ANSWERS
Lessonȱ33—1ȱ
Quiz
3.ȱEȱ
6.ȱDȱ
9.ȱKȱ
12.ȱTheȱpawnbrokerȱmayȱonlyȱsellȱorȱkeepȱtheȱpawnedȱitemsȱafterȱaȱspecificȱtime.ȱ
Practice Activity
1.ȱTheȱcourtȱlookedȱatȱtheȱlawȱinȱOregonȱandȱdeterminedȱthatȱthereȱwasȱnoȱdefiniȬ
tionȱofȱeitherȱwagesȱorȱearnings.ȱInȱreachingȱtheȱconclusionȱthatȱgarnishmentȱ
2.ȱUnderȱgeneralȱcontractȱlawȱgoverningȱanȱ“accommodation,”ȱanȱobligationȱcanȬ
notȱbeȱalteredȱwithoutȱtheȱconsentȱofȱtheȱpartyȱwhoȱassumedȱtheȱobligation.ȱIfȱ
theȱobligationȱisȱaltered,ȱitȱdischargesȱtheȱdebt.ȱTheȱlawȱinȱNewȱYork,ȱhowever,ȱ
Chapter 33 Creditors, Debtors, and Bankruptcy 7-77
Reteach
ASMUP L E D G O R CHAS T
C H A N I C S SWA S U R E T Y
S H I P GESCP L E D G E E A
AsȱmuchȱasȱtwentyȬfiveȱpercentȱofȱdebtors’ȱwagesȱcanȱbeȱgarnished.ȱ
Enrichment Activity
Lessonȱ33—2ȱ
Quiz
ȱ
11.ȱAmy’sȱDressȱShopȱcannotȱholdȱChrystelleȱliableȱforȱanyȱamountȱsinceȱsheȱwasȱ
Practice Activity
1.ȱYes,ȱMrs.ȱAndersonȱwillȱwinȱherȱdiscriminationȱsuit.ȱTheȱcourtȱfoundȱthatȱunderȱ
theȱactȱthereȱwasȱaȱclearȱviolation.ȱTheȱloanȱwasȱgrantedȱsolelyȱuponȱMrs.ȱȱ
7-78 Chapter 33 Creditors, Debtors, and Bankruptcy
Anderson’sȱabilityȱtoȱrepayȱtheȱloan,ȱbutȱinȱspiteȱofȱthat,ȱUnitedȱrequiredȱtheȱ
signatureȱofȱMr.ȱAnderson.ȱTheȱcourtȱnotedȱthatȱthisȱwasȱjustȱtheȱtypeȱofȱdisȬ
appropriateȱforȱaȱlitigantȱwhoȱcausesȱaȱcreditorȱtoȱstopȱunlawfulȱpractices.ȱ
2.ȱYes,ȱtheȱcontractȱofȱadhesionȱtheoryȱwillȱbeȱsuccessfulȱinȱchallengingȱtheȱinsurȬ
anceȱcompany’sȱrefusalȱtoȱpayȱtheȱlifeȱinsuranceȱbenefit.ȱTheȱcourtȱfoundȱthatȱ
Reteach
Theȱteacherȱwillȱhaveȱtoȱdetermineȱifȱtheȱstudentsȱareȱansweringȱcorrectlyȱinȱtheȱ
game.ȱ
Enrichment Activity
Lessonȱ33—3ȱ
Quiz
9.ȱFȱ
11.ȱBobby’sȱcreditorsȱcouldȱnotȱtakeȱmoreȱthanȱ$6,500ȱworthȱofȱtoolsȱsinceȱupȱtoȱ
12.ȱTheȱ$1,200ȱinȱtaxesȱandȱtheȱ$25,000ȱinȱstudentȱloansȱwillȱnotȱbeȱdischargedȱinȱ
Chapter 33 Creditors, Debtors, and Bankruptcy 7-79
Practice Activity
1.ȱYes,ȱBrittanyȱcanȱfileȱbankruptcy.ȱȱAfterȱreview,ȱtheȱcourtȱfoundȱthatȱnoȱproviȬ
2.ȱNo,ȱtheȱSocialȱSecurityȱbenefitsȱcannotȱbeȱassigned.ȱTheȱcourtȱcitedȱtheȱlengthyȱ
ȱ
Reteach
Enrichment Activity
7-80 Unit 7 Tests Chapters 29–33
ANSWERS TO TEST QUESTIONS
ȱ
SECTIONȱIȱ
ȱȱ6.ȱTȱ
ȱ
SECTIONȱIIȱ
11.ȱaȱ
ȱ
SECTIONȱIIIȱ
STUDENT ______________________________________ CLASS _______________________ DATE _________
ȱ
ȱ
TESTȱAȱ
UNITȱ7ȱ
CHAPTERSȱ
29–33ȱ
SECTION I—IDENTIFY LEGAL TERMS
Directions:ȱInȱtheȱAnswersȱcolumn,ȱwriteȱtheȱletterȱfromȱColumnȱ1ȱthatȱrepresentsȱ
heȱwordȱorȱphraseȱthatȱmatchesȱtheȱstatementȱinȱColumnȱ2.ȱt
ȱ
Columnȱ1ȱ
A
.ȱbankruptcyȱlawȱ
B.ȱblankȱindorseȬ
mentȱ
C
.ȱcashier’sȱcheckȱ
D.ȱcertificateȱofȱdeȬ
positȱ
E
.ȱattachmentȱ
F
.ȱcommercialȱpaperȱ
G.ȱconstructiveȱnoȬ
ticeȱ
H.ȱelectronicȱfundȱ
transferȱ(EFT)ȱ
I
.ȱlienȱ
J
.ȱlimitedȱdefensesȱ
K
.ȱpromissoryȱnoteȱ
L.ȱspecialȱindorseȬ
mentȱ
M
.ȱteller’sȱcheckȱ
N.ȱterminationȱ
statementȱ
O.ȱmortgagorȱ
ȱ
Columnȱ2ȱ
1.ȱUnconditionalȱwrittenȱordersȱorȱpromisesȱ
toȱpayȱmoneyȱ
2.ȱAnȱinstrumentȱbearingȱaȱbank’sȱwrittenȱ
acknowledgmentȱofȱtheȱreceiptȱofȱmoney,ȱ
togetherȱwithȱanȱunconditionalȱpromiseȱtoȱ
repayȱitȱatȱaȱdefiniteȱfutureȱtimeȱ
3
.ȱAȱcheckȱthatȱaȱbankȱdrawsȱonȱitselfȱ
4.ȱAȱdraftȱdrawnȱbyȱoneȱbankȱonȱaȱsecondȱ
bankȱ
5
.ȱTransfersȱorderȱpaperȱintoȱbearerȱpaperȱ
6.ȱDefensesȱgoodȱagainstȱeveryoneȱexceptȱanȱ
HDCȱorȱanȱHHDCȱ
7.ȱTransferȱofȱfundsȱthatȱrequiresȱaȱfinancialȱ
institutionȱtoȱdebitȱorȱcreditȱanȱaccountȱ
withoutȱsuchȱpaperȱinstrumentsȱasȱchecksȱ
orȱdraftsȱ
8.ȱInformsȱpotentialȱbuyersȱandȱcreditorsȱthatȱ
theȱpropertyȱisȱnoȱlongerȱcollateralȱ
9.ȱGivesȱtheȱcreditorȱtheȱrightȱtoȱsellȱtheȱpropȬ
ertyȱandȱtoȱuseȱtheȱproceedsȱfromȱtheȱsaleȱ
toȱpayȱtheȱdebtȱinȱcaseȱofȱdefaultȱ
10.ȱProtectsȱdebtorsȱbyȱgivingȱthemȱaȱnewȱecoȬ
nomicȱstartȱandȱalsoȱprotectsȱcreditorsȱbyȱ
settingȱupȱaȱframeworkȱtoȱgiveȱthemȱaȱfairȱ
treatmentȱinȱtheirȱcompetitionȱforȱtheȱ
debtor’sȱassetsȱ
Answers
ȱ1.ȱȱ ȱ
ȱ
ȱ2.ȱȱ ȱ
ȱ
ȱ
ȱ
ȱ3.ȱȱ ȱ
ȱ4.ȱȱ ȱ
ȱ
ȱ5.ȱȱ ȱ
ȱ6.ȱȱ ȱ
ȱ
ȱ7.ȱȱȱ
ȱ
ȱ
ȱ
ȱ8.ȱȱ ȱ
ȱ
ȱ9.ȱȱ ȱ
ȱ
ȱ
10.ȱȱ ȱ
7-82 Unit 7 Tests Chapters 29–33
SECTION II—THINK CRITICALLY ABOUT LEGAL CONCEPTS
Directions:ȱPlaceȱaȱTȱforȱTrueȱorȱanȱFȱforȱFalseȱinȱtheȱAnswersȱcolumnȱtoȱshowȱ
hetherȱeachȱofȱtheȱfollowingȱstatementsȱisȱtrueȱorȱfalse.ȱw
Answers
11.ȱCommercialȱpaperȱwasȱdevelopedȱcenturiesȱagoȱforȱpeopleȱwhoȱ
didn’tȱhaveȱmoney.ȱ
12.ȱChecksȱareȱusuallyȱwrittenȱonȱspecialȱformsȱthatȱareȱmagneticallyȱ
encodedȱtoȱsimplifyȱcheckȱprocessingȱforȱtheȱbankingȱsystem.ȱ
13.ȱLettersȱofȱcreditȱwereȱdevisedȱtoȱovercomeȱtheȱproblemsȱofȱtravelȬ
ersȱfromȱotherȱregionsȱorȱevenȱdifferentȱcountries.ȱ
14.ȱIfȱanȱinstrumentȱisȱnotȱnegotiable,ȱitȱisȱconsideredȱtoȱhaveȱbeenȱ
onlyȱassignedȱandȱthereforeȱgovernedȱbyȱcontractȱlaw.ȱ
15.ȱAnȱindorsementȱisȱaȱsignatureȱonȱtheȱfaceȱofȱanȱinstrumentȱtoȱ
transferȱtheȱpaper.ȱ
16.ȱAnȱHHDCȱisȱaȱholderȱwhoȱtakesȱcommercialȱpaperȱanytimeȱafterȱaȱ
holder.ȱ
17.ȱUnderȱtheȱgoodȱneighborȱrule,ȱaȱbuyerȱofȱconsumerȱgoods,ȱwhoȱ
givesȱvalueȱandȱdoesȱnotȱhaveȱactualȱorȱconstructiveȱknowledgeȱofȱ
theȱsecurityȱinterest,ȱacquiresȱclearȱtitleȱifȱthereȱhasȱbeenȱnoȱfiling.ȱȱȱ
18.ȱAȱsecurityȱinterestȱunderȱtheȱUCCȱcanȱbeȱcreatedȱonlyȱwithȱtheȱ
consentȱofȱtheȱdebtor.ȱ
19.ȱWhenȱtheȱdebtorȱhasȱtheȱgoods,ȱitȱmayȱbeȱnecessaryȱforȱtheȱcrediȬ
torȱtoȱfileȱaȱfinancingȱstatementȱtoȱperfectȱtheȱcreditor’sȱinterest.ȱ
20.ȱCreditorsȱhaveȱnoȱlegalȱprotectionȱagainstȱunsecuredȱdebtsȱandȱ
debtsȱinvolvingȱthirdȱparties.ȱ
11.ȱȱ ȱ
ȱ
12.ȱȱ ȱ
ȱ
13.ȱȱ ȱ
ȱ
14.ȱȱ ȱ
ȱ
15.ȱȱ ȱ
ȱ
16.ȱȱ ȱ
ȱ
17.ȱȱ ȱ
ȱ
ȱȱ
18.ȱȱ ȱ
ȱ
19.ȱȱ ȱ
ȱ
20.ȱȱ ȱ
SECTION III—APPLY LEGAL PRACTICES
Directions:ȱInȱtheȱAnswersȱcolumnȱatȱtheȱrightȱofȱeachȱstatement,ȱwriteȱtheȱletterȱthatȱ
epresentsȱtheȱword,ȱorȱgroupȱofȱwords,ȱthatȱcorrectlyȱcompletesȱtheȱstatement.ȱr
Answers
21.ȱUnconditionalȱordersȱtoȱpayȱmoneyȱareȱ(a)ȱcertificatesȱofȱdeposit,ȱ
(b)ȱchecks,ȱ(c)ȱIOUs,ȱ(d)ȱpromissoryȱnotes.ȱ
22.ȱAȱdraftȱpayableȱonȱaȱsetȱdateȱisȱcalledȱ(a)ȱaȱcheck,ȱ(b)ȱanȱIOU,ȱ(c)ȱaȱ
timeȱdraft,ȱ(d)ȱaȱsightȱdraft.ȱ
23.ȱPersonsȱwhoȱdoȱnotȱhaveȱaȱcheckingȱaccountȱoftenȱuseȱ(a)ȱlettersȱofȱ
credit,ȱ(b)ȱmoneyȱorders,ȱ(c)ȱteller’sȱchecks,ȱ(d)ȱtraveler’sȱchecks.ȱ
21.ȱȱ ȱ
ȱ
22.ȱȱ ȱ
ȱ
23.ȱȱ ȱ
SECTION III (Concluded)
Answers
24.ȱWhichȱtypeȱofȱindorsementȱeliminatesȱtheȱindorser’sȱsecondaryȱ
liabilityȱbecauseȱofȱhisȱorȱherȱsignature’sȱappearingȱonȱtheȱinstruȬ
ment?ȱ(a)ȱblankȱindorsement,ȱ(b)ȱqualifiedȱindorsement,ȱ(c)ȱrestricȬ
25.ȱCommercialȱpaperȱcanȱbeȱdischargedȱbyȱ(a)ȱcancellationȱresultingȱ
fromȱfraud,ȱ(b)ȱfraudulentȱalterations,ȱ(c)ȱmistakenlyȱmarkingȱaȱ
noteȱpaidȱandȱreturningȱitȱtoȱtheȱmaker,ȱ(d)ȱallȱofȱthese.ȱ
26.ȱWhichȱofȱtheȱfollowingȱisȱnotȱaȱlimitedȱdefense?ȱ(a)ȱalteration,ȱȱ
(b)ȱbreachȱofȱcontract,ȱ(c)ȱfailureȱofȱconsideration,ȱ(d)ȱunauthorizedȱ
completionȱ
27.ȱWhenȱunauthorizedȱelectronicȱfundȱtransfersȱoccur,ȱ(a)ȱtheȱconȬ
sumerȱrisksȱfullȱliability,ȱ(b)ȱtheȱfinancialȱinstitutionȱrisksȱfullȱliabilȬ
ity,ȱ(c)ȱtheȱriskȱisȱdividedȱbetweenȱtheȱconsumerȱandȱtheȱfinancialȱ
institution,ȱ(d)ȱtheȱnegligentȱpartyȱbearsȱtheȱfullȱliabilityȱ
28.ȱSinceȱtheȱdebtorȬcreditorȱrelationshipȱisȱprotectedȱbyȱlaw,ȱcreditorsȱ
(a)ȱareȱforbiddenȱtoȱuseȱunfairȱcollectionȱpractices,ȱ(b)ȱareȱmoreȱseȬ
cureȱaboutȱlendingȱmoney,ȱ(c)ȱareȱmoreȱsecureȱaboutȱsellingȱonȱ
credit,ȱ(d)ȱallȱofȱtheseȱ
29.ȱAȱtelevisionȱusedȱasȱpartȱofȱaȱclosedȬcircuitȱsecurityȱsystemȱinȱaȱ
storeȱwouldȱcomeȱunderȱwhichȱclassificationȱifȱusedȱasȱcollateralȱ
forȱaȱsecurityȱinterest?ȱ(a)ȱconsumerȱgoods,ȱ(b)ȱequipment,ȱ(c)ȱfarmȱ
30.ȱUnderȱtheȱtermsȱofȱaȱtypicalȱdeedȱofȱtrust,ȱtheȱtitleȱtoȱaȱsubjectȱ
propertyȱisȱtransferredȱbyȱtheȱdebtor/ownerȱintoȱtheȱhandsȱofȱa(n)ȱ
(a)ȱbank,ȱ(b)ȱattorney,ȱ(c)ȱtrustee,ȱ(d)ȱcreditȱcompanyȱ
24.ȱȱ ȱ
ȱ
ȱ
ȱ
25.ȱȱ ȱ
ȱ
ȱ
26.ȱȱ ȱ
ȱ
ȱ
27.ȱȱ ȱ
ȱ
ȱ
ȱ
28.ȱȱ ȱ
ȱ
ȱ
ȱ
29.ȱȱ ȱ
ȱ
ȱ
ȱ
30.ȱȱ ȱ
SECTION IV—DEMONSTRATE LEGAL IDEAS
ȱ
7-84 Unit 7 Tests Chapters 29–33
32.ȱListȱtheȱsixȱimportantȱtypesȱofȱlawsȱdesignedȱtoȱprotectȱdebtors.ȱ
Unit 7 Tests Chapters 29–33 7-85
STUDENT _______________________________________ CLASS _______________________ DATE _________
ȱ
ȱ
TESTȱBȱ
UNITȱ7ȱ
CHAPTERSȱ
29–33ȱ
SECTION I—IDENTIFY LEGAL TERMS
Directions:ȱPlaceȱaȱTȱforȱTrueȱorȱanȱFȱforȱFalseȱinȱtheȱAnswersȱcolumnȱtoȱshowȱ
hetherȱeachȱofȱtheȱfollowingȱstatementsȱisȱtrueȱorȱfalse.ȱw
Answers
2.ȱBanksȱareȱnotȱtheȱdebtorsȱofȱtheȱdepositorsȱevenȱthoughȱtheyȱcomȬ
3.ȱPersonsȱwhoȱwishȱtoȱpayȱothersȱbyȱcheckȱbutȱdoȱnotȱhaveȱaȱcheckȬ
ingȱaccountȱofȱtheirȱownȱmayȱpurchaseȱaȱcashier’sȱcheckȱfromȱtheȱ
bank.ȱ
4.ȱToȱbeȱnegotiable,ȱcommercialȱpaperȱintendingȱtoȱcreateȱaȱlegalȱobȬ
ligationȱmayȱbeȱeitherȱoralȱorȱwritten.ȱ
5.ȱWhenȱtryingȱtoȱcollectȱonȱanȱinstrument,ȱanȱHDCȱorȱanȱHHDCȱisȱ
legallyȱplacedȱinȱaȱmuchȱbetterȱpositionȱthanȱaȱmereȱholderȱorȱanȱ
assignee.ȱ
6.ȱCommercialȱpaperȱisȱnotȱdischargedȱatȱmaturityȱorȱonȱdemandȱunȬ
lessȱmoneyȱisȱpaidȱevenȱifȱtheȱholderȱagreesȱtoȱsomeȱformȱofȱsubstiȬ
tution.ȱ
7.ȱElectronicȱfundȱtransfersȱbyȱbusinessesȱareȱgovernedȱbyȱtheȱEFTA,ȱ
whileȱelectronicȱfundȱtransfersȱbyȱconsumersȱareȱgovernedȱbyȱArȬ
ticleȱ4AȱofȱtheȱUCC.ȱ
8.ȱAȱperfectedȱsecurityȱinterestȱexistsȱwhenȱtheȱsecurityȱinterestȱisȱsuȬ
periorȱtoȱallȱotherȱclaimsȱinȱtheȱcollateral.ȱ
9.ȱAȱpledgeȱisȱtheȱtransferȱofȱtheȱpossessionȱofȱpersonalȱpropertyȱtoȱaȱ
creditorȱasȱsecurityȱforȱtheȱpaymentȱofȱaȱdebtȱorȱtheȱperformanceȱofȱ
anȱobligation.ȱ
10.ȱCreditȱcardsȱofferȱconvenienceȱandȱprotectionȱfromȱlossȱforȱtheȱ
consumerȱasȱwellȱasȱaȱsignificantȱdecreaseȱinȱtheȱcostȱofȱgoodsȱandȱ
servicesȱpurchased.ȱ
ȱ
ȱ2.ȱȱ ȱ
ȱ
ȱ3.ȱȱ ȱ
ȱ
ȱ
ȱ4.ȱȱ ȱ
ȱ
ȱ5.ȱȱ ȱ
ȱ
ȱ
ȱ6.ȱȱ ȱ
ȱ
ȱ
ȱ7.ȱȱ ȱ
ȱ
ȱ
ȱ8.ȱȱ ȱ
ȱ
ȱ9.ȱȱ ȱ
ȱ
10.ȱȱ ȱ
7-86 Unit 7 Tests Chapters 29–33
SECTION II—THINK CRITICALLY ABOUT LEGAL CONCEPTS
Directions:ȱInȱtheȱAnswersȱcolumnȱatȱtheȱrightȱofȱeachȱstatement,ȱwriteȱtheȱletterȱthatȱ
epresentsȱtheȱword,ȱorȱgroupȱofȱwords,ȱthatȱcorrectlyȱcompletesȱtheȱstatement.ȱr
Answers
11.ȱCertificatesȱofȱdepositȱandȱpromissoryȱnotesȱareȱ(a)ȱbillsȱofȱexȬ
12.ȱWhenȱpersonalȱpropertyȱisȱofferedȱasȱsecurityȱandȱsoȱindicatedȱonȱ
theȱfaceȱofȱtheȱnote,ȱtheȱpaperȱisȱ(a)ȱaȱcollateralȱnote,ȱ(b)ȱaȱmortgageȱ
note,ȱ(c)ȱaȱpersonalȱnote,ȱ(d)ȱaȱpromissoryȱnoteȱ
13.ȱTheȱtypeȱofȱcommercialȱpaperȱusedȱinȱinternationalȱtransactionsȱisȱ
(a)ȱaȱcertifiedȱcheck,ȱ(b)ȱaȱletterȱofȱcredit,ȱ(c)ȱaȱmoneyȱorder,ȱ(d)ȱaȱ
traveler’sȱcheckȱ
14.ȱAnȱinstrumentȱisȱstillȱnegotiableȱifȱitȱrequiresȱthatȱtheȱamountȱbeȱ
paidȱ(a)ȱbyȱinstallment,ȱ(b)ȱwithȱcostsȱofȱcollection,ȱ(c)ȱwithȱinterest,ȱ
(d)ȱallȱofȱtheseȱ
15.ȱWhichȱtypeȱofȱindorsementȱimposesȱaȱconditionȱuponȱpaymentȱofȱ
theȱinstrumentȱbyȱtheȱindorser?ȱ(a)ȱblankȱindorsement,ȱ(b)ȱqualiȬ
fiedȱindorsement,ȱ(c)ȱrestrictiveȱindorsement,ȱ(d)ȱspecialȱindorseȬ
mentȱ
16.ȱTheȱobligationȱtoȱpayȱonȱcommercialȱpaperȱmayȱbeȱdischargedȱȱ
(a)ȱasȱaȱcontract,ȱ(b)ȱbyȱimpairmentȱofȱcollateral,ȱ(c)ȱbyȱpayment,ȱȱ
(d)ȱallȱofȱtheseȱ
17.ȱWhichȱofȱtheȱfollowingȱisȱnotȱaȱuniversalȱdefense?ȱ(a)ȱduressȱdeȬ
18.ȱAȱsecuredȱtransactionȱinvolvesȱ(a)ȱcollateral,ȱ(b)ȱrightȱofȱrepossesȬ
sion,ȱ(c)ȱsecurityȱinterest,ȱ(d)ȱallȱofȱtheseȱ
19.ȱTheȱfederalȱTruthȱinȱLendingȱActȱwasȱdesignedȱtoȱ(a)ȱprotectȱconȬ
sumersȱwhenȱtheyȱbecomeȱdebtors,ȱ(c)ȱgiveȱequalȱrightsȱtoȱallȱborȬ
rowers,ȱ(c)ȱgiveȱbanksȱtheȱabilityȱtoȱinvestigateȱborrowers,ȱȱȱȱȱȱȱȱȱȱȱȱ
(d)ȱmandateȱcreditȱlimitsȱ
20.ȱWhichȱofȱtheȱfollowingȱisȱaȱprotectionȱforȱtheȱcreditor?ȱ(a)ȱdiscloȬ
sureȱlaws,ȱ(b)ȱlawsȱrequiringȱtheȱrecordedȱnoticeȱofȱdebtȱpayment,ȱ
(c)ȱlawsȱallowingȱsecuredȱdebts,ȱ(d)ȱlawsȱsettingȱmaximumȱinterestȱ
ratesȱ
11.ȱȱ ȱ
ȱ
12.ȱȱ ȱ
ȱ
ȱ
13.ȱȱ ȱ
ȱ
ȱ
14.ȱȱ ȱ
ȱ
ȱ
15.ȱȱ ȱ
ȱ
ȱ
ȱ
16.ȱȱ ȱ
ȱ
ȱ
17.ȱȱ ȱ
ȱ
ȱȱ
18.ȱȱ ȱ
ȱ
19.ȱȱ ȱ
ȱ
ȱ
20.ȱȱ ȱ
Unit 7 Tests Chapters 29–33 7-87
SECTION III—APPLY LEGAL PRACTICES
Directions:ȱInȱtheȱspacesȱprovided,ȱwriteȱtheȱword(s)ȱneededȱtoȱmakeȱtheȱsentenceȱaȱ
correctȱstatement.ȱ(accommodationȱparty,ȱcertificateȱofȱdeposit,ȱcertifiedȱcheck,ȱ
Chapterȱ11,ȱcheck,ȱdebtor,ȱgarnishmentȱofȱwages,ȱmechanic’sȱlien,ȱnegotiable,ȱtravȬ
eler’sȱcheck)ȱ
ȱ
Answersȱ
21.ȱAȱtypeȱofȱdraftȱbyȱwhichȱaȱbankȱdepositorȱ
ordersȱtheȱbankȱtoȱpayȱmoney,ȱusuallyȱtoȱaȱ
thirdȱparty,ȱisȱcalledȱa(n)ȱȱ .ȱ
22.ȱWithdrawingȱbeforeȱmaturityȱcanȱresultȱinȱ
aȱsevereȱpenaltyȱtoȱtheȱownerȱofȱa(n)ȱȱ .ȱ
23.ȱAȱpersonalȱcheckȱthatȱhasȱbeenȱacceptedȱbyȱ
aȱbankȱbeforeȱpaymentȱisȱa(n)ȱȱ .ȱ
24.ȱAȱdraftȱdrawnȱbyȱaȱwellȬknownȱfinancialȱ
institutionȱonȱitselfȱorȱitsȱagentȱisȱa(n)ȱȱ .ȱ
25.ȱAnȱinstrumentȱmustȱbeȱinȱwriting,ȱcontainȱ
anȱunconditionalȱpromiseȱorȱorderȱpayableȱ
inȱaȱcertainȱsum,ȱbeȱpayableȱonȱdemandȱorȱ
atȱaȱdefiniteȱtime,ȱandȱbeȱpayableȱtoȱtheȱ
bearerȱorȱtoȱsomeone’sȱorderȱbeforeȱitȱisȱ
consideredȱȱ .ȱ
26.ȱAȱcosignerȱwhoȱlendsȱtheirȱgoodȱcreditȱ
ratingȱtoȱaȱpaperȱisȱcalledȱa(n)ȱȱ .ȱ
27.ȱAȱpersonȱorȱaȱbusinessȱthatȱowesȱmoney,ȱ
goods,ȱorȱservicesȱtoȱanotherȱisȱa(n)ȱȱ .ȱ
28.ȱAȱpersonȱwhoȱhasȱnotȱbeenȱpaidȱforȱlaborȱȱ
orȱmaterialsȱfurnishedȱtoȱbuildȱaȱhome,ȱȱ
building,ȱorȱotherȱrealȱpropertyȱimproveȬȱ
mentȱmayȱfileȱaȱlegalȱclaimȱagainstȱtheȱȱ
propertyȱunderȱa(n)ȱȱ .ȱ
29.ȱAȱmethodȱofȱcreditorȱprotectionȱthatȱallowsȱ
theȱcreditorȱtoȱreceiveȱaȱportionȱofȱtheȱ
debtor’sȱwagesȱdirectlyȱfromȱtheȱdebtor’sȱ
employerȱisȱcalledȱȱ .ȱ
30.ȱBankruptcyȱreliefȱdesignedȱtoȱkeepȱtheȱ
corporation,ȱpartnership,ȱorȱsoleȱproprieȬ
torshipȱinȱactiveȱbusinessȱwithȱnoȱliquidaȬ
tionȱisȱȱ .ȱ
21.ȱȱ ȱ
ȱ
ȱ
22.ȱȱ ȱ
ȱ
23.ȱȱ ȱ
ȱ
24.ȱȱ ȱ
ȱ
25.ȱȱ ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
26.ȱȱ ȱ
ȱ
27.ȱȱ ȱ
ȱ
28.ȱȱ ȱ
ȱ
ȱ
ȱ
ȱ
29.ȱȱ ȱ
ȱ
ȱ
ȱ
30.ȱȱ ȱ
ȱ
SECTION IV—DEMONSTRATE LEGAL IDEAS
31.ȱListȱtheȱwarrantiesȱimpliedȱbyȱlawȱagainstȱallȱtransferorsȱthatȱmayȱstillȱrequireȱaȱ
qualifiedȱindorserȱtoȱpayȱifȱtheȱinstrumentȱcannotȱbeȱcollected.ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
32.ȱListȱtheȱcertainȱtypesȱofȱclaimsȱthatȱcannotȱbeȱdischargedȱbyȱbankruptcy.ȱ
ANSWERS TO UNIT 7 TEST A
SECTION I
SECTION II
SECTION III
SECTION IV
31.ȱAnswersȱmayȱvaryȱbutȱshouldȱincludeȱtheȱfollowingȱinformation:ȱTheȱinstruȬ
mentȱmustȱ(1)ȱbeȱinȱwritingȱandȱbeȱsignedȱbyȱtheȱmakerȱorȱdrawer,ȱ(2)ȱcontainȱ
32.ȱAnswersȱshouldȱincludeȱtheȱfollowingȱinformation:ȱ(1)ȱsettingȱmaximumȱinterȬ
estȱrates,ȱ(2)ȱrequiringȱclearȱandȱcompleteȱadvanceȱdisclosureȱofȱloanȱterms,ȱ(3)ȱ
7-90 Unit 7 Tests Chapters 29–33
ANSWERS TO UNIT 7 TEST B
SECTION I
SECTION II
SECTION III
22.ȱcertificateȱofȱdepositȱ
28.ȱmechanic’sȱlienȱ
30.ȱChapterȱ11ȱ
ȱ
ȱ
ȱ
ȱ
SECTIONȱIVȱ
31.ȱAnswersȱmayȱvaryȱbutȱshouldȱincludeȱtheȱfollowingȱinformation:ȱTheȱwarranȬ
tiesȱguaranteeȱthatȱ(1)ȱtheȱtransferorȱisȱentitledȱtoȱenforceȱtheȱpaper,ȱ(2)ȱallȱsignaȬ
ȱ
32.ȱAnswersȱshouldȱincludeȱtheȱfollowingȱinformation:ȱ(1)ȱcertainȱtaxes,ȱ(2)ȱalimonyȱ
andȱchildȱsupport,ȱ(3)ȱclaimsȱagainstȱtheȱdebtorȱforȱpropertyȱobtainedȱbyȱfraud,ȱ