Q&A Hero

Q: Glen retains Holly, an attorney, on a contingent-fee basis to seek $100,000 in damages in a personal-injury suit against Interstate Shipping Corporation. Glen wins. He must pay a. court fees and other expenses, but not Holly's fee. b. Holly's fee, court fees, and other expenses. c. Holly's fee only. d. neither Holly's fee nor court fees and other expenses.

Q: Trey, an agent for Uno Music Corporation, executes an unau­thor­ized contract with Variety Recording, Inc., that is highly ad­vanta­geous to Uno. Variety withdraws from the deal before Uno ratifies the con­tract. The contract is a. valid. b. variable. c. void. d. voidable.

Q: Every judgment is enforceable.

Q: Darwin borrows $200,000 from Evermore Bank to buy a home. Less than six months into the term, Darwin stops making payments on the loan. To initiate the process to repossess and auction off the property securing the loan, Evermore must a. issue a notice of sale to the borrower. b. offer the property for sale in an auction on the courthouse steps. c. record a notice of default with the appropriate county office. d. resort to litigation to establish clear ownership of the property.

Q: Jock hires Kym to act as his agent to purchase Lifetime Gym & Fitness, Inc. Jock tells Kym to reveal that she is buying the firm on behalf of a third party and to tell Lifetime's seller who that third party is. Jock is a. a disclosed principal. b. an apparent principal. c. an undisclosed principal. d. a partially disclosed principal.

Q: Agnes borrows $110,000 from Bay Harbor Bank to buy a home under a mortgage with an acceleration clause. After eighteen payments, Agnes stops making payments on the mortgage. Bay Harbor a. can foreclose once on the entire amount of the loan. b. may seek only the amount of the missed payments, not the entire loan. c. must foreclose on small amounts over time as each payment comes due. d must notify Agnes to accelerate the steps to cure the default.

Q: Harbor Bay Bank has made mortgage loans to consumers that qualify for the Home Affordable Modification Program (HAMP), which offers incentives to lenders to change the terms of certain loans. The purpose of HAMP is to a. convey property through lenders to consumers who can afford it. b. force lenders to forgive all high-risk mortgages. c. reduce monthly payments to levels that homeowners can pay. d. transfer affordable property to investors to lease to consumers.

Q: A case is remanded when it is sent back for further proceedings to the court that originally heard the case.

Q: Bud approves on behalf of Codybut without authorizationa contract with Dik to build a new silo. Cody does not ratify the contract. Later, Dik tries to enforce the deal. This attempt will be a. partly successful. b. partly unsuccessful. c. totally successful. d. totally unsuccessful.

Q: Velma borrows $110,000 from Watershed Bank to buy a home. If she fails to make payments on the mortgage, the bank has the right to repossess and auction off the property securing the loan. This is a. a short sale. b. forbearance. c. foreclosure. d. the equitable right of redemption.

Q: An appellate court may elect to hear new evidence in a suit.

Q: Without authorization, Rolf contracts on behalf of Sari to have Tige paint the interior and exterior of Sari's house. Sari ratifies the contract. Later, Sari tries to rescind the part of the contract re­lat­ing to the exterior. This attempt will be a. partly successful. b. partly unsuccessful. c. totally successful. d. totally unsuccessful.

Q: Erin and Dooley, a married couple, borrow $120,000 from Capital & Credit Bank to buy a home. When Erin and Dooley divorce, they are unable to make payments on the mortgage. The market value of the home has declined to less than the balance of the loan. Capital & Credit agrees to a sale of the property for this amount. This is a. a deed in lieu of foreclosure. b. a home equity loan. c. a reverse mortgage. d. a short sale.

Q: In most appealed cases, a trial court's decision is affirmed.

Q: Iggy hires Joy to act as his agent to purchase Kup-a-Koffee Kompany. Iggy tells Joy to reveal only that she is buying the firm on behalf of a third party, without telling Kup-a-Koffee's seller who that third party is. Iggy is a. a disclosed principal. b. an implied principal. c. an undisclosed principal. d. a partially disclosed principal.

Q: Based on Bluto's conduct, Cass reasonably believes that Dee has the authority to act on Bluto's behalf even though Dee does not have the actual authority to do so. Cass makes a payment to Dee for Bluto. Dee keeps the money and disappears. Bluto a. can demand that Cass make a repayment directly to Bluto. b. can obtain damages from Cass for Dee's misconduct. c. may be estopped from denying that Dee had authority. d. must repudiate Dee's misconduct to avoid liability.

Q: Denise borrows $90,000 from Clear Lake Credit Union to buy a home. Denise loses her job and fails to make payments on the mortgage, but assures Clear Lake Credit that she will soon secure a new job. The lender agrees to postpone the payments. This is a. a bridge loan. b. forbearance. c. a reamortization. d. a restructure.

Q: A brief includes a statement of the applicable law in a case.

Q: Money Mortgage Mart makes a short-term loan to Natalie to allow her to make a down payment on a new home before selling her current home. This is a. a bridge loan b. a home equity loan. c. an equitable right of redemption. d. a violation of federal law.

Q: The standards for granting a motion for a judgment n.o.v. are often the same as the standards for granting a motion to dismiss.

Q: Based on Nan's conduct, Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so. In this circumstance, Poppy has a. apparent authority. b. express authority. c. implied authority. d. no authority.

Q: Property Financial Corporation makes loans that qualify, under a Federal Reserve Board amendment to Regulation Z, as Higher-Priced Mortgage Loans (HPMLs). Quinn applies to Property Financial for an HPML. To make the loan, the lender must a. convince an appraiser to inflate the value of the property. b. impose a prepayment penalty for the duration of the loan. c. structure the loan to specifically evade the HPML protections. d. verify the borrower's ability to repay the loan.

Q: Sonia manages a Tasty Pastry store for United Food Company. To manage the business, Sonia's authority can be implied by a. an inference from the position Sonia occupies. b. any inference a reasonable customer or supplier would make. c. any inference Sonia chooses to make. d. no inference.

Q: A motion for a new trial will be granted only if the trial judge feels that it is appropriate to grant a judgment for the other side.

Q: A jury verdict specifies the amount of the damages to be paid by a losing party.

Q: Hill & Dale Credit Corporation makes mortgage loans to consumers secured by their principal homes. For a Hill & Dale loan to qualify as a Higher-Priced Mortgage Loan (HPML), its annual percentage rate must exceed, by a certain amount, a. the average prime offer rate for a comparable transaction. b. the consumer's income-to-debt ratio. c. the percentage of income that a consumer can devote to its payment. d. the projected increase in market value of the consumer's home.

Q: Geoff serves in a representative capacity for Huck. To accomplish the objectives of this relationship, Geoff's authority can be implied a. by contradiction. b. by custom. c. by lack of reason. d. under no circumstances.

Q: A jury is free to ignore a judge's statement of the facts in their case.

Q: Cory employs Daily Delivery Agency as an agent under a writ­ten agreement that describes the rights and duties of both parties. This is a. apparent authority. b. equal authority. c. express authority. d. implied authority.

Q: Fact Pattern 22-224-Hour Credit Corporation issues high-cost and high-fee mortgage products to people, including Benny, who could not easily obtain credit under other loan programs.Refer to Fact Pattern 22-2. Under federal law, disclosures with respect to one of 24-Hour Credit's loans must be provideda. a certain number of days after the loan is finalized.b. a certain number of days before the loan is finalized.c. at the same time at which the loan is finalized.d. at whatever time is most rational and appropriate.

Q: Testimony given in court about what someone heard someone else say is not admissible as evidence.

Q: Kady, an agent for Lebron, enters into a contract on Lebron's behalf with Madge that must be in writing to be enforceable under the Statute of Frauds. Kady's authority to enter into this contract is not in writing. Under the equal dignity rule, this contract is a. enforceable. b. void. c. voidable at Lebron's option. d. voidable at Madge's option.

Q: Fact Pattern 22-224-Hour Credit Corporation issues high-cost and high-fee mortgage products to people, including Benny, who could not easily obtain credit under other loan programs.Refer to Fact Pattern 22-2. Under federal law, if 24-Hour Credit fails to provide certain material disclosures with respect to the loan, Benny's right to rescind the loana. expires at midnight on the day the loan is finalized.b. is immediately revoked.c. is extended for up to three years.d. is tolled for the duration of the loan payments.

Q: Voir dire is a process for presenting evidence in a case.

Q: Miklos grants an ordinary power of attorney to Nathalie to handle a list of financial transactions on Miklos's behalf. This power will terminate on a. any transaction causing a loss to Miklos. b. Miklos's death or incapacity. c. Miklos's sixty-fifth birthday. d. Nathalie's handling of one of each stipulated transaction.

Q: Shade Tree Lending Corporation advertises loans as fixed-rate loans but, in fact, their rates or payment amounts will change. This is a. a legal and ethicalbut morally arguablefinancial ruse. b. a legalbut unethicalbusiness practice. c. a necessary tactic to generate a profitable loan in today's market. d. a violation of the law.

Q: In a federal case at law involving more than $20 in damages, a defendant has the right to a jury trial.

Q: Violet negotiates with Urban Credit Corporation to obtain a loan for $85,000 to buy a home. During the negotiations, Urban Credit orally misrepresents the terms, but provides the required documents, which accurately state the terms. Violet does not read the documents. The party or parties most likely liable for a violation of the law is a. neither party. b. Urban Credit. c. Urban Credit and Violet. d. Violet.

Q: Lather Up Soap Products Company grants its agent Kathy an exclusive terri­tory in which to sell Lather Up products. The firm cannot compete with Kathy in that territory under the principal's duty of a. avoidance. b. cooperation. c. indemnification. d. reimbursement.

Q: Riverview Bank makes a mortgage loan of $95,000 to Pomeroy to buy a home. Under federal law, if Riverview fails to provide certain material disclosures with respect to the loan, Pomeroy's right to rescind the loan a. expires at midnight on the day the loan is finalized. b. is canceled immediately. c. is extended for up to three years. d. is tolled for the duration of the mortgage payments.

Q: Jody is an agent for Insta Cross Country Trucking Inc. In the course of Jody's performance for the firm, Jody pays Heck for certain vehicle maintenance and repair services. Jody's right to obtain the amount of those payments from Insta arises under the principal's duty of a. avoidance. b. cooperation. c. indemnification. d. reimbursement.

Q: There is a difference between depositions with written questions and interrogatories.

Q: Fact Pattern 22-1Northeast Bank makes mortgage loans to consumers, including Mai, to buy homes.Refer to Fact Pattern 22-1. For Mai's loan, Northeast provides all required disclosures. Mai has a right to rescind the mortgagea. at any time.b. under no circumstances.c. within three business days.d. within whatever period is most rational and appropriate.

Q: Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, "Buy your carpet here, and I"ll install it for half of what the store would charge." Dita buys the carpet, which Bob in­stalls for half the store's price. Bob keeps the money. Bob has breached a. no duty. b. the duty of loyalty. c. the duty of notification. d. the duty of obedience.

Q: A motion for summary judgment may be made before or during a trial.

Q: Fact Pattern 22-1Northeast Bank makes mortgage loans to consumers, including Mai, to buy homes.Refer to Fact Pattern 22-1. Under federal law, disclosures with respect to one of Northeast's loans must be provideda. a certain number of days after the loan is finalized.b. a certain number of days before the loan is finalized.c. at the same time at which the loan is finalized.d. at whatever time is most rational and appropriate.

Q: A summary judgment will be granted when there are genuine issues of fact in a trial and no question of law.

Q: Home Development Company employs llya to buy property for a future residential development. Ilya secretly buys some of the property and sells it to Home Development at a profit. Ilya has breached a. no duty. b. the duty of accounting. c. the duty of loyalty. d. the duty of notification.

Q: Only a defendant may file a motion for summary judgment.

Q: Main Street Lenders, Inc., attempts to coerce Nolanwho specializes in determining the value of real and personal propertyinto misstating the value of a property on which a loan is to be issued. This is a. a legal and ethicalbut morally arguablefinancial ploy. b. a legalbut unethicalbusiness practice. c. a necessary tactic to generate a profitable loan in today's market. d. a violation of the law.

Q: Elle is an agent for Fine Cosmetics, Inc. Elle owes Fine Cosmetics the duty of a. avoidance. b. compensation. c. indemnification. d. performance.

Q: Only a plaintiff may file a motion for judgment on the pleadings.

Q: Lorna borrows $175,000 from Mountainside Credit Union to buy a home. Among the terms that must be disclosed under federal law is the annual percentage rate. This is a. the actual cost of the loan on a yearly basis. b. the average prime offer rate. c. the interest rate at which the loan is made. d. the loan principal.

Q: Rita is appointed as an agent for Superior Sales, Inc. The agency agree­ment is silent as to the level of sales that Rita is expected to achieve. She must a. achieve nothing because the agreement says nothing on the issue. b. attain the level that Rita achieved with her previous employer. c. maintain the level Superior attained before Rita became an agent. d. use reasonable diligence and skill in selling.

Q: Dizzy is not Edwina's agent but enters into a contract with Frida on Edwina's behalf. Edwina later contacts Frida to approve the contract. This is a. an agency by agreement. b. an agency by estoppel. c. an agency by ratification. d. not the creation of an agency relationship.

Q: An answer can admit to the allegations made in a complaint.

Q: Hubert borrows $100,000 from Integrity Mortgage Mart to buy a home. Soon after obtaining the mortgage, Integrity convinces Hubert to refinance. This is a. a short sale. b a subprime mortgage. c. loan flipping. d. steering and targeting.

Q: Virgil borrows $175,000 from United Finance Bank to buy a home. Federal law regulates primarily a. mortgage terms that must be disclosed in writing. b. oral representations with respect to the terms of a loan. c. the lowest prices for which real property can be sold. d. who can buy real property, where they can buy it, and why.

Q: Sela agrees to act on Thom's behalf, subject to Thom's control, and Thom trusts Sela to so act. They set out the terms in a written document, which they both sign. This is a. an agency by agreement. b. an agency by estoppel. c. an agency by ratification. d. not the creation of an agency relationship.

Q: The time cost of a lawsuit is not significant.

Q: Dahlia borrows $125,000 from Clearview Credit Union to buy a home. The interest rate and other terms that are required to be disclosed under federal law must be a. based on uniform formulas of calculation. b. expressed in lender' language. c. set out in a formula unique to each loan. d. stated in "legalese."

Q: The Federal Rules of Civil Procedure govern a civil trial held in a federal court.

Q: Louis, a certified public accountant and an investor, and Maria, an in­surance salesperson and a realtor, may create an agency relationship for a. a business purpose only. b. a legal purpose only. c. any purpose. d. no purpose.

Q: Duran applies to EZ Credit Mortgage Company for $100,000 to buy a home. EZ Credit steers Duran toward an adjustable-rate mortgage even though he qualifies for a fixed-rate mortgage. This is a. a short sale. b a subprime mortgage. c. loan flipping. d. steering and targeting.

Q: Ace Trucking Corporation files a suit in a state court against Bob's Service Company (BSC), and wins. BSC appeals the court's decision, asserting that the evidence presented at trial to support Ace's claim was so scanty that no reasonable jury could have found for the plaintiff. Therefore, argues BSC, the appellate court should reverse the trial court's decision. May an appellate court ever reverse a trial court's findings with respect to questions of fact?

Q: Lenore is the sole proprietor of Mall Kiosks. With respect to contracting for her own business interests, Lenore is a. an agent and has the authority. b. an agent but does not have the authority. c. not an agent and does not have the authority. d. not an agent but does have the authority.

Q: Milo borrows $125,000 from North State Bank to buy a home. To comply with the Statute of Frauds, the mortgage must be a. a highly formal document. b. a particular form. c. in the same format as the lender's other loans. d. in writing.

Q: MicroWare hosts a Web site that advertises its software products, features upgrades and "patches" for its existing software products, and accepts orders for the products from consumers throughout the world. Mary, who owns and operates Business Records, Inc,, a small bookkeeping and payroll business in Colorado, orders from the Web site a copy of MicroWare's Office Books software. Office Books is designed to help accountants and bookkeepers keep accurate business records. When Office Books is found to have a defect in its calculating program, MicroWare offers a patch on its Web site to fix the problem. Mary has already lost several customers because of the miscalculating defect, however, and files a suit against MicroWare in a Colorado state court. Can the court exercise jurisdiction over MicroWare? Why or why not?

Q: Jim agrees to act on Kit's behalf, subject to Kit's control, and Kit trusts Jim to so act. This describes a relationship between a. a business and its competitors. b. a government and its governed. c. a parent and a child. d. a principal and an agent.

Q: Delite Candy Company hires Elton to sell Delite's products in a certain area. Delite agrees to pay Elton a salary, plus commission, for a trial period. They also agree that Elton can sell using any methods and during any hours that seem appropriate. The key factor in whether Elton is Delite's employee is a. the amount of Elton's salary. b. the control Delite has over the details of the work. c. the length of the trial period. d. the title that designates Elton's position.

Q: Laurel borrows $150,000 from Marketplace Mortgage Loans to buy a home. The financing documents require Laurel to maintain the property, obtain homeowner' insurance, and pay all property taxes and other assessments through the lender. With respect to these terms, a court is most likely to a. enforce them. b. refuse to enforce them. c. rescind them. d. rewrite them.

Q: A clause in a contract between United Timber Corporation, a U.S. firm, and Wang, Ltd., a Japanese firm, specifies that disputes over the contract will be adjudicated in the United States. This is a. a domestic-dispute clause. b. a forum-selection clause. c. an adjudication clause. d. an arbitration clause.

Q: KupaJava hires Lola to manage one of KupaJava's seven drive-through coffee stands. KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the standards that should be observed, the goals that should be attained, and the methods that should be used. Lola is most likely KupaJava's a. employee. b. independent contractor. c. principal. d. work for hire.

Q: Rita borrows $30,000 from South State Credit Union. South State accepts Rita's equity in her home as collateral, which can be seized if the loan is not repaid on time. This is a. a home equity loan. b. an adjustable-rate mortgage. c. an interest-only mortgage. d. a violation of the law.

Q: Community Trust Bank provides Devlin with a mortgage to buy a home. The rate of interest is fixed for seven years. At the end of that period, a large payment for the entire balance of the mortgage loan is due. This is a. a balloon mortgage. b. an adjustable-rate mortgage. c. an interest-only mortgage. d. a violation of the law.

Q: Omega, Inc., a U.S. firm, and Wallaby, Ltd., an Australian firm, enter into a contract that does not have forum-selection or choice-of-law clauses. Litigation between Omega and Wallaby over a dispute involving this contract may occur in a. Australia only. b. Australia or the United States, but not both. c. Australia, the United States, or both. d. the United States only.

Q: Oscar is Precise Service Company's chief executive officer. On Precise's behalf, Oscar solicits business, hires and fires workers, and handles the finances. Precise pays Oscar varying amounts, depending on his "needs." Oscar is most likely a. a principal. b. an employee. c. an employer. d. an independent contractor.

Q: Tracy borrows $30,000 from Secure State Bank. The lender accepts Tracy's equity in her home as collateral, which can be seized if the loan is not repaid on time. With respect to any proceeding that occurs if Tracy fails to make the payments, this loan is subordinated. This means that it a. takes a higher priority. b. takes a lower priority. c. has the same priority as the primary mortgage. d. fluctuates with the market value of the property.

Q: To resolve a dispute between Amy in Boston and Chris in Denver, E-Solution, like most online dispute resolution services, would apply the law of a. the jurisdiction in which the complainant is located. b. the jurisdiction in which the respondent is located. c. the state of California. d. none of the above.

Q: Bubbly Soda Company hires Carlo to work on Bubbly's shipping dock, checking outgoing loads and dispatching Bubbly's drivers. With respect to Carlo, Bubbly is most likely a. an employee. b. an agent. c. an independent contractor. d. a principal.