Business Law, 8e (Cheeseman)
Chapter 47 Personal Property and Bailment
1) Personal property includes land and property that is permanently attached to it.
2) Personal property consists of everything that is not real property.
3) Personal property that is permanently affixed to land or buildings is referred to as chattel.
4) Only intangible property qualifies as personal property.
5) Real property cannot be owned by more than one person.
6) A person can acquire ownership of unowned personal property by taking possession of it.
7) A gift is a voluntary transfer of property without payment of consideration by the donee.
8) For a gift to be considered effective, the donor must be found to have a donative intent.
9) For a tangible gift to be considered effective, the donor must make the delivery in person.
10) A gift causa mortis is an irrevocable present during the donor’s lifetime.
11) The Uniform Transfers to Minors Act establish procedures for adults to make irrevocable
gifts of money and securities to minors.
12) Accession that naturally occurs to a property belongs to the owner.
13) If an accession is mistakenly made by an improver and the improvement cannot be removed
from the original article, the owner owns title to the improved property without any payment.
14) If an accession is made wrongfully, the improver acquires title to the improved property and
does not have to pay the owner for the property.
15) Confusion occurs if two or more persons commingle fungible goods.
16) The owners share ownership in commingled goods in proportion to the amount of goods
contributed by each owner.
17) Title to goods cannot be acquired by confusion.
18) The owner of the premises where the property is mislaid is entitled to take possession of the
property against all except the rightful owner.
19) The finder of a mislaid property can claim title to the property if it is found within the
finder’s premises.
20) A finder who refuses to return the lost property to the loser is liable for the tort of
conversion.
21) If the finder of a lost property posts notices and publishes advertisements describing the lost
property, he or she will be able to clear title to the property after certain requirements are met.
22) The finder of an abandoned property holds title against the whole world except the owner.
23) In a bailment, the title to the goods passes to the bailee.
24) Only personal property can be used in a bailment.
25) Constructive deliveries can be made in bailments.
26) Under the Statute of Frauds, a bailment agreement must be in writing if it is for more than
one year.
27) In a bailment for the sole benefit of the bailor, the bailee owes only a duty of great care to
protect the bailed property.
28) A bailment for the sole benefit of the bailee is an example of an ordinary bailment.
29) In a mutual benefit bailment, the bailee owes a duty of reasonable care to protect the bailed
goods.
30) A bailment at will can be terminated at any time by either party.
31) A bailment for a fixed term cannot be terminated before the end of the term by either party.
32) Ordinary bailments involve warehouse companies, common carriers, and innkeepers.
33) Warehousers are subject to the rights, duties, and liability of an ordinary bailee.
34) A warehouse company has a lien on the goods in its possession for necessary expenses
incurred in storing and handling the goods.
35) The delivery of goods to a common carrier creates a bailment for the sole benefit of the
bailor.
36) A consignee is a person to whom a common carrier makes a delivery.
37) Common carriers are held to a duty of strict liability.
38) Common carriers are not liable for the loss, damage, or destruction of goods caused by an act
of God.
39) The bill of lading is a document of title that is issued by a common carrier to the bailee when
goods are received for transportation.
40) Under the common law, innkeepers were less liable for lost or stolen guest property when
compared to the innkeepers’ statutes.
41) Under the innkeepers’ statutes, innkeepers owe a duty of strict liability regarding loss caused
to the personal property of transient guests.
42) Tangible property such as automobiles, furniture, and equipment, and intangible property
such as securities, patents, and copyrights are collectively referred to as ________.
A) real property
B) immovable property
C) personal property
D) fixtures
43) Which of the following is considered real property?
A) a plantation
B) a car
C) furniture
D) a copyrighted song
44) A building attached to a piece of land would be considered a ________ property.
A) personal
B) movable
C) chattel
D) real
45) Personal property that is permanently affixed to land or buildings is called a(n) ________.
A) chattel
B) fixture
C) attachment
D) lien
46) Which of the following is true about fixtures?
A) They are categorized as real property.
B) They are easily portable.
C) They are typically removed prior to a sale.
D) They can only have one owner at a time.
47) ________ represent rights that cannot be reduced to physical form, such as stock certificates,
certificates of deposit, bonds, and copyrights.
A) Real properties
B) Intangible properties
C) Fixtures
D) Immovable properties
48) Which of the following is a similarity between real and personal property?
A) both properties can include intangible properties
B) both properties are movable properties
C) both properties can be owned concurrently by two or more persons
D) both properties can be removed by a seller prior to a sale of the property
49) Which of the following is true about real property?
A) Real property refers to personal property permanently attached to a land.
B) Real property can be either tangible or intangible property.
C) Real property cannot become personal property under any circumstance.
D) Real property includes land and property permanently attached to it.
50) Which of the following is an example of intangible property?
A) copyrights
B) fixtures
C) minerals
D) automobiles
51) Real property can become personal property if it is ________.
A) removed from the land it is situated in
B) converted to an intangible property
C) fixed permanently to a piece of land
D) owned by more than one person at a time
52) Which of the following methods of acquiring ownership is least in use today?
A) purchase
B) capture
C) gift
D) production
53) Shelton Engines Inc. has built a new model of engines that can withstand more heat than the
competing engines in its class. Lokin Inc., a sports car manufacturer, ________ the equipment
from Shelton Engines Inc. for $1,000,000. Shelton Engines Inc. transfers title to the engine to
Lokin Inc. Lokin Inc. is now the owner of the equipment.
A) captures
B) leases
C) purchases
D) produces
54) ________ is a method of acquiring ownership, when a manufacturer purchases raw materials
and then manufactures a finished good.
A) Gifting
B) Producing
C) Capturing
D) Purchasing
55) The voluntary transfer of title to property without payment of consideration by the donee is
known as a(n) ________.
A) adverse possession
B) future interest
C) gift
D) purchase
56) Which of the following is considered a constructive delivery of a gift?
A) giving the key to a safe-deposit box where the gift is kept
B) paying for the total value of the good being gifted in cash
C) contracting a third-party to deliver goods to the donee
D) gifting someone in person to ensure acceptance of the gift
57) What is a gift inter vicos?
A) a gift that is made in contemplation of death
B) a gift made during a person’s lifetime that is an irrevocable present transfer of ownership
C) a gift that is to be shared by the donor and donee with the payment of consideration by the
donee
D) a gift that requires a monetary payment at a set date in the future
58) A gift that is made in contemplation of death is known as a(n) ________.
A) profit-à-prendre
B) estate pour autre vie
C) gift inter vicos
D) gift causa mortis
59) Which of the following is true of a gift causa mortis?
A) It cannot be revoked before the death of the donor.
B) It does not require the actual death of the donor.
C) It represents an irrevocable present transfer of ownership.
D) It takes precedence over a prior conflicting will.
60) What does the Uniform Transfers to Minors Act establish?
A) rights for what a minor is allowed in case of inheritances without involving custodians
B) rights for what a minor can accept from an adult
C) procedures for adults to make gifts of money and securities to minors
D) procedures for making gifts of money and securities between minors
61) A(n) ________ is an increase in the value of personal property because it is added to or
improved by natural or manufactured means.
A) arraignment
B) accession
C) lien
D) bailment
62) The value of John’s car is said to have undergone a(n) ________.
A) accession
B) arraignment
C) bailment
D) lien
63) Which of the following is true with regard to the new engine, upholstery, and stereo player
the thief installed in John’s car?
A) These improvements have to be returned to the thief.
B) These improvements now rightfully belong to John.
C) The improvements have to be paid for by John if he wants to retain them.
D) The improvements will be confiscated by the police.
64) ________ occurs if two or more persons commingle fungible goods.
A) Confusion
B) Accession
C) Bailment
D) Easement
65) Which of the following is true of ownership titles when confusion occurs?
A) Title to the goods can never be shared between the owners involved.
B) Title to goods commingled without permission goes to the innocent party.
C) Title to goods cannot be acquired by confusion.
D) Title to goods can only be acquired if goods were commingled by accident.
66) Property that an owner voluntarily places somewhere and then inadvertently forgets is
known as ________ property.
A) real
B) abandoned
C) mislaid
D) lost
67) Which of the following is true of mislaid property with regard to the person who finds it?
A) The finder becomes the owner of the property.
B) The finder has the right to share it with the original owner.
C) The finder is not entitled to possess the property.
D) The finder is absolved of any responsibility of the mislaid property.
68) Property that the owner leaves somewhere due to negligence, carelessness, or inadvertence is
referred to as ________ property.
A) abandoned
B) real
C) lost
D) mislaid
69) A(n) ________ statute permits a finder of mislaid or lost property to clear title to the
property if certain prescribed legal formalities are met.
A) estate
B) estray
C) lading
D) recording
70) Property that an owner has discarded with the intent to relinquish his or her rights in it is
known as ________.
A) real
B) lost
C) mislaid
D) abandoned
71) Which of the following is true of ownership rights of an abandoned property?
A) The finder and owner must share ownership of the property.
B) The finder acquires title to the property, even against its original owner.
C) The owner can reclaim his or her property completely from the finder.
D) The owner of the premises where property is mislaid is entitled to possession but does not
acquire title.
72) A transaction in which an owner transfers his or her personal property to another to be held,
stored, or delivered, or for some other purpose is known as a ________.
A) arraignment
B) easement
C) bailment
D) accession
73) In which of the following processes is the title of goods not transferred?
A) an adverse possession
B) a bailment
C) a sale
D) an acquisition
74) Which of the following is true of a bailment?
A) Only personal property can be used in a bailment.
B) Intangible property cannot be used in a bailment.
C) Only physical deliveries can become a bailment.
D) All bailments must be expressed in writing to be effective.
75) A ________ is a gratuitous bailment that arises when the bailee is requested to care for the
bailor’s property as a favor.
A) bailment at will
B) mutual benefit bailment
C) bailment for the sole benefit of the bailee
D) bailment for the sole benefit of the bailor
76) The Rosberg family had asked their neighbors, the Lowells, to feed their cat while they were
away on a vacation. The Lowells fed the cat as they had been asked to but eventually, the cat ran
away and never returned. What kind of bailment agreement existed between the Rosbergs and
the Lowells?
A) bailment for the sole benefit of the bailee
B) bailment for the sole benefit of the bailor
C) mutual benefit bailment
D) bailment at will
77) What kind of agreement existed between Randy and Carl over the car?
A) bailment for the sole benefit of the bailor
B) bailment for the sole benefit of the bailee
C) mutual benefit bailment
D) bailment at will
78) In such a bailment agreement, which of the following types of duties is Randy negligent of?
A) duty of great care
B) duty of slight care
C) duty of reasonable care
D) duty of ordinary care
79) Which of the following duty is owed by the parties in a mutual benefit bailment?
A) duty of great care
B) duty of slight care
C) duty of ordinary care
D) duty of utmost care
80) A bailment without a fixed term is called a ________.
A) bailment for the sole benefit of the bailee
B) bailment for the sole benefit of the bailor
C) bailment for a for mutual benefit
D) bailment at will
81) What is a warehouse receipt?
A) A receipt received by a warehouse after the bailor has retrieved the bailed goods and payment
has been made.
B) A document of title issued by a warehouse company stating that the bailor has title to the
bailed goods.
C) A certificate of authenticity issued by a warehouse stating that it is certified to hold bailed
goods.
D) An inventory list provided to the warehouse company by the bailor of the bailed goods.
82) A(n) ________ is a document of title issued by a common carrier stating that the bailor has
title to the bailed goods.
A) bill of lading
B) accession
C) freight forwarder
D) delivery order
83) Under the common law, innkeepers owe a ________ regarding loss caused to the personal
property of transient guests.
A) duty of negligible care
B) duty of slight care
C) duty of strict liability
D) duty of ordinary care
84) Give an account of the different types of properties that can be owned.
85) Explain the title to goods when fungible goods are commingled.
86) What are the elements necessary to create a bailment?
87) Give an account of the duration and termination of bailments.
88) What is a warehouse receipt?
89) What is the role of an innkeeper as a bailee? How does the innkeepers’ statute help an
innkeeper?