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Business Law
Q:
Under a coinsurance clause, a homeowner who insures a home for 80 percent of its value can recover only 80 percent of the cost for damage to it.
Q:
A tenant cannot withhold rent for any reason.
Q:
Scienter exists if a party makes a statement that he or she does not believe is true.
Q:
Insurance coverage is never effective until a formal written policy is issued.
Q:
Generally, a tenant must pay agreed-to rent even if the tenant moves out.
Q:
One of the elements of fraudulent misrepresentation is the innocent party's reliance on the misrepresentation.
Q:
If a life insurance applicant pays a premium but dies before the physical exam, there is obviously no coverage.
Q:
The implied warranty of habitability does not apply to substantial physical defects that a landlord has had a reasonable time to repair.
Q:
A seller's failure to disclose a serious defect about a product for sale may give rise to an action for fraud.
Q:
A coinsurance clause provides that two or more people will be covered by the same life insurance policy.
Q:
A loss sustained between the time of application and the delivery of an insurance policy may not be covered.
Q:
A tenant is responsible for all damage to leased premises.
Q:
A seller's failure to volunteer certain material information about a product for sale will always give rise to an action for fraud.
Q:
Andy leases to Burgertown Franchise Corporation a 10,000 square-foot building under a written lease with a twenty-year term, rent payable annually. The lease includes a clause stating that Burgertown is responsible for making all necessary repairs, including rebuilding the structure after its destruction by any cause beyond Andy's control. The lease does not include a clause concerning its assignment. One day after the tenth rental payment, Burgertown, without Andy's knowledge or consent, assigns its interest in the lease to Chicken Hut Restaurants, Inc. Meanwhile, Andy dies and Dotty inherits Andy's interest in the building. Without the knowledge or consent of either Burgertown or Chicken Hut, Dotty sells the building to Earnest Investments, Inc. The next month, the building is destroyed in the flood of a nearby river. Burgertown rebuilds it and files a suit against Earnest for the expense. Earnest responds that the lease has terminated. Is Earnest correct? If so, when did the lease terminate? If not, is Earnest liable for the cost of rebuilding the structure? Why or why not?
Q:
A tenant has a duty to maintain in a reasonably safe condition those arÂeas under his or her control.
Q:
A seller's failure to volunteer certain material information about a product for sale will never give rise to an action for fraud.
Q:
Jai owns an orchard behind Key's house and property. The only access to the orchard is Key's driveway, which Jai uses to get to her orchard. Jai sells the orchard to Laurentz. Can Laurentz use the right-of-way across Key's property?
Q:
A tenant is not responsible for the ordinary wear and tear of leased premises.
Q:
Constructive eviction occurs when a tenant moves off the premises in reÂtaliation against the landlord.
Q:
A seller's attempt to conceal a fact that is material to a contract can give rise to an action for fraud.
Q:
Reliance on an "expert's" statement of opinion may be the basis for an action based on fraud.
Q:
Hobby Farms, Inc., owns rural property that it leases to various tenants, including Ira. Ira's transfer of his entire interest in the leased property to a Jason is
a. an assignment.
b. an eviction.
c. a right of entry.
d. a sublease.
Q:
A lease is enforceable even if the premises are intended for an illeÂgal purpose.
Q:
Now Shopping Mall Corporation leases space to Only U Stores and Pik-Ur-Choice, Inc. Later, Pik-Ur-Choice begins to sell items that are similar to Only U's goods, and Only U abandons its space before the end of the lease term. Only U is liable to
a. not Now or its other tenants.
b. Now and its other tenants, except Pik-Ur-Choice, for any effect on their business.
c. Now and its other tenants, including Pik-Ur-Choice, for any effect on their business.
d. Now only for the unpaid rent.
Q:
An innocent party may not seek damages for an injury resulting from fraud.
Q:
Under the covenant of quiet enjoyment, a landlord promises that a tenÂant will not be disturbed in the possession of the premises.
Q:
An innocent party can rescind a fraudulent contract.
Q:
Bren leases an apartment from Cris for one year. After two months, she sublets the premises for the next six months to Dee, without obtaining Cris's consent. Dee pays the rent for only four months. For the last two months of Dee's six-month term, Bren is
a. liable for the rent, because Dee defaulted.
b. liable for the rent, because the sublease lacked Cris's consent.
c. not liable for the rent, because Bren does not own the apartment.
d. not liable for the rent, because Bren sublet the premises to Dee.
Q:
Generally, contract doctrines apply to a landlord-tenant relationship.
Q:
The possession of land without right is a tenancy at will.
Q:
If the subject matter of a contract turns out to be more valuable than one of the parties believed it would be, that party can rescind the contract.
Q:
Oak Grove Residences, Inc., owns apartment buildings. Pedro leases one of Oak Grove's apartments. Pedro's transfer of his interest in the lease to Quito for a period shorter than the lease term is
a. an assignment.
b. an eviction.
c. a right of entry.
d. a sublease.
Q:
A general contractor who suspects that a subcontractor's bid is a mistake can still enforce the bid.
Q:
Rita believes that Shady Grove Apartments, Inc., her landlord, has violated the law in a way that entitles her to withhold the rent. This remedy is generally associated with
a. breach of the covenant of quiet enjoyment.
b. breach of the implied warranty of habitability.
c. discrimination.
d. failure to provide security against crimes in common areas.
Q:
A landlord is usually required to give some period of notice to terminate a periodic tenancy.
Q:
A general contractor who knows that a subcontractor's bid is a mistake cannot enforce the bid.
Q:
Xavier owns a duplex that he leases to Yvon and Zack. Xavier may sell
a. the duplex at any time.
b. the duplex, but only after the lease expires and the tenants move out.
c. the duplex, but only with the tenants' permission.
d. the lease, but not the duplex.
Q:
A fixed-term tenancy is created when a lease does not specify its duration.
Q:
Even if an obvious, significant clerical error exists in a written contract, the contract is enforceable.
Q:
Property Management Corporation (PMC) owns several apartment buildings in two states. Regarding standards for maintenance of the buildings, PMC should consult
a. the applicable city ordinances and state statutes.
b. the previous owners.
c. the long-term tenants.
d. the Uniform Landlords' Maintenance Manual.
Q:
Under the power of eminent domain, the government may take private property only for private use, not for public benefit.
Q:
Dora leases a house from Evan for a two-year term. To ensure the validity of their lease, it should include
a. a description of the premises.
b. a due date for the payment of the property taxes.
c. a requirement that Dora perform structural repairs to the house.
d. a requirement that Evan carry liability insurance.
Q:
A unilateral mistake always affords the mistaken party a right to relief from the contract.
Q:
A recording statute allows deeds to be recorded to give notice to the public.
Q:
Sid rents an apartment from Town Properties, Inc. The lease, which ends on May 31, does not include an option for renewal, and Sid and Town do not discuss whether Sid can stay on at the end of the term. On June 1, Sid has
a. an implied option to renew the term.
b. a right to remain contingent on notice from Town.
c. a right to remain subject to notice to Town.
d. no right to remain.
Q:
A mistake in value will usually enable a party to a contract to avoid it.
Q:
For a party to take by adverse possession, the party's possession must not be open, visible, or notorious.
Q:
A special warranty deed provides the most protection against defects of title.
Q:
Kasper, the owner of Lakeview Farm, and Milt, the tenant of the farmhouse on the property, may create a tenancy for years by
a. deed.
b. express contract.
c. implication.
d. sufferance.
Q:
Eagle Properties, a real estate investment and sales firm, presents a form contract to its customer Floyd, who wants to buy a certain quarter acre of land in a proposed housing subdivision that Eagle is marketing. Eagle does not pressure Floyd to sign a contract, but offers its form on a take-it-or-leave basis. If Floyd signs the form, is it enforceable?
Q:
A warranty deed provides the most protection against defects of title.
Q:
Rafe signs a one-year lease with Suki to occupy an apartment in Lawrence, Kansas, near the University of Kansas. Rafe needs the apartment only for two semesters and may have to sublet it for the rest of the term. Rafe's tenancy is
a. a periodic tenancy.
b. a tenancy at will.
c. a tenancy at sufferance.
d. a tenancy for years.
Q:
Jamal signs a lease with Kelvin to occupy a house on Leech Lake in Minnesota for the summer. Jamal's tenancy is
a. a fixed-term tenancy.
b. a periodic tenancy.
c. a restrictive covenant.
d. a tenancy at will.
Q:
Alpha Investments, Inc., offers to buy Beta Computer Corporation. On May 1, Beta gives Alpha copies of Beta's financial statements for the previous year. The statements show an inventory of $1 million. On May 15, Beta discovers that the previous year's inventory is overstated by $500,000, but does not inform Alpha. On June 1, Alpha, relying on the financial statements, buys Beta. On June 10, Alpha discovers the inventory overstatement. Can Alpha succeed in a suit against Beta for fraud?
Q:
Sam uses duress to force Tanya to agree to pay him for protecting her retail store against the vandalism and destruction. Tanya may
a. avoid the contract or choose to carry it out.
b. do nothing once she has agreed to pay.
c. recover from her insurer for a failure to direct her "protection."
d. recover from the local police for a failure to protect her "direction."
Q:
In most states, the seller of a new house warrants that it is fit for habitation.
Q:
Rural Holding Company (RHC) possesses farmland. RHC has the right to use the property, including harvesting the crops, for ten years. RHC does not have the right to extract the coal under the land. This is
a. a fee simple absolute.
b. a leasehold estate.
c. a life estate.
d. an easement.
Q:
Gary threatens physical harm to force Hugh to sell his business, Imported Goods, Inc., to Gary for a below-market price. This is
a. duress.
b. fraud.
c. puffery.
d. undue influence.
Q:
Real estate sales contract are often made contingent on the buyer obtaining financing.
Q:
Consumer Shops, Inc., signs a lease for a storefront owned by Downtown Building Company. Unlike a purchaser of real property, Consumer Shops
a. acquires only temporary possession of the premises.
b. enjoys exclusive possession of the premises.
c. holds only temporary title to the premises.
d. retains temporary, exclusive possession and title to the premises.
Q:
Fact Pattern 14-2
Flo enters into a contract under Gail's threats. Later, Flo refuses to perform, claiming that she acted under duress.
Refer to Fact Pattern 14-2. Gail sues to enforce the contract. To be guilty of duress, Gail must have threatened
a. a civil suit.
b. a lost opportunity.
c. a social snubbing.
d. a wrongful act.
Q:
A license is the revocable right of a person to come onto another person's land.
Q:
An easement arises when the owner of one piece of land occupies the real property of a neighbor and eventually acquires title to it.
Q:
To acquire the ownership of a mountain cabin by adverse possession, Cody must occupy the cabin exclusively, continuously, and peaceably for a specified period of time
a. in an, open, hostile, and adverse manner.
b. until the owner files a suit.
c. without the owner's knowledge.
d. with the state's permission.
Q:
Fact Pattern 14-2
Flo enters into a contract under Gail's threats. Later, Flo refuses to perform, claiming that she acted under duress.
Refer to Fact Pattern 14-2. Flo sues to rescind the contract. Gail claims that duress is a defense to enforcement of a contract, not a ground for rescission. The court will probably rule in favor of
a. Flo only.
b. Flo and Gail.
c. Flo or Gail, but not both.
d. Gail only.
Q:
Allen, who is Beth's guardian, convinces her to buy a certain parcel of land from Chris at a greatly inflated price. Allen may be liable for
a. duress.
b. fraud.
c. puffery.
d. undue influence.
Q:
Opal conveys three acres of wetlands to Pristine Places, Inc., with a deed that warrants only that Opal held good title during her ownership of the property. This deed is
a. a grant deed.
b. a quitclaim deed.
c. a special warranty deed.
d. a warranty deed.
Q:
A profit is the right to make limited use of another person's real property without taking anything from the property.
Q:
Paul makes an honest but erroneous statement that misrepresents a material fact in a contractual transaction with Quinn. Paul is guilty of
a. a unilateral mistake.
b. duress.
c. fraud.
d. nonfraudulent misrepresentation.
Q:
Elsa, the owner of Fertile Farm, sells Gina a right to camp on Fertile land overnight. Gina's right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
Q:
An easement can be created by prescription.
Q:
Mark fails to reveal a material fact in a business deal with Nancy. This constitutes fraud
a. if Mark is unaware of the material fact.
b. if the amount of consideration received is grossly inadequate.
c. if the fact concerns a serious defect known to Mark and unlikely to be known by Nancy.
d. under any circumstances.
Q:
Life tenants are persons who share ownership rights simultaneously.
Q:
With respect to Egor's land, Fig has an easement, Gabe has a profit, and Huck has a license. A right to possess the land is owned by
a. Egor, Fig, and Gabe only.
b. Egor and Gabe only.
c. Egor only.
d. Fig, Gabe, and Huck only.
Q:
Moby leases from National Theater Corporation a theater in which to stage a series of concerts. Ollie buys a ticket to the series. What distinguishes Moby, a tenant, from Ollie, a licensee, is
a. the exclusivity of possession.
b. the quiet enjoyment of rights.
c. the temporary nature of possession.
d. the title to the property.
Q:
The owner of a fee simple absolute has the right to use property for whatever purpose he or she sees fit.
Q:
Don, a salesperson for Excel Autos, promises Fern that a certain car will give her a "smooth ride." Don offers a test drive, which Fern declines. She buys the car but soon realizes that its suspension is in poor condition. Fern
a. can rescind the contract on the ground of fraud.
b. can rescind the contract on the ground of misrepresentation.
c. can rescind the contract on the ground of mistake.
d. was not defrauded.
Q:
In selling software to A-One Corporation, Blythe tells A-One's purchasing agent that the software is "almost human." This is
a. fraud.
b. duress.
c. puffery.
d. undue influence.
Q:
In a fee simple absolute, the owner has the greatest aggregation of rights, privileges, and power possible.
Q:
Tyro has the right to drive across Ula's land, which is next to Tyro's property, to reach an access road. Tyro's right is
a. an easement appurtenant.
b. an easement in gross.
c. a profit appurtenant.
d. a profit in gross.