B Law Final

40. Anything that an agent obtains by virtue of an agency relationship is held in a constructive trust and thereby belongs to

a. the principal

38. Curly Fries Inc. grants its agent Damon an exclusive territory in which to sell its products. The company cannot compete with Damon in that territory under the duty of

b. cooperation

30. Chapter 7 of the Bankruptcy Code provides for

b. liquidation proceedings

50. Clark hires Dell, a real estate broker, to sell his beach house. The house is destroyed in a storm before it can be sold. Dell is Clark's agent

d. no more

7. To buy a house, Tom obtains a mortgage loan with Universal Credit Union. Later, Tom defaults on the loan. Universal informs him that the property will be sold in a foreclosure proceeding. Before the sale, to gain title and regain possession, Tom can

d. redeem the property

26. Under Chapter 7, the primary effect of a discharge is to

d. void a judgment on a discharged debt and prohibit an action to collect it.

4. To purchase an apartment, Les borrows funds from Metro Bank. The terms of the loan give the lender a lien on the property being acquired by the borrower as security for payment of the debt. This is

A. a mortgage

2. United Contractors Inc. holds a lien on Vista Estate's real property. This property can be sold to satisfy the debt if, before the sale, notice is given to

a. Vista Estate

17. Capital Inc. holds a security interest in Discount Store's inventory. The parties agree that the interest will continue in the collateral even if it is sold, exchanged, or disposed of in some other way. This is

a. a floating lien

10. To make a sale to Gourmet Inc., Hill Valley Commodities asks Gourmet's outside accountant Ingre to co-sign a credit application. According to the terms, if Gourmet defaults, Hill Valley can look to Ingre for payment without first pursuing legal remedies against Gourmet. Ingre is

a. a surety

43. Without authorization, Race contracts on behalf of Sophie to have Theo paint Sophie's Boutique. If Sophie decides to ratify the contract, she must affirm

a. all of the contract.

5. To buy a townhouse, Becky obtains a mortgage loan from Countywide Bank. The lender should record the mortgage to

a. be officially on record as holding an interest in the property

8. Bach borrows funds from City Bank to pay his tuition. Dvorak co-signs the credit application. After the loan agreement is signed, Bach agrees to a higher rate of interest without telling Dvorak, who is thereby

a. discharged from the agreement

29. All bankruptcy proceedings are held in

a. federal bankruptcy courts.

42. A sudden storm threatens the property of Marina Bay LLC. Ngoc, Marina Bay's sales agent, is on site, but lacks the express or implied authority to bind the firm to the cost of appropriate protective measures. Unable to communicate with Marina Bay, Ngoc

a. has emergency powers to deal with the situation.

16. To buy furniture, Gina, a consumer, signs a purchase agreement with Home Store, the seller, to pay $100 down and $50 per month until the price is paid. Home Store takes a security interest in the furniture. Because it was created as part of the purchase agreement with t a consumer, the security interest

a. is automatically perfected

24. If a voluntary petition in bankruptcy is found to be proper, the court's entry of an order for relief.

a. puts into place an automatic stay

13. To create an enforceable security interest for a loan, in terms of the collateral, the debtor must have

a. rights in it

12. To create an enforceable security interest between Mortgage Bank and National Property Company in a written security agreement, the agreement must be signed b

a. the debtor

6. To purchase a farmhouse, Clay obtains a mortgage loan from Debit Bank. Clay defaults on the payments on the loan. The bank has

a. the right to foreclose on the mortgaged property

45. Chu, an agent for Delivery Corporation, rents a truck from Equipment Inc. without revealing that he is acting on Delivery's behalf. When Delivery fails to pay for the use of the vehicle, the lessor collects the unpaid amount from Chu by judicial process. Entitled to be indemnified is

b. Chu

14. Bob's Barber Shop borrows from first Credit Company and then Debit Loans LLC, using the same property as collateral for both loans. Debit Loans perfects its security interest. Credit Company does not. The debtor defaults on both loans. The party with first rights to the collateral is

b. Debit Loans LLC

44. Hana indicates that she is acting as an agent on behalf of an unidentified client - In-Flight Service Inc. - when she enters into a contract with Jet Airlines. Liability to the airline for nonperformance of the contract may be imposed on

b. Hana and In-Flight

49. Milos employs Natalie to handle a list of financial transactions on Milos's behalf. This power will terminate on

b. Milos's death or incapacity

1. Ranch West owes Silo & Barn Inc. $5,000 on their contract, but refuses to pay. To collect, Silo files a mechanic's lien, under which security for the debt is represented by

b. Ranch's real estate

19. Bayou Financial Corporation holds a security interest in property owned by Cajun Farms. Perfection of this security interest may not protect Bayou against the claim of

b. a buyer in the ordinary course of business

27. Construction Inc. wants to agree with its creditors on a plan under which it pays a portion of its debt and is discharged of the rest. To accomplish this goal, the corporation should file a petition in bankruptcy under Chapter 11 for relief through

b. a reorganization

39. Watercraft Inc. employs Vern as a sales agent for a trial period. At the end of the period, Watercraft and Vern disagree on the amount of the commissions Vern is due for sales that he made. Vern may demand

b. an accounting.

36. Rosa introduces Sol to her friend Trey as "my associate." Sol purports to act as Rosa's agent in a business transaction with Trey. If Rosa is liable for Sol's actions, it will be because their relationship is

b. an agency by estoppel.

41. Ruiz agrees to act as Seth's agent to sell Seth's farm while Seth is away from the property. A contract for a sale of real estate must be in writing. The agreement between Ruiz and Seth

b. must be in writing.

20. Proceeds from the disposition of collateral after default on the underlying debt are distributed first to pay

b. the balance of the debt owed to the secured party

32. Bread Company hires Craig to sell the company's products in a certain area. Bread agrees to pay Craig a salary, plus commission, for a trial period. They also agree that he can sell using any methods and during any hours that seem appropriated. The key factor in whether Craig is Bread's employee is

b. the degree of the employer's control over the details of the work

37. Power Company employs Qin to negotiate the purchase of rights of way for a future power transmission project. Qin secretly buys some of the property along the planned route and sells the rights to Power at a profit. Qin has breached

b. the duty of loyalty

11. Redevelopment Capital Inc. is the secured party in a secured transaction with Skyway Airport Corporation. Redevelopment Capital is also known as

b. the secured creditor.

46. Without authority, Dot contracts purportedly on Eva's behalf with Field & Farm Equipment Inc. for the purchase of a tractor. Liability on the contract extends to

c. Dot only

28. Under Chapter 11, soon after the entry of the order for relief

c. a creditors' committee of unsecured creditors is appointed.

35. Lau, an agent for Mae, acts outside the scope of her authority, to enter into a contract on Mae's behalf. Mae approves of the deal and affirms the contract. This is

c. agency by ratification

9. Kari is a surety for Lore's loan from Metro Bank. As a surety, Kari's right of reimbursement entitles her to receive from the debtor

c. all outlays made on behalf of the suretyship arrangement.

31. Nora works at Oil & Gas Inc. She is a sales representative who works with Oil & Gas customers. The company closely supervises its sales reps, and dictates their schedules. With respect to third parties, Nora is

c. an employee and agent

22. With respect to creditors, the main goal of bankruptcy law is to

c. ensure equitable treatment in the competition for debtor assets

34. Because those who cannot legally enter into contracts directly cannot do so indirectly through an agent, a principal must

c. have contractual capacity to be a principal

47. Ira serves in a representative capacity for Jeff. Key is injured through Ira's negligence. Jeff may be liable to Key if Ira's conduct occurred

c. in the course and scope of Ira's employment

25. An involuntary bankruptcy occurs when a debtor

c. is forced into bankruptcy proceedings by his or her creditors

21. With respect to debtors, the main goal of bankruptcy law is to

c. provide a new start without creditors' claims

18. Credit Financing Inc. and Debt Lending Company hold security interests in property owned by Fleet Cartage Inc. Both lenders' interests are perfected. Priority between these security interests is generally determined by

c. the time of perfection

48. Deft Construction Company hires Egan, an independent contractor, to excavate and grade a certain parcel of land for a commercial development. Negligence in Egan's work causes the ground to subside, leading to the collapse of a building in which Deft workers are injured. Liability for the injuries extends to

d. Egan only

33. Kit hires Lane to obtain insurance for Kit's business. Lane agrees to act on Kit's behalf in the effort, and Kit trusts Lane to so act. Their relationship is

d. a principal and an agent

3. Brew Pub Company's debt to Credit Service is past due. Credit obtains a judgment against Brew, but the firm refuses to pay. Credit asks the court to order the seizure of Brew's property. This is a request for

d. a writ of execution

23. In a Chapter 7 bankruptcy, on a finding that the use of Chapter 7 would constitute substantial abuse, the court is most likely to

d. dismiss the debtor's petition

15. The payment of Commerce Inc.'s debt to Debt Service LLC is guaranteed by the firm's property. Debt Service is most likely to perfect its interest by

d. filing a financing statement with the appropriate authority.