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Law
Q:
Kendall executes a separate written instrument to amend her prior will. This separate document is
a. a codicil.
b. a constructive will.
c. an inter vivos will.
d. a nuncupative will.
Q:
In most states, a person must be sixteen years of age to execute a valid will.
Q:
Ratzo is asked to be a witness to Sade's will. Before attesting to the will,
a. Ratzo does not have to read the will or be informed of its contents.
b. Ratzo must read the will and recite its contents.
c. Sade must orally tell Ratzo of the will's contents.
d. Sade's attorney must read the will aloud to Ratzo.
Q:
A testator is a decedent who dies without a will.
Q:
Retail Sales Company and Standard Purchasing Corporation enter into a contract for a sale of goods. To be enforceable, the contract should be in writing if the goods are valued at more than
a. $5.
b. $15.
c. $50.
d. $500.
Q:
An executor is a personal representative appointed by a court for a deceÂdent who dies without a will.
Q:
If no heirs are found, the property of a decedent is transferred to a charitable organization.
Q:
Lani is asked to serve as a witness to Mona's will. To qualify, Lani must be
a. a collateral heir.
b. a lineal descendant.
c. eighteen years of age or older.
d. mentally competent.
Q:
Management Associates Corporation wants to sell its office building and furnishings to National Properties, Inc. (NPI). A writing is not required for
a. a two-year lease during which NPI has an option to buy the building.
b. the sale of an office chair, valued at $50, to NPI.
c. the sale of art, displayed in an office and valued at $100,000, to NPI.
d. the sale of the building.
Q:
AAA Loans, Inc., is one of Beta Business Corporation's creditors. AAA guarantees Beta's debt to City Bank to forestall litigation. To be enforceable, this guarantee must be in writing
a. to allow Beta to stay in business and pay AAA and City Bank.
b. to allow Beta to stay in business and pay AAA only.
c. to allow Beta to stay in business and pay City Bank only.
d. under no circumstances.
Q:
An insured's lack of an insurable interest is an absolute defense against payment.
Q:
Juli types onto a computer what she intends to be "My Will" and prints it out. Juli has capacity. "My Will" is
a. invalid.
b. valid if Juli signs it.
c. valid if Juli signs it and has three witnesses sign it.
d. valid if Juli signs it, has three witnesses sign it, and files it in a certain state office.
Q:
Delta, Inc., agrees to assume a debt of Excel Company to First State Bank. The agreement is not in writing. To be enforceable, the promise must be for the benefit of
a. any party.
b. Delta.
c. Excel.
d. First State.
Q:
Lost in a canyon near Gila, Arizona, Hester writes her will in crayon, on a paper bag, while Ivan states orally how he wants his estate distributed. Most states do not permit
a. an olographic will.
b. a nuncupative will.
c. a will written on a paper bag.
d. a will written in crayon.
Q:
In defense against payment, an insurance company can raise any of the deÂfenses that would be valid in an ordinary action on a contract.
Q:
Eighty-year-old Clark exhibits confusion, forgetfulness, and disorientation. Dave, Clark's doctor, believes that the symptoms indicate dementia. Elsa, who has significant contact with Clark, believes that he is in a state of mental decline. These facts indicate
a. an urgency that Clark distribute his assets.
b. Clark's lack of capacity.
c. Dave's misdiagnosis.
d. Elsa's intent to take advantage of Clark.
Q:
Jill agrees to build a warehouse for Ken and orders supplies from Larry for the job. Ken promises Larry that Ken guarantees payment for the supplies. Ken's promise is
a. enforceable only if it is in writing.
b. enforceable only if it is oral.
c. enforceable whether it is oral or in writing.
d. not enforceable.
Q:
Because insurance law follows contract law, bad faith tort actions against insurers are not allowed.
Q:
Gigi, a twenty-year-old, wants to execute a will before she undertakes a mountain-climbing trip on a peak in the Himalaya Mountains. In most states, the legal age for executing a will is
a. sixteen years of age.
b. eighteen years of age.
c. twenty-one years of age.
d. twenty-five years of age.
Q:
An insurer has a duty to avoid the payment of claims.
Q:
Lou agrees to assume Mira's debt to New Sales Corporation. Lou does not get any personal benefit for the agreement. To be enforceable, the promise must be in writing if the debt is for
a. $50.
b. $500.
c. $5,000.
d. $50, $500, or $5,000.
Q:
General Contractors (GC) and Holly enter into an oral contract under which Holly agrees to work on a GC project for sixteen months. This contract is enforceable by
a. either party.
b. GC only.
c. Holly only.
d. neither party.
Q:
The assets in Dong'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:
An applicant for insurance has a duty to disclose only material facts that the insurer asks for.
Q:
Andy and Business Company (BC) enter into an oral contract under which Andy agrees to clean BC's office for two years. This contract is enforceable by
a. Andy only.
b. BC only.
c. either party.
d. neither party.
Q:
According to the terms of Carmen's will, specific gifts are made, and taxes and other estate expenses and debts are paid. The assets of Carmen's estate that remain are
a. a bequest.
b. a legacy.
c. an abatement.
d. the residuum.
Q:
The words used in an insurance contract are interpreted against the party who applied for the policy.
Q:
Timber, Inc., and United Corporation enter into an oral contract for a sale of a lumber mill. Under the Statute of Frauds, before United takes possession, this contract is enforceable by
a. either party.
b. neither party.
c. Timber only.
d. United only.
Q:
State law may mandate that an incontestability clause be included in an insurÂance policy.
Q:
In his will, Vigor makes a gift of $10,000 to Wylie. This is
a. a general bequest.
b. an abatement.
c. a residuary.
d. a specific devise.
Q:
Ace Properties. Inc., and Dandy Capital Corporation enter into a contract for a sale of land. To be enforceable, the contract must be in writing if the land is valued at
a. $50.
b. $500.
c. $5,000.
d. $50, $500, or $5,000.
Q:
Keri's will states, "I give to my sister Liz my condominium in Malibu, California." This is
a. a general bequest.
b. an abatement.
c. a residuary.
d. a specific devise.
Q:
A coinsurance clause provides that two or more people will be covered by the same life insurance policy.
Q:
Insurance coverage is never effective until a formal written policy is issued.
Q:
Omega Systems Corporation and Perfect Technology, Inc., agree to several contracts. The Statute of Frauds requires that to be enforceable, a writing is required for
a. all contracts.
b. certain contracts.
c. no contracts.
d. the initial contract only.
Q:
Clayton dies without a will. The distribution of Clayton's property, including his farm near Lincoln, Nebraska, is prescribed by
a. a court-appointed executor.
b. federal probate statutes.
c. state intestacy laws.
d. the degree of consanguinity between Clayton and his next of kin.
Q:
If a life insurance applicant pays a premium but dies before the physical exam, there is obviously no coverage.
Q:
Parol evidence includes oral evidence that is outside a written contract and not incorporated into the contract expressly or by reference.
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:
A loss sustained between the time of application and the delivery of an insurance policy may not be covered.
Q:
Oral evidence can be introduced in any case to show that a contract is void.
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:
Evidence of prior agreements that differ from the written terms of a contract can be introduced in court to alter the contract.
Q:
An insurance application is part of the insurance contract.
Q:
Kelsy obtains a business liability insurance policy from Luminous Insurance Company for Kelsy's Framing & Art Supplies store. When an event occurs that gives rise to a claim, Luminous has a duty to
a. investigate to determine the facts.
b. file a suit against Kelsy 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:
Liability insurance protects against liability imposed on the insured as a result of injuries to the person or property of another.
Q:
Evidence of prior negotiations over a contract can be introduced in court only if that evidence contradicts the contract's written terms.
Q:
An oral contract that must be in writing to be enforceable is not enforceable even if the parties to it admit to its existence in court.
Q:
Edy obtains a homeowners' insurance policy with First Source Insurance Company. 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 home's value.
d. under no circumstances.
Q:
A party must own property to have an insurable interest in it.
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:
A person can insure anything in which he or she has an insurable interest.
Q:
An oral contract for a sale of land may be enforceable if the contract has been partially performed.
Q:
Holly obtains an insurance policy from Inviolable Insurance Corporation (IIC). IIC may cancel, or refuse to renew, the policy because of
a. Holly's appearance as a witness against IIC.
b. Holly's national origin.
c. Holly's race.
d. none of the choices.
Q:
Insurance is classified according to the amount of the payment on a claim.
Q:
There are no exceptions to the Statute of Frauds.
Q:
Trustworthy Insurance, Inc., has a valid reason to cancel a policy issued to USA Sales Company. In most states, Trustworthy could cancel the policy with
a. oral notice.
b. oral or written notice.
c. no notice.
d. written notice.
Q:
The consideration paid to an insurer to obtain an insurance policy is the premium.
Q:
To be enforceable, a contract for a sale of goods priced at $500 or more should be in writing.
Q:
A party's oral agreement to pay another's debt is enforceable under any circumstances.
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 business firm may have an insurable interest in the life of any of its employees, except a key employee.
Q:
All promises must be in writing to be enforceable.
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:
Andy leases to Burgertown Franchise Corporation a 10,000 square-foot building under a written lease with a twenty-year term, rent payable anÂnually. The lease includes a clause stating that Burgertown is reÂsponsiÂble 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, asÂsigns its interest in the lease to Chicken Hut Restaurants, Inc. MeanÂwhile, 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 termiÂnate? If not, is Earnest liable for the cost of reÂbuilding the structure? Why or why not?
Q:
All collateral promises must be in writing to be enforceable.
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:
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:
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 conÂsent. 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:
A contract must be in writing to be enforceable if performance is impossible within one year.
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:
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:
If a contract to do something in certain intervals over a period of less than one year is not in writing, it is not enforceable.
Q:
EZ Rentals Company wants to insure the equipment that it rents to the public. To obtain insurance, EZ must have an insurable interest in the equipment
a. at any time.
b. at the time a loss occurs.
c. at the time a policy is obtained.
d. continuously from the time a policy is obtained to the time a loss occurs.
Q:
Mena applies for a homeowners' insurance policy on her house with Neighbors Insurance Company through Obie, an agent who works for Neighbors. In this transaction, Obie is
a. an agent for both parties.
b. Mena's agent, and not Neighbors's agent.
c. Neighbors's agent, and not Mena's agent.
d. not an agent.
Q:
If a contract to do something in certain intervals over a period of more than one year is not in writing, it is not enforceable.
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:
Reno is the beneficiary of a life insurance policy on Sula's life obtained from Thayer Insurance Company. The underwriter of this policy is
a. Reno.
b. Sula.
c. Thayer.
d. the agent or broker through whom the policy was obtained.
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 tenant' permission.
d. the lease, but not the duplex.
Q:
A contract that by its own terms cannot be performed within a year must be in writing to be enforceable.