Question 1

Why are delivery and acceptance both necessary to a valid gift? Explain.

Accepted Answer

The answer of Why are delivery and acceptance both necessary...

Question 2

Darlene rents an car for her business trip.What is the relationship between Darlene and the car rental company?
A)A bailment for the sole benefit of the bailor
B)A bailment for the sole benefit of the bailee
C)A bailment for mutual benefit
D)Pledgee and pledgor

Accepted Answer

The relationship is a bailment for mutual benefit because both Darlene and the car rental company benefit from the transaction; Darlene gets to use the car, and the rental company receives payment.

Question 3

If Jim, Ken, and Lee each deposit 10,000 bushels of wheat in a grain elevator, they would own one-third of the remaining mixture by:
A)accession.
B)adverse possession.
C)prescription.
D)confusion.

Accepted Answer

The correct answer is D) confusion. This legal principle applies when goods are commingled to the extent that they cannot be distinguished from one another, and each contributor owns a proportionate share of the mixed goods. In this scenario, Jim, Ken, and Lee each deposit an equal amount of wheat into a common storage, making their individual contributions indistinguishable from one another, and thus each owns one-third of the total mixture.

Question 4

Name and briefly describe the special features or extraordinary duties of five special types of bailments.

Accepted Answer

The answer of Name and briefly describe the special features...

Question 5

Marilyn brought her $300 silk dress to University Dry Cleaners to be cleaned.On the back of the ticket she received in exchange for the dress was written, "liability limited to five times the cost of cleaning." Marilyn's dress was lost and University now claims it owes her only $45, five times the cost of cleaning.Is that true?
A)No, because Marilyn is not a bailor.
B)No, because the cleaner is not a common carrier.
C)No, because the limitation was not communicated to her before she bailed the property.
D)Yes, because the cleaner had the right to limit its liability to a reasonable amount.

Accepted Answer

The limitation of liability was not communicated to Marilyn before she entrusted her dress to the cleaners, so it may not be enforceable.

Question 6

Lynne took her earrings off at Marcia's beauty parlor and put them on the counter.She left the shop without remembering the earrings.Betty finds them and wants to keep them.Can she?
A)Yes, since she is a finder
B)Yes, she now is the true owner
C)No, since the earrings were personal property
D)No, Marcia would have first claim if the true owner is not discovered

Accepted Answer

Marcia, the owner of the beauty parlor, would have a claim to the lost earrings if the true owner cannot be identified. As personal property, the earrings would not automatically become the property of the finder, Betty.

Question 7

Mark wants to give Susan his car.He can effectively "deliver" it by:
A)giving Susan the keys.
B)giving her a written statement that he plans to give the car to her.
C)letting her drive it for a period of time.
D)telling his wife that he wants to give the car to Susan.

Accepted Answer

Delivering the keys to the car is the most effective way to transfer ownership and possession of the car to Susan. A written statement or verbal agreement may be helpful as evidence of the transfer, but the actual delivery of the car is what legally finalizes the transaction. Letting Susan drive the car or telling his wife about the transaction are not sufficient to transfer ownership.

Question 8

A bill of lading serves as:
A)a receipt for storage of goods.
B)a document of title.
C)a warehouser's lien.
D)evidence of insurance on the goods covered by the document.

Accepted Answer

A bill of lading is a document that serves as a title to goods being transported. It identifies the goods being shipped, the destination, and the terms of shipment. It acts as a contract between the shipper and carrier and serves as proof of ownership of the goods in transit.

Question 9

Dr.Olson is a board-certified ophthalmologist who constructs some specially designed examining tables to use in looking at his patient's eyes.The tables are firmly attached to the floor of the space he rents for his office.If Dr.Olson decides to move his office, which of the following is correct?
A)The tables are fixtures that cannot be removed.
B)The tables are not fixtures because Dr.Olson installed them.
C)Dr.Olson may remove the tables if they can be removed without materially damaging the realty.
D)All of these.

Accepted Answer

Dr. Olson may remove the tables if they can be removed without materially damaging the realty, as they are considered trade fixtures used for his business.

Question 10

A gift causa mortis is contingent upon:
A)the donee's surviving the donor.
B)the donor's surviving the donee.
C)the donee's death as anticipated.
D)the donee's not revoking the gift prior to the donee's death.

Accepted Answer

A gift causa mortis is made in anticipation of the donor's imminent death, and is contingent upon the donee surviving the donor. If the donee dies before the donor, the gift is revoked. Therefore, the correct choice is A, which states that the gift is contingent upon the donee's surviving the donor.

Question 11

Mary cleaned her dorm room in the spring and left a pile of books in Sara's room.Mary told everybody that the books were a gift to Sara.Does Sara have to dispose of them?
A)Yes, because there was a present intent and delivery
B)Yes, because they are constructively in Sara's possession
C)No, because Sara did not accept the books
D)No, because there was no agreement between the two parties

Accepted Answer

The answer of Mary cleaned her dorm room in the...

Question 12

In determining whether an item is a fixture, which of the following will be considered?
A)How it is attached to the building or land
B)Whether the item can be removed without harm to the building
C)Whether the item is usually included in that type of real estate
D)All of these factors may be considered.

Accepted Answer

All three factors can be considered in determining whether an item is a fixture. The method of attachment is important because it indicates whether the item was intended to be permanent and part of the real estate. The harm that might be caused by removal may also be considered to determine permanency. Finally, the customary use of the item in that type of real estate can also give an indication of whether it is a fixture or not.

Question 13

Margaret told Bill she would give him her tickets to an upcoming concert.Later she changed her mind and decided to go to the concert after all.Can Bill require Margaret to give him the tickets?
A)No, because there was no intent to make a present gift
B)No, because there was no delivery
C)No, because there was no acceptance
D)All of these are correct.

Accepted Answer

Margaret's promise to give Bill the tickets was not legally binding as there was no intent to make a present gift, no delivery of the tickets, and no acceptance by Bill.

Question 14

Which of the following is not a function of a bill of lading?
A)It serves as a receipt for goods.
B)It serves as evidence that the goods specified in the bill of lading are stored in the insured building of the issuer.
C)It is evidence of the contract of carriage.
D)It serves as a document of title.

Accepted Answer

A bill of lading serves as a receipt for goods, evidence of the contract of carriage, and a document of title. However, it does not necessarily serve as evidence that the goods are stored in an insured building of the issuer.

Question 15

Taylor Corp.rents a warehouse where it conducts a small manufacturing operation.As a condition of its lease, it pays a fire insurance premium.Taylor needs more room and rents larger quarters.Taylor then subleases its old warehouse to Mack.Taylor also assigns its already-paid insurance policy to Mack.This action is:
A)appropriate, so long as Taylor and Mack agree to it.
B)appropriate, so long as the landlord agrees to it.
C)not binding on the insurer.
D)totally within the rights of Taylor, who already paid the premium.

Accepted Answer

Assigning an insurance policy to another party without the insurer's consent is generally not binding on the insurer. Insurance policies often include clauses that restrict the policyholder's ability to transfer the policy without the insurer's approval, primarily because the risk profile of the new insured might be significantly different from that of the original policyholder.

Question 16

Larry leaves his hat under the seat at the movie theater.Is this a bailment?
A)No, because the theater manager does not have physical control of the area in which Larry left the hat
B)No, because Larry did not pay the theater to keep his hat
C)Yes, if the theater manager finds the hat
D)Yes, since the theater controls the building

Accepted Answer

A bailment is a legal relationship where one party (the bailor) gives possession of personal property to another party (the bailee), with the understanding that the bailee will return the property to the bailor or dispose of it in a certain way. In this case, Larry left his hat under the seat at the theater, which could be considered a bailment if the theater manager finds the hat and takes possession of it with the intention of returning it to Larry. Therefore, choice C is the best answer.

Question 17

Darinel insures a $150,000 building with Morales Insurance Co.for $50,000 and with Washington Insurance Co.for $100,000.The building is partially destroyed by fire, causing $25,000 in damages.Darinel will be able to collect:
A)one-third of the damages from Morales Insurance Co.
B)one-half of the damages from Morales Insurance Co.
C)from neither Morales nor Washington since it was fraudulent to purchase policies covering the same property from two different insurance companies.
D)$25,000 from either Morales or Washington Insurance Co., but cannot collect from both insurers.

Accepted Answer

The answer of Darinel insures a $150,000 building with Morales...

Question 18

An insurable interest in property must exist:
A)at the time the insurance policy is obtained.
B)at the time the loss occurs.
C)from the time the policy is obtained to the time the loss occurs without interruption.
D)for only one person at a time in a particular property.

Accepted Answer

The answer of An insurable interest in property must exist:
A)at...

Question 19

A person, other than a collecting bank or other intermediary, who negotiates a document of title for value:
A)warrants to her immediate purchaser that the document is genuine.
B)warrants to all who later take the document that it is genuine.
C)warrants that nothing impairs the document's validity or worth.
D)makes no warranties.

Accepted Answer

The answer of A person, other than a collecting bank...

Question 20

Insurance protects a business from:
A)tort liability.
B)strict liability.
C)negligence.
D)All of these.

Accepted Answer

Insurance can protect a business from various liabilities, including tort liability, strict liability, and negligence. Therefore, option D, "All of these," is the best choice.

Quiz 47: Introduction to Property, Property Insurance, Bailments, and Documents of Title

Why are delivery and acceptance both necessary to a valid gift? Explain.

Darlene rents an car for her business trip.What is the relationship between Darlene and the car rental company?

If Jim, Ken, and Lee each deposit 10,000 bushels of wheat in a grain elevator, they would own one-third of the remaining mixture by:

Name and briefly describe the special features or extraordinary duties of five special types of bailments.

Lynne took her earrings off at Marcia's beauty parlor and put them on the counter.She left the shop without remembering the earrings.Betty finds them and wants to keep them.Can she?

Mark wants to give Susan his car.He can effectively "deliver" it by:

A bill of lading serves as:

Dr.Olson is a board-certified ophthalmologist who constructs some specially designed examining tables to use in looking at his patient's eyes.The tables are firmly attached to the floor of the space he rents for his office.If Dr.Olson decides to move his office, which of the following is correct?

A gift causa mortis is contingent upon:

Mary cleaned her dorm room in the spring and left a pile of books in Sara's room.Mary told everybody that the books were a gift to Sara.Does Sara have to dispose of them?

In determining whether an item is a fixture, which of the following will be considered?

Margaret told Bill she would give him her tickets to an upcoming concert.Later she changed her mind and decided to go to the concert after all.Can Bill require Margaret to give him the tickets?

Which of the following is not a function of a bill of lading?

Larry leaves his hat under the seat at the movie theater.Is this a bailment?

Darinel insures a $150,000 building with Morales Insurance Co.for $50,000 and with Washington Insurance Co.for $100,000.The building is partially destroyed by fire, causing $25,000 in damages.Darinel will be able to collect:

An insurable interest in property must exist:

A person, other than a collecting bank or other intermediary, who negotiates a document of title for value:

Insurance protects a business from: