Business Contracts & Intellectual Property – Business Law
Discussions in this lesson are based on intellectual property rights, business contracts and business law
Madison promises Grace $10 if Grace collects her dry cleaning for her. This is an example of a(n) ______ contract.
A. bilateral
B. unilateral – Correct
C. voidable
D. void
E. unenforceable
Fred takes Betty to dinner at a very expensive and exclusive restaurant. The menu does not mention the prices. The server takes their order and both Fred and Betty enjoy the meal immensely. When the bill arrives, Fred refuses to pay because the menu had no prices and because he and the server never engaged in language indicating an offer and acceptance. The server said, “Are you ready to order?” and when Fred said “Yes,” the server merely asked, “What may I get you tonight?” In the context of this scenario, which of the following statements is true?
A. Fred must pay based on an implied-in-fact contract theory – Correct
B. Fred must pay based on a promissory estoppel theory.
C. Fred must pay based on an express contract theory.
D. Fred is correct because no contract was formed.
E. Fred is correct because he and the server entered into an agreement without a written document.
A(n) ______ is one in which the promised terms of the contract are discussed by the parties.
A. express contract – Correct
B. reciprocal contract
C. implied contract
D. bilateral contract
E. unilateral contract
The doctrine of quasi-contracts is predominantly based on a(n)
A. reciprocal contract.
B. implied-in-law contract – Correct
C. express contract.
D. bilateral contract.
E. unilateral contract.
The remedy of quasi-contract generally applies only when
A. there are more than three parties in a contractual agreement.
B. no actual contract exists to cover the dispute – Correct
C. the contract is bilateral in nature.
D. no more than two parties expressly discuss the terms of their agreement.
E. implied warranties are included in a contract.
The ultimate purpose of a contract is the creation of an agreement that courts will order parties to perform or to pay consequences for the failure of performance. When courts uphold the validity of such promises, the resulting agreement is a(n) ______.
A. absolute contract
B. differentiated contract
C. void contract
D. relative contract
E. enforceable contract – Correct
A(n) ______ is one that appears to be an agreement but lacks an essential requirement for validity and enforceability.
A. voidable contract
B. unenforceable contract
C. void contract – Correct
D. valid contract
E. executed contract
A(n) ______ is one when parties have not performed their agreement.
A. executed contract
B. executory contract – Correct
C. express contract
D. exculpatory contract
E. unenforceable contract
A(n) ______ is an agreement when one party has the right to withdraw from the promise made without incurring any legal liability.
A. executed contract
B. voidable contract – Correct
C. void contract
D. implied-in-fact contract
E. reciprocal contract
Laborers working on a building are promised by their contractors that their wages would be paid at the end of every month. The laborers also in return promise to work from the beginning of the subsequent month. When the laborers have worked for the entire duration of the month and are awaiting their wages at the end of the month, the contract is ______.
A. void
B. executory – Correct
C. implied
D. executed
E. unilateral
In the context of implied warranties as defined by the Uniform Commercial Code (UCC), which of the following refers to the merchantability of goods?
A. The goods will be of fair average quality and conform to any labeling – Correct
B. The goods will be suitable for the buyer’s purpose if the seller is aware of it.
C. The goods will be delivered within two weeks of order.
D. The goods will be worth at least $500 or more.
E. The goods will be sold within states and not across states.
In the context of contracts formed by interactions of parties, which of the following arises from the conduct of the parties rather than from words?
A. express contracts
B. implied-in-fact contracts – Corrects
C. executed contracts
D. void contracts
E. adhesion contracts
A(n) ______ contains a specific promise and a specific demand.
A. consideration
B. revocation
C. offer – Correct
D. capacity
E. exculpation
Mayra offers to sell her home to Hanna for “about $100,000 plus closing costs.” Hanna accepts Mayra’s offer. Later, a dispute arises over the precise dollar amount of the purchase price. How will a court most likely resolve this dispute?
A. The court will determine a reasonable price to be paid by Hanna.
B. The court will determine that Hanna pay only the figures mentioned in the contract.
C. The court will appoint a licensed real estate appraiser to determine the price to be paid by Hanna.
D. The court will require Hanna to pay the average of her price and Mayra’s price.
E. The court will declare the purchase price and terms too indefinite to create a binding contract – Correct
In the context of termination of an offer, ______ occurs when an offeror retracts the offer before the acceptance.
A. rejection
B. reversion
C. novation
D. revocation – Correct
E. rescission
Brett offers to sell his old but functioning cell phone to James for $65. James says he will accept the offer if Brett lowers the price to $60. James has
A. made an unequivocal acceptance.
B. made a counteroffer – Correct
C. demonstrated the exculpatory rule.
D. entered into an option contract.
E. entered into an executory contract.
Josh announces a reward of $500 for his dog, Ginger, that ran away from his house. Josh spreads the word only by pinning up posters in his neighborhood. Amanda, Josh’s colleague, sees Ginger and brings her back to Josh without ever seeing the poster. After returning the dog, Amanda sees one of the reward posters and returns to claim the money. In the context of this scenario, which of the following statements is true?
A. Amanda is not entitled to the money because the offer was not communicated to her.
B. Amanda is not entitled to the money because she is Josh’s colleague and acted in good faith.
C. Amanda is entitled to the money because the poster constituted an offer and is effective for the entire neighborhood.
D. Amanda is entitled to the money since performance of the requested act in the poster indicates acceptance – Correct
E. Amanda is not entitled to the money since she did not communicate the acceptance of the offer in writing.
According to the mirror image rule, ______.
A. the acceptance must exactly match the offer – Correct
B. a contract must be accepted in writing by both the parties involved to make it enforceable in the court of law
C. the acceptance of an offer involves changing the terms of the offer or adding new terms
D. one of the parties to a contract should be a minor
E. there has to be at least two or more counteroffers to bind a contract
Which of the following statements is true of silence as a method of acceptance?
A. An offeree’s silence implies that the offeree will make a counter offer.
B. Silence may well imply acceptance if the parties previously dealt with each other – Correct
C. When an offer specifies that silence indicates acceptance, the offeree has to respond.
D. Silence alone can be acceptance and the basis of a binding contract.
E. Silence leads to acceptance of an offer due to the mirror image rule.
The deposited acceptance rule is also known as the ______.
A. mirror image rule
B. mailbox rule – Correct
C. unilateral rule
D. bilateral rule
E. negotiation rule
According to the mailbox rule, a contract is formed
A. when the offer is mailed.
B. when the offer is received
C. when the acceptance is received.
D. when the acceptance is mailed – Correct
E. when the offer is converted to a written document.
Brandie is facing financial difficulties. Warren wants to help Brandie, and tells her that he will loan her $1,000. Later, Warren refuses to loan the promised money to Brandie. In the context of this scenario, which of the following statements is true?
A. Warren must loan the money to Brandie because a promise is made and consideration has nothing to do with the agreement.
B. Warren need not loan the money to Brandie because Brandie did not promise anything in return – Correct
C. Warren must loan the money to Brandie because he has entered into an implied-in-fact contract by promising her the money.
D. Warren does not have to loan the money to Brandie because of the mirror image rule.
E. Warren must loan the money to Brandie because he has entered into an executory contract by promising her the money.
Robert is about to graduate from his university. His parents tell him that as he is the first member of the family to graduate college, they want to buy him a new but inexpensive car. They have the money to buy the car, and Robert is excited to receive his gift. On graduation day, his
parents tell him that they have decided to use the car money for a vacation and that there will be no car. In this situation, can Robert sue his parents?
A. Robert can successfully sue based on promissory estoppel.
B. Robert can successfully sue based on the promise of a gift.
C. Robert cannot sue because the promise was not reasonable and did not follow the mailbox rule.
D. Robert cannot sue because he did not suffer any legal detriment in the receipt of the promise – Correct
E. Robert can sue since the promise is his legal benefit, and it is an implied-in-fact contract.
Valid consideration can include any promise to do something one has no obligation to do, refrain from doing something one has the right to do, or in the case of a unilateral contract, a performance when there is no obligation to do so. This is known as a(n) ______.
A. exculpation
B. legal detriment – Correct
C. release
D. negotiation
E. promissory estoppel
Aria asks Jessica if she can borrow an outfit for an office party and Jessica agrees. When Aria picks an outfit, Jessica refuses to give it to her. Which of the following statements is true of this situation?
A. Jessica has committed a breach of contract.
B. A bargained-for exchange has not occurred, so Jessica does not have to loan the outfit to Aria – Correct
C. Jessica has promised Aria something of value, so she must loan her the outfit.
D. The contract between Aria and Jessica is terminated as Aria makes a counteroffer.
E. Jessica has given a valid consideration, thereby making the agreement between her and Aria a binding contract.
The legal mechanism for evaluating the existence of an incentive for a person’s promise to establish a binding contract and acts as a receipt of a legal benefit or the suffering of a legal detriment is ______.
A. collusion
B. accord and satisfaction
C. consideration – Correct
D. reversion
E. novation
In which of the following cases does the legal power of the offeree to bind the offeror end?
A. When the offeree accepts the offer
B. When the offeror is declared insane before acceptance of the offer by the offeree – Correct
C. When the subject matter of the contract is destroyed after the acceptance of the offer
D. When the offeror accepts the counteroffer
E. When the offeror attempts to retract the offer after its acceptance by the offeree
Smith Inc. sends a letter dated August 1 to Cervaille Stores, offering to sell 20 table lamps to Cervaille Stores at $80 each. Cervaille Stores provides a consideration of $160 to Smith Inc. to keep the offer open for at least two weeks. In the second week of August, Smith Inc. receives an offer from Shine Retailers Inc. to purchase the table lamps at a price of $85 each. Can Smith withdraw its offer made to Cervaille Stores?
A. Smith cannot withdraw its offer as the agreement is in the form of an option – Correct
B. Smith cannot withdraw its offer since the doctrine of promissory estoppel is applicable.
C. Smith can withdraw its offer as the offer was simply an invitation to negotiate.
D. Smith cannot withdraw its offer as this is a firm offer.
E. Smith can withdraw its offer as the consideration makes it enforceable as a property transfer.
In contracts that are not between merchants selling goods, a promise to keep an offer open for a certain time period must be supported by the offeree’s consideration. Such agreement to not revoke an offer is called a(n) ______.
A. firm offer
B. option – Correct
C. promissory estoppel
D. novation
E. accord
An important exception to the rule requiring consideration to support a promise is the doctrine of ______. This doctrine arises when a promisee justifiably relies on a promisor’s promise to his or her economic injury.
A. firm offer
B. consideration
C. termination
D. promissory estoppel – Correct
E. accord and satisfaction
Systek 22 Inc. made a promise to Garrett offering him a job with an annual salary of $150,000 and at least two years of employment. Since Garrett had to move to New York for the new job, Systek 22 also offered to reimburse all of his moving expenses. Based on this promise, Garrett resigned from his job at another firm that offered him an annual salary of $100,000. When Garrett moved to New York, his employment with Systek 22 was terminated, because the company found a candidate who was willing to work for a lesser salary. Which of the following is true of this situation?
A. Garrett cannot sue Systek 22 since the promise was oral.
B. Garrett can sue Systek 22 under the doctrine of promissory estoppel – Correct
C. Garrett cannot file a lawsuit since a promise of employment is always subject to market conditions.
D. Garrett can sue Systek 22 only for the moving expenses that Garrett can prove he incurred.
E. Garrett cannot sue Systek 22 since the reasons for termination will be accepted in court as a legal detriment.
Which of the following terms refers to a person’s ability to be bound by a contract?
A. legality
B. capacity – Correct
C. usability
D. negotiability
E. measurability
If a minor fails to disaffirm a contract within a reasonable time after reaching majority, the minor is said to ______ the contract.
A. transcend
B. terminate
C. rescind
D. ratify – Correct
E. breach
Dustin, who is 17 years old, purchased a car from Speed Auto Sales Inc. for $1,000. The following year, Dustin’s father gifted him a brand new car on his 18th birthday. Dustin returned the car that he had purchased to Speed Auto Sales the next day, and he demanded his money back. At the time of disaffirmance, Dustin was 18—the age at which he was considered an adult in his jurisdiction. Will this disaffirmance be enforceable in the court of law?
A. The disaffirmance will not be enforceable since Dustin did not give Speed Auto Sales a signed revocation.
B. The disaffirmance will be enforceable since Dustin disaffirmed during the year he attained adulthood – Correct
C. The disaffirmance will not be enforceable since the disaffirmance must be written when the price exceeds $500.
D. The disaffirmance will be enforceable since courts and laws always rule in the favor of minors.
E. The disaffirmance will not be enforceable since Dustin attained adulthood, and disaffirmance can be expressed only by a minor.
Tristam, an insurance agent, wants Philomena to purchase the insurance policy of his choice. Despite Philomena’s resistance to accept his offer, Tristam compels her to purchase the policy by exerting his physical force on her and forces her to sign the insurance documents. Which of the following has been most likely used by Tristam to complete the contract arrangements?
A. duress – Correct
B. misrepresentation
C. undue influence
D. misstatement
E. fraud
Tony’s Carpets Inc. wants to charge $9.80 a yard for installing a carpet for Serenity Bookstore but accidentally states $8.90 a yard in the bid. Serenity Bookstore accepts Tony’s Carpets’ bid. Tony’s Carpets made a ______.
bilateral mistake
unilateral mistake – Correct
mutual mistake
rescission mistake
contractual mistake
Which of the following terms refers to force or threat of force?
A. rescission
B. misrepresentation
C. undue influence
D. duress – Correct
E. revocation
Which of the following statements is true about the acceptance of an offer?
Bilateral contracts are predominantly accepted by the offeree performing the act.
Unilateral contracts are accepted by making a promise.
The language of an offer is optional in determining the nature of contract and its acceptance.
Counteroffer usually means an acceptance of an offer.
Acceptance must follow the mirror image rule to create a binding contract – Correct
Which of the following statements is true about the consideration in a contract?
A. Courts usually enforce contractual promises in the absence of consideration.
B. The amount of the consideration is the most important and relevant part of a contract for a legal action.
C. The consideration must be contemporaneous and a part of both parties’ understanding of the contract terms – Correct
D. The consideration in any unilateral contract is usually absent.
E. Performance made before parties discuss their agreement counts as a consideration.
Which of the following statements is true about a promise to make a gift?
A. Upon delivery of the item, a true gift can be enforceable as a property transfer – Correct
B. Promissory estoppel prevents a gift from being enforceable.
C. A promise to make a gift is binding as a contract as it usually supports the bargain.
D. A promise to make a gift becomes an option when it has a clause in the agreement that revokes the gift.
E. Insignificant consideration in return for a great one raises concerns that the exchange is actually not a gift.
Which of the following statements is true about minors as parties to a contract?
A. A contract into which a minor has entered is voidable at the election of the minor – Correct
B. A minor can be legally bound to contractual promises involving necessaries of life such as shelter and medical care.
C. In a number of states, courts do not hold a minor who has misrepresented his or her age.
D. A minor can explicitly ratify a contract and forego disaffirmance even before reaching the age of majority.
E. Upon ratification, a minor gains the right to disaffirm.
Which of the following statements is true about adhesion contracts?
A. They are a common type of unconscionability – Correct
B. They exclude any standard form contracts.
C. They are generally unenforceable in a court of law.
D. They provide substantial opportunity for revision for all parties involved in a contract.
E. They are usually drafted by multiple parties in a contract.
Which of the following statements is true about intoxicated and mentally incompetent persons in a contract?
A. A court of law legally terms mentally incompetent persons as “infants” to a contract.
B. A court prevents intoxicated persons from making a contract voidable in any circumstance.
C. The capacity to contract is simply lost due to intoxication and mental incompetency even before a court can adjudge a person of such mental incompetency.
D. A court measures capacity to contract by whether an adult is capable of understanding the nature and purpose of the contract – Correct
E. The complexity of a contractual transaction and the mental capacity of an adult are irrelevant in controlling the right to disaffirm a contract.
Vincent agrees to sell 10 cartons of footwear to a local retail outlet at $150 for each carton. Each carton is to contain 30 pairs of footwear, but the local retail outlet finds that most of the cartons have only 25 pairs of footwear. The retail outlet decides to sue Vincent, but they decide to settle the matter outside the court in order to reduce the expenses involved in a lawsuit. Both parties finally agree to revise the rate of each carton to $135 with each carton containing 25 pairs of footwear. This settlement is an example of ______.
A. accord and satisfaction – Correct
B. duress
C. mutual mistake
D. undue influence
E. promissory estoppel
Miguel offers to sell Nisha 100 laptops at $50 each. Nisha ponders over the offer but mails her acceptance that evening to Miguel. Before her acceptance reaches Miguel, Miguel finds another buyer who is willing to pay $70 each for the laptops. Miguel sends a revocation mail the next day to cancel his initial offer to Nisha, but a storm has hit the city causing the mail services to halt temporarily. Which of the following statements is true about this situation?
A. As per the mirror image rule, Nisha cannot sue Miguel for revoking his initial offer.
B. Miguel can use the doctrine of the promissory estoppel to defend his right to find and sell his laptops to another buyer.
C. As per the mailbox rule, Miguel cannot revoke his initial offer to Nisha as she had accepted his offer – Correct
D. Nisha cannot sue Miguel as the deposited acceptance does not create a binding contract despite Miguel’s revocation.
E. Nisha cannot sue Miguel as the storm prevents Miguel from mailing his revocation.
Harry regularly shipped 100 cartons of electronic goods to Keith on the 15th of every month as per the original agreement. He had been continuing this shipment routine for over a year. On the 20th day of one of the months, Keith refused the goods as he did not want Harry to ship those goods to him and had never accepted any such offer of goods. Harry had not received any prior notification to cancel the shipment of goods. Which of the following statements is true of this situation?
A. Keith can sue Harry based on the doctrine of promissory estoppel.
B. Keith’s prior act of dealing and conduct with Harry confirms acceptance of the offer – Correct
C. Harry used duress in controlling the terms of the offer.
D. Keith can sue Harry based on the misstatement of the facts of the offer.
E. Harry should have ensured only partial delivery of goods as he received no oral confirmation from Keith about the shipment of goods.
In the context of legal capacity of parties to a contract, who among the following are also called infants in a contract?
A. intoxicated persons
B. physically impaired persons
C. mentally impaired persons
D. minors – Correct
E. non-merchants
Which of the following statements is true about the laws under the Uniform Commercial Code (UCC)?
A. The laws of the UCC exclude individuals but include firms and charitable trusts in their scope.
B. The laws of the UCC permit sales of goods to have open nonquantity terms to be decided at a future time – Correct
C. Section 2-207 of the UCC applies the mirror image rule for contracts involving the sale of goods.
D. The laws of the UCC allow the rules of consideration to apply to firm offers.
Which of the following is an exception to the statute-of-frauds requirement that sale-of-goods contracts be in writing?
A. a contract involving goods that are worth at least $500
B. a contract involving the sale of land
C. a contract for goods for which payment has been made – Correct
D. a contract for a service that lasts for 5 years
E. a collateral promise to pay another’s debt
Which of the following types of contracts are beyond the scope of application of the statute of frauds?
A. contracts for sale of goods worth $500 or more
B. contracts for mortgages, mining rights, and easements
C. oral contracts for services that last more than 20 months – Correct
D. collateral contracts to pay the debt of another person
E. contracts involving interest in land
Which of the following statements is true about property?
A. People can privately own every resource, especially every resource of use.
B. A private property in a resource can be created if you can legally exclude others from that resource – Correct
C. The federal law has little control over the exercise of ownership or sale of any type of property across all states.
D. A property is usually infinite but has an ambiguous boundary.
E. A property includes resources but not the use of resources.
In the context of legal framework, which of the following statements is true about the property system?
The state takes ownership of resources directly as a result of legislation provided.
The citizens acquire resources primarily through taxation.
The state enforces rights when people legally have exclusive property rights in scarce resources – Correct
The state primarily plans what people should do and allocates the resources.
The state limits and excludes any redistribution of resources through voluntary exchange.
Mike gives Maria a life estate in one of the homes he owns. Maria lives there for a while and then accepts a job in another state, so she gives the property to her sister Jackie as it is permissible. Jackie owns the property until
A. Mike revokes the life estate.
B. Maria dies – Correct
C. Mike dies.
D. the life estate is taken over by the government.
E. Maria returns to the life estate.
Which of the following statements is true about the property boundaries in the physical world?
A. The physical dimension of tangible personal property is the most difficult to define.
B. Law rather than intuition should ideally provide physical boundaries for a real property – Correct
C. The physical boundaries for real property are relatively easier to establish than for other forms of property.
D. An individual rather than the law defines and sets forth the boundaries of an intellectual property or a security.
E. The law regarding physical boundaries is fixed across all the states regardless of the type of land involved.
In the context of real property, when an object of personal property becomes an object of real property by physical annexation (attachment), it is known as a(n) ______.
fixture – Correct
gift
fee simple
lien
accession
Sarah has given 24 acres of land to Kent County as long as the land is used as a park. In this case, Kent County has a
A. life estate.
B. fee simple defeasible – Correct
C. fee simple absolute.
D. tenancy in common.
E. warranty deed.
Which of the following is an example of intangible property?
A. cars
B. books
C. clothing
D. securities – Correct
E. land
Which of the following is an example of a bailment done for the sole benefit of the bailee?
A. borrowing a laptop – Correct
B. renting a car
C. babysitting for free
D. finding lost or misplaced property
E. using a car without permission
Which of the following statements is true about concurrent ownership?
A. The property interest is divided in joint tenancy.
B. The joint tenants can have unequal ownership of shares.
C. The tenants in common can own different shares of the resource – Correct
D. The tenants in common can have the right of survivorship.
E. The ownership is divided such that each concurrent owner owns a specific piece of the resource.
The Homestead Act of 1862 illustrates ownership through ______.
A. possession – Correct
B. exchange
C. gifting
D. confusion
E. accession
A ______ makes no guarantees other than that the grantor surrenders all claim against the land.
A. simple warranty deed
B. trust deed
C. quitclaim deed – Correct
D. special warranty deed
E. fiduciary deed
Which of the following is a similarity between joint tenancy and tenancy in common?
A. In both these forms of ownership, the property interest is divided.
B. In both these forms of ownership, the tenants can own different shares of the resource.
C. In both these forms of ownership, the tenants can exercise right of survivorship.
D. In both these forms of ownership, the tenants can have disproportionate ownership of share.
E. In both these forms of ownership, the tenants can force the separation of ownership under the doctrine of partition – Correct
Which of the following statements is true of an easement?
A. It creates ownership of the land in question.
B. It exists for the benefit of pharmaceutical corporations.
C. It occurs when landlocked property is purchased.
D. It creates a leasehold estate.
E. It places a particular use of land behind the exclusive legal fence – Correct
The rules of a testamentary gift require that such a gift pass ownership by
A. mere delivery.
B. transfer of interest.
C. death of the donor and proving of a valid will that specifies the gift. – Correct
D. providing evidence of the physical existence of the gift and the transferor.
E. physical transfer to the donee.
A ______ promises the grantee that the grantor has good ownership and the full power to convey it.
A. special warranty deed
B. pass title deed
C. quitclaim deed
D. freehold deed
E. warranty deed – Correct
Which of the following statements is true about adverse possession?
A. The practice of adverse possession requires that possession be interrupted to grant ownership.
B. The possessor should have the owner’s permission to be on the land.
C. The practice of adverse possession discourages land use.
D. The practice of adverse possession increases the possibilities of an absent owner to claim rights many years down the road.
E. The most common way to destroy a claim of adverse possession is to sue for trespass – Correct
Mike rents a car from Brandy Car Rentals at $40 per day. In this scenario, which of the following statements is true?
A. This is a bailment for the sole benefit of the bailor.
B. Brandy is the bailee.
C. Mike owes the duty of slight care.
D. Mike is under a duty to use “reasonable care” to take care of the car – Correct
E. This is a bailment for the sole benefit of the bailee.
Vincent conveys his land to his friend “as long as it is used for non-commercial purposes.” A few months later, Vincent finds out that his friend has been using the land as a parking garage for tourists and charging unreasonable rates. In this case, Vincent’s friend would most likely be in violation of the ______.
A. remainder interest
B. future interest
C. fee simple absolute
D. fee simple defeasible – Correct
E. reversion interest
Solomon plans to sell his property. He intends to sell the cattle on his property to the prospective buyer but not the clothes and the household goods. Which of the following is the reason for the clothes and the household goods not being sold with the house?
A. The clothes and household goods are intangible goods.
B. The clothes and household goods are fixtures.
C. The clothes and household goods are personal property – Correct
D. The clothes and household goods form real property.
E. The clothes and household goods are abandoned.
Simon’s relatives come to visit him and want him to show them around the town. Linda helps Simon by lending him her car for a week. This is an example of a(n):
A. bailment for the sole benefit of the bailor.
B. easement by prescription.
C. bailment for the sole benefit of the bailee – Correct
D. bailment for the mutual benefit of the parties.
E. easement by necessity.
Which of the following exclusively applies to real property?
A. securities
B. books
C. clothing
D. bailments
E. easements – Correct
Seth takes his laundry to Denise’s Dry Cleaners. When Seth gets his clothes back, he notices that two of his shirts, perfect when brought in, are ripped. In this scenario, which of the following statements is true?
A. This was a mutual benefit bailment, and Denise’s owed a duty of reasonable care – Correct
B. This was a bailment for the sole benefit of the bailee, and Denise’s owed a duty of slight care.
C. This was a bailment for the sole benefit of the bailor, and Denise’s owed a duty of great care.
D. This was not a bailment.
E. This was an unintentional bailment, so Denise’s does not owe a duty of care.
Ruth is visiting her granddaughter Marcy and decides to give Marcy her very expensive cameo brooch. The brooch, an heirloom, has been in the family for over 100 years and is the only item in a safe in Ruth’s home. Ruth offers the brooch to Marcy who accepts it. Ruth then gives Marcy the only key to the safe. According to the information given, which of the following statements is true?
A. This is not a valid gift because there has been no delivery.
B. This is a valid gift because the gift is a physical entity.
C. This is a testamentary gift, and Marcy can claim the gift only after Ruth’s death.
D. This is a valid gift because there has been a constructive delivery – Correct
E. This is not a valid gift because Ruth must provide a document for chain of custody.
Goods that are identical are known as a(n) ______.
A. fungible – Correct
B. accession
C. lien
D. gifts
E. collateral
Identify a correct statement regarding joint tenants.
A. Joint tenants do not have the right of survivorship.
B. Joint tenants must have equal ownership shares – Correct
C. The property of joint tenants is owned through fee simple absolute and fee simple defeasible.
D. If one of the joint tenants dies, the remaining tenant is allowed to take ownership of only his or her share.
E. Joint tenants cannot force the separation of concurrent ownerships like the tenants in common.
Vincent keeps his bag of books and magazines at his friend’s storeroom, as he believes that he will not be using it for a few months. This is an example of a(n) ______.
A. bailment for the sole benefit of the bailor – Correct
B. easement by prescription
C. bailment for the sole benefit of the bailee
D. negative easement
E. easement by necessity
Which of the following statements is true about bailment?
A. In a bailment for the sole benefit of the bailee, the possessor of the object is known as the bailor.
B. In a bailment, the possessor of the object is predominantly the owner.
C. In the business world, most bailments are of mutual benefit to both parties – Correct
D. In a mutual benefit bailment, the bailee is under a duty to use high care in taking care of the object in possession.
E. In a bailment for the sole benefit of the bailor, the bailee owes a very high duty of care while in possession of the object.
You and your roommate are driving through a residential area when you see some furniture piled on the curb to be picked up by the trash collectors the next morning. As you pick up a chair, the homeowner opens a window and yells, “Get away from my stuff.” Which of the following statements is true in this scenario?
A. You may claim the chair as lost property.
B. You may claim the chair as mislaid property.
C. You may claim the chair as abandoned property – Correct
D. The homeowner retains ownership until it is picked up the next morning, so you must leave it.
E. The homeowner retains ownership of the property until you buy it from him.
Which of the following statements is true about lost items?
A. The law distinguishes things that have been lost from things that have simply been mislaid – Correct
B. The things that have been lost belong to the person who owns the premises where the item was lost.
C. The finder of a lost item becomes the owner of the item even before reducing it to possession.
D. The ownership is lost at the end of a statutory period for the finder of a lost item.
E. The assumption of knowledge about the original owner is irrelevant in determining the ownership of the mislaid item.
Josh borrows Amanda’s car to get to school. Josh is obligated to exercise ______.
A. the level of care imposed by Amanda
B. a reasonable duty of care
C. a slight duty of care
D. the level of care imposed by Amanda’s parents
E. a very high duty of care – Correct
Which of the following is a mutual benefit bailment?
A. renting a car – Correct
B. lending your car to a friend without receiving consideration
C. borrowing a car from a friend without paying consideration
D. buying a car
E. riding a bus
A(n) ______ means that an adjoining landowner cannot do anything that would cause your land to cave in or collapse, such as digging a ditch that would cause the land on your side to collapse.
A. easement by prescription
B. negative easement – Correct
C. mutual benefit bailment
D. eminent domain
E. accession
In 2008, Donald gives Tony a life estate in one of his houses, specifying that upon the end of the life estate, the property is to go to Tony’s son, Mike. Tony dies in 2012. In this scenario, which of the following statements is true?
A. If Donald is still alive, he may revoke the transfer to Mike and keep the property.
B. Mike gets a reversion interest in 2012.
C. Mike gets a remainder interest in 2012 – Correct
D. In 2012, Mike and Donald become joint tenants until Donald’s death when Mike becomes the sole owner.
E. The property is held in trust until Mike comes of age.
When the owner of an old airplane engine has it restored and has an airplane built around it, the owner of the engine now owns the entire airplane through the doctrine of ______, which refers to something “added.”
A. accession – Correct
B. collateral
C. eminent domain
D. negative easement
E. easement by prescription
Which of the following is an example of a bailment?
A. babysitting your sister’s child for the weekend
B. house-sitting for a friend over the weekend
C. feeding a neighbor’s dog by tossing food over the fence
D. borrowing a friend’s car for a day – Correct
E. losing your car keys in a restaurant
Ben lives in an apartment building next to a children’s park. He is in his apartment when a baseball flies in through the window and lands in his room. Which of the following statements is true of this scenario?
A. Ben must return the baseball to the owner immediately as it is not an object of great value.
B. Ben can keep the baseball because of the rule of first possession – Correct
C. The owner of the apartment building must take the final decision as the baseball landed on his premises.
D. The owner of the baseball can exercise his right of eminent domain and claim the baseball.
E. The baseball must be turned over to police and can only be claimed after a week has passed.
Which of the following types of easement is also called easement by necessity?
A. negative easement
B. easement by prescription
C. easement by reservation
D. natural easement – Correct
E. functional easement
Ivana’s car was stolen. The car needed some repairs and the thief, Donald, had the rearview mirror replaced as well as the muffler. Donald was apprehended and the car was returned to Ivana. In this scenario, which of the following is true?
A. Ivana owns the car but Donald owns the rearview mirror and muffler.
B. Ivana owns the car but must pay Donald for the rearview mirror and muffler.
C. Donald becomes the owner of the car due to accession.
D. Ivana owns the car and owes Donald nothing – Correct
E. Donald and Ivana both own the car as both have contributed equally to the finished product.
Which of the following statements is true of an easement?
A. A negative easement is otherwise known as easement by necessity in many states.
B. An easement can also be reserved in a deed – Correct
C. An easement usually excludes any such uses of land as the laying of water pipes or the stringing of power wires across land.
D. A titleholder can prevent a person from continuing to use the land in instances where an easement by prescription arises.
E. An easement works exclusively without the rights of passage across the land.
A secured transaction involves a creditor who has sold something on credit or made a loan to a debtor who agrees to give the creditor a security interest in a valuable object, called ______.
A. collateral – Correct
B. gift
C. lien
D. easement
E. reversion
The general way of perfecting a security interest under Article 9 is to file a(n)
A. artisan’s lien.
B. financing statement – Correct
C. deed of trust.
D. warranty deed.
E. creditor’s instrument.
Rachel owns a beach house and wants to build a deck. Zoning restrictions limit decks to 120 square feet, but Rachel wants to build one that is 144 square feet. Which of the following should Rachel do next?
A. She can go ahead and build it as the law permits that once the deck is built it cannot be brought down.
B. She should ask for a nonconforming exemption.
C. She should ask for a variance – Correct
D. She must shift to some other location, because once zoning ordinances are in place, they allow for no changes, variations, or exceptions.
E. She should lobby her local zoning board to force them to change the restriction as that is the only plausible recourse.
In many states, if foreclosure and auction does not produce enough money to satisfy the debt owed by the mortgagor, the creditor-mortgagee can still sue the debtor for the balance owed, called a(n) ______.
A. collateral
B. deficiency – Correct
C. attachment
D. perfection
E. accession
A(n) ______ arises when someone contributes materials and/or services to real estate, usually a building, and is not paid.
A. general lien
B. chattel lien
C. surety lien
D. mechanic’s lien – Correct
E. assayer’s lien
If your home is being foreclosed on, you may retain ownership of the property if you pay the full amount of the debt before the sale. This is called a
A. right of revision.
B. right of recovery.
C. right to cure deficiency.
D. right of redemption – Correct
E. right to debt forgiveness.
Under the deed of trust, a third party who holds the full ownership to a land is called a ______.
A. bailor
B. bailee
C. trustee – Correct
D. debtor
E. mortgagee
______ is the term used for the exercise of the secured property interest, which usually means that the creditor must go through the court system to ensure that procedures are properly followed before debtors lose their homes and land.
A. Lien
B. Easement
C. Redemption
D. Deficiency
E. Foreclosure – Correct
The legal foundation for federal taxation is found in ______.
A. yearly power grants from each of the individual states
B. the Declaration of Independence
C. Article 1, Section 8 of the United States Constitution – Correct
D. the Congressional Budget and Impoundment Control Act, which created the Congressional Budget Office
E. the Transportation Equity Act
Landon, an 80-year-old, writes a trust that states that his property is to go to his “great-great-great grandchild” upon his death. At the time of creating the trust, his only child is one year old. In this scenario, which of the following statements is true about the validity of the trust?
A. The trust is valid, but the property must wait until the great-great-great grandchild is born to be transferred.
B. The trust is invalid due to the rule against eventualities.
C. The trust is valid due to the rule of progression.
D. The trust is invalid due to the rule against perpetuities – Correct
E. The trust is valid, but the property must wait until Landon’s child dies to be transferred.
Danny has five pit bull dogs. They bark constantly and terrify the neighbor, Terry. When Terry tries to sell his house, no one wants to buy the house due to the dogs. In this scenario, if Terry takes Danny to court, what should Danny be held liable for by Terry?
A. a public nuisance
B. a private nuisance – Correct
C. an adverse possession
D. an eminent domain
E. an accession
Stephen, a private individual, intends to bring a public nuisance claim against a textiles plant because its runoff is destroying the natural habitat of the local river’s beaver population. Which of the following will permit Stephen to bring a valid claim?
A. Stephen is the leading aquatic biodiversity scientist in the state.
B. Stephen traps the beavers for a living.
C. The state owns the textile plant.
D. The runoff has caused substantial damage to Stephen’s property – Correct
E. The governor owns the textiles plant.
Which of the following is beyond the scope of zoning ordinances?
A. to separate commercial districts from residential districts
B. to specify the number of buildings that can be built on land
C. to enforce ethnic or gender diversity – Correct
D. to impose specific color requirements
E. to specify a specific design for all buildings in an area
What type of laws divides counties or municipalities into use districts designated residential, commercial, or industrial?
A. purchase money security interest
B. zoning ordinance – Correct
C. adverse possession
D. eminent domain
E. partitioning
The ______ limits all exercise of property over resources to a duration of “lives in being plus twenty-one years.”
A. rule of transaction
B. rule against perpetuities – Correct
C. rule of first possession
D. rule against lateral transfers
E. rule against eventualities
Which of the following is an example of intangible property?
A. land
B. cars
C. securities – Correct
D. books
E. clothing
Which of the following statements is true about property?
A. A property includes resources but not the use of resources.
B. A private property in a resource can be created if you can legally exclude others from that resource – Correct
C. People can privately own every resource, especially every resource of use.
D. The federal law has little control over the exercise of ownership or sale of any type of property across all states.
E. A property is usually infinite but has an ambiguous boundary.
Which of the following types of easement is also called easement by necessity?
A. natural easement – Correct
B. easement by reservation
C. easement by prescription
D. negative easement
E. functional easement
Which of the following statements is true about concurrent ownership?
A. The ownership is divided such that each concurrent owner owns a specific piece of the resource.
B. The property interest is divided in joint tenancy.
C. The tenants in common can have the right of survivorship.
D. The joint tenants can have unequal ownership of shares.
E. The tenants in common can own different shares of the resource – Correct
A ______ makes no guarantees other than that the grantor surrenders all claim against the land.
A. special warranty deed
B. fiduciary deed
C. quitclaim deed – Correct
D. simple warranty deed
E. trust deed
Landon, an 80-year-old, writes a trust that states that his property is to go to his “great-great-great grandchild” upon his death. At the time of creating the trust, his only child is one year old. In this scenario, which of the following statements is true about the validity of the trust?
A. The trust is invalid due to the rule against eventualities.
B. The trust is invalid due to the rule against perpetuities – Correct
C. The trust is valid, but the property must wait until the great-great-great grandchild is born to be transferred.
D. The trust is valid due to the rule of progression.
E. The trust is valid, but the property must wait until Landon’s child dies to be transferred.
Solomon plans to sell his property. He intends to sell the cattle on his property to the prospective buyer but not the clothes and the household goods. Which of the following is the reason for the clothes and the household goods not being sold with the house?
A. The clothes and household goods are personal property – Correct
B. The clothes and household goods form real property.
C. The clothes and household goods are abandoned.
D. The clothes and household goods are fixtures.
E. The clothes and household goods are intangible goods.
Ruth is visiting her granddaughter Marcy and decides to give Marcy her very expensive cameo brooch. The brooch, an heirloom, has been in the family for over 100 years and is the only item in a safe in Ruth’s home. Ruth offers the brooch to Marcy who accepts it. Ruth then gives Marcy the only key to the safe. According to the information given, which of the following statements is true?
A. This is not a valid gift because Ruth must provide a document for chain of custody.
B. This is a valid gift because there has been a constructive delivery – Correct
C. This is a testamentary gift, and Marcy can claim the gift only after Ruth’s death.
D. This is not a valid gift because there has been no delivery.
E. This is a valid gift because the gift is a physical entity.
In the context of real property, when an object of personal property becomes an object of real property by physical annexation (attachment), it is known as a(n) ______.
A. gift
B. lien
C. fee simple
D. accession
E. fixture – Correct
Which of the following statements is true about bailment?
A. In the business world, most bailments are of mutual benefit to both parties – Correct
B. In a bailment for the sole benefit of the bailee, the possessor of the object is known as the bailor.
C. In a bailment, the possessor of the object is predominantly the owner.
D. In a bailment for the sole benefit of the bailor, the bailee owes a very high duty of care while in possession of the object.
E. In a mutual benefit bailment, the bailee is under a duty to use high care in taking care of the object in possession.
______ is the term used for the exercise of the secured property interest, which usually means that the creditor must go through the court system to ensure that procedures are properly followed before debtors lose their homes and land.
A. Foreclosure – Correct
B. Redemption
C. Easement
D. Deficiency
E. Lien
In 2008, Donald gives Tony a life estate in one of his houses, specifying that upon the end of the life estate, the property is to go to Tony’s son, Mike. Tony dies in 2012. In this scenario, which of the following statements is true?
A. Mike gets a remainder interest in 2012 – Correct
B. Mike gets a reversion interest in 2012.
C. The property is held in trust until Mike comes of age.
D. If Donald is still alive, he may revoke the transfer to Mike and keep the property.
E. In 2012, Mike and Donald become joint tenants until Donald’s death when Mike becomes the sole owner.
Mike gives Maria a life estate in one of the homes he owns. Maria lives there for a while and then accepts a job in another state, so she gives the property to her sister Jackie as it is permissible. Jackie owns the property until
A. Maria returns to the life estate.
B. Mike revokes the life estate.
C. Mike dies.
D. Maria dies – Correct
E. the life estate is taken over by the government.
Which of the following exclusively applies to real property?
A. bailments
B. easements – Correct
C. clothing
D. books
E. securities
Identify a correct statement regarding joint tenants.
A. Joint tenants must have equal ownership shares – Correct
B. The property of joint tenants is owned through fee simple absolute and fee simple defeasible.
C. Joint tenants cannot force the separation of concurrent ownerships like the tenants in common.
D. If one of the joint tenants dies, the remaining tenant is allowed to take ownership of only his or her share.
E. Joint tenants do not have the right of survivorship.
Stephen, a private individual, intends to bring a public nuisance claim against a textiles plant because its runoff is destroying the natural habitat of the local river’s beaver population. Which of the following will permit Stephen to bring a valid claim?
A. The state owns the textile plant.
B. Stephen is the leading aquatic biodiversity scientist in the state.
C. Stephen traps the beavers for a living.
D. The runoff has caused substantial damage to Stephen’s property – Correct
E. The governor owns the textiles plant.
Which of the following statements is true of an easement?
A. It exists for the benefit of pharmaceutical corporations.
B. It creates a leasehold estate.
C. It creates ownership of the land in question.
D. It places a particular use of land behind the exclusive legal fence – Correct
E. It occurs when landlocked property is purchased.
Which of the following statements is true about lost items?
A. The finder of a lost item becomes the owner of the item even before reducing it to possession.
B. The things that have been lost belong to the person who owns the premises where the item was lost.
C. The law distinguishes things that have been lost from things that have simply been mislaid – Correct
D. The assumption of knowledge about the original owner is irrelevant in determining the ownership of the mislaid item.
E. The ownership is lost at the end of a statutory period for the finder of a lost item.
What type of laws divides counties or municipalities into use districts designated residential, commercial, or industrial?
A. eminent domain
B. adverse possession
C. purchase money security interest
D. partitioning
E. zoning ordinance – Correct
Mike rents a car from Brandy Car Rentals at $40 per day. In this scenario, which of the following statements is true?
A. Brandy is the bailee.
B. Mike is under a duty to use “reasonable care” to take care of the car – Correct
C. This is a bailment for the sole benefit of the bailee.
D. Mike owes the duty of slight care.
E. This is a bailment for the sole benefit of the bailor.
Your neighbor’s water line crosses your property because you gave the neighbor a/an ____.
A. Adverse Possession
B. Deed
C. Easement – Correct
D. Fee Simple
E. Fixture
F. Intangible Personal Property
G. Joint Tenancy
H. Life Estate
I. Mortgage
J. Personal Property
K. Private Nuisance
L. Property
M. Public Nuisance
N. Real Property
O. Tenancy in Common
P. Title
Q. Zoning Ordinance
When the city changes the permitted uses of your property they will use a/an _____.
A. Adverse Possession
B. Deed
C. Easement
D. Fee Simple
E. Fixture
F. Intangible Personal Property
G. Joint Tenancy
H. Life Estate
I. Mortgage
J. Personal Property
K. Private Nuisance
L. Property
M. Public Nuisance
N. Real Property
O. Tenancy in Common
P. Title
Q. Zoning Ordinance – Correct
Property is deeded to Bart a 40% interest, to Lisa a 25% interest and to Maggie a 35% interest. This is an example of _____. Hint: When Maggie dies, and her heirs get her 35% interest.
A. Adverse Possession
B. Deed
C. Easement
D. Fee Simple
E. Fixture
F. Intangible Personal Property
G. Joint Tenancy
H. Life Estate
I. Mortgage
J. Personal Property
K. Private Nuisance
L. Property
M. Public Nuisance
N. Real Property
O. Tenancy in Common – Correct
P. Title
Q. Zoning Ordinance
Making too much noise and bothering the neighbor is an example of this.
A. Adverse Possession
B. Deed
C. Easement
D. Fee Simple
E. Fixture
F. Intangible Personal Property
G. Joint Tenancy
H. Life Estate
I. Mortgage
J. Personal Property
K. Private Nuisance – Correct
L. Property
M. Public Nuisance
N. Real Property
O. Tenancy in Common
P. Title
Q. Zoning Ordinance
The most complete estate, the most complete legal interest in land.
A. Adverse Possession
B. Deed
C. Easement
D. Fee Simple – Correct
E. Fixture
F. Intangible Personal Property
G. Joint Tenancy
H. Life Estate
I. Mortgage
J. Personal Property
K. Private Nuisance
L. Property
M. Public Nuisance
N. Real Property
O. Tenancy in Common
P. Title
Q. Zoning Ordinance
Property is deeded to Bart for the life of Marge, then to Lisa.
A. Adverse Possession
B. Deed
C. Easement
D. Fee Simple
E. Fixture
F. Intangible Personal Property
G. Joint Tenancy
H. Life Estate- Correct
I. Mortgage
J. Personal Property
K. Private Nuisance
L. Property
M. Public Nuisance
N. Real Property
O. Tenancy in Common
P. Title
Q. Zoning Ordinance
A couch would be this type of property.
A. Adverse Possession
B. Deed
C. Easement
D. Fee Simple
E. Fixture
F. Intangible Personal Property
G. Joint Tenancy
H. Life Estate
I. Mortgage
J. Personal Property – Correct
K. Private Nuisance
L. Property
M. Public Nuisance
N. Real Property
O. Tenancy in Common
P. Title
Q. Zoning Ordinance
You invent a new software. A patent in the new software would be this type of property.
A. Adverse Possession
B. Deed
C. Easement
D. Fee Simple
E. Fixture
F. Intangible Personal Property – Correct
G. Joint Tenancy
H. Life Estate
I. Mortgage
J. Personal Property
K. Private Nuisance
L. Property
M. Public Nuisance
N. Real Property
O. Tenancy in Common
P. Title
Q. Zoning Ordinance
If a neighboring landowner builds a fence that encroaches 3 feet onto your property, the landowner may eventually acquire title through ____.
A. Adverse Possession – Correct
B. Deed
C. Easement
D. Fee Simple
E. Fixture
F. Intangible Personal Property
G. Joint Tenancy
H. Life Estate
I. Mortgage
J. Personal Property
K. Private Nuisance
L. Property
M. Public Nuisance
N. Real Property
O. Tenancy in Common
P. Title
Q. Zoning Ordinance
A hot sauce factory that emits such strong fumes that people in the town have burning eyes and sore throats is an example of this.
A. Adverse Possession
B. Deed
C. Easement
D. Fee Simple
E. Fixture
F. Intangible Personal Property
G. Joint Tenancy
H. Life Estate
I. Mortgage
J. Personal Property
K. Private Nuisance
L. Property
M. Public Nuisance – Correct
N. Real Property
O. Tenancy in Common
P. Title
Q. Zoning Ordinance
When you sell your house, it is a good idea to put in the contract which items are ___(s) and which are not, so that the buyer will know what things (such as bookshelves and window blinds) that you plan to remove from the house.
A. Adverse Possession
B. Deed
C. Easement
D. Fee Simple
E. Fixture – Correct
F. Intangible Personal Property
G. Joint Tenancy
H. Life Estate
I. Mortgage
J. Personal Property
K. Private Nuisance
L. Property
M. Public Nuisance
N. Real Property
O. Tenancy in Common
P. Title
Q. Zoning Ordinance