Q&A Hero

Q: Trucks & Trailers, Inc. (T&T), and United Delivery Service enter into a contract for a lease of trucks. T&T is a merchant who deals in goods of the kind leased. Under the UCC, an implied warranty of merchantability arises a. automatically in lease contracts. b. only if the lessee asks for it. c. only if the lessor does not expressly disclaim it. d. only in conjunction with sales contracts, not lease contracts.

Q: Fact Pattern 18-2Jake is the maker of a $2,000 promissory note payable to Kim. Kim indorses the note to Lou who, in turn, indorses it to Mona, who then in­dorses it to Nat, the present holder.Refer to Fact Pattern 18-2. Suppose that Mona pays Nat on the note. With timely notice to the proper parties, Mona may collect payment on the note froma. Jake, Kim, or Lou.b. Jake or Kim only.c. Lou only.d. no one.

Q: In most states, the seller of a new house warrants that it is fit for habitation.

Q: Fact Pattern 18-2Jake is the maker of a $2,000 promissory note payable to Kim. Kim indorses the note to Lou who, in turn, indorses it to Mona, who then in­dorses it to Nat, the present holder.Refer to Fact Pattern 18-2. Nat properly pre­sents the note to Jake for pay­ment, but Jake dishonors it. With timely notice to the proper parties, Nat may collect payment on the note froma. Kim, Lou, or Mona.b. Kim or Lou only.c. Mona only.d. no one.

Q: Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, "This is the best car Ive ever seen." This statement is a. an express warranty. b. an implied warranty. c. a warranty of title. d. puffery.

Q: Dependable Appliances, Inc., and Elaine enter into a contract for a sale of kitchen appliances. Dependable, a merchant who deals in goods of the kind sold, notes that its goods come with an implied warranty of merchantability. Under the UCC, this means that the goods are reasonably a. fit for the buyer's particular purpose. b. fit for the ordinary purpose for which such goods are used. c. suitable for resale at an acceptable price. d. the best quality that money can buy.

Q: A quitclaim deed warrants more than any other deed.

Q: State Bank receives a check drawn by Tricia. The check is re­ceived af­ter the established "cutoff" hour. Payment can be postponed without dishonor a. indefinitely. b. under no circumstances. c. unless Tricia personally demands acceptance. d. until the close of the next business day.

Q: John is an art dealer with special expertise in modern art. Rachel comes to John's gallery to purchase a modern art painting as an investment. John shows her several paintings that he says are high quality and will increase in value in the next ten years. John's statement is a. an express warranty. b. an implied warranty. c. an opinion. d. puffery.

Q: A warranty deed provides the most protection against defects of title.

Q: An easement can be created by implication.

Q: Nero signs a check "pay to the order of Olive" drawn on Nero's account in Plum Bank. Olive signs the back of the check. Secondary liability on this check extends to a. Nero and Olive only. b. Nero and Plum Bank only. c. Nero only. d. Plum Bank only.

Q: Sari buys a new sport utility vehicle (SUV) from Terrific Cars & Trucks, Inc. The most important factor in determining whether an ex­press war­ranty is created is whether a. Sari expresses to Terrific what she wants warranted. b. Sari's desire for the SUV becomes part of her motivation to deal. c. Terrific expresses to Sari what it expects of its customers. d. Terrific's promise becomes part of the basis of the bargain.

Q: Don writes a check to Eve drawn on Don's account at First Bank. Eve presents the check for payment to First Bank, which ac­cepts it. The bank is a. not liable for payment. b. primarily liable for payment. c. secondarily liable for payment. d. simultaneously liable, with Don, for payment.

Q: A profit is a right to make a profit from some part of land or some product of the land, and the right terminates once that profit is made.

Q: Life tenants are persons who share ownership rights simultaneously.

Q: Superior Company draws a check payable to Ted. Uri makes a note payable to Vital Finance Corporation. Primarily liable parties include a. neither Superior nor Uri. b. Superior and Uri. c. Superior only. d. Uri only.

Q: Fancy's Feedlot orders one hundred sacks of cattle feed from Bovine Feeders, Inc. Each bag has the words "Twenty percent protein" printed on the front. This is a. an express warranty. b. an implied warranty. c. a warranty of title. d. puffery.

Q: The holder of a life estate has the right to use property for whatever purpose he or she sees fit without regard to the rights of a fee simple owner.

Q: Biff signs a note "payable to the order of County Credit Union." Unless Biff has a valid defense against payment, Biff's liability on this note is a. lateral. b. primary. c. secondary. d. tertiary.

Q: Krissa, a horse breeder, shows Maggie, a customer looking for a new stallion for her breeding program, a stallion and tells her that the stallion is very fertile and can easily breed twenty mares per year. Krissa's statement is a. an express warranty. b. an implied warranty. c. a warranty of title. d. puffery.

Q: A contract for the sale of commercial realty should indicate what items are included in the sale.

Q: Kris transfers a note, on which Liu is the maker, to Mia, who takes it for value and in good faith. Mia knows that Kris breached the contract underlying the note, giving Liu a defense against payment. With respect to this note, Mia is a. a knowledgeable holder in due course. b. an ordinary holder. c. an ordinary holder in due course. d. an ordinary note taker.

Q: Barry buys a bulldozer from Big Sandbox Equipment Company. Barry is unaware that there is a lien against the bulldozer when he buys it. Under the UCC, if the creditor reposes the bulldozer, Barry a. can recover from Big Sandbox Equipment for breach of warranty. b. can do nothing. c. can file criminal charges against Big Sandbox Equipment. d. can recover damages from the creditor.

Q: Personal property may become real property by attaching it to real property.

Q: Big Screen Video Corporation sells high-definition television sets. Under most cir­cum­stances, Big Screen Video will be presumed to have warranted that its title to the TVs is a. the same as each brand's name. b. none of the choices'a warranty of title is not presumed. c. good and valid. d. the best that money can buy.

Q: Pola wants to transfer a check to Quin. The check is defective if it a. has been previously dishonored. b. has no irregularities on its face. c. is not overdue. d. is so complete that no element of negotiability is lacking.

Q: Nina wants to transfer a check to Opie. The check is not defective if it a. has an obvious irregularity on its face. b. has been previously honored. c. is incomplete so that an element of negotiability is lacking. d. is overdue.

Q: Merchant Supply Company and National Discount Stores enter into a contract for a lease of cash registers. Merchant assures National that it has valid title to the goods. Under the UCC, a warranty of title arises a. automatically in most lease contracts. b. only if the lessee asks for such a warranty. c. only if the lessor expresses such a warranty. d. only in conjunction with sales contracts, not lease contracts.

Q: An item cannot be a fixture unless it is physically attached to the land.

Q: Jen makes a gift of a check to Kilroy who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Kilroy is a. an extraordinary holder in due course. b. an ordinary check passer. c. an ordinary holder. d. an ordinary holder in due course.

Q: William steals a valuable collection of baseball cards from Phillip. William then sells the cards to Darrel, who does not know that the cards are stolen. Phillip discovers that Darrel has the cards. Which of the following best describes the rights and liabilities of the parties involved? a. Darrel has the right to keep the cards if he compensates Phillip monetarily. b. Phillip has the right to reclaim the cards from Darrel, but is liable to Darrel for damages. c. Phillip has the right to reclaim the cards from Darrel and William is liable to Darrel for damages. d. Darrel has the right to keep the cards without compensating William.

Q: Plant life is not considered to be real property.

Q: Owen is a holder of a promissory note obtained from Purchase Money, Inc. Regarding the defenses against payment of the note to which Purchase Money is subject, Owen, as an ordinary holder, is subject to a. more defenses. b. no defenses. c. some defenses, but not as many. d. the same defenses.

Q: Jean buys a bike from Mike's Bike Shop. She wants to make sure that there is a warranty of title. Jean a. does not need to do anything because warranties of title arise automatically in most sales contracts. b. must request a written warranty of title. c. must request an oral warranty of title. d. must request both a written and an oral warranty of title.

Q: Land includes the artificial structures attached to it.

Q: Land includes all of the waters on or under its surface.

Q: To pay for a new desk bought at Office Outlet, Pete makes a check pay­able to "Offs Outlet." A proper indorsement of the check is a. "Office Outlet" only. b. "Offs Outlet" only. c. "Office Outlet" or "Offs Outlet." d. "Pete" only.

Q: The dangers associated with using sharp knives are so commonly known that manufacturers need not warn users of those dangers

Q: Procter, who is not in contemplation of imminent death, tells his daughter Opal that she can have his Dodge truck on his death, whenever that happens. This is a. a valid gift causa mortis. b. a valid gift inter vivos. c. a valid gift largesse. d. not a valid gift.

Q: Courts in many jurisdictions will consider the negligent actions of both the plaintiff and the defendant when apportioning liability in a product liability action.

Q: Todd indorses a check, "Pay to Interstate Trucking if they deliver the lumber by May 1, 2010." This is a. a blank indorsement. b. a qualified indorsement. c. a restrictive indorsement. d. a special indorsement.

Q: During the last years of her life, Barb's chief companion was Sylvia. Barb told Sylvia that she could have a certain painting when Barb died. Barb died without a valid will. Her family refused to give the painting to Sylvia, however, who filed a suit to obtain its possession. Based on the de­cision in Case 43.1, In re Estate of Piper, the court will most likely rule in favor of a. Barb's family, because the painting was never delivered to Sylvia. b. Sylvia, because Barb intended to give the painting to Sylvia. c. Barb's family, because there was no will. d. Sylvia, because Barb's family never cared about Barbara.

Q: Suppliers are generally required to expect reasonably foreseeable misuses of their products.

Q: Clancy sells shares in Darling Pool & Spa Company to Eton. Clancy does not deliver the actual possession of the shares to Eton, but gives him the key to a safety-deposit box in First State Bank in which the stock certifi­cates are locked. Presenting the key is a. constrictive delivery. b. constructive delivery. c. destractive delivery. d. destructive delivery.

Q: On the back of a check payable to Nero, he writes "Pay to Odell, without recourse" and signs it. This a. does not effect the check's negotiability or any party's liability. b. relieves Nero of liability on the check. c. relieves Odell of liability on the check. d. renders the check nonnegotiable.

Q: Recovery in a product liability case may be limited when it can be shown that the plaintiff misused the product.

Q: Vladimir negotiates a bearer instrument to Wendy by a. assignment. b. delivery. c. presenting it in response to a demand by Wendy. d. promising to pay.

Q: Ansel owns Bar-B Ranch. Ansel's only son Cy owns Double-D Ranch in the same county. Ansel gives 90 percent of the Bar-B to Etta, a short-term employee. This gift a. may lack the required element of "donative intent." b. may lack the required element of "donor's acknowledgement." c. may lack the required element of "heir's acquiescence." d. meets all of the requirements for an effective gift.

Q: Petra signs a check payable to Quincy, who in­dorses the back, gives it to Regional Credit Union, and receives cash. The transfer of the check from Quincy to the credit union is a. an assignment. b. a negotiation. c. a payment. d. a sale.

Q: A design defect is not the sort of product defect that will support the imposition of liability on a strict product liability basis.

Q: Ira is declared mentally incompetent. Jay, Ira's son, is named his guard­ian. At Jay's insistence, Ira transfers his assets to Jay "for safekeeping." A court might conclude that this gift is not effective on the ground that there was no a. acceptance. b. delivery. c. donative intent. d. donor's acknowledgment.

Q: Sellers or lessors are liable only for products that are reasonably dangerous.

Q: Ollie negotiates an order instrument to Phil by a. assignment of its rights under a contract. b. delivery with any necessary indorsement. c. making an unconditional promise to pay. d. presenting it in response to a demand by B.

Q: Patty's parents give her a car as a gradua­tion present. While Patty spends the sum­mer in Europe, her friend Rita agrees to keep the car in her ga­rage. On Patty's part, this is acquisition of property by a. bailment. b. capture. c. find. d. gift.

Q: On May 1, Doug signs a check that is payable to the order of Extra Credit Corporation and that is dated July 1. This check is a. negotiable. b. nonnegotiable, because it is payable to Extra Credit Corporation. c. nonnegotiable, because it is postdated. d. nonnegotiable, because it is signed by Doug.

Q: An action in strict product liability requires that the product not be in a defective condition when the defendant sells it.

Q: Ruth gives Seth a computer as a gift. Using the computer, Seth develops a new game, for which he obtains intellectual property protection, and forms Top Games, Inc., to make and market the game. Seth's ac­quisition of the game is by a. a bailment. b. accession. c. confusion. d. production.

Q: Wilbur signs a note that includes a clause under which the note's holder can delay the date of its payment indefinitely. This is a. an acceleration clause. b. an extension clause. c. an immaturity clause. d. a stop-payment clause.

Q: To support the imposition of strict product liability, a product must be substantially changed from the time it is sold to the time an injury occurs.

Q: Fanny buys clay to throw pottery, which is glazed and fired in a kiln. The finished products are sold to Gifte Shoppe, which sells these items and others to customers who often present them as gifts. Thus, property can be acquired in various ways. The most common way to acquire personal property, however, is to a. buy it. b. commingle it. c. produce it. d. receive it as a gift.

Q: Tyrone draws a check payable to "Cash" and presents it to United Bank for payment. This instrument is a. a bearer instrument. b. an order instrument. c. valid but nonnegotiable. d. void.

Q: To succeed in a strict product liability suit, an injured plaintiff must show that a product's defect was the proximate cause of the injury.

Q: Klondike and Leola own 10,000 shares of stock in My-T Gro Corporation. On the death of ether owner, that owner's interest in the stock passes to the surviving owner. This is a. a joint tenancy. b. a tenancy by the entirety. c. a tenancy in common. d. ownership in fee simple absolute.

Q: Strict liability depends on privity of contract between an injured party and a seller.

Q: Edna and Flavia buy a boat that they dock in a marina near Gulfport, Mississippi. On the death of either owner, that owner's interest in the boat passes to her heirs. This is a. a joint tenancy. b. a tenancy by the entirety. c. a tenancy in common. d. ownership in fee simple absolute.

Q: Quincy draws a check payable to "Replay Stadium" to buy two season tickets to the next year's State College football games. This instrument is a. a bearer instrument. b. an order instrument. c. valid but nonnegotiable. d. void.

Q: Under the doctrine of strict liability, people are liable for the results of their acts only if their intentions are malicious.

Q: Faye owns the land on which Golden Spurs Ranch is situated, plus the ranch house, barn, and other structures permanently attached to the land. Faye's brother Huey owns everything else in the ranch's opera­tionlivestock, feed, and so on. The personal property is owned by a. Faye and Huey. b. Faye only. c. Golden Spurs Ranch. d. Huey only.

Q: EZ Credit Company signs an instrument payable to the order of Flem that states, "The maker of this note at the date of maturity, May 1, 2013, can extend the time of pay­ment, but for no more than a rea­sonable time." This instrument is a. negotiable. b. nonnegotiable, because it includes an extension clause. c. nonnegotiable, because it is not payable within a definite time. d. nonnegotiable, because it is payable to a specific payee.

Q: Helen owns heavy construction equipment and the tools to service it, as well as office furniture, including computers. Ilya owns a number of pat­ents, trademarks that identify the products made under those patents, and stock in the company that sells those products. Personal property in­cludes the items owned by a. Helen and Ilya. b. Helen only. c. Ilya only. d. neither Helen nor Ilya.

Q: A failure to exercise reasonable care is negligence.

Q: A manufacturer's duty of care extends to the inspection and test­ing of products bought to incorporate in the final product.

Q: Opal signs a promissory note payable to the order of Payday Loan Company. The note states that it is payable "with interest at the legal rate." This note is a. negotiable. b. nonnegotiable, because it does not specify a rate of interest. c. nonnegotiable, because it is a promissory note. d. nonnegotiable, because it is payable only with interest.

Q: Unlike an ordinary bailee, a warehouse company cannot limit its liability.

Q: In sales law, product liability is assurance by one party of the existence of a fact on which the other party can rely.

Q: To finance the purchase of a car from Giant Auto Sales, Hoppy signs an instrument promising to pay to "Ideal Credit Union" $18,000 with interest in installments with the final payment due May 15, 2014. To be negotiable, this instrument must include on its face a. any conditions on the sale of the car. b. any conditions to the disbursement of the funds. c. any conditions to the repayment of the loan. d. no conditions.

Q: Common carriers are held to a standard of care based on strict liability in protecting bailed property in their possession.

Q: Ray signs a promissory note for $10,000 in favor of State University (SU). The note does not specify the date of its payment. Ray defaults. In SU's suit to collect on the note, the court will most likely rule in favor of a. Ray, because SU assumed the risk that the note would not be paid. b. Ray, because the note is not payable at a definite time or on demand. c. SU, because the note is an unconditional promise to pay the holder. d. SU, because there is a uniform "default time" for repayment when a date is not specified.

Q: A seller does not have to provide a written warranty for consumer goods.