Question;1. Refer to Fact Pattern A. Felix's check is most likelya. a certificate of deposit.b. an order to pay.c. a promise to pay.d. a promissory note.____ 2. Refer to Fact Pattern A. With respect to Felix's check, DeliMart isa. the drawee.b. the drawer.c. the maker.d. the payee.Fact Pattern BCommodity Sales Corporation and Resource Purchasing Company enter a contract for a sale of unprocessed silver. Commodity Sales draws a draft unconditionally ordering Resource Purchasing to pay $50,000 to Commodity Sales's order in sixty days. Resource Purchasing signs and dates the draft.____ 3. Refer to Fact Pattern B. This instrument isa. a banker's acceptance.b. a nonnegotiable instrument.c. a promissory note.d. a trade acceptance.____ 4. Bagels n' Coffee Caf? issues an instrument in favor of Eatery Supplies, Inc. For the instrument to be negotiable, it musta. be a conditional promise or order to pay.b. be payable on demand or at a specific time.c. be signed by the payee.d. recite the consideration given in exchange for it.____ 5. To finance the purchase of a car from Giant Auto Sales, Hoppy signs an instrument promising to pay to "Ideal Credit Union" $18,000 with interest in installments with the final payment due May 15, 2014. To be negotiable, this instrument must include on its facea. any conditions on the sale of the car.b. any conditions to the disbursement of the funds.c. any conditions to the repayment of the loan.d. no conditions.____ 6. Karen writes on a piece of paper, "I owe you $600," signs it, and gives it to Lou. This instrument isa. negotiable.b. nonnegotiable, because it does not include an express promise to pay.c. nonnegotiable, because it does not recite any consideration.d. nonnegotiable, because it does not state any conditions to payment.____ 7. Jack signs an instrument that states it is being executed "as per a contract for the sale of three magic beans dated June 1." This instrument isa. negotiable.b. nonnegotiable, because banks cannot easily process commodities.c. nonnegotiable, because it includes the specific date of a contract.d. nonnegotiable, because it refers to an express contract.____ 8. Hayley signs an instrument payable to the order of InstaCredit, Inc., that allows a holder to demand payment of the entire amount due, with interest, if Hayley fails to make a payment. This instrument isa. negotiable.b. nonnegotiable, because a holder can move up the payment date.c. nonnegotiable, because moving up the payment date is conditional.d. nonnegotiable, because the exact payment date cannot be determined from the face of the instrument.____ 9. Shad signs a promissory note payable to Theresa "with interest" on which he conspicuously notes that it is "nonnegotiable." This instrument isa. negotiable.b. nonnegotiable, because it includes the notation "nonnegotiable."c. nonnegotiable, because it does not specify a rate of interest.d. nonnegotiable, because the exact amount payable cannot be determined from the face of the instrument.____ 10. Locke signs a check payable to the order of Metro Bank, filling in the blanks for the amount with the figures "$100" and "One thousand and 00/100 dollars." This check is payable in the amount ofa. $0.b. $100.c. $1,000.d. $1,100.____ 11. Ollie negotiates an order instrument to Phil bya. assignment of its rights under a contract.b. delivery with any necessary indorsement.c. making an unconditional promise to pay.d. presenting it in response to a demand by B.____ 12. Ivy signs a check payable to Jon and gives it to him. Jon indorses the back, and transfers the check to Ked. To negotiate the check to Luis, Ked musta. write "Ked" on the back.b. write "pay to the order of Luis [signed] Ked" on the back.c. deliver the check to Luis.d. obtain Luis's signature on the back.Fact Pattern CRollo obtains a check payable to his order from Simone. Rollo signs the back and gives the check to Trey. Trey writes "Pay to Trey" above Rollo's signature.____ 13. Refer to Fact Pattern C. When Trey writes "Pay to Trey" above Rollo's signature, the check becomesa. a bearer instrument.b. an order instrument.c. a promissory note.d. a nonnegotiable instrument.____ 14. Refer to Fact Pattern C. After Trey writes "Pay to Trey" above Rollo's signature, further negotiation of the checka. requires Rollo's re-indorsement and delivery.b. requires delivery alone.c. requires Trey's indorsement and delivery.d. is not possible.____ 15. Mike receives a payroll check from National Computer Systems, Inc., and indorses it by signing his name on the back of the check. This isa. a blank indorsement.b. a qualified indorsement.c. a restrictive indorsement.d. a special indorsement.____ 16. Dora receives a check from Eagle Corporation. Dora indorses the check to First National Bank by writing "pay to First Nat'l Bank only" and signing her name. This isa. a blank indorsement.b. a qualified indorsement.c. a restrictive indorsement.d. a special indorsement.____ 17. Jen makes a gift of a check to Kilroy who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Kilroy isa. an extraordinary holder in due course.b. an ordinary check passer.c. an ordinary holder.d. an ordinary holder in due course.____ 18. Derby Stables writes a check to Extendo Credit, Inc., that is drawn on Derby's account at Farm & Ranch Bank. If the bank does not accept the check, liability for its amount is ona. Derby.b. Extendo.c. Farm & Ranch.d. the holder of the check.____ 19. Dirk is the maker of a note, on which Erv is secondarily liable. Friendly Credit Company is the current holder of the note. Erv will be obligated to pay the note ifa. Dirk defaults on the note.b. Friendly Credit breaches a transfer warranty.c. Friendly Credit negotiates the note to a third party.d. Friendly Credit presents the note for payment.Fact Pattern DSeymour writes a check on his account at Platinum Bank to Teri to pay a debt. Teri negotiates the check by indorsement to Rosanna, who presents it for payment to Onyx Bank.____ 20. Refer to Fact Pattern D. Teri isa. not liable for payment under any circumstances.b. primarily liable.c. secondarily liable.d. simultaneously liable.____ 21. Refer to Fact Pattern D. If Onyx Bank dishonors the check, Rosanna can obtain payment from Teria. if Rosanna timely notifies Teri.b. only if Seymour refuses to pay the check.c. under any circumstances.d. under no circumstances.____ 22. Opalina asks Paolo, who does not understand English, to sign what Opalina says is an application to open a bank account. In fact, the "application" is a note. If sued on the note by an HDCa. Paolo must pay the note.b. Paolo's best defense would be fraud in the execution.c. Paolo's best defense would be fraud in the inducement.d. Paolo's best defense would be mistake.____ 23. Chris convinces Dion, who does not understand English, to sign a $1,000 note that Dion believes is an application for a credit card. Chris negotiates the note to EZ Finance Company. Diona. can avoid payment on the note even if EZ is an HDC.b. can avoid payment on the note only if EZ is a holder.c. must pay EZ the amount that it paid for the note.d. must pay the note in full.____ 24. Laptop Assembly Company gives a $3,000 promissory note to My-T-Fast Delivery Service to deliver a load of computer chips to Laptop's plant. The chips are contaminated during transit, and are useless to Laptop on delivery. If My-T-Fast presents the note for paymenta. Laptop's best defense would be breach of warranty.b. Laptop must pay the note.c. Laptop's best defense would be nondelivery of an instrument.d. Laptop's best defense would be failure of consideration.____ 25. Elmo pays First National Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This isa. a cashier's check.b. a certified check.c. a trade acceptance.d. a traveler's check.____ 26. First Community Bank agrees to accept a check by setting aside sufficient funds to cover the amount. This check is considereda. cashed.b. certified.c. deposited.d. provisionally credited.____ 27. Brandy forges Caleb's signature on a check "payable to the order of Brandy" drawn on Caleb's account in Delphi Bank. Caleb's forged signature isa. effective if an innocent third party accepts the check.b. effective to the degree that it matches Caleb's genuine signature.c. effective to the extent that Downtown Bank debits Caleb's account.d. not effective.____ 28. Elmer has a checking account at Finance City Bank on which he is the sole signatory. Gina steals the checks, forges Elmer's signature, and cashes the checks at Finance City. The bank is excused from any liability if, after receipt of the first forged check, Elmer fails to report the forgeries withina. five days.b. fourteen days.c. one year.d. three years.____ 29. Ronald writes a check for $700 payable to Savannah. Savannah indorses the check in blank and transfers it to Mitchell, who alters the check to read $7,000 and presents it to Union Bank, the drawee, for payment. The bank cashes it. Ronald discovers the alteration and files a suit against the bank. Ronald can recovera. $7,000.b. $6,300.c. $700.d. 0.____ 30. On Monday morning, Bob deposits into his account at County Bank a $500 check from Dyna, who also has an account at County Bank. On that same day, this check is considereda. cashiered.b. certified.c. paid.d. provisionally credited.Fact Pattern EMike loses his National Bank access card. He realizes his loss the next day but waits a week to call National. Meanwhile, Opal finds and uses Mike's card to withdraw $3,000 from Mike's account.____ 31. Refer to Fact Pattern E. Mike is responsible fora. $0.b. $50.c. $500.d. $3,000.____ 32. Refer to Fact Pattern E. When Mike receives his National statement, he demands that the bank investigate the matter and recredit his account. The banka. has no duty to investigate.b. must investigate and, if the dispute is not resolved within ten days, recredit Mike's account (at least until the dispute is resolved).c. must investigate and immediately recredit Mike's account (at least until the dispute is resolved).d. must investigate but need not recredit Mike's account.____ 33. Residence Painting Company has a claim against Stuart's property to satisfy a debt that takes priority over other claims against the same property. This isa. a lien.b. a violation of most state laws.c. a writ of attachment.d. a garnishment.____ 34. Delia refuses to pay Ewing $500 in cash on their contract to repair certain theater sets, which Ewing still possesses. Ewing's lien on the sets will terminatea. if Ewing continues to maintain possession.b. if Ewing does not file a written notice of lien within thirty days.c. if Ewing voluntarily surrenders possession.d. within thirty days.____ 35. Sydney borrows money from Rite Now Loan Company. For Rite Now to obtain a writ of execution, Sydney musta. be unable or refuse to pay the amount of a judgment.b. be unable to redeem Sydney's exempt property.c. notify Rite Now in writing (in a "writ") of his intent.d. surrender possession of his property to a court.____ 36. Flip's debt to George is past due. George brings a legal action against Flip to collect the debt. George asks the court to order Home Bank, in which Flip has an account, to pay a portion of the funds to George. This is a request fora. a writ of execution.b. an order of garnishment.c. an order that would violate most state laws.d. an artisan's lien.____ 37. Liu and Midge?Nero's creditors?contract with Nero for the discharge of Nero's liquidated debts on payment of a lesser sum. This isa. a composition agreement.b. a subrogation.c. a suretyship agreement.d. in violation of most states' laws.Fact Pattern FDollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory. Estimable requires Flair, Dollar Value's president, sign a personal guaranty to pay the debt if Dollar Value defaults. Meanwhile, to buy a pick-up truck from Dollar Value, Gina asks Harper to be a signatory on Gina?s credit application.____ 38. Refer to Fact Pattern F. If Harper signs the application but the application fails to condition Harper?s liability on Dollar Value's agreement to pursue its legal remedies against Gina before looking to Harper, then Harper isa. a surety.b. a lienor.c. a guarantor.d. a creditor.____ 39. Refer to Fact Pattern F. If, after the loan agreement is signed, Gina agrees to a higher rate of interest without telling Harper, then Harper isa. discharged from the agreement.b. liable at the higher rate of interest.c. liable at the lower rate of interest.d. liable for the principal only.____ 40. Bayside Credit Corporation lends funds to Claude, a consumer, to apply to the cost of a boat, which is the collateral for the loan. An enforceable security interest in the boat requiresa. a written agreement and Bayside's possession of the boat.b. a written agreement or Bayside's possession of the boat.c. the boat seller's acknowledgement of the loan in writing.d. Claude's possession of the boat.____ 41. The payment of Laine's debt to Mingo is guaranteed by Laine's personal property. The process by which Mingo can protect himself against the claims of third parties to this property isa. attachment.b. authentication.c. perfection.d. bankruptcy.____ 42. Mona lives in New Jersey, but she works in New York. Mona borrows $1,000 from National Bank, using her motorcycle as collateral. To perfect its security interest, the bank must file its financing statement in at leasta. every state.b. New Jersey.c. New Jersey and New York.d. New York.Fact Pattern GLuxuro Vehicles, Inc., makes and sells automobiles to auto dealers, including MotorPros Auto & Truck Sales. MotorPros sells the cars to consumers and businesses.____ 43. Refer to Fact Pattern G. Nani, a professional driver, buys a customized Luxuro 990 from MotorPros to drive in a Grand Prix race. Nani's Luxuro isa. a consumer good.b. an instrument.c. equipment.d. inventory.____ 44. OK Investments, Inc., files a financing statement to provide notice of its security interest in the property of Pancakes and Waffles Restaurant. The initial effective term of a financing statement is a period ofa. five days.b. five months.c. five weeks.d. five years.____ 45. Ron does not make a payment on his car loan for several months. The dealer, Star Auto, repossesses the car by towing it from a public parking lot. Ron sues Star for breach of the peace. Ron will probablya. prevail, because Ron has not formally defaulted on the car loan.b. prevail, because the car was in a public lot when it was towed.c. not prevail, because the repossession was not a breach of the peace.d. not prevail, because a creditor can repossess property in which it holds an interest if no threats or force are used against a debtor.____ 46. Bernice files a petition in bankruptcy. The initial proceeding on this petition will be ina. a federal bankruptcy court.b. a state bankruptcy court.c. the highest court in the state in which Bernice is located.d. the United States Supreme Court.____ 47. Mia's voluntary petition for bankruptcy is found to be proper. The order for relief is effective as soon asa. Mia files the petition.b. Mia posts a bond to cover the costs of the proceedings.c. Mia's creditors agree to the terms.d. the trustee collects and distributes the property of Mia's estate.Fact Pattern HStacy sells her all-terrain vehicle (ATV) to her brother Terrill for $1,000. Twelve days later, Stacy files a petition in bankruptcy for relief through a liquidation.____ 48. Refer to Fact Pattern H. Terrill dies while riding the ATV. Stacy is Terrill's only heir. With respect to the bankruptcy estate, the inheritance isa. exempt property.b. part of the estate if Terrill died more than 180 days after Stacy's filing.c. part of the estate if Terrill died within 180 days after Stacy's filing.d. part of the estate if the accident was in some way Stacy's fault.____ 49. Refer to Fact Pattern H. Regarding the sale of the ATV, the trustee maya. cancel it as a fraudulent transfer.b. cancel it as a voidable preference.c. not cancel it because it is a sale, not a gift.d. not cancel it, but can sue Terrill's estate for the return of the $1,000.____ 50. Kipper files a petition in bankruptcy. Kipper's dischargeable debts includea. domestic-support obligations.b. student loans unless the lender would suffer undue hardship.c. unpaid state and federal taxes.d. unsecured credit-card debt.Extra Credit. Each correct answer is worth one additional point.51. John, the secured party, perfects its security interest by filing a financing statement. What is the effect of perfection of John?s security interest?a. The secured party has priority in the collateral over most creditors who acquire a security interest in the same collateral after the filing.b. The security interest becomes enforceable against the debtor.c. The debtor is protected against all other parties who acquire an interest in the collateral after the filing.d. The assets subject to the security interest do not become part of the bankruptcy estate in the event the creditor files an involuntary petition against the debtor.52. With regard to a prior perfected security interest in goods for which a financing statement has been filed, which of the following parties is most likely to have a superior interest in the same collateral?a. The trustee in bankruptcy of the debtor.b. Lien creditors of the debtor.c. A buyer of goods in the ordinary course of business.d. A subsequent buyer of consumer goods who purchased the goods from another consumer.53. A party who filed a financing statement covering inventory on April 1, 2011 would have a superior interest to which of the following parties?a. A holder of a mechanic?s lien whose lien was filed on March 15, 2011.b. A judgment lien creditor who filed its judgment on April 15, 2011.c. A holder of a purchase money security interest in after-acquired inventoryfiled on March 20, 2011.d. A purchaser in the ordinary course of business who purchased on April 10, 2011.____ 54. Kettlecorn Investments, Inc., and Lone Bank are secured parties with security interests in property owned by Metal Fabrication Corporation. Priority between these security interests is generally determined bya. the amount of the claim.b. the custom in the trade.c. the time of perfection or attachment.d. the "float" of the liens.Fact Pattern IGeneral Leasing Company (GLC) buys equipment for use as inventory, borrowing $1 million from Helpful Finance Corporation (Helpful) for a security interest in the equipment. The next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the equipment. GLC defaults on both loans.____ 55. Refer to Fact Pattern I. Suppose that two weeks after GLC takes possession of the equipment, Helpful and Interstate file financing statements, with Interstate filing first. In that circumstance, the party with priority to the equipment isa. GLC.b. Helpful and Interstate proportionately.c. Helpful only.d. Interstate Bank only.____ 56. Ken files a petition for bankruptcy. Ken must include with the petitiona. a plan to turn over his future income to the trustee.b. a certificate proving attendance at a credit-counseling briefing.c. a provision of adequate means for the petition's execution.d. a statement of preference for one creditor over another.____ 57. Hasty Pastries declares bankruptcy, idling Hasty's delivery vehicles. The court can compel Hasty to make periodic cash payments to a creditor with a secured interest in the vehicles to offset the depreciation in their value. This isa. the adequate protection doctrine.b. the avoidance doctrine.c. a preferential transfer.d. the automatic stay.____ 58. Lorissa files a petition for bankruptcy. Lorissa's creditors must file with the court their proof of claims against Lorissa's assets withina. fifteen days of the order for relief.b. thirty days of the filing of the petition.c. sixty days of the automatic stay.d. ninety days of the creditors' meeting.____ 59. Building Services receives a discharge in bankruptcy, even though some creditors hold judgments on overdue debts against it and others filed actions to collect on overdue debts before the bankruptcy. Reconstruction's discharge willa. absolve the liability of any co-debtors.b. permit the debtor to enter into reaffirmation agreements.c. allow the debtor to file a petition for a reorganization.d. prohibit actions and void judgments regarding overdue debts.____ 60. Wilbur files a petition in bankruptcy for relief through an individual's repayment plan. Wilbur is granted a discharge. Debts that will not be discharged include claims fora. contributions to employee benefit plans.b. money to be paid for services not rendered.c. fraudulently incurred debt.d. long overdue credit-card debt.
Paper#39066 | Written in 18-Jul-2015Price : $57