Q&A Hero

Q: ________ is an interest a creditor automatically obtains when he or she extends credit to a consumer to purchase consumer goods. A) purchase money security interest B) cumulative security interest C) future advance monetary interest D) default interest

Q: Which of the following has the highest priority of claim? A) the first party to secure the interest B) the first party to attach the interest C) the first party to perfect the interest D) the first party to file a financing statement

Q: The ________ is a statute that requires a mortgage or deed of trust to be recorded in the county recorder's office of the county in which the real property is located. A) recording statute B) real property statute C) mortgage statute D) compilation statute

Q: To which of the following type of mortgages does the antideficiency statute apply? A) foreign currency mortgages B) home improvement mortgages C) first purchase money mortgages D) second purchase money mortgages

Q: A contractor's, laborer's, and material person's statutory lien that makes the real property to which services or materials have been provided security for the payment of the services and materials is known as ________. A) material lien B) judgment lien C) tax liens D) mechanic's lien

Q: ________ is a situation in which a creditor agrees to extend credit only if the purchaser pledges some personal property as collateral for the loan. A) Floating lien B) Attachment C) Mortgage D) Secured credit

Q: Which article of the Uniform Commercial Code governs secured transactions in personal property? A) Article 8 B) Article 9 C) Article 18 D) Article 19

Q: When a creditor extends credit to a debtor and takes a security interest in some personal property of the debtor, it is called a ________. A) super-priority lien B) collateral claim C) collateral disposition D) secured transaction

Q: When is a creditor referred to as a secured creditor? A) when the creditor has been guaranteed payment by a trustee B) when the creditor gives a loan without security C) when the creditor has been paid back his debt D) when the creditor has acquired collateral

Q: An arrangement where an owner of real property borrows money from a lender and pledges the real property as collateral to secure the repayment of the loan is known as ________. A) consignment B) foreclosure C) mortgage D) assignment

Q: A(n) ________ is an instrument that gives a creditor a security interest in the debtor's real property that is pledged as collateral for a loan. A) credit report B) letter of credit C) note D) deed of trust

Q: A(n) ________ is an instrument that evidences a borrower's debt to the lender for a real property. A) note B) consignment C) accommodation D) deed of trust

Q: Liquidation is a form of bankruptcy in which the debtor's exempt property is auctioned.

Q: An executory contract refers to a contract or lease that has not been fully performed.

Q: Ashton borrows $25,000 from Amanda. Amanda lends the money to Ashton without taking an interest in collateral for the loan. Amanda is relying on Ashton's credit standing when she made the loan. What kind of creditor is Amanda? A) unsecured creditor B) secured creditor C) administrative claim creditor D) post-petition creditor

Q: The surety is primarily liable for paying the principal debtor's debt when it is due in a surety arrangement.

Q: In a guaranty agreement, the guarantor is primarily liable on the debt.

Q: There are separate state and federal bankruptcy laws.

Q: A voluntary petition is a petition filed by a creditor that states that the debtor has debts.

Q: Gifts that a debtor is entitled to receive within 180 days after the petition is filed are part of the bankruptcy estate.

Q: Perfection of a security interest is establishes the right of a secured creditor against other creditors who claim an interest in the collateral.

Q: Perfection by investment of collateral is one of the methods of perfecting a security interest under the UCC.

Q: Purchase money security interest is an interest a creditor automatically obtains when he or she extends credit to a consumer to purchase consumer goods.

Q: Attachment is a situation in which the value of the creditor's collateral is insufficient to satisfy the debt it is collated for.

Q: A floating lien is a security interest in property that was not in the possession of the debtor when the security agreement was executed.

Q: In a secured credit, the creditor cannot recover the collateral despite the debtor's defaults on the loan.

Q: Article 9 of the Uniform Commercial Code governs secured transactions in personal property.

Q: To be valid, a security agreement must set forth the creditor's rights upon the debtor's default.

Q: The creditor who has to rely on collateral to secure payment is known as an unsecured creditor.

Q: In a mortgage transaction, the creditor is known as the mortgagee.

Q: An improperly recorded document is effective against either subsequent purchasers of the real property.

Q: The deficiency judgment protects the mortgagor from being recovered further in case there is a foreclosure sale deficiency.

Q: A lien release discharges a material person from a mechanic's lien.

Q: Which of the following would contain the term "no-arrival, no-sale" in their contract? A) shipment contract B) destination contract C) a contract to sell real estate D) consignment contract

Q: Larry, a merchant seller, had contracted with Simon, to buy welding equipment. The contract stipulated that Larry would pick up the equipment from Simon's warehouse on the 14th day from the date of the contract. But Larry could not make the pick up on that date and before he could do so on the 15th day, the warehouse was burned down by miscreants. In this situation, who bears the risk of loss of the goods that were to be received by Larry? A) The risk of loss lies with Larry for delaying the pick-up. B) The risk of loss lies with Simon for not protecting the goods. C) The risk of loss is equally shared by Larry and Simon. D) The risk of loss is shifted to the persons responsible for the fire.

Q: The property in which the security interest is taken is called collateral.

Q: Unsecured credits require collateral to protect the payment of the debt.

Q: Legal action cannot be bought against a debtor who is judgment proof.

Q: The ________ requires all contracts for the sale of goods costing $500 or more and lease contracts involving payments of $1,000 or more to be in writing. A) parol evidence rule B) open price term C) firm offer rule D) Statute of Frauds

Q: Kimberley, a merchant-seller in Kansas, had an oral contract to sell goods to Jane, a merchant-buyer in Memphis for $100,000. Two days after contracting, Kimberley sends a sufficient written confirmation to Jane of the agreed-upon transaction. Jane, who has reason to know the contents of the written confirmation, fails to object to the contents of the confirmation immediately. Two weeks after receiving the written confirmation, Jane receives a delivery of the goods from Kimberley. Jane immediately sends an objection to the confirmation to Kimberley. Which of the following is true of the contract between Kimberley and Jane? A) The Statute of Frauds can be raised against the contract because a letter of objection was sent to the offeror. B) The offer is valid as the offeree knew the contents of the confirmation and did not object within 10 days. C) The contract is void as the offeror did not receive a letter of confirmation from the offeree for delivery. D) The Statute of Frauds can be raised because the offeree did not sign the contract.

Q: A computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual, is known as a(n) ________. A) electronic agent B) electronic record C) firewall D) operating system

Q: Which of the following parties to a shipping contract bears the risk of loss of goods during transport? A) the seller B) the carrier C) the buyer D) the seller and the carrier

Q: The ________ bears the risk of loss during transportation in a destination contract. A) buyer B) seller C) carrier D) shipper

Q: Whistle Cabs, a taxi service company, has been ordered by the traffic department to update their taximeters to digital ones. Whistle Cabs decides to contract with Running Electricals, who provide digital taximeters. But to acquire it on such short notice, Whistle Cabs approaches Goldmint Bank. Goldmint Bank purchases the taximeters, and the taximeters are delivered to Whistle Cabs. The contract between Whistle Cabs and Goldmint Bank allows the taxi service company to use the taximeters for a period of time by providing monthly rentals till that period is completed. What is the nature of the contract made between Goldmint, Whistle Cab, and Running Electricals? A) counteroffer B) lease C) sale of goods D) option contract

Q: Under the UCC, if the time, place, and manner of delivery of goods are not mentioned in a contract, ________. A) the place of delivery is the buyer's place of business B) the contract is void for lack of definiteness C) the place of delivery is the seller's place of business D) the seller is obligated to pay for shipping to the buyer's place of business

Q: The rule states that a merchant who offers to buy, sell, or lease goods and gives a written and signed assurance on a separate form that the offer will be held open cannot revoke the offer for the time stated or, if no time is stated, for a reasonable time is referred to as ________. A) gap-filling rule B) firm-offer rule C) mirror image rule D) open term rule

Q: A contract is created when ________. A) the acceptance has been received by the offeror B) an acknowledgement is sent by the offeror to the offeree of receiving an acceptance C) the offeree dispatches the acceptance D) a written acceptance has been passed between the offeror and the offeree

Q: Which of the following is true of additional terms being added under the UCC? A) They are considered to be counteroffers. B) It can be added when the sale is between two merchants. C) It can be added into the contract without the consent of the offeror. D) It can be added in a sale that involves one or both parties being a nonmerchant.

Q: Which of the following describes a mixed sale? A) a sale that involves two or more intangible goods B) a sale that involves the passing of title of goods from a seller to a buyer for a price C) a sale that involves the possession and use of named goods for a set D) a sale that involves the provision of a service and a good in the same transaction

Q: A ________ is a transfer of the right to the possession and use of named goods for a set term in return for certain consideration. A) trade B) gift C) lease D) sale

Q: A person who transfers the right of possession and use of goods under a lease is known as the ________. A) lessor B) lessee C) seller D) consignee

Q: Which of the following does Article 2A of the Uniform Commercial Code govern? A) mixed sales B) sale of goods C) leases D) letters of credit

Q: A ________ is defined as the passing of title of goods from a seller to a buyer for a price. A) lease B) sale C) loan D) gift

Q: Which of the following sales would be covered by Article 2 of the UCC? A) the sale of intangible goods B) the sale of tangible goods C) the sale of real estate D) the sale of stocks

Q: The ________ is a model act passed in 1949 that includes comprehensive laws that cover most aspects of commercial transactions. A) Gramm-Leach Bliley Act B) Sarbanes-Oxley Act C) Uniform Sales Act D) Uniform Commercial Code

Q: Which of the following articles in the UCC deals with the sale of goods? A) Article 2 B) Article 4 C) Article 5 D) Article 8

Q: In which of the following does the title to the goods pass from the seller to the buyer? A) option contract B) rental agreement C) lease D) sale of goods

Q: A seller's or lessor's statement of opinion or commendation of the goods does not create an express warranty.

Q: An implied warranty requires that the quality of the goods must pass without objection in the trade.

Q: The implied warranty of fitness for a particular purpose applies only to merchants.

Q: Implied warranties of quality cannot be disclaimed.

Q: A disclaimer of the implied warranty of merchantability must specifically mention the term merchantability for the implied warranty of merchantability to be disclaimed.

Q: A person with voidable title to goods can transfer the goods title to a good faith purchaser for value.

Q: If the receipt of an electronic communication has a legal effect, it has that effect even if no individual is aware of its receipt.

Q: Receipt of an electronic acknowledgment of an electronic communication establishes that the communication was received and establishes that the content sent corresponds to the content received.

Q: The right to withhold delivery is available to the seller if the buyer or lessee wrongfully rejects or revokes acceptance of the goods.

Q: Only written express warranties are valid.

Q: As per the Statute of Frauds provisions, all contracts for the sale of goods costing $500 or more must be in writing.

Q: In a destination contract, the seller is required to replace any goods lost in transit.

Q: In a case in which a buyer purchases goods from a thief who has stolen them, the purchaser does not acquire title to the goods.

Q: The firm offer rule allows the offeror to revoke an offer at any point of time prior to the acceptance.

Q: A contract is only created when the offeror receives the offeree's acceptance.

Q: Revised Article 2A (Leases) includes provisions that recognize the importance of electronic lease contracts.

Q: A finance lease involves a lessor leasing money to a lessee.

Q: In a finance lease, the lessor manufactures and supplies the goods of the contract.

Q: If the parties to a sales contract do not agree to the time, place, and manner of delivery of the goods, the place for delivery is the seller's place of business.

Q: If a person buys a computer, the sale of contract for it would be subject to Article 2 of the UCC.

Q: Only movable goods come under the scope of Article 2 of the UCC.

Q: Contracts for the provision of services are not covered by Article 2 of the UCC.

Q: Sales that contain provisions of services and goods in the same transaction are not covered by Article 2 of the UCC.