. B. discharge. C. investiture. D. dissolution
D. dissolution
A director has a legal and ethical obligation to act diligently and prudently in conducting the affairs of the corporation. This is called the: A. mandatory duty. B. psychological duty. C. legal responsibility. D. duty of loyalty
D. duty of loyalty
The authority that has actually been given by the principal, either orally or in writing, is known as: A. forbidden authority. B. foreseen authority. C. implied authority. D. express authority
D. express authority
The owner of a freehold estate who holds the estate absolutely is said to hold it in: A. accession. B. easements. C. life estates. D. fee simple
D. fee simple
In a corporation, directors and officers of the company in which they hold their positions have a _____________ to the company. A. dependability B. mandatory duty C. time bound duty D. fiduciary responsibility
D. fiduciary responsibility
Wheat, sugar and flour are sold by weight and measure and are examples of: A. mutated goods. B. moss goods. C. amoebic goods. D. fungible goods
D. fungible goods
The voluntary transfer of property by one person to another without consideration or payment of any kind is a(n): A. informal transfer. B. will. nullity. C. statutory transfer. D. gift.
D. gift.
Patents, rights to drill for oil on someone's land, and copyrights of creative works such as books are: A. special possessions. B. tangible possessions. C. inalienable possessions. D. intangible possessions
D. intangible possessions
In sales contracts, the complete agreement need not be in writing, but there must be some evidence of the: A. purpose of the seller. B. objective of the buyer. C. fraud of the parties. D. intention of the parties
D. intention of the parties
A bailment allows an owner of personal property to transfer possession of it to another individual for any one of the following purposes, EXCEPT: A. sale. B. transportation. C. storage. D. lease.
D. lease
A person who finds property has a(n) _________ responsibility to make reasonable efforts to return the property to its rightful owner. A. ethical B. moral C. religious D. legal
D. legal
A contract for labor and materials to be enforceable, even though it involves $500 or more: A. must be entered by parties owning a business. B. must be certified by notary. C. should always be in writing. D. need not always be in writing
D. need not always be in writing
Many people in the United States have an entrepreneurial spirit that encourages them to pursue the "American Dream" of: A. traveling throughout the world. B. having employment security. C. having a leisurely life. D. owning and operating their own business
D. owning and operating their own business
The contractual relationship in a bailment for work and services is concerned with the kind and the quality of work done and the payment for services: A. disaffirmed. B. assigned. C. ratified. D. performed
D. performed
When goods are shipped free on board (f.o.b.) shipping point by common carrier, title passes from the seller to the buyer when the goods: A. are delivered to the buyer. B. are turned over to the carrier. C. are sold. D. reach the carrier's warehouse
D. reach the carrier's warehouse
A property that comprises land and everything attached to the land, including minerals such as oil, iron ore, and others, is known as: A. transient property. B. personal property. C. public property. D. real property
D. real property
Real estate, also known as ____________, is land and all articles permanently attached to it, such as buildings and trees. A. personal property B. property in rem C. property in persona D. real property
D. real property
The Uniform Commercial Code (UCC) does not cover contracts for: A. investment securities. B. leases. C. sales. D. services
D. services
When the buyer is insolvent, the UCC provides the seller with the right of: A. action in shipment. B. strike in transfer. C. walk out in transit. D. stoppage in transit
D. stoppage in transit
When the buyer refuses to accept delivery of the goods the seller may: A. manhandle the buyer for rejection. B. wait for the buyer to receive the goods. C. destroy the goods and sue the buyer. D. sue to recover the sales price
D. sue to recover the sales price
A form of joint ownership of property by husband and wife in which both have the right to the entire property is a(n): A. life estate. B. ownership by severalty. C. co-ownership. D. tenancy by the entirety
D. tenancy by the entirety
An agency contract is terminated by an act of the parties when the principal and the agent have mutually agreed on: A. renewal. B. amendment. C. continuation. D. termination
D. termination
Title to goods shipped free on board (f.o.b.) destination passes when the goods are delivered to the buyer. In the event of their loss, the cost of transporting the goods is paid: A. to the carrier by the buyer. B. to the seller by the buyer. C. to the seller by the carrier. D. to the carrier by the seller
D. to the carrier by the seller
A bailment for the sole benefit of a bailor requires the bailee take extraordinary care in taking care of the article
false
A bailment is a special kind of contract that is widely used in business and not in personal affairs
false
A contract for sale with the right of return gives the buyer the opportunity to return them to the seller at a later time, but does not give the buyer title
false
A corporation drafts articles of incorporation that lists the liabilities of the company
false
A leasehold estate is an ownership, with the right to possess real property, subject to the provisions of a lease
false
A person who finds property has no legal responsibility to make an effort to return the property to its rightful owner
false
A person who represents another is known as a principal
false
A principal is not responsible to third parties for all agreements made by the agent on behalf of the principal even if the agent acted within the scope of his or her authority
false
A salesperson in a retail store or service station is known as a retainer party
false
A salesperson need not have the express or implied permission of the titleholder of the merchandise to sell it
false
A warehouser is not responsible for goods left in storage
false
Actual ownership of goods is necessary to create a bailment
false
Although limited liability companies provide all of the owners with limited liability, these owners are not permitted to participate in the management of the business
false
An agency by invention is created when circumstances make such an agency necessary
false
An order bill of lading is not negotiable
false
Anyone who is legally competent to act for himself or herself cannot delegate that legal right to perform to another
false
Automobiles, furniture, clothing, and pets are not considered tangible goods
false
Dissolution of a partnership is governed by a stockholders' agreement
false
For title to pass by estoppel, the purchaser need not prove that the purchase was made from one in rightful possession
false
For title to pass through adverse possession it need not be proved that there was actual and exclusive continuous possession or use of the property
false
Goods that exist at the time of the sales transaction and are expected to come into the possession of the seller are considered future goods
false
If a person acts as agent for more than one party with their knowledge, the agent is only entitled to receive compensation from the first principal the agent contracted with
false
If a seller fails to deliver goods as promised, the buyer cannot buy similar goods to substitute for those not delivered
false
In a bailment for the sole benefit of a bailee, both the bailor and the bailee get the benefit
false
In a mutual-benefit bailment, the bailor does not have the duty to warn the bailee of any defects in the property that could cause harm
false
In a tenancy in common, joint ownership must be in equal interests
false
In an entire and divisible sales contract, if all the components are interdependent and are included in the same order, an entire contract payment for the contract is required before the whole order is filled
false
In states that have enacted community property statutes, property acquired by a member of a designated community belongs to that entire community
false
It is not necessary for the agent to obey all of the principal's reasonable and lawful orders and instructions within the scope of the agency contract
false
It is not possible for title to goods to be passed by a nonowner who does not have title
false
It is not possible to have possession of goods without having title, just as it is not possible to have title without having possession
false
Organizations that are referred to as not-for-profits may not include universities, political parties, and labor unions
false
Personal property includes real property such as land and all property attached to it
false
The authority of an agent to perform the duties that are specifically stated in the contract of agency is known as apparent authority
false
The duty of loyalty means that a director has no legal or ethical obligation to administer to the affairs of the corporation with personal integrity, honesty, and candor
false
The legal principles governing the relationship of principal and agent and of employer and employee are entirely different from each other
false
The major disadvantage of a corporation is the fact that the shareholders have shared personal liability for a corporation's obligations
false
The major disadvantage of a sole proprietorship is the fact that the owner of the establishment has limited liability
false
The transfer of real property is, in many ways, simpler than the transfer of personal property
false
There is one organizational form that is available for a business structure
false
Title is a tangible property
false
When a contract provides for the sale of goods subject to the buyer's approval, the transaction is a sale on return
false
When a partner acts with either actual or apparent authority, all other partners are not liable for his or her acts
false
When the agent informs the third party that he or she is acting on behalf of another, and makes the third party aware of the identity of the principal, the principal is known as a furtive principal
false
When the owner of goods entrusts property to a person who sells the same type of goods and that person sells the property to an innocent third party, the owner cannot be estopped from recovering the goods from the third party
false
A bailee's lien is a claim against the property of another as security for a debt
true
A bailment is created when the parking lot attendant actually takes control of the vehicle
true
A carrier, in most cases, has a right to hold a shipment until payment is made
true
A conditional sales contract is one way of selling merchandise with the condition that title will remain with the buyer until the purchase price has been paid
true
A joint tenancy exists when two or more persons own equal shares of property
true
A legally enforceable agreement that has as a purpose the immediate transfer of title to personal property in return for consideration is a contract for sale
true
A negotiable warehouse receipt, like the negotiable order bill of lading, requires that the original copy be presented to the warehouser before the goods will be surrendered to someone claiming them
true
A principal is liable for the torts and crimes of the agent if they are committed at the direction of the principal or while the agent is performing authorized duties during the ordinary course of the agency
true
A principal must pay the agent the compensation agreed to in the contract
true
A sales contract for goods of special design, construction, or manufacture is a contract for labor and materials
true
A sales contract must be signed by the affected parties
true
Agency is a type of contract and, like other contracts, may be terminated by agreement, by performance, or by operation of law
true
Agents are usually classified according to the nature of their relationship with their principals
true
An advantage to a sole proprietorship is that the owner has complete authority, within the boundaries of the law, for the running of the business
true
An agency by operation of law is created when a court finds the need for an agency to achieve a desired social policy
true
An agency by ratification results when a principal approves an unauthorized act performed by an agent
true
An object that has not been intentionally left in the custody of someone else and then forgotten is considered lost, not mislaid
true
Businesses are generally structured as one of the following: (1) sole proprietorship, (2) partnership, (3) corporation, or (4) limited liability company.
true
Contracts for services are not covered by the Uniform Commercial Code
true
Corporations are owned by shareholders, who purchase shares of stock in the corporation
true
Duty of care means that a director has a legal and ethical obligation to act diligently and prudently in conducting the affairs of the corporation
true
Fungible goods are those that are generally sold by weight or measure
true
If a buyer refuses to accept delivery of goods, the seller can store the goods for the buyer and sue to recover the sales price if the goods are not readily resalable to another customer
true
If the owner of goods entrusts proof of ownership to someone in possession of the goods, the goods cannot be recovered by the true owner from an innocent purchaser
true
In a common carrier bailment, the consignor, or shipper, turns over goods to a common carrier and a mutual-benefit bailment is created that is terminated only when the common carrier delivers the goods to the consignee
true
In an area that is not open to the public, the owner of the property is presumed to possess both the place itself and whatever it contains
true
In bailment for work and services, a bailor-bailee relationship is concerned with the care of the property
true
In general in a bailment, the bailee must return the identical goods
true
In the context of a life estate, if real property is transferred from A to B for B's lifetime, and B dies, the property is then returned to A, if he or she is still alive, or to A's heirs
true
In the event that the seller delivers goods that are not as specified in the contract, the buyer may revoke the contract and return the goods that are substantially different from those that were ordered
true
Items of personal property added to real property are fixtures
true
Personal property, such as trees or shrubbery purchased at a nursery, become real property when they are planted
true
Rights to land include the airspace above the land to an indefinite height, subject to the rights of aircraft in flight that do not pose a hazard to persons or property on the land
true
Situations of wrongful possession occur when property, such as stolen goods, is transferred without the permission of the owner
true
Stoppage in transit is the right of an unpaid seller to stop goods in transit and order the carrier to hold them for the seller
true
Taking clothes to a dry cleaner transfers possession, but not ownership of the clothes
true
The major disadvantage of a corporation is the fact that the corporation is required to pay separate income taxes at a special corporate rate for any year during which a profit is earned.
true
The person who retains ownership and transfers possession is the bailor and the person who receives the goods is the bailee
true
The right to extract minerals, such as oil or coal, from land is known as subterranean rights
true
The two types of conditions found in contracts for conditional sales are conditions precedent and conditions subsequent
true
There are instances in which goods are thrust upon a bailee who does not have any choice about whether or not he or she wishes to serve as bailee, which is a type of a constructive bailment
true
Title passes when the parties intend it to pass
true
Title to goods shipped free on board destination passes before the goods are delivered to the buyer
true
When a purchaser takes title to goods but has the right to return them within a specified or reasonable time, the purchaser must assume all the obligations of ownership while the goods are in his or her possession
true
When individuals become partners for only a short period of time, or for only a single project, they are engaged in a joint venture
true
