Question 1

In a guaranty situation,there is only one contract among three parties.

Accepted Answer

In a guaranty situation, there are two contracts involved. One is the underlying contract between the creditor and debtor, and the second is the guaranty contract between the guarantor and the creditor. Therefore, there are three parties involved in this situation - the creditor, debtor, and guarantor.

Question 2

In a guarantee situation,the guarantor's liability is secondary.

Accepted Answer

In a guarantee situation, the guarantor's liability is secondary to that of the principal debtor. This means that the creditor must first seek payment from the principal debtor before turning to the guarantor for payment.

Question 3

The ________ says that agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable.
A)merger clause
B)common law of contracts
C)doctrine of equity
D)equal dignity rule

Accepted Answer

The Equal Dignity Rule states that if an agent is entering into a contract to sell property covered by the Statute of Frauds, the agent's contract must also be in writing in order to be enforceable.

Question 4

According to the Statute of Frauds,an executory contract that cannot be performed by its own terms within one year of its formation must be in writing.

Accepted Answer

According to the Statute of Frauds, an executory contract that cannot be performed within one year of its formation must be in writing to be enforceable.

Question 5

A guaranty contract between people with no bad credit history can be oral.

Accepted Answer

The answer of A guaranty contract between people with no...

Question 6

The ________ states that if the main purpose of a transaction and an oral collateral contract is to provide pecuniary benefit to the guarantor,the collateral contract does not have to be in writing to be enforced.
A)merger clause
B)leading object exception
C)collateral contract rule
D)parol evidence rule

Accepted Answer

The leading object exception states that if the main purpose of a transaction and an oral collateral contract is to provide pecuniary benefit to the guarantor, the collateral contract does not have to be in writing to be enforced.

Question 7

The primary contract in a guarantee situation is between the debtor and the creditor.

Accepted Answer

In a guarantee situation, the primary contract is indeed between the debtor (the person who owes the money) and the creditor (the person to whom the money is owed), establishing the obligation to pay the debt.

Question 8

Statute of Frauds is a state statute that requires certain types of contracts to be in writing.

Accepted Answer

The statement is true.

Question 9

Under the Statute of Frauds,any contract that transfers an ownership interest in real property must be in writing to be enforceable.

Accepted Answer

The Statute of Frauds requires that contracts for the transfer of ownership in real property must be in writing to be enforceable.

Question 10

Nina wants to borrow money from Tina,but Tina refuses to lend the money unless another person promises to pay the money in case Nina cannot clear the debt.James agrees to pay the debt if Nina does not.James is the ________ in this transaction.
A)creditor
B)debtor
C)guarantor
D)facilitator

Accepted Answer

James is acting as a guarantor, agreeing to pay Nina's debt if she cannot.

Question 11

Built-in cabinets in a house would be considered as permanent parts of the real property.

Accepted Answer

Built-in cabinets are attached to the walls or floors and cannot be removed without damaging the structure of the house. Therefore, they are considered permanent parts of the real property.

Question 12

Trees,crops,minerals,and timber are barred from being included in contracts involving interests in real property.

Accepted Answer

Trees, crops, minerals, and timber can be included in contracts involving interests in real property. In fact, they are often considered part of the "bundle of rights" that come with ownership of real property. However, there may be separate contracts or agreements necessary for the sale or management of these resources.

Question 13

A lease is an interest in real property given to a lender as security for the repayment of a loan.

Accepted Answer

A lease is not given to a lender as security for a loan. A lease is a contractual agreement between a landlord and a tenant for the use and occupation of the landlord's property.

Question 14

A life estate will be transferred to another party in the event of the holder's death.

Accepted Answer

A life estate is an interest in property that lasts for the life of the holder. Upon the holder's death, the interest typically transfers to another designated party, as specified in the legal documentation creating the life estate.

Question 15

In most states,contracts for the sale of goods for $900 do not require to be in writing.

Accepted Answer

According to the Statute of Frauds, contracts for the sale of goods for $500 or more (not $900) must be in writing to be enforceable.

Question 16

In most states,contracts for the lease of goods with payments of $2000 require to be in writing.

Accepted Answer

According to the Uniform Commercial Code (UCC), contracts for the lease of goods with payments of $1000 or more are required to be in writing in most states, and the threshold amount may vary by state. However, in some states, the threshold amount may be $500 or $5000.

Question 17

An easement is a form of real property security given by a borrower to a lender.

Accepted Answer

An easement is a right to use someone else's property for a specific purpose, such as accessing a road or utility line. It is not a form of real property security given to a lender.

Question 18

The main purpose exception to the Statute of Frauds allows oral collateral contracts to be enforced if there is a monetary benefit to the guarantor.

Accepted Answer

The main purpose exception to the Statute of Frauds does allow oral collateral contracts to be enforced if the guarantor receives a monetary benefit from the transaction.

Question 19

An easement contract occurs when one person agrees to answer for the debts or duties of another person.

Accepted Answer

An easement contract involves the granting of a right to use someone else's property for a specific purpose, such as a driveway or utility line. It has nothing to do with answering for someone else's debts or duties. The term for answering for someone else's debts or duties is "suretyship."

Question 20

The transfer of the right to use real property for a specified period of time is known as a lease.

Accepted Answer

This is the standard definition of a lease, which grants the tenant the right to use the property for a defined period of time in exchange for rent payments to the landlord.

Quiz 14: Statute of Frauds and Equitable Exceptions