Question 1

A bill of lading serves as:
A) evidence of the contract of insurance.
B) a contract for employment.
C) a receipt for the storage of goods.
D) a document of title.

Accepted Answer

A bill of lading serves as a document of title, indicating the ownership and terms of the transportation of goods.

Question 2

Farmer Brown brings his crop of wheat to the local grain elevator where it is stored along with the grain of several other farmers.A few months later, the grain elevator declares bankruptcy.Who owns the grain? Can Farmer Brown get his grain back? Explain.

Accepted Answer

The answer of Farmer Brown brings his crop of wheat...

Question 3

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 there was no agreement between the two parties.
D) No, because Sara did not accept the books.

Accepted Answer

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

Question 4

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 trade fixtures.
C) Dr. Olson may remove the tables if they can be removed without materially damaging the realty.
D) The tables are trade fixture and that  Dr. Olson may remove the tables if they can be removed without materially damaging the realty.

Accepted Answer

The tables are considered trade fixtures because they are equipment used in a trade or business and attached to the property. Dr. Olson can remove them if it's possible to do so without causing significant damage to the property, which is a common allowance for trade fixtures in many jurisdictions.

Question 5

Which of the following is/are the criteria for a common carrier?
A) The carriage must be part of its business.
B) The carriage must be for remuneration.
C) The carrier must represent to the general public that it is willing to serve the public in the transportation of property.
D) All of these are criteria.

Accepted Answer

All of these criteria must be met for an entity to be considered a common carrier. These criteria include that the transportation of goods or people must be a part of its primary business, the carrier must be compensated for the service provided, and the carrier must hold itself out to the public as willing and available to transport goods or people for hire.

Question 6

Carol took her earrings off at Marcia's beauty shop 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, she now is the true owner.
B) No, Marcia would have the right to keep them as against anyone but Carol.
C) Yes, since she is a finder.
D) No, since the earrings were personal property.

Accepted Answer

Marcia, as the owner of the beauty shop where the earrings were found, has superior rights to the found property over anyone except the original owner, Carol. This is based on the legal principle that the owner of the premises has rights to items found on their property, except against the true owner.

Question 7

Marilyn brought her $400 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 no more than $53.25, five times the cost of cleaning.Is that true?
A) No, because the limitation was not communicated to her.
B) No, because University is a common carrier.
C) No, because the limitation is unconscionable.
D) No, because Marilyn is not a bailor.

Accepted Answer

The limitation of liability was not effectively communicated to Marilyn before she agreed to the service, making it unenforceable.

Question 8

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

Accepted Answer

Confusion is the legal term used when goods of the same kind and quality are mixed together, making it impossible to distinguish the contributions of each owner. In this case, each depositing the same amount of wheat results in confusion, giving each one-third ownership of the mixture.

Question 9

Margaret told Bill she would give him her concert tickets.Later she changed her mind and decided she wanted to use the tickets after all.Is Margaret required to give Bill the tickets?
A) No, because there was no acceptance.
B) No, because there was no delivery.
C) No, because there was no intent to make a present transfer.
D) All of these are correct.

Accepted Answer

Margaret's statement to Bill does not constitute a legally binding gift because there was no acceptance by Bill, no delivery of the tickets to Bill, and no clear intent from Margaret to make a present transfer of the tickets to Bill. All these elements are necessary for a gift to be legally effective.

Question 10

Insurance protects a business from:
A) strict liability.
B) damage from natural causes.
C) negligence.
D) tort liability.
E) All of these are protected.

Accepted Answer

Insurance can protect a business from various risks including strict liability, damage from natural causes, negligence, and tort liability, hence all of these options are correct.

Question 11

Showplace insures its $160,000 building with two insurers: with Hometown Insurance for $60,000 and with National Insurance for $120,000.The building suffers a fire loss of $75,000.From whom and for how much can Showplace collect?

Accepted Answer

The answer of Showplace insures its $160,000 building with two...

Question 12

Intangible real property includes all of the following except:
A) leases.
B) fixtures.
C) easements.
D) None of these. All real property is tangible.

Accepted Answer

Intangible real property refers to rights or interests in real property that do not have a physical existence. Examples include leases, easements, and air rights. Fixtures, on the other hand, are physical objects that are attached to real property and are considered tangible real property. Therefore, choice B is the correct answer as it is not an example of intangible real property.

Question 13

The rights of a holder of a negotiable document of title to whom it has been duly negotiated include:
A) title to the goods.
B) all rights accruing under the law of agency or estoppel.
C) title to the document.
D) All of these are rights.

Accepted Answer

A holder of a negotiable document of title who has had the document duly negotiated to them acquires several rights, including title to the goods described in the document, title to the document itself, and all rights accruing under the law of agency or estoppel. This comprehensive set of rights facilitates the smooth and secure transaction of goods in commerce.

Question 14

Explain the difference between lost, mislaid, and abandoned property and who has rights to it.

Accepted Answer

The answer of Explain the difference between lost, mislaid, and...

Question 15

Mark wants to give Susan his car.How can he effectively "deliver" it?
A) By giving her an indorsed title certificate.
B) By giving Susan the keys.
C) By making her take it for a period of time.
D) By giving her a bill of sale for it.
E) By giving her an indorsed title certificate or by  giving Susan the keys.

Accepted Answer

The effective delivery of a car to another person typically involves transferring the title certificate with an endorsement to the new owner and may also include handing over the keys as a symbolic act of delivery. Both actions signify the intent to transfer ownership.

Question 16

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

Accepted Answer

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

Question 17

Which of the following statements is not true of insurance policies?
A) The basic principles of contract law apply to insurance policies.
B) Insurance companies tend to standardize their policies.
C) Some states forbid standardization of insurance policies.
D) All of these.

Accepted Answer

Most states do not forbid the standardization of insurance policies; in fact, standardization is common in the industry to ensure consistency and compliance with state regulations.

Question 18

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

Accepted Answer

The answer of Larry leaves his hat under the seat...

Question 19

All but which of the following hold an insurable interest?
A) A buyer of a truck, whether or not the buyer had knowledge of the fact that the truck was stolen by the seller.
B) A seller with a purchase money security interest.
C) Shareholders in a closely held corporation to the extent of their interest in the corporation's property.
D) A lessee of property.

Accepted Answer

An insurable interest exists when the insured party derives a financial or other type of benefit from the continuous existence of the insured object, and would suffer financial loss or other kinds of losses if the insured object were damaged or lost. In the case of a stolen truck, the buyer, not knowing the truck was stolen, still has an insurable interest because they stand to lose financially if something happens to the truck. However, if it's known that the truck was stolen, the legality and ethics of insuring such property come into question, but from a purely financial perspective, the buyer still has an insurable interest. The other options (B, C, D) clearly have insurable interests due to their financial stakes in the property or entity.

Question 20

Warranties in insurance contracts:
A) may be used to avoid liability in all states, whether or not the breach of warranty is material.
B) are of great importance.
C) are becoming increasingly easy to use as a basis for an insurer to avoid liability on a policy when an insured breaches.
D) may be expressly included in the contract, be clearly incorporated by reference, or be implied.

Accepted Answer

Warranties in insurance contracts are of great importance because they are promises made by the insured that certain conditions will be met. If these warranties are breached, it can affect the validity of the insurance contract.

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

A bill of lading serves as:

Farmer Brown brings his crop of wheat to the local grain elevator where it is stored along with the grain of several other farmers.A few months later, the grain elevator declares bankruptcy.Who owns the grain? Can Farmer Brown get his grain back? Explain.

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?

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?

Which of the following is/are the criteria for a common carrier?

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

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

Margaret told Bill she would give him her concert tickets.Later she changed her mind and decided she wanted to use the tickets after all.Is Margaret required to give Bill the tickets?

Insurance protects a business from:

Showplace insures its $160,000 building with two insurers: with Hometown Insurance for $60,000 and with National Insurance for $120,000.The building suffers a fire loss of $75,000.From whom and for how much can Showplace collect?

Intangible real property includes all of the following except:

The rights of a holder of a negotiable document of title to whom it has been duly negotiated include:

Explain the difference between lost, mislaid, and abandoned property and who has rights to it.

Mark wants to give Susan his car.How can he effectively "deliver" it?

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

Which of the following statements is not true of insurance policies?

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

All but which of the following hold an insurable interest?

Warranties in insurance contracts: