Q&A Hero

Business Law

Q: In most bailments, the bailor must notify the bailee of hidden defects that the bailor knows or could have discovered with reasonable dili­gence.
Q: For consumer goods costing more than $25, a written warranty must be labeled "full" or "limited."
Q: In an ordinary bailment, a bailee has the right to limit his or her liability.
Q: General descriptions take precedence over inconsistent samples.
Q: In most bailments, the bailee has a right to place a lien on the bailed property until he or she is fully compensated.
Q: Express warranties can not be disclaimed in contracts.
Q: In a gratuitous bailment, a bailee has a right to be compensated for costs incurred in keeping bailed property.
Q: USA Oil Corporation signs an instrument that states it is being exe­cuted "in accord with a contract for the purchase of 4,000 barrels of oil dated May 1." This instrument is a. negotiable. b. nonnegotiable, because information about the sale must be ob­tained from another source. c. nonnegotiable, because it states an express condition to payment. d. nonnegotiable, because the terms of the sale are not clear.
Q: All bailments include a bailee's right to use the bailed property.
Q: To finance the purchase of a house from Tuna, Uri signs an instrument promising to pay to "Verity Mortgage Service" $160,000 with interest in installments with the final payment due July 10, To be negotiable, this instrument must include the signature of a. a non-party witness. b. Tuna or Tuna's realtor. c. Uri. d. Verity's chief financial officer.
Q: Implied warranties can arise from a "course of dealing."
Q: A bailment must be in writing to be valid.
Q: Merchants are not required to warrant that the goods they sell are fit for their ordinary purpose.
Q: Fact Pattern 18-1Ewa signs an instrument unconditionally promising to pay to "First State Bank" $5,000 with interest in installments with the final payment due June 1, 2012.Refer to Fact Pattern 18-1. With respect to this instrument, First States Bank isa. the drawee.b. the drawer.c. the maker.d. the payee.
Q: A product is unmerchantable if an accident could arise in connection with the goods.
Q: Constructive delivery does not satisfy the delivery requirement for an ef­fective bailment.
Q: Fact Pattern 18-1Ewa signs an instrument unconditionally promising to pay to "First State Bank" $5,000 with interest in installments with the final payment due June 1, 2012.Refer to Fact Pattern 18-1. The instrument that Ewa signed is most likelya. a certificate of deposit.b. a draft.c. an order to pay.d. a promissory note.
Q: In a bailment, possession of the property is transferred to the bailee.
Q: An implied warranty of merchantability does not arise in every lease by a merchant who deals in goods of the kind leased.
Q: For an effective bailment, the bailor must deliver possession of the bailed property with its title.
Q: When the drawee of an unaccepted draft or check pays to a holder the amount due in full, all parties to the instrument are discharged.
Q: Goods must be of the highest quality possible to be merchantable.
Q: A lack or failure of consideration is no defense to payment of a negotiable instrument to any holder.
Q: Property voluntarily discarded by its owner with no inten­tion of reclaiming it is abandoned property.
Q: Puffery creates an express warranty.
Q: If a seller is an expert and gives an opinion as an expert, then he or she usually creates an express warranty.
Q: An alteration of an instrument is material if it changes the terms between two parties in any way.
Q: Estray statutes determine ownership rights in fungible goods that have been "strayed."
Q: The completion of an originally incomplete instrument in an unauthor­ized manner is a defense against payment on the instrument to an HDC.
Q: An expression of opinion will usually create a warranty.
Q: A finder acquires title to lost property good against the whole world, in­cluding the original owner.
Q: A person whose name is forged on an instrument is liable to pay only a holder in due course the value of the forged instrument.
Q: Property voluntarily placed by its owner and inadver­tently forgotten is mislaid property.
Q: Only a statement made after a contract is entered into can be an express warranty.
Q: Property voluntarily placed somewhere by its owner and inadver­tently forgotten is lost property.
Q: Presentment war­ranties protect the person who presents an instrument for payment.
Q: A seller does not have to use words such as "warrant" to make an express warranty.
Q: A warranty against infringement is a promise by the seller that the prod­uct is free from any patent, trademark, or copyright claims of a third person.
Q: If confusion occurs as a result of the act of a third party, that third party acquires ownership rights in proportion to the amount confused.
Q: Transfer warranties attempt to impose liability on the wrongdoer or the party who dealt most immediately with the wrongdoer.
Q: A person acquires title to fungible goods by mixing them.
Q: Promises of fact made during the bargaining process are express warranties.
Q: When an instrument has a forged indorsement, the loss usually falls on the first party to take the instrument.
Q: A gift causa mor­tis is effective only if the donor dies and the donee lives.
Q: A lien is an encumbrance on a property to satisfy or protect a claim for payment of a debt.
Q: An unauthorized signature binds the person whose name is forged.
Q: A gift to a dying donee is a gift causa mortis.
Q: In sales law, there is only one type of warranty of title.
Q: The dishonor of an instrument relieves secondary parties of liability.
Q: Delivery of intangible personal property must be done by constructive delivery.
Q: A drawer is primarily liable on an instrument.
Q: A promise to deliver a gift is constructive delivery.
Q: A warranty of good title means that a seller warrants that he or she has valid title to the goods and that transfer of the title is rightful.
Q: A maker is secondarily liable on an instrument.
Q: Constructive delivery occurs when property is physically transferred.
Q: Warranties of title do not arise in most sales contracts.
Q: In sales law, a warranty is an assurance by one party of the existence of a fact on which the other party can rely.
Q: An instrument is not defective because it has been previ­ously dis­honored.
Q: A gift is effective whether or not it is accepted.
Q: Bob is shopping in Carl's Hardware Store when a nail gun in use by Dan, one of Carl's employees, fires without warning and hits Bob in the leg. Carl checks the gun and discovers that it was assembled improperly. Bob files a suit against Eagle Tools, Inc., the manufacturer of the gun, for product liability, on the ground of strict liability. What are the elements for an action based on strict liability? In whose favor is the court likely to rule and why?
Q: If a note is payable in thirty days, payment is due by midnight on the thir­tieth day.
Q: One way to acquire ownership rights to property is merely to possess it.
Q: An instrument is not defective simply because it is overdue.
Q: Cutter Company makes and sells table saws, which are designed to be safe if used properly. Erin buys a Cutter saw and lends it to her neighbor Frank. To reach a toolbox on a high shelf in his garage, Frank props the saw at an angle against a cabinet and climbs onto the saw. Frank loses his footing, slips off the saw, falls on the blade, and is injured. He files a product liability suit against Cutter, on the ground of negligence. On what basis could the maker prevail?
Q: The most common way to acquire personal property is to "capture" it.
Q: Property used by a government for a public purpose such as a park is community property.
Q: A person who in good faith acquires a negotiable instrument from a thief cannot become an HDC.
Q: Dwayne, an electrician, files a suit against Electro Mechanix, Inc., alleging that its circuit breakers are unreasonably dangerous due to the possibility of electrical shock. Dwayne's suit is most likely to a. fail, because Dwayne assumes the risk if he uses an Electro product. b. fail, because Dwayne is a knowledgeable user. c. succeed, because the danger is open and obvious. d. succeed, because Electro's products are not safe for all uses.
Q: The brakes on a River Valley Railroad train malfunction and it rolls towards main­te­nance workers on the tracks. Everyone gets out of the way except Dick, who wants to show off. The train hits Dick, who sues Stops-it, Inc., the brake' manufacturer. Stops-it can raise the defense of a. a component-part manufacturer. b. assumption of risk. c. consumer participation. d. product misuse.
Q: If property is owned as community property, each spouse owns an undivided one-half interest in it.
Q: A deceased joint tenant's interest in jointly held property passes to his or her heirs.
Q: A holder takes an instrument for value by performing the promise for which the instrument was issued.
Q: Toyoda Company buys gas pedals and other parts from suppliers and puts them in its vehicles without changing their composition. If the pedals or other parts are defective, strictly liable for any damage caused by the defects are a. neither Toyoda nor the suppliers. b. Toyoda and the suppliers. c. the suppliers only. d. Toyoda only.
Q: It is presumed that a co-tenancy is a tenancy in common unless there is a clear intention to establish a joint tenancy.
Q: A person who receives an instrument as a gift normally possesses the rights of an HDC.
Q: An instrument payable to two persons jointly requires the indorsement of only one of the payees for negotiation.
Q: SurgeStop Company makes electrical cords and other connectors for elec­tronic devices. Rollo files a product liability suit against SurgeStop, alleg­ing a warning defect. In deciding whether to hold SurgeStop liable, the court may consider a. consumer' general lack of desire to read the product's warnings. b. the plaintiff's specific lack of desire to read the product warnings. c. the obvious risks of other products. d. the obvious risks of this product.
Q: A joint tenant's sale of his or her interest terminates the joint tenancy.
Q: Goldtone Corporation makes cell phones. Haji files a product liabil­ity suit against Goldtone, alleging a design defect. In deciding whether to hold Goldtone liable, the court may consider an alternative design's a. popularity among industrial designers. b. attractiveness to consumers. c. aesthetics. d. effect on the product.
Q: A payee whose name is misspelled on an instrument cannot indorse the instrument.
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