Q&A Hero

Q: When the terms of a written agreement are clear, and there is no fraud, oral evidence can not be introduced to contradict those terms.

Q: The assets in Hong's estate, including the value of his home on Elm Street and its contents, are insufficient to pay in full all of the gifts provided for in his will. His heirs will receive a. full payment in order of seniority until the assets are exhausted. b. nothingthe assets will descend to the state. c. reduced benefits. d. the option of distributing the assets according to their wishes.

Q: Evidence of contemporaneous agreements that differ from the written terms of a contract can be introduced in court to alter the contract.

Q: Philomena dies without a will. A court appoints Quigley to handle the probate of Philomena's estate. The administrator of the estate is a. Philomena's closest blood relative. b. Philomena. c. Quigley. d. the court.

Q: Evidence of prior negotiations that differ from the written terms of a contract can be introduced in court to alter the contract.

Q: Skyler dies after having made a valid will. Skyler has died a. in escheat. b. in probate. c. intestate. d. testate.

Q: Garth dies without a will. The distribution of Garth's property, including his eleven forested acres near Hope, Arkansas, is prescribed by a. a court-appointed executor. b. federal probate statutes. c. state intestacy laws. d. Garth's relatives.

Q: If the party against whom enforcement of an oral contract is sought admits, in pleadings, to its existence, the contract is enforceable.

Q: Speedy Shipping Corporation applies to TransInsurance Company for a fire insurance pol­icy on Speedy's warehouse. On the application, Speedy misrepresents the age of the property to obtain a lower premium. When a fire soon destroys the ware­house, TransInsurance can a. deny payment, because a fire destroyed Speedy's warehouse. b. deny payment, because of Speedy's fraud in the application. c. not deny payment, because a fire destroyed Speedy's warehouse. d. not deny payment, because the application is not part of the policy.

Q: An oral contract for a sale of land cannot be enforced even if the contract has been partially performed.

Q: Kelsey obtains a business liability insurance policy from Loyal Insurance Company for Kelsey's Framing & Art Supplies store. When an event occurs that gives rise to a claim, Loyal has a duty to a. investigate to determine the facts. b. file a suit against Kelsey so that a court can settle the claim. c. find a third party on whom to impose liability. d. refund any unearned amount of the premium.

Q: A contract for a sale of goods does not need to be in writing to be enforceable.

Q: A prenuptial agreement does not have to be in writing to be enforceable.

Q: Edy obtains a property insurance policy with First Source Insurance Company for Edy's fishing trawler. First Source can cancel the policy a. if Edy appears as a witness in a case against First Source. b. if Edy fails to pay the premiums. c. if Edy makes changes that add to the trawler's value. d. under no circumstances.

Q: An oral contract for a sale of goods may be enforceable if the goods are priced at $499.99 or less.

Q: Myles obtains a property insurance policy from Nova Insurance Company for Myles's restored 1957 Chevy. Nova can cancel the policy a. if Myles increases the risk assumed by the Nova. b. if Myles files a claim under the policy. c. if Myles appears as a witness in a case brought against Nova. d. under no circumstances.

Q: Haya obtains an insurance policy from Inviolable Insurance Corporation (IIC). IIC may cancel, or refuse to renew, the policy because of a. Haya's appearance as a witness against IIC. b. Haya's gender. c. Haya's national origin. d. none of the choices.

Q: A party's oral agreement to pay another's debt is enforceable if the party's main purpose is to derive a benefit for himself or herself.

Q: Kerin obtains a property insurance policy for her art collection from Lawton Insurance Company. Kerin can cancel the policy a. at any time. b. only at the end of a period for which a premium has been paid. c. only if Kerin no longer has an insurable interest in the property. d. only on advance written notice.

Q: No collateral promise needs to be in writing to be enforceable.

Q: A contract does not need to be in writing to be enforceable if the contract makes performance within one year possible.

Q: Isabel obtains a fire insurance policy on her home from Justice Insurance Company. The home is lost in a fire, but the parties dispute the amount of Justice's liability under an ambiguous clause in the policy. A court would most likely a. interpret the clause against Isabel. b. interpret the clause against Justice. c. rewrite the clause and apply it as rewritten. d. strike the clause from the policy.

Q: Ginny obtains a health-insurance policy for her family from Hope Insurance Company. The policy includes an incontestability clause. Under such a clause, after a policy has been in force for a specified period or time, such as two or three years a. Ginny cannot contest Hope's insurable interest. b. Ginny cannot contest Hope's refusal to pay a claim under the policy. c. Hope cannot contest Ginny's eligibility for continued coverage. d. Hope cannot contest Ginny's statements in the application.

Q: A contract must be in writing to be enforceable if it makes performance possible only over a period of more than one year.

Q: A contract must be in writing to be enforceable if the contract makes performance within one year possible.

Q: Root & Branch Lumber Company obtains a fire insurance policy from Statistical Insurers, Inc., on a $400,000 warehouse. The policy includes an 80-percent coinsurance clause. Root & Branch insures the property for $320,000. In a fire, the warehouse suffers $200,000 in damage. Root & Branch can recover a. $400,000. b. $320,000. c. $200,000. d. $80,000.

Q: A contract does not need to be in writing to be enforceable if it makes performance possible within any definite period of time.

Q: Rolling Transport & Storage Corporation wants to insure its warehouse to obtain the maximum possible recovery for the lowest possible pre­mium. To obtain the maximum recovery under a coinsurance clause, the percentage of the value of the property that should be insured is a. 80 percent. b. 90 percent. c. 100 percent. d. 120 percent.

Q: Donald applies for a life insurance policy with Equity Insurance Company through Fletch, an agent who works for Equity. Donald pays the initial premium. Fletch writes a binder, which a. acknowledges the application and promises to consider it. b. attests to the truth of each statement in the application c. evidences receipt of the payment of the initial premium. d. indicates that a policy is pending and states its essential terms.

Q: Feta is a partner in the game design firm GR8 Games, Inc., which ob­tains key-person life in­surance on Feta in the amount of $1 million from Halo Insurance Company. Feta quits GR8 Games to join Icy Applications, Inc. Feta dies. Under the principle of insurable interest, Halo must pay the $1 million to a. Feta's spouse Jo. b. GR8 Games. c. Icy Applications. d. no one.

Q: A contract involving a mortgage is the only contract relating to an interest in land that must be in writing to be enforceable.

Q: Doctors Medical Associates obtains an insurance policy that protects its members against negligence claims by their pa­tients. This is a. casualty insurance. b. fidelity or guaranty insurance. c. malpractice insurance. d. worker' compensation insurance.

Q: A contract involving a sale is the only contract relating to an interest in land that must be in writing to be enforceable.

Q: Shingle & Tile Roofing Contractor, LLC, obtains an insurance policy against liability for injuries or losses sustained by employees during the course of their employment. The policy covers claims not covered by worker' compensation insurance. This is a. casualty insurance. b. fidelity or guaranty insurance. c. key-person life insurance. d. employer's liability insurance.

Q: A written contract for a transfer of land is enforceable.

Q: The Statute of Frauds requires that certain types of contracts must be in writing to be enforceable.

Q: Reno is the beneficiary of a life insurance policy on Sula's life obtained from Traditional Insurance Company. The underwriter of this policy is a. Reno. b. Sula. c. Traditional. d. the agent or broker through whom the policy was obtained.

Q: State law may mandate that an incontestability clause be included in an insur­ance policy.

Q: The Statute of Frauds requires that fraud must be proved by a writing.

Q: Grace applies for a homeowner' insurance policy on her house with Heroic Insurance Company through Ian, a broker. In this transaction, Ian is a. an agent for both parties. b. Grace's agent, and not Heroic's agent. c. Heroic's agent, and not Grace's agent. d. not an agent.

Q: Bret obtains a fire insurance policy on his rental house with Continental Insurance Company. Like all insurance, this policy is an arrangement for a. avoiding the assumption of responsibility. b. predicting a potential loss based on unknown factors. c. shifting the imposition of liability. d. transferring and allocating risk.

Q: An insurance application is usually not part of the insurance contract.

Q: Under the Statute of Frauds, a contract that is in writing is void.

Q: A constructive trust is "constructed" by a property owner to fulfill certain unique functions outside the usual bounds of a trust.

Q: A party must own property to have an insurable interest in it.

Q: Frances has lived in an apartment for ten years when she decides to buy a house. Her one-year lease will end on May 1. On April 15, she orally contracts to buy Smith's house for $100,000, with the closing (transfer of the deed) to take place on June1. Smith's lawyer, who is out of town on vacation, is to draft a written contract of sale on his return to his office on May 15. Because Frances's lease is terminating, Smith agrees to let her take possession of the house on May 1 if Frances gives him a "down payment" on the house of $5,000. Frances agrees and gives Smith the $5,000. She moves into the house on May 2, and the following weekend plants trees in the back yard. On May 10, Smith receives a written offer from Green to buy Smith's house for $120,000. Smith accepts Green's offer, asks Frances to move out of the house, and tries to return the $5,000 to Frances. Frances claims that she has an enforceable contract to buy the house. Smith claims that any such contract must be in writing to be enforceable under the Statute of Frauds. Who is correct and why?

Q: A spendthrift trust provides for a beneficiary's transfer of his or her right to future payments of trust funds.

Q: Delta Company hires Earl to design a Web page for Delta for $400. Before the project is started, Delta asks Earl to trouble-shoot Delta's computer operating system software for an additional $400. Earl agrees. The entire contract is oral. Earl completes the work, but Delta refuses to pay. Earl files a suit against Delta, who raises the Statute of Frauds as a defense. Can Earl recover from Delta? If so, how much, and on what basis?

Q: A person has an insurable interest in property if he or she would sustain a financial loss from damage to the property.

Q: An express trust is created or declared in explicit terms.

Q: Dina files a suit against Engineering Associates to enforce a written contract between the parties. Parol evidence will be admitted to prove a. an orally agreed-on condition. b. contemporaneous negotiations that contradict the written contract. c. prior negotiations that contradict the terms of the written contract. d. any of the above.

Q: A person can insure anything in which he or she has an insurable interest.

Q: A business firm may have an insurable interest in the life of a key employee.

Q: Deb and Eve sign a written contract. Deb claims that the parties later orally agreed to modify the contract. Any oral modification is likely not enforceable if it falls under a. the doctrine of promissory estoppel. b. the "main purpose" exception. c. the "partial performance" exception. d. the Statute of Frauds.

Q: The trustee is the person for whose benefit a trust is held.

Q: Fact Pattern 15-1 Macro Marketing, Inc., and National Food Corporation (NFC) discuss the terms of a contract. Macro then faxes NFC a memo on Macro's letterhead that summarizes the items on which they agreed, including a two-year term. NFC begins to perform, but Macro refuses to pay.Refer to Fact Pattern 15-1. Under the decision of the court in Case 15.1, Coca-Cola Co. v. Babyback's International, Inc., the transaction between Macro and NFC falls within the Statute of Frauds' a. collateral-promise provision. b. one-year rule. c. sales-of-goods stipulation. d. secondary-contracts section.

Q: If no children or grandchildren survive a decedent who dies without a will, a surviving spouse is entitled to the entire estate.

Q: Insurance is classified according to the amount of the payment on a claim.

Q: A will is probated in part to establish its validity.

Q: Dieter's will provides for a distribution of his assets on his death. Who will "distribute" Dieter's property, and what are the steps involved?

Q: Patty, who is divorced, owns a house. She has no reasonable expectation of benefit from the life of Quinn, her ex-spouse, but she applies for insur­ance on his life anyway. She also obtains a fire insurance policy on the house, which she later sells. Five years later, Quinn dies and the house is destroyed in a fire. Can Patty obtain payment on either the death of Quinn or the loss of the house? Explain.

Q: A divorce revokes an entire will.

Q: Fact Pattern 15-1 Macro Marketing, Inc., and National Food Corporation (NFC) discuss the terms of a contract. Macro then faxes NFC a memo on Macro's letterhead that summarizes the items on which they agreed, including a two-year term. NFC begins to perform, but Macro refuses to pay.Refer to Fact Pattern 15-1. In line with the decision of the court in Case 15.1, Coca-Cola Co. v. Babyback's International, Inc., between Macro and NFC, there is a. an oral contract only. b. a pre-contract only. c. a written contract. d. no contract.

Q: Mason creates a trust to prevent his son, Newt, the beneficiary, from assign­ing his rights to future payments of income from the trust. This is a. a charitable trust. b. a constructive trust. c. a spendthrift trust. d. an illegal trust.

Q: To "publish" a will means to release it to the media.

Q: Property Development Company and Quality Land Corporation sign a written contract for a sale of land. In some states, to be enforceable, this contract must include a. a correct title, such as "Land Transfer" or "Real Estate Agreement." b. a declaration of the subject matter. c. a statement of the consideration. d. the parties' names.

Q: Benny dies without a will, with no surviving spouse or child. Benny's survivors in­clude his granddaughter Callie, his nephew Doug, and his cousin Earl. In most states, his estate would pass to a. Callie. b. Doug. c. Earl. d. the state.

Q: A nuncupative will is a will that is completely in the handwriting of the testator.

Q: Eagle Corporation and Finest Products, Inc., enter into a contract. To be enforceable, the contract must include a. no particular signatures. b. the signatures of all parties to the deal. c. the signature of the party against whom enforcement is sought. d. the signature of the party who is seeking enforcement.

Q: Eve files a suit against Financial Associates, Inc. (FA), to enforce an oral contract that would otherwise be unenforceable under the Statute of Frauds. The court could enforce such a contract if a. Eve foreseeably, justifiably, and detrimentally relied on a promise by FA. b. FA continues to deny the existence of a contract. c. neither party has begun to perform. d. the deal does not involve customized goods.

Q: Cliff dies without a will. His survivors include his spouse Dana and his two children, Efrem and Fay. Under applicable laws, Dana will probably receive a. all of Cliff's estate. b. none of Cliff's estate. c. one-half of Cliff's estate. d. one-third of Cliff's estate.

Q: Lara, a sales representative, files a suit against Macro Corporation, claiming that Macro made an oral promise to Lara, on which she relied to her detriment. The court can enforce the promise under a. the doctrine of promissory estoppel. b. the "main purpose" exception. c. the parol evidence rule. d. the Statute of Frauds.

Q: An "X" can qualify as a signature on a will.

Q: Nina and Owen enter into an oral contract for Nina's sale to Owen of a laser printer for $400. Before Owen takes possession of the printer, the contract is enforceable by a. either party. b. Nina only. c. neither party. d. Owen only.

Q: A will must normally be attested to by two or three witnesses.

Q: Orin creates a living trust to pass his assets, including stock in Petro Oil Company and other business investments, to his heirs. One advantage of this arrangement is that a. income taxes do not have to be paid on trust earnings. b. the assets are sheltered from the payment of estate taxes. c. the assets can be transferred without going through probate. d. the trust does not come into existence until the grantor's death .

Q: Undue influence can occur when a named beneficiary is in a position to influence the making of a will.

Q: Dyan executes her will to give "to my nephew Esau my stock in Fargo, Inc." Later, Dyan writes separately, with the same formalities required for a will, to leave the stock to her niece Ginny and cash to Esau. This writing a. does not affect the will's gift of the stock to Esau. b. requires a gift of the stock in equal shares to Esau and Ginny. c. revokes the whole will, which must be redrafted. d. revokes the will's gift of the stock to Esau.

Q: To execute a valid will, a testator must remember the "natural objects of his or her bounty."

Q: Don executes a will leaving half of his farm to his spouse Elsie and the rest to his sons, Frank and Greg, in equal shares. The will disinherits a third son, Hal. Don and Elsie divorce, but Don dies before changing his will. Under the Uniform Probate Code a. Elsie receives half of the farm, and Frank and Greg share the rest. b. Elsie receives half of the farm, and Frank, Greg, and Hal share the rest. c. Frank and Greg receive the entire estate in equal shares. d. the state inherits the entire estate.