Business law MO5

Business as we know it could not exist without secured transactions because otherwise sellers and lenders would be less likely to sell and lend on credit.

True

The destruction of an original check after the creation of a substitute check prevents the check from being paid twice.

True

To avoid liability for negligence, a customer must examine monthly bank statements and canceled checks promptly and with reasonable care, and report any forged signatures to the bank.

True

Under the principles of agency law, any sale of goods by a salesperson in a store to a customer can be binding on the owner of the store.

True

Once a bankruptcy petition is properly filed, creditors can commence or continue most legal actions against the debtor to recover claims.

False

The duties that an agent owes a principal must be set forth in the agency agreement because they do not arise by operation of law.

False

The principal is bound by the agent's unauthorized act, unless the principal negates it.

False

To qualify for a Chapter 7 bankruptcy, a debtor must complete a means test to determine whether the debtor has been living within his or her means.

False

With a joint checking account, the bank can hold any joint-account owner liable for payment of an overdraft even if that owner did not sign the check or benefit from its proceeds.

False

Because checks serve as a substitute for cash, they can facilitate financial record keeping.

True

Ron borrows funds from Suburban Bank secured by Ron's house. Ron defaults on the debt. The bank's options include

disposing of the collateral in any commercially reasonable manner

A gratuitous agent can be liable to a principal for breach of contract, even in the absence of a contract, but not liable for the negligent performance of the deal. Correct!

False

Agency relationships cannot exist outside an employment, so agency law has a narrower reach than employment law.

False

Agency relationships come about by voluntary consent and agreement of the parties—consideration is required, and the agreement must be in writing.

False

An independent contractor is, by definition, an employee.

False

Any person—including individuals, but not partnerships or corporations—may be a debtor under Chapter 7.

False

If a bank pays a stale check in good faith but without consulting the customer, the bank has no right to charge the customer's account for the amount. Correct!

False

If any financial institution, such as a brokerage house, handles a check for payment or collection, the check is covered by UCC Article 4.

False

In an agency relationship, one party called the principal agrees to represent or act for another called the agent.

False

A bank may contractually shift to its customer the risk of forged checks created electronically or otherwise by the use of non-manual signatures.

True

A check may fall under Uniform Commercial Code Article 3 as a negotiable instrument and be subject to UCC Article 4 in the course of collection.

True

Any person can be an agent, regardless of whether he or she has the capacity to contract.

True

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

Vista Estate.

Business Sales Inc.'s debt to Cartage Company is past due. Cartage brings a legal action against Business Sales to collect. To ensure that a judgment in the creditor's favor will be collectible, Cartage asks the court to order the seizure of the debtor's property. This is a request for

a writ of attachment

Ingmar asks Jess to contract with Kay's Lawn Service to maintain Ingmar's lawn. Jess orally agrees to do so. This is an agency by

agreement

Motor Parts Sales Inc. hires Nolly to work on its shipping dock, accepting deliveries, and dispatching trucks, and dealing with customers and drivers. With respect to Motor Parts, Nolly is most likely

an agent

Refresh Inc.'s debt to Spring Water Company is past due. Spring brings a legal action against Refresh to collect the debt. Spring asks the court to order Tempo Bank, in which Refresh has an account, to pay a portion of the funds to Spring. This is a request for

an order of garnishment

Building Company adds a shipping dock to the property of Corporate Complex, but the owner does not pay. Building files a lien on Corporate's property. The property

can be held to guarantee payment of the debt.

Owen is given value by Payday Sales Company in the form of a commitment to sell goods on credit. In terms of creating an enforceable security interest, this is

one of the requirements

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 appropriate. The key factor in whether Craig is Bread's employee is

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