M 81478 | Course Paper

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When does title to property pass?

A. When the parties intend.

B. When a contract is made.

C. When physical possession is obtained.

D. Twenty-four hours after possession is obtained.

E. Three days after a contract is signed.

“Missed Payments.” Robin, who loved water sports and relaxing in hot tubs, purchased

a hot tub on an installment plan and was to pay the seller monthly. Her last payment

was made on January 2, 2008. After several attempts at collection, the seller brought a

lawsuit against her for sums remaining on the account on January 3, 2013. Robin

defended on the basis that the statute of limitations had run. The seller claimed,

however, that adequate time remained because the UCC applies a flexible statute of

limitations; and, at any rate, sellers have at least five years in which to sue. Robin also

arranged to purchase a personal watercraft. By contract with the seller, Robin was to

pay an initial deposit within 10 days of the sale at which point she could take

possession of the watercraft making monthly payments thereafter. Recognizing that a

personal watercraft would not allow her to invite all her friends on lake trips, a couple

of days after purchasing the personal watercraft, Robin purchased a pontoon boat.

Because the seller of the pontoon boat demanded cash, Robin paid the total sales price

prior to delivery. Unfortunately, when the pontoon boat was delivered, Robin found that

it had a less powerful motor than the seller represented. Robin notified the seller of the

problem, but the seller claimed to have no obligation to remedy the problem. Although

recognizing that she paid too much for it, Robin decided that since lake season was

underway, she would keep the pontoon boat. Because Robin paid full price for the

pontoon boat, she was unable to pay within 10 days the deposit on the personal

watercraft. The seller refused to deliver the watercraft, and sold it to another customer.

Robin informed the seller that the refusal to deliver the watercraft was wrongful and

that she was going to exercise her right to cover.

Which of the following is true regarding Robin’s options in regard to the pontoon boat?

A. She has no options in regard to recovery from the seller because she retained the

pontoon boat knowing that the seller refused to grant relief.

B. She has only 90 days in which to return the pontoon boat and seek either specific

performance or monetary damages to give her the benefit of the bargain.

C. She has only one year in which to return the pontoon boat and seek specific

performance, but she cannot sue for damages.

D. She has only one year in which to return the pontoon boat and seek monetary

damages to give her the benefit of the bargain, but she may not seek specific

performance.

E. She may keep the pontoon boat and seek monetary damages to give her the benefit of

the bargain.

“Wild Things.” Image Company, a company specializing in photography of exotic and

wild animals, took out a life insurance policy through ABC Insurance on its president

Bruno and also on a company-owned jeep that he drove. Bruno got a better offer from

Wild Things Company, another company specializing in the photography of exotic

animals, and went to work for them. He parted on good terms with Image Company and

taking the jeep with him under the mistaken idea that the jeep was part of his severance

benefits. Neither of the insurance policies was cancelled by Image. Unfortunately, while

photographing a lion for Wild Things Company, Bruno was attacked and eaten. His jeep

was then stolen by an unknown bystander who apparently saw the attack and took the

opportunity to take the jeep. Image Company had been in the process of contacting

Bruno in an attempt to obtain possession of the jeep but had not reacquired it at the time

of his death. Image Company had renewed the policy on the jeep reaffirming to the

insurer that its purpose was for use by Image employees because Image planned to have

possession of the vehicle shortly. Image Company filed a claim to collect on the life

insurance policy and also on the vehicle policy. ABC Insurance denied both claims.

Which of the following is true regarding whether ABC Insurance will be required to

provide coverage on the jeep?

A. ABC will likely not be required to provide coverage on the jeep because Image made

material misrepresentations in the renewal of the policy that would have prevented its

renewal.

B. ABC will likely be required to provide coverage on the jeep because any

misrepresentations made were innocently made in the belief that the jeep would be

returned soon.

C. ABC will not have to provide coverage because Image did not have an insurable

interest in the jeep.

D. ABC will have to provide coverage unless Bruno had already obtained his own

insurance on the vehicle because one vehicle may only be insured under one policy.

E. ABC will not likely be required to provide coverage because Bruno’s new employer

was liable under workers’ compensation.

Which of the following refers to the right of a principal to sue an agent to recover any

amount assessed against the principal for a breach of contract caused by the agent’s

negligence?

A. Reformation

B. Indemnification

C. Reimbursement

D. Contribution

E. Recoupment

“Hair Stylist Woes.” Maryann, a college student, went to see her hair stylist, Candy.

Maryann who had black, curly hair, requested straight, blond hair. Candy told her that

she could make that change, but that there would be significant upkeep involved. Candy

made the change, but Maryann did not do the upkeep required. She also falsely claimed

that Candy did not do what Maryann asked her to do, that Candy lied to her, and that

Candy was professionally incompetent. Maryann made the statements to friends of hers.

She also wrote an editorial in her college newspaper to the effect that Candy’s shop

should be avoided at all costs because Candy was incompetent. In fact, Candy was a

good hair stylist and enjoyed a good reputation up until the time that Maryann started

her criticism. Candy threatened to sue Maryann for defamation, but Maryann told

Candy that Candy could not prevail because Candy could not prove loss of income.

Candy had to admit that while her reputation had been damaged somewhat and she felt

embarrassed and humiliated, the damage was primarily among the college population.

Her income kept increasing from other segments of the community, and she had

suffered no net loss. All her appointment times were booked and she could do no more

business.

As far as the editorial is concerned, which of the following is true in regards to

Maryann’s statement that Candy cannot recover because she cannot show loss of

income?

A. Maryann is correct.

B. Maryann is correct only if she can establish that she did not intend to cause

economic loss to Candy.

C. Maryann is incorrect because her actions would be considered liable per se.

D. Maryann is incorrect because general damages would be presumed.

E. Maryann is incorrect because Candy has proven special damages.

“Disappointing Boat Purchase.” Sally went to purchase a new boat. She wanted a boat

that she could use in both a nearby lake and also a boat that she could take to the coast

for use in ocean waters. Sally saw a boat that she liked and told the sales representative

at the dealership that she wanted a boat for both lake usage and ocean usage. She told

the sales representative that she particularly liked a boat that they were looking at in the

showroom. The representative told her that the dealership had the best boats in the state,

that the engine was great in the boat she liked, and that she would have no problem with

steering or with the carburetor. He said nothing at all regarding whether or not the boat

was appropriate for ocean waters. Sally purchased the boat. She immediately began to

have significant problems with it. The engine did not perform adequately, and there

were problems with the steering and carburetor among other things. Additionally, after

Sally attempted to take the boat out into ocean waters and had significant difficulty, she

discovered that it was not an ocean-going vessel. It was only appropriate for lake usage.

Without considering any statements made by either the salesperson or Sally regarding

uses for the boat, what type of warranty did the seller make by merely selling the boat?

A. The sale itself constituted an implied warranty of merchantability but not an express

warranty or a warranty of fitness for a particular purpose.

B. The sale itself constituted a warranty of fitness for a particular purpose but not an

express warranty or an implied warranty of merchantability.

C. The sale itself constituted an express warranty but not an implied warranty of

merchantability or a warranty of fitness for a particular purpose.

D. The sale itself constituted both an express warranty and a warranty of fitness for a

particular purpose but not an implied warranty of merchantability.

E. The sale itself constituted both an express warranty and an implied warranty of

merchantability but not an express warranty.

Chicago School theorists argue that the central, and perhaps only, purpose of antitrust

law is to encourage economic ____.

A. Control

B. Regulation

C. Efficiency

D. Competition

E. Success

In order to be upheld in court, an agency’s fact finding must be supported by which of

the following?

A. Substantial evidence

B. A rational basis

C. Any evidence

D. Material evidence

E. Non-hearsay evidence

Compliance with federal laws may lead to the defense that use of state tort law is

______________ by a federal statute designed to ensure the safety of a particular class

of products.

A. Preempted

B. Complimented

C. Refuted

D. Extinguished

E. Upheld

Which of the following is a mark used in conjunction with a service?

A. Product trademark

B. Collective mark

C. Certification mark

D. Service mark

E. Physical activity mark

Which of the following is needed for diversity-of-citizenship?

A. Only that the plaintiff not reside in the same state as the defendant.

B. Only that the plaintiff reside in the same state as the defendant.

C. Only that the controversy concern an amount in excess of $75,000.

D. Only that the controversy concern an amount in excess of $100,000.

E. That the plaintiff and the defendant reside in different states and that the controversy

concerns an amount in excess of $75,000.

“Convertibles.” Barry, a new car dealer, advertised that a new brand of convertible

called Wind would be available at his dealership for the price of $10,000 each. He had

only three Wind vehicles, however; and when those were sold, he tried to convince

shoppers to purchase a much more expensive new convertible at a price of $25,000.

Kathy, a customer who decided to purchase one of the more expensive vehicles needed

financing in order to do so. She had $10,000 to pay on the car and sought a loan from

ABC Bank for the remainder. She wanted the loan for a specific amount of time. ABC

Bank offered her the loan and she agreed. The only information she received from ABC

Bank was confirmation that she borrowed $15,000 at an 8% interest rate. After

receiving several complaints, the Federal Trade Commission disapproved of Barry’s

action in regard to the Wind vehicles. After appropriate proceedings, the Commission

proceeded to issue a cease-and-desist order involving Barry’s misleading advertisement

in regard to Wind vehicles and also in regard to any other vehicles he offered for sale.

Which of the following terms references the cease-and-desist order entered by the

Federal Trade Commission involving not only Barry’s sales of Wind, but also his sales

of all other vehicles?

A. A multiple cease-and-desist order

B. A multiple-product order

C. A combined order

D. A superlative order

E. An exceptional order

“Overextended Debtor.” For his home, Dennis purchased a big screen television from

ABC Electronics and financed the purchase through ABC Electronics. Later, because

Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend,

and some other items, he was unable to continue making payments on the television.

The manager from ABC Electronics called 60 days after the sale and asked Dennis to

return the television. Dennis refused on the basis that ABC Electronics never perfected

its interest in the television. He also explained that he had later granted a secured

interest in the television along with his other goods to XYZ Credit in return for a loan.

No financing statement was filed on behalf of ABC Electronics although XYZ Credit,

with no knowledge of any interest of ABC Electronics, did file a financing statement.

Which of the following is true regarding priority in rights to the computer?

A. The bank had priority because the computer was considered after-acquired property

properly covered by the initial security interest.

B. XYZ Electronics had priority because XYZ Electronics had a purchase-money

security interest in the computer.

C. XYZ Electronics had priority only if XYZ Electronics perfected its security interest

within 10 days of the purchase.

D. XYZ Electronics had priority only if XYZ Electronics perfected its security interest

within 20 days of the purchase.

E. The bank had a security interest in the computer because it perfected its security

interest before XYZ Electronics did so.

Which of the following are damages identified before the breach occurs?

A. Nominal damages

B. Compensatory damages

C. Reliance damages

D. Liquidated damages

E. Consequential damages

A[n] ______ allows a person to transfer property to another person with the property to

be used for the benefit of a third person.

A. Probate

B. Trust

C. Command

D. Executor

E. Allocation

“Fighter.” Willy, a ninety-year-old wild bronco rider in the rodeo, had a will leaving all

his possessions to a girlfriend, Linda, age twenty-two. During a rodeo, Willy was placed

on a particularly wild bronco named “Fighter.” During the ride, Grumpy the clown

yelled out to Willy that Linda had suggested that particular horse. Willy was very

grumpy about that because he was having trouble controlling Fighter. Nevertheless,

Willy prevailed and collected the prize. Willy was so excited that he felt himself having

a heart attack. Just before he died, he yelled out, “Linda, you had me put on that crazy

horse, and I’m revoking my will. I’m dying, and I’m leaving everything to my other

girlfriend, Candy.” A number of witnesses heard his statement; and Grumpy, who had

always liked Candy more than Linda, promptly wrote down Willy’s statement. Linda

knew nothing about Candy and was very upset. She told Candy that Candy could have

nothing because Willy’s written will was still in effect. She also told Candy that Willy

was suffering from a mental illness and did not know what he was doing when he stated

that Candy should take everything. Willy’s daughter, Monique, age 65, also entered the

discussion stating that Linda had unfairly coerced Willy into writing a will leaving her

everything.

Assuming he was of sound mind, which of the following is true regarding the effect of

Willy’s statement that Candy should take everything?

A. Because a will must be in writing, his statement has no effect.

B. Because a will is not usually required to be in writing, his statement was effective to

revoke any prior will.

C. His statement was ineffective to revoke his prior will only because he was angry

when he made it.

D. His statement was ineffective to revoke his prior will only because he believed he

was dying at the time he made it.

E. His statement would likely be upheld as an oral will because he made the statement

during his last illness in front of witnesses who later wrote down his wishes.

Paul and Mary have an agreement that Mary will buy Paul’s house. Later Mary orally

assigns the right to buy the house to Ally, one of Paul’s former girlfriends. When Ally

shows up with the money, Paul says “No way! You ditched me to date Rick. I’m not

ever letting you get anything from me!” Which of the following is true in regard to the

dispute between Paul and Ally?

A. Ally can enforce the assignment only if the agreement that Paul and Mary had was in

writing.

B. Ally can enforce the assignment.

C. Ally cannot enforce the assignment because it was not in writing.

D. Ally cannot enforce the assignment because Paul did not specifically grant Mary the

power to assign the contract.

E. Ally cannot enforce the assignment because assignments to purchase property cannot

ever be assigned for public policy reasons.

Which of the following is true regarding a secured party’s interest in proceeds?

A. A secured party automatically has an interest in proceeds.

B. A secured party has an interest in proceeds only if the proceeds are taken into the

possession of the secured party.

C. A secured party has an interest in proceeds only if a financing statement is filed on

the proceeds.

D. A secured party has an interest in proceeds only if the secured party has a signed

statement from the debtor granting an interest in proceeds.

E. The secured party may not acquire a security interest in proceeds.

Which of the following is considered a debtor eligible for Chapter 7 relief in

bankruptcy?

A. Banks

B. Railroads

C. Health maintenance organizations

D. Partnerships

E. Insurance companies

“Miracle Face.” Tara developed a great new type of face cream guaranteed to provide

total sun protection, remove wrinkles, and result in anyone looking at least ten years

younger. Her product, Miracle Face, became extremely popular in the U.S., where she

has several shops, and also in other countries to which it was shipped. Tara has a

number of individuals in other countries seeking to team with her in selling Miracle

Face. Sam, a citizen of Mexico, asks that she grant him permission to use her name and

any associated trademarks, and allow him to sell Miracle Face in Mexico. Tara has an

offer, however, from another Mexican citizen, Maria. Maria proposes that she and Tara

associate together, open a business to sell Miracle Face, and share profits and

management responsibilities. Tara has also thought about opening her own business in

Mexico in conformity with Mexican laws. She would then, hire employees in Mexico to

sell the product. Another matter Tara has considered is simply arranging for her

products to be shipped to Mexico for sale, and she is interested in the effect of any trade

agreements in effect between the U.S. and Mexico.

If Tara simply opens her own business in Mexico in conformity with Mexican laws and

hires employees in Mexico to sell the product, she would have opened a[n] ______.

A. Franchise

B. Distributorship

C. Joint venture

D. Licensing subsidiary

E. Affiliate

Which of the following occurs when parties agree that they simply wish to discharge

each other from their mutual obligations and therefore rescind or cancel the contract?

A. Accord and satisfaction

B. Novation

C. Substituted contract

D. Mutual rescission

E. Alteration

Under the Sarbanes-Oxley Act, which of the following is true regarding the destruction

of documents in a federal bankruptcy investigation?

A. The destruction of documents in a federal bankruptcy investigation is a misdemeanor

with possible sentences of up to 364 days in jail.

B. The destruction of documents in a federal bankruptcy investigation is a felony with

possible sentences of up to 364 days in jail.

C. The destruction of documents in a federal bankruptcy investigation is a felony with

possible sentences of up to 5 years in jail.

D. The destruction of documents in a federal bankruptcy investigation is a felony with

possible sentences of up to 20 years in jail.

E. The destruction of documents in a federal bankruptcy investigation is a felony with

possible sentences of life imprisonment.