Acct 340 Exam 1
Personal property includes _____ property such as equipment, vehicles, furniture, and jewelry, as well as _____ property such as securities, patents, trademarks, and copyrights. A. tangible; intangible B. intangible; physical C. real; physical D. intangible; tangible E. tangible; real
A. tangible; intangible
A(n) ________ petition can be filed by the debtor in ________ bankruptcy cases. A. voluntary; Chapters 7, 11, 12 and 13 B. voluntary; Chapters 12 and 13, but not in Chapters 7 and 11 C. voluntary; Chapters 7 and 11, but not in Chapters 12 and 13 D. involuntary; Chapters 7 and 11, but not in Chapters 12 and 13 E. involuntary; Chapters 7, 11, 12 and 13
A. voluntary; Chapters 7, 11, 12 and 13
Intentional torts include all but which of the following? A. false imprisonment B. negligence C. battery D. assault E. intentional infliction of emotional distress
B. negligence
A power of attorney is an _____ agency agreement that is often used to give a(n) _____ the power to sign legal documents on behalf of the _____. A. express; principal; agent B. express; agent; principal C. implied; agent; principal D. implied; principal; agent E. express; third party beneficiary; incidental beneficiary
B. express; agent; principal
Which of the following is NOT a required procedure for filing a voluntary bankruptcy petition? A. pre-petition counseling B. post-petition counseling C. a statement of the financial affairs of the debtor D. a statement of the debtor's monthly income; current income and expenses E. attorney certification
B. post-petition counseling
Power of _____ is a power stated in a mortgage or deed of trust that permits _____ without court proceedings and sale of the property through auction. A. attorney; reconveyance B. sale; foreclosure C. sale; remuneration D. attorney; reclamation E. sale; execution
B. sale; foreclosure
Article 9 of the Uniform Commercial Code (UCC) governs _____ transactions in _____ property. A. secured; real B. secured; personal C. unsecured; intangible D. unsecured; real E. secured; intangible
B. secured; personal
Under the _____ test, if an agent commits an intentional tort within a work-related time or space—for example, during working hours or on the principal's premises—the principal is liable for any injuries caused by the agent's intentional torts. A. frolic and detour B. work-related C. worker's compensation D. tacit approval E. coming and going
B. work-related
Although the automobile industry is exempt from _____ supervision, it is subject to oversight by the _____. A. CPSC; EPA B. FTC; CFPB C. CFPB; FTC D. CPSC; CFPB E. EPA; CPSC
C. CFPB; FTC
A(n) _____ lien is a security interest in property that was not in the possession of the debtor when the security agreement was executed. A. non-collateralized B. unsecured C. floating Your answer is correct. D. elusive E. intangible
floating
A creditor who extends credit to a consumer to purchase a consumer good under a written security agreement obtains a(n) _____ security interest in the consumer good. A. equitable B. incidental C. constructive D. symbolic E. purchase money
purchase money
Which of the following is NOT true about a Chapter 13 bankruptcy? A. A creditor can file an involuntary petition to institute a Chapter 13 case against an individual debtor. B. A creditor cannot file an involuntary petition to institute a Chapter 13 case. C. An individual with regular income means an individual whose income is sufficiently stable and regular to enable him or her to make payments under a Chapter 13 plan. D. The debts of the individual debtor must be primarily consumer debt. E. A Chapter 13 proceeding can be initiated only through the voluntary filing of a petition by an individual debtor with regular income.
A. A creditor can file an involuntary petition to institute a Chapter 13 case against an individual debtor.
Which of the following is NOT true about taking possession of collateral? A. After legally repossessing the goods, the secured party must sell the collateral. B. A secured party may repossess the collateral pursuant to judicial process or without judicial process if theself-help repossession of the collateral does not breach the peace. C. Many debtors peacefully allow a secured creditor to repossess goods. D. After legally repossessing the goods, the secured party can retain the collateral. E. If necessary, a secured creditor may obtain a court judgment or warrant to repossess personal property.
A. After legally repossessing the goods, the secured party must sell the collateral.
Which of the following is NOT true about an agent's duties? A. An agent owes no duty to notify the principal of important information learned concerning the agency. B. An agent who does not perform his or her express duties or who fails to use the standard degree of care, skill, or diligence is liable to the principal for damages. C. Normally, an agent is required to render the same standard of care, skill, and diligence that a fictitious reasonable agent in the same occupation would render in the same locality and under the same circumstances. D. An agent who enters a contract with a principal has a duty to perform the lawful duties expressed in the contract. E. An agent who enters a contract with a principal has a duty to meet the standards of reasonable care, skill, and diligence implicit in all contracts.
A. An agent owes no duty to notify the principal of important information learned concerning the agency.
_____ is a situation in which a creditor has an enforceable security interest against a debtor and can satisfy the debt out of the designated collateral. A. Attachment B. Detachment C. Abasement D. Rapprochement E. Denouement
A. Attachment
Cougar Car Sales, Inc. (Cougar), a new car dealership, finances all its inventory of new automobiles at First Bank. First Bank takes a security interest in Cougar's inventory of cars and perfects this security interest. Kim, a buyer in the ordinary course of business, purchases a car from Cougar for cash. If Cougar defaults on its payments to thebank, _______. A. First Bank cannot recover the car from Kim because she is a purchaser in the ordinary course of business B. First Bank can recover the car from Kim because she is a purchaser in the ordinary course of business C. Cougar can avoid the payments to First Bank because it no longer has the car D. Cougar can recover the car from Kim because she is a purchaser in the ordinary course of business E. First Bank cannot recover the car from Kim because she has a perfected security interest in the car
A. First Bank cannot recover the car from Kim because she is a purchaser in the ordinary course of business
Which of the following is NOT true about a deficiency judgment? A. If the underlying transaction is the sale of accounts, chattel paper, payment intangibles, or promissorynotes, the debtor is entitled to any surplus and is not liable for any deficiency. B. If the underlying transaction is the sale of accounts, chattel paper, payment intangibles, or promissorynotes, the debtor is not entitled to any surplus and is not liable for any deficiency. C. Unless otherwise agreed, after a debtor's default, if the proceeds from the disposition of collateral are not sufficient to pay the expenses incurred by the secured party for the collection and enforcement of the debt and to satisfy the debt to the secured party, the debtor is personally liable to the secured party for the payment of the deficiency. D. The parties may agree in their security agreement that the debtor will not be liable for any deficiency. E. A secured party may bring an action to recover a deficiency judgment against the debtor.
A. If the underlying transaction is the sale of accounts, chattel paper, payment intangibles, or promissorynotes, the debtor is entitled to any surplus and is not liable for any deficiency.
Which of the following is NOT true about the Fair Credit Reporting Act? A. Information in a consumer credit report may not be provided to a prospective employer. B. Users of the information for credit, insurance, employment, and other purposes must notify the consumer when an adverse action is taken on the basis of such reports. C. Information in a consumer credit report can only be provided to parties who have a purpose for obtaining the information. D. A credit report cannot be supplied to anyone who does not have a legitimate purpose for using the report as provided in the act. E. If a consumer challenges the accuracy of pertinent information contained in a credit file, the agency may be compelled to reinvestigate.
A. Information in a consumer credit report may not be provided to a prospective employer.
_____ credit requires collateral that secures payment of the loan. A. Secured B. Secondary C. Primary D. Unsecured E. Subprime
A. Secured
Which of the following is NOT true about a meeting of the creditors? A. The bankruptcy judge must attend the meeting. B. Creditors may ask questions regarding the debtor's financial affairs, disposition of property prior tobankruptcy, possible concealment of assets, and similar matters. C. The debtor must appear and submit to questioning, under oath, by creditors. D. Within a reasonable time after a court grants an order for relief (not less than 10 days or more than 30days), a court must call a meeting of the creditors (also called the first meeting of the creditors). E. The debtor may have an attorney present at this meeting.
A. The bankruptcy judge must attend the meeting.
Which of the following is NOT true about a proof of claim and proof of interest? A. The proof of claim must be timely filed, which generally means within 12 months of the first meeting of the creditors. B. A secured creditor whose claim exceeds the value of the collateral may submit a proof of claim and become an unsecured claimant as to the difference. C. The document for filing a proof of claim is provided by the court. D. A creditor must file a proof of claim stating the amount of the claim against the debtor. E. An equity security holder (e.g., a shareholder of a corporation) must file a proof of interest.
A. The proof of claim must be timely filed, which generally means within 12 months of the first meeting of the creditors.
Raymond buys a house for $800,000. He puts $200,000 down and borrows $600,000 from a bank, which takes a mortgage on the property to secure the loan. Raymond defaults, and when the bank forecloses on the property, it is worth only $500,000. There is a deficiency of $100,000 ($600,000 loan ? $500,000 foreclosure sale price). The bank _____. A. can recover the $100,000 deficiency from Raymond's other property. B. can exercise its power of sale C. can recover $600,000 from Raymond's other property D. can exercise its right of redemption E. cannot recover the amount lost
A. can recover the $100,000 deficiency from Raymond's other property.
The Chapter 7 means test is a calculation that establishes a bright-line test to determine whether the debtor has sufficient _____ income to pay pre-petition debts out of post-petition income. A. disposable B. gross C. average D. median E. taxable
A. disposable
Which of the following schedules is NOT required to be submitted by an individual debtor who files a voluntary bankruptcy petition? A. evidence of payments received from employers within 120 days prior to the filing of the petition B. a statement of the debtor's monthly income; current income and expenses C. a list of all property owned D. a statement of the financial affairs of the debtor E. a list of secured and unsecured creditors, with addresses
A. evidence of payments received from employers within 120 days prior to the filing of the petition
In many situations, a principal and an agent do not expressly create an agency. Instead, the agency is inferred from the conduct of the parties. This type of agency is referred to as a(n) _____ agency. A. implied B. durable C. reserved D. express E. general
A. implied
The duty of _____ is a fiduciary duty owed by an agent not to act adversely to the interests of the principal. A. loyalty B. obedience C. indemnification D. reciprocity E. reservation
A. loyalty
If two or more secured parties have perfected security interests in the same collateral, the first to _____ has priority. A. perfect B. litigate C. remunerate D. arbitrate E. detach
A. perfect
Which of the following is a duty an agent owes to a principal? A. performance B. ratification C. indemnification D. compensation E. subrogation
A. performance
All things that are movable when a security interest attaches are called _____ property. A. tangible personal B. intangible personal C. intangible intellectual D. intangible real E. tangible real
A. tangible personal
In a(n) _____ agency, a contracting third party does not know of either the existence of the agency or the principal's identity. A. undisclosed B. statutory C. symbolic D. common law E. constructive
A. undisclosed
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires that before an individual debtor receives a discharge in a Chapter _____ or Chapter _____ bankruptcy, the debtor must attend a personal _____ course approved by the U.S. Trustee. A. 7; 13; financial management B. 7; 11; financial management C. 7; 13; responsibility D. 11; 13; financial management E. 7; 11; responsibility
A. 7; 13; financial management
Article _____ of the Uniform _____ Code governs secured transactions where personal property is used as collateral for a loan or the extension of credit. A. 9; Commercial B. 2; Commercial C. 9; Contracts D. 3; Commercial E. 3; Contracts
A. 9; Commercial
Title X of the _____ Act, which is titled the Consumer Financial Protection Act of 2010, is designed to increase relevant _____ regarding consumer financial products and services. A. Dodd-Frank; disclosure B. Gramm-Rudman; collateral C. Gramm-Rudman; market share D. Smoot-Hawley; security E. Taft-Hartley; market share
A. Dodd-Frank; disclosure
Which of the following is an INCORRECT statement regarding a principal's liability for an independent contractor's torts and contracts? A. Generally, a principal is liable for the torts of its independent contractors. B. Principals cannot avoid liability for inherently dangerous activities that they assign to independent contractors. C. The reason a principal is not usually liable for the torts of an independent contractor is because the principal does not control the means by which the independent contractor accomplishes results. D. If an independent contractor enters into a contract with a third party on behalf of the principal without express or implied authority from the principal to do so, the principal is not liable on the contract. E. Principals are bound by the authorized contracts of their independent contractors.
A. Generally, a principal is liable for the torts of its independent contractors.
Form _____ is a uniform financing statement form that is used in all states. A. UCC-1 B. CFPB-1 C. SEC-1 D. FTC-1 E. NYSE-2
A. UCC-1
Saachi, who owns a piece of vacant real estate, hires Maaksharth, a licensed real estate broker, to list the property for sale. Ian, an adjacent property owner to Saachi's property, tells the agent that a chemical plant has polluted his property and probably Saachi's property. The owner is unaware of any pollution and the agent does not tell her. If Saachi sells the property to Mabina and it is later discovered that the property Mabina bought from Saachi ispolluted, would Saachi be liable? A. Yes, the agent's knowledge is imputed to Saachi B. No, the buyer had a duty to discover the pollution C. No, only the agent can be held liable D. Yes, Saachi was negligent in not conducting an environment survey before listing the property E. Yes, Saachi has committed fraud
A. Yes, the agent's knowledge is imputed to Saachi
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires an attorney _____ 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 _____. A. certification; perjury B. addendum; perjury C. addendum; conspiracy D. certification; conspiracy E. warranty; conspiracy
A. certification; perjury
A creditor who has the only _____ interest in the debtor's collateral has priority over _____ interests. A. secured; unsecured B. equitable; contractual C. unsecured; secured D. conditional; unconditional E. constructive; symbolic
A. secured; unsecured
The first step in determining whether a debtor qualifies for Chapter 7 relief is to apply the _____ income test. A. poverty B. median C. mode D. average E. mean
B. median
The federal exemptions established in the Bankruptcy Code are adjusted every _______ to reflect changes in the consumer price index A. 6 months B. 3 years C. 10 years D. 1 year E. 3 months
B. 3 years
Which of the following is NOT true regarding powers of attorney? A. To be enforceable, powers of attorney must be written. B. A power of attorney may be given verbally. C. A general power of attorney confers broad powers on the agent to act in any matters on the principal's behalf. D. A power of attorney is one of the most formal types of express agency agreements. E. In a power of attorney relationship, the agent is called an attorney-in-fact even though they do not have to be a lawyer.
B. A power of attorney may be given verbally.
Which of the following is an INCORRECT statement regarding dual agency? A. Some agents, such as middlemen and finders, are not considered dual agents. B. As a general rule, dual agency is permissible. C. If an agent acts as an undisclosed dual agent, he or she must forfeit all compensation received in the transaction. D. An agent cannot meet a duty of loyalty to two parties with conflicting interests. E. Dual agency occurs when an agent acts for two or more different principals in the same transaction.
B. As a general rule, dual agency is permissible.
Which of the following is a correct statement regarding bankruptcy law? A. Bankruptcy law is exclusively state law. B. Bankruptcy law is exclusively federal law. C. Bankruptcy law consists of both federal and state law. D. New York was the first state to enact its own state bankruptcy law. E. Congress enacted the original federal Bankruptcy Act in 1778.
B. Bankruptcy law is exclusively federal law.
_____ is a court order that relieves a debtor of the legal liability to pay his or her debts that were not paid in the bankruptcy proceeding. A. Proof of interest B. Discharge C. Proof of claim D. Automatic stay E. Temporary injunction
B. Discharge
_____ agency occurs when an agent acts for two or more different principals in the same transaction. A. Conditional B. Dual C. Cooperative D. Unilateral E. Symbiotic
B. Dual
Which of the following is an INCORRECT statement regarding an agency by ratification? A. Once an agency by ratification occurs, the agent is relieved of any liability for misrepresentation. B. For an agency by ratification to occur, an employer-employee relationship must exist between the principal and the agent. C. For an agency by ratification to occur, the purported principal must ratify (accept) the unauthorized act. D. For an agency by ratification to occur, a person must represent him- or herself as another's agent when in fact he or she is not. E. With the creation of an agency by ratification, the principal is legally bound to perform.
B. For an agency by ratification to occur, an employer-employee relationship must exist between the principal and the agent.
Which of the following is NOT true about the Credit Card Act? A. The terms of the credit card agreement must be written in plain English and in no less than 12-point font(thus avoiding "legalese" and fine-print agreements). B. If cardholders cancel a card, their remaining balances are subject to any rate increase. C. Card companies cannot retroactively increase interest rates on existing balances. D. If cardholders cancel a card, they have the right to pay off existing balances at the existing interest rate and existing payment schedule (e.g., current minimum monthly payment). E. Credit cards cannot be issued to individuals under the age of 21 (the previous minimum age was 18) unless they have a co-signer (e.g., parent) or they can prove they have the means to pay credit card expenses.
B. If cardholders cancel a card, their remaining balances are subject to any rate increase.
Which of the following is NOT true about a Chapter 7 bankruptcy? A. The claims of secured creditors to the debtor's nonexempt property have priority over the claims of unsecured creditors. B. If using the means test calculation, a debtor is determined to have a sufficient amount of disposable income as determined by bankruptcy law, the debtor qualifies for Chapter 7 bankruptcy. C. In a Chapter 7 bankruptcy, the property of the estate is sold, and the proceeds are distributed to satisfy allowed claims. D. The first step in determining whether a debtor qualifies for Chapter 7 relief is to apply the median income test. E. If a debtor qualifies for a Chapter 7 liquidation bankruptcy, the nonexempt property of the bankruptcy estate must be distributed to the debtor's secured and unsecured creditors
B. If using the means test calculation, a debtor is determined to have a sufficient amount of disposable income as determined by bankruptcy law, the debtor qualifies for Chapter 7 bankruptcy.
Which of the following is an INCORRECT statement regarding unsecured credit? A. If the debtor is judgment proof, the creditor may never collect. B. It requires collateral to protect the payment of the debt. C. The creditor relies on the debtor's promise to repay the principal, plus any interest, when the debt is due. D. In deciding whether to make the loan, the unsecured creditor considers the debtor's credit history, income, and other assets. E. If the debtor fails to make the payments, the creditor may bring legal action and obtain a judgment against the debtor.
B. It requires collateral to protect the payment of the debt.
Which of the following is NOT true about a Chapter 11 bankruptcy? A. A debtor-in-possession is empowered to operate the debtor's business during the bankruptcy proceeding. B. Only the trustee can be a debtor-in-possession. C. In most Chapter 11 cases, the debtor is left in place to operate the business during the reorganization proceeding. D. Credit extended by post-petition unsecured creditors in the ordinary course of business is given automatic priority as an administrative expense in bankruptcy. E. The court may appoint a trustee to operate the debtor's business only on a showing of cause, such asfraud, dishonesty, or gross mismanagement of the affairs of the debtor by current management.
B. Only the trustee can be a debtor-in-possession.
Which of the following is NOT true about a buyer in the ordinary course of business? A. A buyer in the ordinary course of business who purchases goods from a merchant takes the goods free of any perfected or unperfected security interest in the merchant's inventory, even if the buyer knows of the existence of the security interest. B. The buyer in the ordinary course of business rule applies to persons who buy farm products from a person engaged in farming operations. C. The buyer in the ordinary course of business rule is often applied to inventory collateral. D. The buyer in the ordinary course of business rule is necessary because buyers would be reluctant to purchase goods if a merchant's creditors could recover those goods if the merchant defaulted on loans owed to secured creditors. E. The buyer in the ordinary course of business rule does not apply to persons who buy farm products from a person engaged in farming operations.
B. The buyer in the ordinary course of business rule applies to persons who buy farm products from a person engaged in farming operations.
An employer-employee relationship exists when an employer hires an employee to perform some form of physical service but does not give that person _____ authority to enter into contracts. A. assignee B. agency C. delegator D. third party beneficiary E. incidental beneficiary
B. agency
A party who agrees to act on behalf of another is called a(n) _____. A. assignor B. agent C. incidental beneficiary D. delegator E. principal
B. agent
Walt Disney Company wants to open a new theme park in Chicago but first needs to acquire land for the park. Disney employs Saul Arnold as an agent to work on its behalf to acquire the needed property, with an express agreement that the agent will not disclose the existence of the agency to a third-party seller. If Jackie Knox, who owns property in Chicago, agrees to sell the needed land and the agent signs his name "Saul Arnold," _____. A. only Saul is liable on the contract B. both Saul and Disney are liable on the contract C. neither Saul nor Disney is liable on the contract D. only Jackie Knox is liable on the contract E. only Disney is liable on the contract
B. both Saul and Disney are liable on the contract
A _____ judgment permits a secured lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan. A. preliminary B. deficiency C. proffer of judgment D. summary E. declaratory
B. deficiency
An apparent agency is also known as an agency by _____. A. first refusal B. estoppel C. last resort D. rebuttal E. ratification
B. estoppel
Upon the filing of a voluntary or an involuntary petition, all EXCEPT which of the following creditor actions arestayed? A. non-judicial collection efforts, such as self-help activities B. filing a proof of claim C. enforcing judgments obtained against the debtor D. instituting or maintaining legal actions to collect prepetition debts E. obtaining, perfecting, or enforcing liens against the property of the debtor
B. filing a proof of claim
With a _____ power of attorney, a principal confers broad powers on the agent to act in any matters on theprincipal's behalf. A. special B. general C. conditional D. restricted E. reserved
B. general
Chapter 7 bankruptcy is also called _____ bankruptcy. A. debtor-in-possession B. liquidation C. reaffirmation D. rescheduling E. non-liquidation
B. liquidation
Walt Disney Company wants to open a new theme park in Chicago but first needs to acquire land for the park. Disney employs Saul Arnold as an agent to work on its behalf to acquire the needed property. Disney tell Saul that the maximum it will pay for a 1-acre lot is $1 million. If Jackie Knox, who owns property in Chicago, agrees to sell the needed land for $1.5 million and the agent signs his name "Saul Arnold, agent for Walt Disney", _____. A. only Disney is liable on the contract B. only Disney is liable on the contract if Disney ratified the contract C. only Jackie Knox is liable on the contract D. both Saul and Disney are liable on the contract E. neither Saul nor Disney is liable on the contract
B. only Disney is liable on the contract if Disney ratified the contract
Walt Disney Company wants to open a new theme park in Chicago but first needs to acquire land for the park. Disney employs Saul Arnold as an agent to work on its behalf to acquire the needed property. Disney tell Saul that the maximum it will pay for a 1-acre lot is $1 million. If Jackie Knox, who owns property in Chicago, agrees to sell the needed land for $1.5 million and the agent signs his name "Saul Arnold, agent for Walt Disney",_____. A. neither Saul nor Disney is liable on the contract B. only Saul is liable on the contract C. only Disney is liable on the contract D. both Saul and Disney are liable on the contract E. only Jackie Knox is liable on the contract
B. only Saul is liable on the contract
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 _____ in the automobile to secure the loan. This is a secured credit transaction with the automobile being _____ for the loan. If Sarah defaults and fails to make the required payments, the lender can _____. A. mortgage; collateral; repossess the automobile B. security interest; collateral; repossess the automobile C. mortgage; collateral; enter a deficiency judgment D. right of redemption; protection; repossess the automobile E. right of redemption; protection; foreclose on the property
B. security interest; collateral; repossess the automobile
Which of the following is NOT an example of tangible collateral? A. unborn young of animals B. stocks and bonds Your answer is correct. C. manufactured homes D. iron ore E. moving cranes
B. stocks and bonds
Maya Corporation borrows $100,000 from First Bank and gives the bank a security interest in both its current andafter-acquired inventory. If Maya Corporation defaults on its loan to First Bank, _______. A. the bank may only claim after-acquired inventory if it was acquired prior to the signing of the security agreement B. the bank can claim any available original inventory as well as enough after-acquired inventory to satisfy its secured claim C. the bank may only claim after-acquired inventory if it was acquired prior to the filing of a UCC-1 D. the bank may only claim the after acquired inventory E. the bank may only claim the original inventory
B. the bank can claim any available original inventory as well as enough after-acquired inventory to satisfy its secured claim
Whose actions create an apparent agency? A. the agent's B. the principal's C. the intermediary's D. the third party beneficiary's E. the incidental beneficiary's
B. the principal's
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. A. thirty days B. two years C. sixty days D. six months E. one year
B. two years
Which of the following is NOT a critical factor in determining independent contractor status? A. whether the worker is engaged in a distinct occupation or an independently established business B. whether or not the agent has a degree C. whether the principal supplies the tools and equipment used in the work D. the amount of time that the agent works for the principal E. the length of time the agent has been employed by the principal
B. whether or not the agent has a degree
Which of the following is NOT a critical factor in determining independent contractor status? A. the length of time the agent has been employed by the principal B. whether the worker is paid by way of direct deposit or check C. the amount of time that the agent works for the principal D. whether the worker is engaged in a distinct occupation or an independently established business E. whether the principal supplies the tools and equipment used in the work
B. whether the worker is paid by way of direct deposit or check
Chapter _____ is a _____ form of bankruptcy that permits bankruptcy courts to supervise the debtor's plan for the payment of unpaid debts in installments over the plan period. A. 13; liquidation B. 13; rehabilitation C. 7; rehabilitation D. 7; liquidation E. 11; liquidation
B. 13; rehabilitation
Which of the following is NOT true about anti-deficiency statutes? A. Anti-deficiency statutes usually apply only to first purchase money mortgages. B. Anti-deficiency statutes prohibit deficiency judgments regarding certain types of mortgages, such as second mortgages on residential property. C. A first purchase money mortgage is a mortgage taken out to purchase a house. D. Second mortgages and other subsequent mortgages, even mortgages that refinance the first mortgage, usually are not protected by anti-deficiency statutes. E. Anti-deficiency statutes prohibit deficiency judgments regarding certain types of mortgages, such as loans for the original purchase of residential property.
B. Anti-deficiency statutes prohibit deficiency judgments regarding certain types of mortgages, such as second mortgages on residential property.
_____ of a security interest is a process that establishes the right of a(n) _____ creditor against other creditors who claim an interest in the collateral. A. Separation; secured B. Perfection; secured C. Detachment; unsecured D. Detachment; secured E. Perfection; unsecured
B. Perfection; secured
A(n) _____ statute prohibits deficiency judgments regarding certain types of mortgages, such as those on _____ property. A. reconveyance; urban B. anti-deficiency; residential C. deficiency; commercial D. deficiency; government-owned E. anti-deficiency; rural
B. anti-deficiency; residential
A(n) _____ lien is a _____ lien given to workers on personal property to which the workers furnish services or materials in the ordinary course of business. A. statutory; common law B. artisan's; statutory C. artisan's; precedential D. artisan's; common law E. common law; statutory
B. artisan's; statutory
Which of the following is an INCORRECT statement regarding the bankruptcy trustee? A. A bankruptcy may be appointed in a Chapter 11 case on a showing of fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management. B. Once appointed, a bankruptcy trustee becomes the legal representative of the debtor's estate. C. A bankruptcy trustee cannot be appointed in a Chapter 7 bankruptcy case. D. A bankruptcy trustee must be appointed in a Chapter 13 bankruptcy case. E. A bankruptcy trustee must be appointed in a Chapter 12 bankruptcy case.
C. A bankruptcy trustee cannot be appointed in a Chapter 7 bankruptcy case.
Which of the following is an INCORRECT statement regarding agent self-dealing? A. An agent who engages in undisclosed self-dealing with the principal has violated his or her duty of loyalty to the principal. B. If there has been undisclosed dealing by an agent, the principal can rescind the purchase and recover the money paid to the agent. C. Agents are generally allowed to self-deal with the principal, especially if the self-dealing is undisclosed. D. If there has been undisclosed dealing by an agent, the principal can ratify the purchase. E. Self-dealing is a common type of breach of the agent's duty of loyalty to the principal.
C. Agents are generally allowed to self-deal with the principal, especially if the self-dealing is undisclosed.
Which of the following is an INCORRECT statement regarding misuse of confidential information and the agent's duty of loyalty? A. If the agent violates the duty not to disclose or misuse confidential information, the principal can obtain an injunction ordering a third party to return the confidential information and to not use such information. B. An agent is under a legal duty not to disclose or misuse confidential information after the course of the agency. C. Agents are prohibited from using general information, knowledge, or experience acquired during the course of an agency in later employment. D. An agent is under a legal duty not to disclose or misuse confidential information during the course of the agency. E. If the agent violates the duty not to disclose or misuse confidential information, the principal can recoverdamages, lost profits, and any remuneration the agent received from another party to obtain the information.
C. Agents are prohibited from using general information, knowledge, or experience acquired during the course of an agency in later employment.
Which of the following is an INCORRECT statement regarding usurping an opportunity and the agent's duty ofloyalty? A. If the agent appropriates an opportunity that belongs to the principal for him- or herself without theprincipal's rejection of it after due consideration, the principal can recover the opportunity from the agent. B. An agent cannot appropriate an opportunity that belongs to the principal for him- or herself unless the principal rejects it after due consideration. C. An agent can personally usurp an opportunity that belongs to the principal. D. Usurping an opportunity is a common type of breach of the agent's duty of loyalty to the principal. E. A third-party offer to an agent must be conveyed to the principal.
C. An agent can personally usurp an opportunity that belongs to the principal.
Which of the following is an INCORRECT statement regarding independent contractors? A. Certified public accountants commonly act as independent contractors. B. 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. C. As a general rule, employees are independent contractors. D. A principal can authorize an independent contractor to enter into contracts. E. Doctors commonly act as independent contracts.
C. As a general rule, employees are independent contractors.
Which of the following is NOT true about a Chapter 13 bankruptcy? A. Chapter 13 permits a debtor to propose a plan to pay all or a portion of the debts owed in installments over a specified period of time. B. The bankruptcy court supervises the debtor's plan for the payment in a Chapter 13 bankruptcy case. C. Chapter 13 is only available to corporations, partnerships, and LLCs. D. Chapter 13 petitions are usually filed by individual debtors who do not qualify for Chapter 7 liquidation bankruptcy and by homeowners who want to protect nonexempt equity in their residence. E. Chapter 13 enables debtors to catch up on secured credit loans, such as home mortgages, and avoid repossession and foreclosure.
C. Chapter 13 is only available to corporations, partnerships, and LLCs.
Which of the following is an INCORRECT statement regarding a fully disclosed agency? A. A fully disclosed principal is liable on a contract with the third party. B. In a fully disclosed agency, the agent is not liable on the contract with the third party. C. In a fully disclosed agency, the contract is between the agent and the third party. D. In a fully disclosed agency, the agent's signature must clearly indicate that he or she is acting as an agent for a specifically identified principal. E. In a fully disclosed agency, the third party typically relied on the principal's credit and reputation when the contract was made.
C. In a fully disclosed agency, the contract is between the agent and the third party.
Qaadir hires Zaafir, a lawyer and an independent contractor, to represent him in a court case. While driving to the courthouse to represent Qaadir at trial, Zaafir negligently causes an automobile accident in which Maali is severely injured. Who is liable? A. Qaadir, because Zaafir is his independent contractor B. both Zaafir and Qaadir C. Zaafir only, because he is an independent contractor D. Qaadir only, because Zaafir is his agent acting on his behalf E. no one
C. Zaafir only, because he is an independent contractor
If two or more secured parties claim an interest in the same collateral but neither has a perfected claim, the first to_____ has priority. A. litigate B. detach C. attach D. mediate E. arbitrate
C. attach
Walt Disney Company wants to open a new theme park in Chicago but first needs to acquire land for the park. Disney employs Saul Arnold as an agent to work on its behalf to acquire the needed property. If Jackie Knox, who owns property in Chicago, agrees to sell the needed land and the agent signs his name "Saul Arnold, agent," _____. A. only Saul is liable on the contract B. only Jackie Knox is liable on the contract C. both Saul and Disney are liable on the contract D. neither Saul nor Disney is liable on the contract E. only Disney is liable on the contract
C. both Saul and Disney are liable on the contract
Unsecured credit does not require any _____ to protect the payment of the debt. A. contract B. moral obligation C. collateral D. consideration E. promise
C. collateral
Under the _____ rule, a principal is generally _____ for injuries caused by its agents and employees while they are on their way to or from work. A. worker's compensation; liable B. coming and going; liable C. coming and going; not liable D. tort reform; liable E. frolic and detour; liable
C. coming and going; not liable
Notice that an agency has terminated that has been placed in the newspaper is an example of ___________. A. direct notice B. an ineffective termination C. constructive notice D. termination due to unusual circumstances E. termination by impossibility of performance
C. constructive notice
The doctrine of _____ rests on the principle that if someone expects to derive certain benefits from acting throughothers, that person should also bear the liability for injuries caused to third persons by the negligent conduct of an agent who is acting within his or her scope of employment. A. absolute liability B. strict liability C. negligence D. contributory negligence E. assumption of the risk
C. negligence
If a debtor qualifies for a Chapter 7 bankruptcy, the _________ property of the bankruptcy estate must be distributed to the debtor's secured and unsecured creditors pursuant to statutory priority established by the Bankruptcy code. A. executory B. voidable C. nonexempt D. executed E. exempt
C. nonexempt
Walt Disney Company wants to open a new theme park in Chicago but first needs to acquire land for the park. Disney employs Saul Arnold as an agent to work on its behalf to acquire the needed property. If Jackie Knox, who owns property in Chicago, agrees to sell the needed land and the agent signs his name "Saul Arnold, agent for WaltDisney," _____. A. both Saul and Disney are liable on the contract B. only Saul is liable on the contract C. only Disney is liable on the contract D. neither Saul nor Disney is liable on the contract E. only Jackie Knox is liable on the contract
C. only Disney is liable on the contract
An agency can be legally terminated in all EXCEPT which of the following ways? A. if a stated time has elapsed B. the occurrence of a stated event C. ratification of the contract by the principal D. if a specific purpose is achieved E. the mutual assent of the parties
C. ratification of the contract by the principal
With a(n) _____ power of attorney, a principal confers powers on an agent to act in specified matters on theprincipal's behalf. A. ratified B. broad C. special D. unconditional E. general
C. special
Which of the following is NOT a duty a principal owes to an agent? A. reimbursement B. indemnification C. subrogation D. compensation E. cooperation
C. subrogation
Which of the following circumstances can lead to termination of an agency by impossibility of performance? A. after the contract is formed, it becomes more difficult for the principal to perform his or her agency-related duties B. after the contract is formed, it becomes more difficult for the agent to perform his or her agency-related duties C. the loss of a required qualification D. after the contract is formed, it becomes more expensive for the principal to perform his or heragency-related duties E. after the contract is formed, it becomes more expensive for the agent to perform his or her agency-related duties
C. the loss of a required qualification
Which of the following circumstances can lead to termination of an agency by impossibility of performance? A. after the contract is formed, it becomes more expensive for the agent to perform his or her agency-related duties B. after the contract is formed, it becomes more difficult for the principal to perform his or her agency-related duties C. the loss or destruction of the subject matter of the agency D. after the contract is formed, it becomes more difficult for the agent to perform his or her agency-related duties E. after the contract is formed, it becomes more expensive for the principal to perform his or heragency-related duties
C. the loss or destruction of the subject matter of the agency
Chapter _____ is a bankruptcy method that allows the _____ of the debtor's financial affairs under the supervision of the bankruptcy court. A. 7; restructuring B. 7; reorganization C. 11; reorganization D. 11; liquidation E. 13; liquidation
C. 11; reorganization
Principals often employ outsiders—that is, persons and businesses that are not _____—to perform certain tasks on their behalf. These persons and businesses are called _____. A. independent contractors; employees B. independent contractors; incidental beneficiaries C. employees; independent contractors D. third party beneficiaries; incidental beneficiaries E. incidental beneficiaries; third party beneficiaries
C. employees; independent contractors
Jordan is a lawyer who has her own law firm and specializes in real estate law. Dylan, a real estate developer, hires Jordan to represent him in the purchase of land. Dylan is the _______, and Jordan is the ________. A. principal; employee B. agent; independent contractor C. principal; independent contractor D. principal; subagent E. agent; employee
C. principal; independent contractor
A _____ statement is a document filed by a secured party that ends a secured interest because _____. A. reconveyance; of commercial impracticability B. reconveyance; the debt has been paid C. termination; the debt has been paid Your answer is correct. D. termination; of frustration of purpose E. termination; of commercial impracticability
C. termination; the debt has been paid
A debtor must receive prepetition credit counseling within _____ days prior to filing his or her petition for bankruptcy. A. 30 B. 90 C. 60 D. 180 E. 120
D. 180
Which of the following is an INCORRECT statement regarding recording statutes? A. The non-recordation of a mortgage does not affect the legality of the instrument between the mortgagor and the mortgagee. B. The filing of a mortgage in the county recorder's office in the county in which the real property is located is public record and alerts the world that the mortgage has been recorded against the real property. C. The filing of a deed of trust in the county recorder's office in the county in which the real property is located is public record and alerts the world that the deed of trust has been recorded against the real property. D. As a general rule, it is not necessary to record a mortgage or deed of trust in the county recorder's office. E. The mortgagor is obligated to pay the amount of the mortgage according to the terms of the mortgage, even if the document is not recorded.
D. As a general rule, it is not necessary to record a mortgage or deed of trust in the county recorder's office.
Which of the following is not a special chapter of the Bankruptcy Code which provides different types of bankruptcy under which individual and business debtors may be granted remedy? A. Chapter 11 B. Chapter 13 C. Chapter 12 D. Chapter 5 E. Chapter 7
D. Chapter 5
Because lenders are sometimes reluctant to lend large sums of money simply on the borrower's promise to repay, many lenders take a security interest in the property purchased or some other property of the debtor. _____ secures payment of a secured loan. A. Income B. An ethical obligation C. A contract obligation D. Collateral E. A promise
D. Collateral
_____ property is property that may be retained by the debtor pursuant to federal or state law that does not become part of the bankruptcy estate. A. Void B. Executory C. Executed D. Exempt E. Voidable
D. Exempt
_____ agency is the most common form of agency. A. Symbolic B. Conditional C. Implied D. Express E. Constructive
D. Express
_____ is a legal procedure by which a secured creditor causes the judicial sale of the secured real estate to pay a defaulted loan. A. Execution B. Remuneration C. Reclamation D. Foreclosure E. Reconveyance
D. Foreclosure
The party who employs an independent contractor is called a(n) _____. A. employer B. trustor C. assignee D. agent E. principal
E. principal
Which of the following is NOT true about a Chapter 7 bankruptcy? A. Approximately 475,000 Chapter 7 bankruptcies are filed each year. B. In a Chapter 7 bankruptcy the debtor is permitted to keep a substantial portion of his or her assets (exempt assets). C. In a Chapter 7 bankruptcy the debtor's future income, even if the debtor becomes rich, cannot be reached to pay the discharged debt. D. In a Chapter 7 bankruptcy the debtor's future income can be reached to pay the discharged debt. E. In a Chapter 7 bankruptcy 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 discharged.
D. In a Chapter 7 bankruptcy the debtor's future income can be reached to pay the discharged debt.
Which of the following is an INCORRECT statement regarding power of sale? A. The procedure for the sale is provided in the mortgage or deed of trust itself. B. Power of sale must be expressly conferred in the mortgage or deed of trust. C. The sale must be by auction for the highest price obtainable, and any surplus must be paid to the mortgagor. D. Only a few states permit foreclosure by power of sale, as such a sale is per se unconscionable against the mortgagor and deprives him or her of necessary shelter. E. No court action is necessary to exercise a power of sale.
D. Only a few states permit foreclosure by power of sale, as such a sale is per se unconscionable against the mortgagor and deprives him or her of necessary shelter.
Which of the following is an INCORRECT statement regarding a "frolic and detour?" A. Negligence actions stemming from frolic and detour are examined on a case-by-case basis. B. Agents are always personally liable for their tortious conduct during a frolic and detour. C. A frolic and detour is a situation in which an agent does something during the course of his or her employment to further his or her own interest rather than the principal's. D. Principals are generally liable if an agent's frolic and detour is substantial. E. An agent might choose to run a personal errand while on assignment for the principal. This is commonly referred to as a frolic and detour.
D. Principals are generally liable if an agent's frolic and detour is substantial.
_____ of collateral is a secured creditor's repossession of collateral on a debtor's default and proposal to retain the collateral in satisfaction of the debtor's obligation. A. Rejection B. Revocation C. Remuneration D. Retention E. Rescission
D. Retention
An owner of a vacant lot enters into an agency agreement with a real estate agent to sell the lot for $1 million based on the agent's market analysis. After signing the agreement, the agent learns that oil has been discovered on theproperty, a discovery that makes the land worth $5 million. Which of the following is true? A. The agency does not terminate because it would be a wrongful termination. B. The agency terminates because of impossibility of performance. C. The agency terminates by operation of law. D. The agency may be terminated because of this change in circumstances. E. The owner of the lot must sell the land for $1 million.
D. The agency may be terminated because of this change in circumstances.
Which of the following is an INCORRECT statement regarding secured credit? A. A security interest may be taken in intangible property. B. To minimize the risk associated with extending unsecured credit, a creditor may require collateral. C. A security interest may be taken in personal property. D. Unsecured credit requires collateral for a loan. E. A security interest may be taken in real property.
D. Unsecured credit requires collateral for a loan.
Which of the following is an INCORRECT statement regarding express agencies? A. In most states, a real estate broker's contract to sell real estate must be in writing. B. Express agency is the most common form of agency. C. Express agency occurs when a principal and an agent expressly agree to enter into an agency agreement with each other. D. Without exception, express agency contracts must be in writing to be enforceable. E. In an express agency, the agent has the authority to contract or otherwise act on the principal's behalf, as expressly stated in the agency agreement.
D. Without exception, express agency contracts must be in writing to be enforceable.
A principal-_____ relationship is formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf. A. bailee B. third party beneficiary C. assignee D. agent E. incidental beneficiary
D. agent
Which of the following is NOT an example of tangible personal property? A. equipment B. inventory C. accessions D. chattel paper E. consumer goods
D. chattel paper
An agent works as a salesperson for a principal who owns an automotive parts business. The agent's job is to sell the principal's automotive parts to auto repair shops and other purchasers. While doing so, the agent also works as a salesperson for a competing seller of automotive parts. This is a violation of the duty of loyalty known as___________. A. usurping an opportunity B. self-dealing C. dual agency D. competing with the principal E. misuse of confidential information
D. competing with the principal
Olivia signs a document giving her sister the authority to act on her behalf while she undergoes surgery. This is known as a(n) _____. A. special power of attorney B. general power of attorney C. agency by ratification D. durable power of attorney E. implied agency
D. durable power of attorney
A general medical practitioner in a rural area would be held to the standard of a reasonable ________. A brain surgeon would be held to the standard of a reasonable ________. A. general practitioner in rural areas; brain surgeon in rural areas B. general practitioner in rural areas; person C. general practitioner; brain surgeon D. general practitioner in rural areas; brain surgeon E. person; general practitioner
D. general practitioner in rural areas; brain surgeon
All things that are nonphysical property when a security attaches are called _____ property. A. tangible personal B. tangible personal C. intangible real D. intangible personal E. tangible intellectual
D. intangible personal
An agency is terminated by operation of law in which of the following circumstances? A. if a stated time has elapsed B. the occurrence of a stated event C. if a specified purpose is achieved D. the mutual assent of the parties E. the bankruptcy of the principal
E. the bankruptcy of the principal
Tamara sues Jerry for fraud. Tamara lost a large sum of money to Jerry when she invested in what she alleges was a fraudulent investment scheme. If Tamara is afraid that Jerry will dispose of property prior to the resolution of the lawsuit she has filed, in order to attempt to avoid paying her the funds he owes to her, she _______. A. may file for a writ of garnishment B. may file for a writ of execution C. must enter into a surety arrangement D. may file for a writ of attachment E. must enter into a guaranty arrangement
D. may file for a writ of attachment
Assume that a debtor owns a principal residence worth $100,000 that is subject to a $70,000 mortgage and the debtor therefore owns $30,000 of equity in the property. The debtor files a petition for Chapter 7 liquidation bankruptcy. The trustee may sell the home, _________, (applying the federal exemption), and use the remaining proceeds of ___________ for distribution to the debtor's creditors. A. pay off the unsecured creditors, pay the debtor $23,675; $6,325 B. pay off the mortgage, pay the debtor $0; $30,000 C. pay off the mortgage, pay the debtor $23,675; $6,325 D. pay the debtor $25,150, pay off the mortgage; $6,850 E. pay off the mortgage, pay the debtor $6,325; $23,675
D. pay the debtor $25,150, pay off the mortgage; $6,850
A party who employs another person to act on his or her behalf is called a(n) _____. A. assignee B. agent C. independent contractor D. principal E. delegatee
D. principal
A _____ agreement is an agreement entered into by a debtor with a creditor prior to discharge whereby the debtor agrees to pay the creditor a debt that would otherwise be discharged in bankruptcy. A. restitution B. revocation C. reclamation D. reaffirmation E. rehabilitation
D. reaffirmation
Which of the following is NOT a common type of breach of the agent's duty of loyalty to the principal? A. misuse of confidential information B. usurping an opportunity C. self-dealing D. single agency with the principal E. competing with the principal
D. single agency with the principal
Olivia signs a document giving her sister the authority to sign any documents necessary to list her house for sale while she is on vacation. This is known as a(n) _____. A. agency by ratification B. durable power of attorney C. implied agency D. special power of attorney E. general power of attorney
D. special power of attorney
Which of the following is NOT required to be disclosed in a written solicitation under the Fair Credit and Charge Card Disclosure Act? A. any annual membership fee B. any transaction charge for use of the card for purchases C. the debt to income ratio required D. the APR E. any minimum or fixed finance charge
D. the APR
An agency is terminated by operation of law in which of the following circumstances? A. if a specified purpose is achieved B. the occurrence of a stated event C. the mutual assent of the parties D. the death of the principal E. if a stated time has lapsed
D. the death of the principal
Which of the following is NOT a federal exemption recognized by the Bankruptcy Code? A. up to $25,150 in equity in a burial plot B. any unmatured life insurance policy owned by the debtor C. up to $4,000 in value in one motor vehicle D. up to $150,000 in equity in property used as a primary residence E. personal injury awards up to $25,150
D. up to $150,000 in equity in property used as a primary residence
Which of the following is an INCORRECT statement regarding the creation of an agency relationship? A. Generally, insane persons cannot appoint agents. B. An agency can be created only to accomplish a lawful purpose. C. Any person who has the capacity to contract can appoint an agent to act on his or her behalf. D. Generally, minors can appoint agents. E. Agency contracts that are created for illegal purposes or are against public policy are void and unenforceable.
D. Generally, minors can appoint agents.
Article _____, Section _____, Clause 4 of the U.S. Constitution states, "The Congress shall have the power...to establish...uniform laws on the subject of bankruptcies throughout the United States." A. II; 8 B. I; 5 C. III; 8 D. I; 8 E. II; 5
D. I; 8
The _____ Reform and Anti-_____ Lending Act is designed to eliminate many abusive loan practices and mandates new duties and disclosure requirements for mortgage lenders. A. Tort; Mortgage B. Tort; Predatory C. Mortgage; Tort D. Mortgage; Predatory E. Consumer; Commercial
D. Mortgage; Predatory
Sometimes principals request that agents run errands or conduct other acts on their behalf while the agent or employee is on personal business. In this case, the agent is on a _____, and most jurisdictions hold _____ liable if the agent injures someone while on such a mission. A. unilateral mission; neither the principal nor the agent B. dual-purpose mission; the principal, but not the agent, C. unilateral mission; both the principal and the agent D. dual-purpose mission; both the principal and the agent E. dual-purpose mission; the agent, but not the principal,
D. dual-purpose mission; both the principal and the agent
Perfection by possession of collateral is a rule stating that if a(n) _____ creditor has _____ possession of thecollateral, no financing statement has to be filed. A. unsecured; symbolic B. secured; future C. unsecured; constructive D. secured; physical Your answer is correct. E. unsecured; physical
D. secured; physical
In a _____ arrangement, a third party promises to be primarily liable with the borrower for the payment of theborrower's debt, while in a _____ arrangement, a third party promises to be secondarily liable for the payment ofanother's debt. A. guaranty; surety B. deed of trust; mortgage C. mortgage; deed of trust D. surety; guaranty E. subrogation; cosigner
D. surety; guaranty
Which of the following is NOT true about an agent's duties? A. Unless otherwise agreed, an agent owes a duty to maintain an accurate accounting of all transactions undertaken on the principal's behalf. B. The duty to account (sometimes called the duty of accountability) includes keeping records of all property and money received and expended during the course of the agency. C. A principal has a right to demand an accounting from the agent at any time. D. The agent is liable to the principal for any injuries resulting from a breach of its duty to notify. E. An agent may keep the principal's money in the agent's personal bank account for safekeeping.
E. An agent may keep the principal's money in the agent's personal bank account for safekeeping.
Which of the following is NOT true about Article 9 of the UCC? A. Article 9 does not apply to transactions involving real estate mortgages, landlord's liens, artisan's ormechanic's liens, liens on wages, judicial liens, and the like. Your answer is not correct. B. Most states have enacted Revised Article 9 as the secured transactions statute within their states. C. In 2001, the National Conference of Commissioners on Uniform State Laws and the American Law Institute issued Revised Article 9 (Secured Transactions) of the UCC. D. Article 9 (Secured Transactions) of the Uniform Commercial Code (UCC) governs secured transactions in which personal property is used as collateral for a loan or the extension of credit. E. Article 9 applies to transactions involving real estate mortgages, landlord's liens, artisan's or mechanic's liens, liens on wages, judicial liens, and the like.
E. Article 9 applies to transactions involving real estate mortgages, landlord's liens, artisan's or mechanic's liens, liens on wages, judicial liens, and the like.
Marty Levine sees a house for sale and thinks his friend Linda Maxwell would want to buy it. Marty enters into a contract to purchase the house from the seller and signs the contract "Marty Levine, agent for Linda Maxwell." Which of the following is NOT true? A. If Linda agrees to purchase the house, there is an agency by ratification. B. If Linda had signed an agency agreement with Marty, Linda Maxwell would be obligated to purchase the house. C. Because Marty is not Linda Maxwell's agent, Linda is not bound to the contract. D. If Linda does not accept the contract, she is not bound by it. E. Because Marty is now Linda Maxwell's agent, Linda is bound to the contract.
E. Because Marty is now Linda Maxwell's agent, Linda is bound to the contract.
Which of the following is NOT true about a Chapter 11 bankruptcy? A. Chapter 11 is available to partnerships, corporations, limited liability companies, and other business entities. B. Approximately 7,000 Chapter 11 bankruptcies are filed each year. C. The goal of Chapter 11 is to reorganize the debtor with a new capital structure so that the debtor emerges from bankruptcy as a viable concern. D. Chapter 11, which is referred to as reorganization bankruptcy, is often in the best interests of debtors and creditors. E. Chapter 11 is only available to wealthy individuals.
E. Chapter 11 is only available to wealthy individuals.
Which of the following is an INCORRECT statement regarding bankruptcy exemptions? A. A state that enacts its own bankruptcy exemptions may require debtors to follow state law regarding those exemptions. B. The exemptions available under state law are often more liberal than those provided by federal law. C. A state that enacts its own bankruptcy exemptions may give debtors the option of choosing between federal and state exemptions. D. Exempt property is property of the debtor that he or she can keep and that does not become part of the bankruptcy estate. E. The Bankruptcy Code does not permit states to enact their own bankruptcy exemptions.
E. The Bankruptcy Code does not permit states to enact their own bankruptcy exemptions.
Which of the following is NOT true about disposing of the collateral? A. The method, manner, time, place, and terms of the disposition must be commercially reasonable. B. Disposition of collateral may be by public or private proceeding. C. In the event of a debtor's default, a secured party may sell, lease, or otherwise dispose of the collateral in its current condition or following any commercially reasonable preparation or processing. D. The secured party must notify the debtor in writing about the time and place of any public or private sale or any other intended disposition of the collateral unless the debtor has signed a statement renouncing or modifying the right to receive such notice. E. The debtor is not entitled to receive any surplus that remains after the sale or other disposition.
E. The debtor is not entitled to receive any surplus that remains after the sale or other disposition
____ credit does not require any security (collateral) to protect the payment of the debt. A. Secured B. Primary C. Secondary D. Commercial E. Unsecured
E. Unsecured
Which of the following is NOT an example of intangible personal property? A. negotiable instruments B. chattel paper C. accounts D. deposit accounts E. accessions
E. accessions
When can a debt collector contact a debtor? A. at church, mosque, or synagogue B. when the debtor is represented by an attorney C. after 9:00 PM D. prior to 8:00 AM E. between 8:00 AM and 9:00 PM
E. between 8:00 AM and 9:00 PM
Siri, who is driving her automobile, is injured when another driver negligently causes an automobile accident. Siri hires a lawyer to represent her on a 35 percent contingency-fee basis. If the lawyer wins the case for Siri or settles the case with Siri's approval, he will earn 35 percent of whatever is collected from the defendant. If the lawyer does not win or settle the lawsuit, he gets paid nothing. The agent can recover this amount from the principal because of the duty to _______. A. cooperate B. indemnify C. perform D. reimburse E. compensate
E. compensate
Section 1(1) of 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." A. fallacious B. employment C. entreated D. fictitious E. fiduciary
E. fiduciary
Irene, a college student, wants to purchase a new BMW automobile. She goes to Auto Dealer and finds exactly the car she wants, and she wants to finance the car. Auto Dealer will not sell the car to Irene on credit based on Irene's own credit standing. Auto Dealer requires Irene to find a co-signer for the purchase and credit contract. Irene asks her mother to agree to pay the debt if she defaults. If Irene's mother signs such a document, this is known as a________. Irene's mother ________ on the loan. A. surety arrangement; is primarily liable B. writ of execution; is primarily liable with Irene C. writ of attachment; is not liable D. writ of garnishment; is secondarily liable with Irene E. guaranty arrangement; is secondarily liable
E. guaranty arrangement; is secondarily liable
An agency terminates by _____ of performance because a situation arises that makes the fulfillment of the agency impossible. A. rescission B. improbability C. rejection D. revocation E. impossibility
E. impossibility
If the debtor is _____, he or she has little or no property or income that can be garnished to pay the debt. A. secured B. a corporation C. unsecured D. a sole proprietorship E. judgment proof
E. judgment proof
Isaias, a college student, wants to purchase a new computer, printer, and other electronic equipment on credit from Electronics Retail, Inc. Electronics will not sell the computer and other equipment to Isaias unless he can get someone to guarantee the payment. Isaias asks his roommate, Edward, to guarantee the payment. Edward agrees, and he is placed on the credit agreement as a guarantor. If Isaias fails to make the necessary payment, Electronics_____. A. may file a joint action against both Isaias and Edward B. may only recover against Edward C. may immediately file an action against Edward D. may only recover against Isaias E. must first attempt unsuccessfully to recover the payments from Isaias before taking legal action against Edward to recover payment
E. must first attempt unsuccessfully to recover the payments from Isaias before taking legal action against Edward to recover payment
The bankruptcy estate is created _____. A. with the execution of a reaffirmation agreement B. at the second meeting of creditors C. at the first meeting of creditors D. with the execution of a reclamation agreement E. on the commencement of a bankruptcy case
E. on the commencement of a bankruptcy case
In a(n) _____ agency, a contracting third party knows that the agent is acting for a principal but does not know the identity of the principal. A. statutory B. undisclosed C. fully disclosed D. common law E. partially disclosed
E. partially disclosed
If two or more secured parties claim an interest in the same collateral but only one has perfected his or her securityinterest, the _____ interest has priority. A. symbolic B. equitable C. unperfected D. constructive E. perfected
E. perfected
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 personal use. This is a violation of the duty of loyalty known as _________. A. dual agency B. competing with the principal C. misuse of confidential information D. self-dealing E. usurping an opportunity
E. usurping an opportunity
_____ of collateral is a secured creditor's repossession of collateral on a debtor's default and selling, leasing, or otherwise disposing of it in a _____ manner. A. Defalcation; commercially reasonable B. Deposition; commercially reasonable C. Disposition; personally convenient D. Defalcation; personally convenient E. Disposition; commercially reasonable
E. Disposition; commercially reasonable
Sometimes principals request that agents run errands or conduct other acts on their behalf while the agent or employee is on personal business. In this case, the agent is on a _____, and most jurisdictions hold _____ liable if the agent injures someone while on such a mission. A. unilateral mission; both the principal and the agent B. unilateral mission; neither the principal nor the agent C. dual-purpose mission; the principal, but not the agent, D. dual-purpose mission; the agent, but not the principal, E. dual-purpose mission; both the principal and the agent
E. dual-purpose mission; both the principal and the agent
A writ of _________ is a court order directing a sheriff or other government officials to _________ that is in thedebtor's possession and authorizes a judicial sale of that property. A. garnishment; seize the debtor's property B. execution; post a bond with the court C. attachment; post a bond with the court D. attachment; seize the debtor's property E. execution; seize the debtor's property
E. execution; seize the debtor's property
Under the _____ test, if the agent's motivation for committing an intentional tort is to promote the _____ business, the principal is liable for any injury caused by the tort. A. captivation; principal's Your answer is not correct. B. motivation; agent's C. motivation; third party's D. captivation; agent's E. motivation; principal's
E. motivation; principal's
The right of _____ allows the mortgagor to redeem real property after _____ and before _____. A. ademption; foreclosure; default B. redemption; foreclosure; default C. reconveyance; default; foreclosure D. reconveyance; default; foreclosure E. redemption; default; foreclosure
E. redemption; default; foreclosure
A financing statement is a document filed by a(n) _____ creditor with the appropriate government office that constructively notifies the world of his or her security interest in _____ property. A. unsecured; personal B. non-commercial; real C. unsecured; real D. secured; real E. secured; personal
E. secured; personal
If a real estate agent who is employed to purchase real estate for a principal secretly sells his or her own property to the principal, this is a violation of the duty of loyalty known as __________. A. usurping an opportunity B. competing with the principal C. misuse of confidential information D. dual agency E. self-dealing
E. self-dealing
A farmer purchases equipment from a manufacturer. The farmer obtains a loan to purchase the equipment from abank, which obtains a security interest in the equipment. The equipment manufacturer is paid for the equipment out of the proceeds of the loan. This is a __________ secured transaction. The manufacturer is the seller, the farmer is the __________, and the bank is the ___________ creditor. A. three-party; seller-lender; buyer-debtor-secured B. two-party; buyer-debtor; seller-lender-secured C. two-party; seller-lender; buyer-debtor-secured D. two-party; buyer-debtor; seller-lender-unsecured E. three-party; buyer-debtor; lender-secured
E. three-party; buyer-debtor; lender-secured
A _____ transaction occurs when a seller sells goods to a buyer on credit and retains a security interest in the goods. A. three-party unsecured B. multi-party; unsecured C. two-party unsecured D. three-party secured E. two-party secured
E. two-party secured
A farmer purchases equipment on credit from a farm equipment dealer. The dealer retains a security interest in the farm equipment that becomes collateral for the loan. This is a _________ secured transaction. The farmer is the__________ and the farm equipment dealer is the _________ creditor. A. two-party; buyer-debtor; seller-lender-unsecured B. two-party; seller-lender; buyer-debtor-secured C. three-party; seller-lender; buyer-debtor-secured D. three-party; buyer-debtor; lender-secured E. two-party; buyer-debtor; seller-lender-secured
E. two-party; buyer-debtor; seller-lender-secured
Which of the following is NOT true regarding financing statements? A. Most states require financing statements covering farm equipment, farm products, accounts, and consumer goods to be filed with the county clerk [Revised UCC 9-501]. B. Financing statements are effective for 5 years from the date of filing [Revised UCC 9-515(a)]. C. A continuation statement may be filed up to 6 months prior to the expiration of a financing statement's 5-year term. D. They serve as constructive notice to the world that a creditor claims an interest in a property. E. Financing statements can only be reviewed by approved creditors.
Financing statements can only be reviewed by approved creditors.
A(n) _____ judgment is a judgment of a court that permits a(n) _____ lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan. A. default; unsecured B. deficiency; secured Your answer is correct. C. executory; secured D. summary; non-commercial E. declaratory; commercial
deficiency; secured
A _____ transaction occurs when a seller sells goods to a buyer who has obtained financing from a third-party lender who takes a security interest in the goods sold. A. two-party unsecured B. three-party unsecured C. two-party secured D. three-party secured Your answer is correct. E. two-party mortgage
three-party secured