ACCT 340 Practice Exam 1
Revised Article 9 governs what type of transactions?
Secured transactions of personal property
If a principal files for bankruptcy, the agency is terminated ________.
by operation of law
There are at least two parties in each credit transaction, which may include any of the following parties EXCEPT?
collateral
Which type of bankruptcy involves liquidation?
Chapter 7
A(n) _____ is an instrument that gives the creditor a security interest in the debtor's property that is pledged as collateral.
Deed of trusst
Which of the following is included in a Chapter 13 estate?
nonexempt property of the debtor at the commencement of the case
Independent contractors usually ________.
work for a number of clients
Assume that Jason files a petition for chapter 7 liquidation bankruptcy. He owns a principal residence worth $600,000 that is subject to a $400,000 mortgage and the trustee sells the home for $600,000. How much money can Jason keep from the sale if the federal homestead exemption is applied?
$22,975
Which of the following is NOT part of the bankruptcy estate?
Alimony Received
Personal property that is subject to a security agreement is known as __________.
Collateral
When an unsecured debtor defaults on a loan, the creditor may ________.
bring legal action against the debtor
All things that are movable when a security interest attaches are called _____ property.
tangible personal
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 gives the bankruptcy court the power to void certain fraudulent transfers of a debtor's property made by the debtor within _____ prior to filing a petition for bankruptcy.
2 years
In Chapter _____ bankruptcy, also called _____ bankruptcy, the debtor is permitted to keep a substantial portion of his or her assets. The debtor's non-exempt property is sold for cash, and the cash is distributed to the creditors. Any of the debtor's unpaid debts are _____.
7; straight; discharged
Revised Article _____ of the _____ contains provisions that recognize the importance of electronic records, providing rules for the creation, filing, and enforcement of electronic secured transactions in personal property.
9; Uniform Commercial Code
Which of the following is an INCORRECT statement regarding the filing of a Chapter 13 petition?
A Chapter 13 proceeding can be initiated only through the involuntary filing of a petition by an individual debtor with sporadic (i.e., irregular) income.
Which of the following statements regarding the UCC rule for establishing priority of claims is NOT true?
A creditor who has the only unsecured interest in the debtor's collateral has priority over secured interests.
_______________ is a security interest in property that was not in the possession of the debtor when the security agreement was executed; this includes after-acquired property, future advances, and sale proceeds.
A floating lien
Which of the following is an INCORRECT statement regarding after-acquired property, sales proceeds, and future advances?
A floating lien cannot attach to after-acquired property, sale proceeds, or future advances.
When two or more creditors claim an interest in the same collateral or property, which of the following statements is true?
A secured creditor has priority over an unsecured creditor.
Which of the following statements regarding surety and guaranty arrangement is true?
A surety is primarily liable and a guarantor is secondarily liable
______________ is a postjudgment order that permits the seizure of the debtor's property that is in the possession of the debtor.
A write of execution
An agency that occurs when a person misrepresents him- or herself as another's agent when they are not and the purported principal ratifies the unauthorized act is known as ________.
Agency by ratification
Principal and third party are not bound to the contract unless the principal ratifies the contract in which type of agency
Agency by ratification
A debtor-in-_____ is a debtor who is left in place to operate the business during the reorganization proceeding.
Possession
Which of the following is an INCORRECT statement regarding electronic financing statements and records?
An encoding is information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
Article 9 of the UCC defines the rights, duties, and remedies of the secured party and the debtor in the event of default. The UCC categorizes the term default as _______.
An undefined term
Agency that arises when a principal creates the appearance of an agency that in actuality does not exist is called ________.
Apparent Agency
Authority that is created when the principal leads a third party to believe that the agency has authority is called ________.
Apparent agency
If two or more secured parties claim an interest in the same collateral but neither has a perfected claim, the first to _____ has priority.
Attach
_______________ is a situation in which the creditor has an enforceable security interest against a debtor and can satisfy the debt out of the designated collateral.
Attachment
The 2005 act requires a(n) ___________ whereby an attorney who represents a client in bankruptcy must certify the accuracy of the information contained in the bankruptcy petition and the schedules, under penalty of perjury.
Attorney Certification
Which of the following is/are exempt from the Consumer Financial Protection Bureau?
Automobile industry
Which is the true statement regarding bankruptcy law?
Bankruptcy judges are appointed for 14-year terms.
If a client authorizes an attorney to settle a case within a certain dollar amount and the attorney does so, the settlement agreement is _____.
Binding
In a partially disclosed agency, who would be liable to the third party?
Both the principal and the agent
In an undisclosed agency, who has liability to the third party?
Both the principal and the agent
Assume that a car salesperson is employed to sell the principal's car. The principal tells the agent that the car was repaired after it was involved in a major accident. If the agent intentionally tells the buyer that the car was never involved in an accident, the agent has made an intentional misrepresentation. Which of the following statements is true?
Both the principal and the agent are liable for this misrepresentation.
When an unsecured debtor defaults on a loan, the creditor may ________.
Bring legal action against the debtor
The Consumer Financial Protection Bureau has all of the following powers EXCEPT?
Bringing criminal charges
An agency contract can be terminated in all of the following ways EXCEPT?
By the third party involved in the transaction
Suppose Sarah purchases an automobile from a car dealership. She borrows part of the purchase price from a lender. The lender requires Sarah to give it a security interest in the automobile to secure the loan. This is a secured transaction, with the automobile being _____ for the loan.
Collateral
Which of the following statements about a Chapter 11 bankruptcy is true?
Chapter 11 is available to individuals, partnerships, corporations, and other business entities.
What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 13 requires debtors to pay some of their future income to pay off prepetition debts, while Chapter 7 does not require it.
Under a Chapter 13 petition, the debts of the individual debtor must be primarily ________________ debt.
Consumer
With regard to a credit transaction, all of the following are true EXCEPT?
Credit must be extended on a secured basis
When an instrument gives a creditor security interest in a debtor's real property that is pledged as collateral for a loan, this is known as a ________.
Deed of trust
In the court case In re Hoang, the debtor was ordered by the bankruptcy court to turn over ______________ as a result of a fraudulent transfer.
Diamonds
Which of the following is NOT an important question to answer in determining whether an agent's conduct occurred within the scope of his or her employment?
Did the agent possess the required professional licensure(s)?
An example of an independent contractor is a ________.
Doctor
Which of the following is NOT a duty of the agent?`
Duty to Indemnify
The principal owes certain duties to an agent and independent contractor. These duties include all of the following EXCEPT?
Duty to subrogate
______________ means chattel paper evidenced by a record or records consisting of information stored in an electronic medium.
Electronic chattel paper
Which of the following is an example of tangible personal property?
Equipment
Apparent agency, or agency by _____, arises when a principal creates the appearance of an agency that in actuality does not exist.
Estoppel
Which of the following is the most common form of agency?
Express
________, the most common form of agency, gives the agent the authority to contract or otherwise act on the principal's behalf, as stated in the agency agreement.
Express Agency
Which type of agency exists when there is a written agency agreement between the parties?
Express agency
Which of the following statements is NOT true regarding property that is exempt from the bankruptcy estate?
Federal exemptions are adjusted every 5 years.
Which of the following is an INCORRECT statement regarding perfection by filing a financing statement?
Federal law specifies where a financing statement must be filed.
The Restatement (Second) of Agency defines agency as a(n) _____ relationship "which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control, and consent by the other so to act."
Fiduciary
______________ means a record composed of an initial financing statement and any filed record related to the initial financing statement.
Financing statement
If the retail dealer (the secured creditor) files a _________________, it has given public notice of its __________________ in the collateral. This form is also known as a ___________.
Financing statement;secured interest;UCC-1
How long are financing statements effective if a continuation statement is not filed?
Five Years
A _____ lien is a security interest in property that was not in the possession of the debtor when the security agreement was executed.
Floating
__________________ occurs when (1) a debtor transfers property to a third person within two year of the filing of a petition in bankruptcy, and (2) the transfer was made by the debtor with an intent to hinder, delay, or defraud creditors.
Fraudulent transfer
When an agent runs personal errands while on the job, this is known as __________, which would release the principal from liability.
Frolic and detour
__________________ are funds advanced to a debtor from a line of credit secured by collateral.
Future advance
A power of attorney where a principal confers broad powers on the agent to act in any matters on the principal's behalf is known as a(n) ________.
General Power of attorney
Suppose Qixia hires Harold, a lawyer and an independent contractor, to represent her in a court case. While driving to the courthouse to represent Qixia at trial, Harold negligently causes an automobile accident in which Mildred is severely injured. Which of the following is an accurate statement regarding the liability of Qixia and/or Harold for Mildred's injuries?
Harold is liable for Mildred's injuries, but quixia is not liable
Texas Car Sales, Inc., a new car dealership, finances all its inventory of new automobiles at Horns Bank. Horns Bank takes a security interest in the dealership's inventory of cars and perfects this security interest. Tyrone, a buyer in the ordinary course of business, purchases a car from the dealership for cash. If the dealership defaults on its payments to the bank, ________.
Horns Bank cannot recover the car Tyrone bought
Which of the following is NOT true about secured credit?
If the sale of the collateral is insufficient to repay the loan plus interest, the creditor may not bring a lawsuit against the debtor to recover the deficiency judgment.
Suppose a homeowner employs a real estate broker to sell his house. A water pipe breaks and begins to leak water into the house. If the homeowner cannot be contacted, the real estate broker has _____ authority to hire a plumber to repair the pipe to stop the water leak.
Implied
A type of agency that is formed when an agent does not have an express power but one can be inferred is best known as ________.
Implied agency
An agency that occurs when a principal and an agent do not expressly create an agency, but it is inferred from the conduct of the parties, is called ________.
Implied agency
When can the creditor seek payment from a surety or guarantor?
In a surety arrangement, the principal does not have to be in default of the payment in order for the creditor to seek payment against surety; in a guaranty arrangement, the principal does have to be in default of payment in order for the creditor to seek payment against the guarantor.
One can employ an outsider—that is, persons and businesses that are not employees—to perform certain tasks on their behalf. This outsider is a(n) ________.
Independent Contractor
Outsiders who are employed by principals to perform certain tasks on their behalf are called ________.
Independent contractors
Which of the following is NOT a requirement of a security agreement in personal property?
It must indicate the legal description of the property subject to the mortgage
What is the purpose of The Credit Card Accountability Responsibility and Disclosure Act of 2009?
It requires disclosures to consumers concerning credit card terms.
What is the purpose of The Mortgage Reform and Anti-Predatory Lending Act?
It requires disclosures to consumers concerning credit card terms.
What is the purpose of the Consumer Financial Protection Act of 2010?
It requires the disclosure of relevant information in plain language that permits consumers to understand the costs, benefits, and risks associated with the loan.
Which of the following about independent contractors is true?
Labeling someone an independent contractor is only one factor in determining status.
A person who uses their own real property as collateral for a loan is known as a(n) __________.
Mortgagor
The owner-debtor in a mortgage arrangement is known as the _____.
Mortgagor
A principal is liable under the doctrine of vicarious liability for intentional torts of agents and employees committed within the agent's scope of employment. The _________ tests are the two tests applied by courts to determine whether an agent's intentional torts were committed within the agent's scope of employment.
Motivation and work related
Sid hires Dina, a licensed real estate broker, to serve as a buyer's agent in a real estate transaction. Sid authorizes Dina to make an offer on a piece of real estate. While in the process of making the offer, Dina learns that a medical waste facility has just acquired adjoining land. If Dina fails to tell Sid about this neighboring acquisition, she has breached her duty to ______________.
Notify
Which of the following is an INCORRECT statement regarding the Bankruptcy Code?
Per the delegated powers set forth in the Tenth Amendment to the United States Constitution, the Bankruptcy Code is a matter of state law.
If two or more secured parties have perfected security interests in the same collateral, the first to _____ has priority.
Perfect
After a debtor's default, if the proceeds from the disposition of collateral are not sufficient to satisfy the debt to the secured party, the debtor has _________ liability to the secured party for the payment of the deficiency.
Personal
A party who employs another person to act on his or her behalf is called a(n) __________.
Principal
Rani decides to sell her house and hires Mark, a real estate broker, to list and sell the house for a price of $1 million. They agree that Mark will disclose the existence of the agency and the identity of the principal to interested third parties. Mark shows the house to Heather, a prospective buyer, and does not disclose to Heather that he is acting as an agent for Rani. Heather agrees to buy the house, and Mark signs the contract on behalf of Rani. Which of the following statements is true?
Rani, the principal, and Mark, the agent, both are liable.
Security interests may be taken in ________.
Real, personal, intangible, or other property
When a mortgage or deed of trust is paid off, the lender files a(n) _____________ with the county recorder.
Reconveyance
______________ means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
Record
While scouting out real estate for his principal, Nick incurs travel expenses. Nick seeks to collect these sums from his principal, invoking the principal's duty to ___________.
Reimburse
A Chapter 11 bankruptcy is known as a(n)______________.
Reorganization
______________ provides for the creation, filing, and enforcement of electronic secured transactions.
Revised Article 9
_______________ are the resulting assets from the sale, exchange, or disposal of collateral subject to a security agreement.
Sale proceeds
In a(n) _______________ transaction the lender may repossess the collateral on which the loan was given.
Secured credit
What is the main difference between unsecured credit and secured credit?
Secured credit requires collateral of the debt amount.
A(n) __________________ is when a creditor extends credit to a debtor and takes a security interest in some personal property of the debtor.
Secured transaction
The Consumer Financial Protection Bureau does NOT have the authority to enforce which of the following?
Securities Exchange Act of 1934
Because lenders are sometimes reluctant to lend large sums of money simply on the borrower's promise to repay, many lenders take a ______________ in the property purchased or some other property of the debtor. The property in which the security interest is taken is called ______________. If the debtor does not pay the debt, the creditor can _____________ on and recover the collateral.
Security interest; collateral; foreclose
Which of the following is an INCORRECT statement regarding unsecured credit?
Since no security interest is associated with the transaction, unsecured credit requires collateral to protect the payment of the debt.
Under the standard for the __________________, an employer—the ______________—can be liable if an employee, who is motivated by jealousy, injures someone during work hours on the premises. Under this standard, the employee's motivation is immaterial for liability purposes.
work realted test; principal
Suppose a principal hires a lawyer to represent her in a lawsuit until the lawsuit is resolved. If the principal and the lawyer voluntarily agree to terminate the relationship prior to the resolution of the case by trial or settlement, the agency is _____.
Terminated by an act of the parties
Which of the following is an accurate statement regarding the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005?
The Act made it much more difficult for debtors to escape unwanted debt through bankruptcy.
_________________ established a new median income test and a means test to determine whether a debtor should be granted relief under Chapter 7.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
________________________ made it more difficult for debtors to relieve themselves of unwanted debt through bankruptcy proceedings.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
Which of the following is an INCORRECT statement regarding the Consumer Financial Protection Bureau (CFPB)?
The CFPB has no authority to enforce federal consumer financial protection laws, as that authority is exclusively within the province of the Federal Trade Commission (FTC).
The _______________________ requires the disclosure of relevant information to consumers in plain language that permits the consumers to understand the costs, benefits, and the risks associated with consumer financial products and services.
The Consumer Financial Protection Act of 2010
In a meeting with the creditors, which of the following is NOT true?
The bankruptcy judge must attend the meeting.
Who is liable for the torts of an independent contractor?
The independent contractor only
Who is liable if an independent contractor enters into a contract without authority from the principal?
The independent contractor only
In general, when does the obligation of an accommodation party begin?
The obligation of the accommodation party begins at the beginning of the contract.
Who is liable for the injury caused by inherently dangerous activities that a principal assigns to an independent contractor?
The principal only
Who is liable if an independent contractor enters into a contract with authority from the principal?
The principal only
_____ created the Consumer Financial Protection Bureau.
The united states congress
Which of the following statements regarding chapter 7 liquidation is NOT true?
The debtor's unpaid debts will be paid by the debtor's future income
The Bankruptcy Code permits states to enact their own exemptions. States that do so may (1) give debtors the option of choosing between federal and state exemptions or (2) _____________. The exemptions available under state law are often ___________ vis a vis the debtor than those provided by federal law.
require debtors to follow state law; more liberal
The bankruptcy court has the power to void certain fraudulent transfers of a debtor's property made by the debtor within ______ year(s) prior to filing a petition for bankruptcy.
Two
When two or more creditors claim an interest in the same collateral or property, which of the following statements is true?
When there are two unperfected claims, the first to attach has priority.
Hamed wins a $25,000 judgment against Dema. Dema refuses to pay the amount of the judgment to Hamed. Hamed can obtain a postjudgment relief from the court whereby the court directs the sheriff to seize Dema's automobile and other property and have them sold at public auction to satisfy the judgment she owes Hamed. This is known as a ________.
Writ of execution
Methods used by creditors to obtain property of a debtor in order to satisfy a debt or a judgment include all of the following EXCEPT?
Writ of indenture
Title _____ of the _____ Act is also called the Consumer Financial Protection Act of 2010.
X; Dodd-Frank
Which of the following is NOT one of the main provisions of the Credit CARD Act of 2009?
requires that the terms of the credit-card agreement must be written in legal terminology and in no less than 10-point font
Suppose Georgia Pacific, Inc. interviews Albert Iorio for a sales representative position. Iorio, accompanied by Jane Franklin, the national sales manager, visits retail stores located in the open sales territory. While visiting one store, Franklin tells the store manager, "I wish I had more sales reps like Albert." Nevertheless, Iorio is not hired. If Iorio later enters into contracts with the store on behalf of Georgia Pacific and Franklin has not controverted the impression of Iorio that she left with the store manager, the company will ______.
be bound to the contract, based on Iorio's apparent authority
Prima Company goes to Urban Bank and borrows $100,000. In this case, Prima Company is the _________________, and Urban Bank is the _________________.
borrower-debtor; lender-creditor
Who does the Consumer Financial Protection Bureau oversee?
all the parties participating in the consumer finance and mortgage area
An agent who enters into a contract on behalf of another party impliedly warrants that he has the authority to do so. This is called the agent's implied warranty of _____.
authority
Under apparent agency, if Luke tells his agent Isaac that he no longer has authority to enter into contracts on his behalf, but fails to notify a third party who then enters into a contract with Isaac, Luke will ________.
be bound to the contract
If a contract indicates that the agency agreement terminates on July 27, 2020, it is terminated ________.
by an act of the parties
A termination of agency where a situation arises that makes the fulfillment of the agency not possible is known as a termination ________.
by impossibility of performance
Suppose that at the time that Jerome is granted Chapter 7 relief, he still owes $50,000 of unsecured debt and that there is no money in the bankruptcy estate to pay these liabilities. This debt is composed of credit card debt, an unsecured loan from a friend, and unsecured credit from a department store. This $50,000 of unsecured credit is _______________. This means that Jerome _______________________________________.
discharged; is relieved of this debt and is not legally liable for its repayment
Which of the following is NOT exempt from the bankruptcy estate?
dividend earnings
If an agent acts for two or more different principals in the same transaction, this is known as ________.
dual agency
An agent enters an authorized contract with a third party on the principal's behalf, The principal fails to perform on the contract, and the third party recovers a judgment against the agent. The agent can recover this amount from the principal because of the
duty to indemnify
Which of the following is NOT a duty of the principal?
duty to perform
Sally hires James to work as an employee at her firm. James does not have the ability to enter into contracts on behalf of Sally. This is called a(n) ________.
employer-employee relationship
Which of the following is NOT an example of intangible personal property?
equipment
Which of the following creditor actions are NOT stayed by the filing of a voluntary or an involuntary bankruptcy petition?
extending credit to business affiliates of the debtor
In bankruptcy proceedings, a discharge of unsatisfied debts is denied if the debtor did any of the following EXCEPT?
filed a voluntary petition rather than an involuntary petition (assuming the bankruptcy trustee can establish that the debtor incurred the majority of his or her debt due to financial irresponsibility)
When a creditor files a UCC-1 with the appropriate government office to obtain a security interest in the goods this is known as perfection by ________.
filing a financing statement
Which of the following is the most common method of perfecting a creditor's security interest in collateral?
filing a financing statement in the appropriate government office
To obtain a writ of attachment, a creditor must ________.
follow the procedures of state law, give the other creditors notice, and post a bond with the court
Which of the following is NOT a recognized advantage of Chapter 13 bankruptcy?
for the debtor, receiving a discharge from all pre-petition debts
Kyla owes her unsecured creditors $100,000. On February 9, Kyla knows that she is insolvent. Kyla owns a Mercedes-Benz automobile that is worth $55,000. On February 9, Kyla sells her Mercedes-Benz automobile to her friend, Wei, for $30,000. Wei is a bona fide purchaser who does not know of Kyla's financial situation. On July 1, Kyla files for Chapter 7 liquidation bankruptcy while still owing the $100,000 to her unsecured creditors. The court can void Kyla's sale of her automobile to Wei as a(n) __________________ because it occurred within _____________ of the petition and Kyla received less than a reasonable equivalent in value.
fraudulent transfer; 2 years
What is it called when a person goes to Europe to teach for a year and signs a document giving her brother the ability to make decisions on her behalf while she is overseas (including the power to purchase or sell stocks or real estate, pursue or defend lawsuits, and to make all other relevant decisions)?
general power of attorney
Sonia, who owns a piece of vacant real estate, hires Matthew, a licensed real estate broker, to list the property for sale. Leonard, an adjacent property owner to Sonia's property, tells Matthew that a chemical plant has polluted his property and probably Sonia's property. Sonia does not know this fact, and Matthew does not tell Sonia this information. Sonia sells the property to Macy. It is later discovered that the property Macy bought from Sonia is polluted. In this Example, the information that Matthew was told about the possible pollution of the property is imputed to Sonia. Sonia will be held liable to Macy because of the legal rule of
imputed knowledge
Principals often employee outsiders—that is, persons and businesses that are not employees—to perform certain tasks on their behalf. These persons and businesses are called _____.
independent contractors
A principal is liable for an agent's ________.
intentional and innocent misrepresentations made within the scope of his or her authority
A major benefit of Chapter 11 bankruptcy is that the debtor ________.
is given the opportunity to accept or reject certain executory contracts and unexpired leases
the term respondeat superior literally means "_____," and is based on the legal theory of vicarious liability, which is liability _____.
let the master answer; without fault
If an agent acquires confidential information during the course of the agency and uses it to his or her advantage, this is known as ________.
misuse of confidential information
Under the standard for the __________________, an employer—the______________—is not liable if an employee, who is motivated by jealousy, injures someone during work hours on the premises who dated the employee's boyfriend. In this standard, the employee's personal motivation is important to the standard.
motivation test; principal
Agents owe a duty _______________ to the principal.
of loyalty
A principal, Nigel Jones, and an agent, Marcia McKee, agree that the agent will represent the principal to purchase a business and that the agent will disclose the existence of the agency and identity of the principal to third parties. The agent finds a suitable business and contracts to purchase the business on behalf of the principal, but the agent mistakenly signs the contract "Marcia McKee, agent." This is a(n) _____ agency that occurs because of _____.
partially disclosed; mistake
A security interest can be obtained by the creditor in the goods without filing a financing statement when the creditor has ________.
possession of collateral
Most states permit foreclosure through _________________.
power of sale
Suppose Big Oil Company owns a manufacturing plant and has borrowed $50 million from a bank and used the plant as collateral for the loan. If Big Oil Company files for Chapter 11 bankruptcy, an automatic stay _____.
prevents the bank from foreclosing and taking the property
Sally hires James to work as an employee at her firm. James has the ability to enter into contracts on behalf on Sally. This is called a(n) ________.
principal-agent relationship
When a creditor extends credit to a consumer to purchase consumer goods and obtains a security interest in the goods, this is known as perfection by ________.
purchase money security interest
To void a transfer or an obligation, the court must find that (1) the transfer was made or the obligation was incurred by the debtor with the actual intent to hinder, delay, or defraud a creditor or (2) the debtor _____________________.
received less than a reasonable equivalent in value
If a debtor defaults in his security agreement, the secured party may do any of the following EXCEPT?
repossess and dispose of the collateral in a commercially unreasonable manner
Sarah purchases an automobile from a car dealership. She borrows part of the purchase price from a lender. The lender requires Sarah to give it a security interest in the automobile to secure the loan. This is a(n) __________________ with the automobile being _____________ for the loan. If Sarah defaults and fails to make the required payments, the lender can ___________________.
secured credit transaction; collateral; repossess the automobile
Most _____________ seek to cure a default by ______________.
secured parties; taking possession of the collateral
A real estate agent who is employed to purchase real estate for a principal cannot secretly sell his or her own property to the principal. This is because agents are generally prohibited from undisclosed _____ with the principal.
self dealing
Suppose a principal employs an agent to trap alligators. If a law is passed that makes trapping alligators illegal, the agency contract _____.
terminates due to impossibility of performance
When an agent exceeds the scope of his or her authority, who is liable to the third party?
the agent only
All of the following are requirements in order for the court to confirm a Chapter 13 plan of payment EXCEPT?
the plan must require payments for at least ten years
In a fully disclosed agency, who is liable to the third party?
the principal only
Types of debt that can be discharged in a Chapter 7 bankruptcy include ________.
the remaining unpaid debt after Chapter 7 liquidation
All of the following statements are true regarding imputed knowledge EXCEPT?
there is no recourse for a principal if the agent fails to notify him of material information regarding the agency.
if an agent is offered a business opportunity that is meant for the principal and the agent takes advantage of it, this is known as ________.
usurping an opportunity
Suppose that an agent works for a principal that is in the business of real estate development. The principal is looking for vacant land to purchase to develop. A third party who owns and wants to sell his vacant land tells an agent of the principal of the availability of the land. The agent, without informing the principal, purchases the land for her own use. The agent is wrongfully _____ an opportunity, and thereby violating the agent's duty of _____.
usurping;loyalty
A principal is liable for an agent's actions _________________.
when the agent is negligent when acting within the scope of his or her authority
In determining the degree of control that the principal has over the party, the courts will look at all of the following EXCEPT?
whether or not the agent has a college degree
Which of the following is NOT a critical factor in determining independent contractor status?
whether the worker is employed in an "employment-at-will" jurisdiction
Which of the following is NOT a critical factor in determining independent contractor status?
whether the employer's form of business ownership is sole proprietorship, partnership, traditional corporation (C-corp), Subchapter S corporation (S-corp), or limited liability company (LLC)
the bankruptcy court will confirm a plan of reorganization under the acceptance method if ________.
(1) the plan is in the best interests of the creditors because the creditors would receive at least what they would receive in a Chapter 7 liquidation bankruptcy, (2) the plan is feasible, and (3) each class of creditors accepts the plan
Which of the following is an accurate statement regarding the liability of a principal for an independent contractor's torts?
Generally, a principal is not liable for the torts of its independent contractors.
Rani decides to sell her house and hires Mark, a real estate broker, to list and sell the house for a price of $1 million. They agree that Mark will disclose the existence of the agency and the identity of the principal to interested third parties. Mark shows the house to Heather, a prospective buyer, and discloses to Heather that he is acting as an agent for Rani. Heather agrees to buy the house, and Mark signs the contract on behalf of Rani. Which of the following statements is true?
Rani, the principal, is liable on the contract, but Mark, the agent, is not.
A party who employs another person to act on his or her behalf is called a(n) _____, while a party who agrees to act on behalf of another is called a(n) _____.
principal; agent