Chapter 7 Business law

. Ivana's car was stolen. The car needed some repairs and the thief, Donald, had the rearview mirror replaced as well as the muffler. Donald was apprehended and the car was returned to Ivana. In this scenario, which of the following is true? A. Ivana owns the car but Donald owns the rearview mirror and muffler. B. Ivana owns the car but must pay Donald for the rearview mirror and muffler. C. Donald becomes the owner of the car due to accession. D. Ivana owns the car and owes Donald nothing. E. Donald and Ivana both own the car as both have contributed equally to the finished product.

D

A(n) ______ arises when someone contributes materials and/or services to real estate, usually a building, and is not paid. A. general lien B. chattel lien C. surety lien D. mechanic's lien E. assayer's lien

D

If your home is being foreclosed on, you may retain ownership of the property if you pay the full amount of the debt before the sale. This is called a A. right of revision. B. right of recovery. C. right to cure deficiency. D. right of redemption. E. right to debt forgiveness.

D

A secured transaction involves a creditor who has sold something on credit or made a loan to a debtor who agrees to give the creditor a security interest in a valuable object, called ______. A. collateral B. gift C. lien D. easement E. reversion

A

Seth takes his laundry to Denise's Dry Cleaners. When Seth gets his clothes back, he notices that two of his shirts, perfect when brought in, are ripped. In this scenario, which of the following statements is true? A. This was a mutual benefit bailment, and Denise's owed a duty of reasonable care. B. This was a bailment for the sole benefit of the bailee, and Denise's owed a duty of slight care. C. This was a bailment for the sole benefit of the bailor, and Denise's owed a duty of great care. D. This was not a bailment. E. This was an unintentional bailment, so Denise's does not owe a duty of care.

A

The Homestead Act of 1862 illustrates ownership through ______. A. possession B. exchange C. gifting D. confusion E. accession

A

Vincent keeps his bag of books and magazines at his friend's storeroom, as he believes that he will not be using it for a few months. This is an example of a(n) ______. A. bailment for the sole benefit of the bailor B. easement by prescription C. bailment for the sole benefit of the bailee D. negative easement E. easement by necessity

A

When the owner of an old airplane engine has it restored and has an airplane built around it, the owner of the engine now owns the entire airplane through the doctrine of ______, which refers to something "added." A. accession B. collateral C. eminent domain D. negative easement E. easement by prescription

A

Which of the following is a mutual benefit bailment? A. renting a car B. lending your car to a friend without receiving consideration C. borrowing a car from a friend without paying consideration D. buying a car E. riding a bus

A

Which of the following is an example of a bailment done for the sole benefit of the bailee? A. borrowing a laptop B. renting a car C. babysitting for free D. finding lost or misplaced property E. using a car without permission

A

Which of the following statements is true about lost items? A. The law distinguishes things that have been lost from things that have simply been mislaid. B. The things that have been lost belong to the person who owns the premises where the item was lost. C. The finder of a lost item becomes the owner of the item even before reducing it to possession. D. The ownership is lost at the end of a statutory period for the finder of a lost item. E. The assumption of knowledge about the original owner is irrelevant in determining the ownership of the mislaid item.

A

Rachel owns a beach house and wants to build a deck. Zoning restrictions limit decks to 120 square feet, but Rachel wants to build one that is 144 square feet. Which of the following should Rachel do next? A. She can go ahead and build it as the law permits that once the deck is built it cannot be brought down. B. She should ask for a nonconforming exemption. C. She should ask for a variance. D. She must shift to some other location, because once zoning ordinances are in place, they allow for no changes, variations, or exceptions. E. She should lobby her local zoning board to force them to change the restriction as that is the only plausible recourse.

C

Simon's relatives come to visit him and want him to show them around the town. Linda helps Simon by lending him her car for a week. This is an example of a(n): A. bailment for the sole benefit of the bailor. B. easement by prescription. C. bailment for the sole benefit of the bailee. D. bailment for the mutual benefit of the parties. E. easement by necessity.

C

Solomon plans to sell his property. He intends to sell the cattle on his property to the prospective buyer but not the clothes and the household goods. Which of the following is the reason for the clothes and the household goods not being sold with the house? A. The clothes and household goods are intangible goods. B. The clothes and household goods are fixtures. C. The clothes and household goods are personal property. D. The clothes and household goods form real property. E. The clothes and household goods are abandoned.

C

The legal foundation for federal taxation is found in ______. A. yearly power grants from each of the individual states B. the Declaration of Independence C. Article 1, Section 8 of the United States Constitution D. the Congressional Budget and Impoundment Control Act, which created the Congressional Budget Office E. the Transportation Equity Act

C

The rules of a testamentary gift require that such a gift pass ownership by A. mere delivery. B. transfer of interest. C. death of the donor and proving of a valid will that specifies the gift. D. providing evidence of the physical existence of the gift and the transferor. E. physical transfer to the donee.

C

Under the deed of trust, a third party who holds the full ownership to a land is called a ______. A. bailor B. bailee C. trustee D. debtor E. mortgagee

C

Which of the following is beyond the scope of zoning ordinances? A. to separate commercial districts from residential districts B. to specify the number of buildings that can be built on land C. to enforce ethnic or gender diversity D. to impose specific color requirements E. to specify a specific design for all buildings in an area

C

Which of the following statements is true about bailment? A. In a bailment for the sole benefit of the bailee, the possessor of the object is known as the bailor. B. In a bailment, the possessor of the object is predominantly the owner. C. In the business world, most bailments are of mutual benefit to both parties. D. In a mutual benefit bailment, the bailee is under a duty to use high care in taking care of the object in possession. E. In a bailment for the sole benefit of the bailor, the bailee owes a very high duty of care while in possession of the object.

C

Which of the following statements is true about concurrent ownership? A. The property interest is divided in joint tenancy. B. The joint tenants can have unequal ownership of shares. C. The tenants in common can own different shares of the resource. D. The tenants in common can have the right of survivorship. E. The ownership is divided such that each concurrent owner owns a specific piece of the resource.

C

. In 2008, Donald gives Tony a life estate in one of his houses, specifying that upon the end of the life estate, the property is to go to Tony's son, Mike. Tony dies in 2012. In this scenario, which of the following statements is true? A. If Donald is still alive, he may revoke the transfer to Mike and keep the property. B. Mike gets a reversion interest in 2012. C. Mike gets a remainder interest in 2012. D. In 2012, Mike and Donald become joint tenants until Donald's death when Mike becomes the sole owner. E. The property is held in trust until Mike comes of age.

C

. In the context of legal framework, which of the following statements is true about the property system? A. The state takes ownership of resources directly as a result of legislation provided. B. The citizens acquire resources primarily through taxation. C. The state enforces rights when people legally have exclusive property rights in scarce resources. D. The state primarily plans what people should do and allocates the resources. E. The state limits and excludes any redistribution of resources through voluntary exchange.

C

. You and your roommate are driving through a residential area when you see some furniture piled on the curb to be picked up by the trash collectors the next morning. As you pick up a chair, the homeowner opens a window and yells, "Get away from my stuff." Which of the following statements is true in this scenario? A. You may claim the chair as lost property. B. You may claim the chair as mislaid property. C. You may claim the chair as abandoned property. D. The homeowner retains ownership until it is picked up the next morning, so you must leave it. E. The homeowner retains ownership of the property until you buy it from him.

C

A ______ makes no guarantees other than that the grantor surrenders all claim against the land. A. simple warranty deed B. trust deed C. quitclaim deed D. special warranty deed E. fiduciary deed

C

A ______ promises the grantee that the grantor has good ownership and the full power to convey it. A. special warranty deed B. pass title deed C. quitclaim deed D. freehold deed E. warranty deed

E

Josh borrows Amanda's car to get to school. Josh is obligated to exercise ______. A. the level of care imposed by Amanda B. a reasonable duty of care C. a slight duty of care D. the level of care imposed by Amanda's parents E. a very high duty of care

E

Which of the following exclusively applies to real property? A. securities B. books C. clothing D. bailments E. easements

E

Which of the following is a similarity between joint tenancy and tenancy in common? A. In both these forms of ownership, the property interest is divided. B. In both these forms of ownership, the tenants can own different shares of the resource. C. In both these forms of ownership, the tenants can exercise right of survivorship. D. In both these forms of ownership, the tenants can have disproportionate ownership of share. E. In both these forms of ownership, the tenants can force the separation of ownership under the doctrine of partition.

E

Which of the following statements is true about adverse possession? A. The practice of adverse possession requires that possession be interrupted to grant ownership. B. The possessor should have the owner's permission to be on the land. C. The practice of adverse possession discourages land use. D. The practice of adverse possession increases the possibilities of an absent owner to claim rights many years down the road. E. The most common way to destroy a claim of adverse possession is to sue for trespass.

E

Which of the following statements is true of an easement? A. It creates ownership of the land in question. B. It exists for the benefit of pharmaceutical corporations. C. It occurs when landlocked property is purchased. D. It creates a leasehold estate. E. It places a particular use of land behind the exclusive legal fence.

E

______ is the term used for the exercise of the secured property interest, which usually means that the creditor must go through the court system to ensure that procedures are properly followed before debtors lose their homes and land. A. Lien B. Easement C. Redemption D. Deficiency E. Foreclosure

E

Landon, an 80-year-old, writes a trust that states that his property is to go to his "great-great-great grandchild" upon his death. At the time of creating the trust, his only child is one year old. In this scenario, which of the following statements is true about the validity of the trust? A. The trust is valid, but the property must wait until the great-great-great grandchild is born to be transferred. B. The trust is invalid due to the rule against eventualities. C. The trust is valid due to the rule of progression. D. The trust is invalid due to the rule against perpetuities. E. The trust is valid, but the property must wait until Landon's child dies to be transferred.

D

Mike rents a car from Brandy Car Rentals at $40 per day. In this scenario, which of the following statements is true? A. This is a bailment for the sole benefit of the bailor. B. Brandy is the bailee. C. Mike owes the duty of slight care. D. Mike is under a duty to use "reasonable care" to take care of the car. E. This is a bailment for the sole benefit of the bailee.

D

. Goods that are identical are known as a(n) ______. A. fungible B. accession C. lien D. gifts E. collateral

A

. In the context of real property, when an object of personal property becomes an object of real property by physical annexation (attachment), it is known as a(n) ______. A. fixture B. gift C. fee simple D. lien E. accession

A

. What type of laws divides counties or municipalities into use districts designated residential, commercial, or industrial? A. purchase money security interest B. zoning ordinance C. adverse possession D. eminent domain E. partitioning

B

. Which of the following statements is true about the property boundaries in the physical world? A. The physical dimension of tangible personal property is the most difficult to define. B. Law rather than intuition should ideally provide physical boundaries for a real property. C. The physical boundaries for real property are relatively easier to establish than for other forms of property. D. An individual rather than the law defines and sets forth the boundaries of an intellectual property or a security. E. The law regarding physical boundaries is fixed across all the states regardless of the type of land involved.

B

A(n) ______ means that an adjoining landowner cannot do anything that would cause your land to cave in or collapse, such as digging a ditch that would cause the land on your side to collapse. A. easement by prescription B. negative easement C. mutual benefit bailment D. eminent domain E. accession

B

Ben lives in an apartment building next to a children's park. He is in his apartment when a baseball flies in through the window and lands in his room. Which of the following statements is true of this scenario? A. Ben must return the baseball to the owner immediately as it is not an object of great value. B. Ben can keep the baseball because of the rule of first possession. C. The owner of the apartment building must take the final decision as the baseball landed on his premises. D. The owner of the baseball can exercise his right of eminent domain and claim the baseball. E. The baseball must be turned over to police and can only be claimed after a week has passed.

B

Danny has five pit bull dogs. They bark constantly and terrify the neighbor, Terry. When Terry tries to sell his house, no one wants to buy the house due to the dogs. In this scenario, if Terry takes Danny to court, what should Danny be held liable for by Terry? A. a public nuisance B. a private nuisance C. an adverse possession D. an eminent domain E. an accession

B

Identify a correct statement regarding joint tenants. A. Joint tenants do not have the right of survivorship. B. Joint tenants must have equal ownership shares. C. The property of joint tenants is owned through fee simple absolute and fee simple defeasible. D. If one of the joint tenants dies, the remaining tenant is allowed to take ownership of only his or her share. E. Joint tenants cannot force the separation of concurrent ownerships like the tenants in common.

B

In many states, if foreclosure and auction does not produce enough money to satisfy the debt owed by the mortgagor, the creditor-mortgagee can still sue the debtor for the balance owed, called a(n) ______. A. collateral B. deficiency C. attachment D. perfection E. accession

B

Mike gives Maria a life estate in one of the homes he owns. Maria lives there for a while and then accepts a job in another state, so she gives the property to her sister Jackie as it is permissible. Jackie owns the property until A. Mike revokes the life estate. B. Maria dies. C. Mike dies. D. the life estate is taken over by the government. E. Maria returns to the life estate.

B

Sarah has given 24 acres of land to Kent County as long as the land is used as a park. In this case, Kent County has a A. life estate. B. fee simple defeasible. C. fee simple absolute. D. tenancy in common. E. warranty deed.

B

The ______ limits all exercise of property over resources to a duration of "lives in being plus twenty-one years." A. rule of transaction B. rule against perpetuities C. rule of first possession D. rule against lateral transfers E. rule against eventualities

B

The general way of perfecting a security interest under Article 9 is to file a(n) A. artisan's lien. B. financing statement. C. deed of trust. D. warranty deed. E. creditor's instrument.

B

Which of the following statements is true about property? A. People can privately own every resource, especially every resource of use. B. A private property in a resource can be created if you can legally exclude others from that resource. C. The federal law has little control over the exercise of ownership or sale of any type of property across all states. D. A property is usually infinite but has an ambiguous boundary. E. A property includes resources but not the use of resources.

B

Which of the following statements is true of an easement? A. A negative easement is otherwise known as easement by necessity in many states. B. An easement can also be reserved in a deed. C. An easement usually excludes any such uses of land as the laying of water pipes or the stringing of power wires across land. D. A titleholder can prevent a person from continuing to use the land in instances where an easement by prescription arises. E. An easement works exclusively without the rights of passage across the land.

B

Ruth is visiting her granddaughter Marcy and decides to give Marcy her very expensive cameo brooch. The brooch, an heirloom, has been in the family for over 100 years and is the only item in a safe in Ruth's home. Ruth offers the brooch to Marcy who accepts it. Ruth then gives Marcy the only key to the safe. According to the information given, which of the following statements is true? A. This is not a valid gift because there has been no delivery. B. This is a valid gift because the gift is a physical entity. C. This is a testamentary gift, and Marcy can claim the gift only after Ruth's death. D. This is a valid gift because there has been a constructive delivery. E. This is not a valid gift because Ruth must provide a document for chain of custody.

D

Stephen, a private individual, intends to bring a public nuisance claim against a textiles plant because its runoff is destroying the natural habitat of the local river's beaver population. Which of the following will permit Stephen to bring a valid claim? A. Stephen is the leading aquatic biodiversity scientist in the state. B. Stephen traps the beavers for a living. C. The state owns the textile plant. D. The runoff has caused substantial damage to Stephen's property. E. The governor owns the textiles plant.

D

Vincent conveys his land to his friend "as long as it is used for non-commercial purposes." A few months later, Vincent finds out that his friend has been using the land as a parking garage for tourists and charging unreasonable rates. In this case, Vincent's friend would most likely be in violation of the ______. A. remainder interest B. future interest C. fee simple absolute D. fee simple defeasible E. reversion interest

D

Which of the following is an example of a bailment? A. babysitting your sister's child for the weekend B. house-sitting for a friend over the weekend C. feeding a neighbor's dog by tossing food over the fence D. borrowing a friend's car for a day E. losing your car keys in a restaurant

D

Which of the following is an example of intangible property? A. cars B. books C. clothing D. securities E. land

D

Which of the following types of easement is also called easement by necessity? A. negative easement B. easement by prescription C. easement by reservation D. natural easement E. functional easement

D