Question 1

​Refer to Fact Pattern 23-1. These facts give rise to

Accepted Answer

A)  a presumption of negligence by Truck & Transfer.
B)  a presumption of theft by a third party.
C)  a presumption of theft by Truck & Transfer.
D)  United Home's liability for the container's loss. A

Question 2

When there is an ambiguity in an insurance policy, the provision generally is interpreted against the insurance company.

Accepted Answer

A) True 
 B)False  True

Question 3

Ester sells stock in Fast Food Franchise Inc. to Gayle. Ester does not hand the stock certificates to Gayle, but gives her the key to a safety-deposit box in Heartland Bank in which the certificates are locked. This is​

Accepted Answer

A)  incomplete delivery.
B)  constructive delivery.
C)  accession.
D)  conversion. B

Question 4

Miranda delivers her bridesmaid's dress to Nina for alterations. Nina promises that the dress will be ready within five business days. Miranda agrees to pay the charge when she picks up the dress. This is​

Accepted Answer

A)  an implied bailment.
B)  an involuntary bailment.
C)  an express bailment.
D)  not a bailment.

Question 5

GR8 Vision, Inc., hires Haul-Way Company to transport fifty large-screen HDTVs from GR8's warehouse in San Diego to an Ideal Electronics retail store in Phoenix. The bailee is​

Accepted Answer

A)  GR8 Vision.
B)  Haul-Way.
C)  Ideal Electronics.
D)  no one.

Question 6

For estray statutes to apply, property must be mislaid, not merely lost.

Accepted Answer

A) True 
 B)False

Question 7

To be effective, a gift causa mortis must meet only two requirements: intent and acceptance.

Accepted Answer

A) True 
 B)False

Question 8

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​

Accepted Answer

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.

Question 9

Phil is an insurance broker. This means that Phil is​

Accepted Answer

A)  an employee of an insurance company.
B)  an independent contractor.
C)  not allowed to deal directly with an insurance company.
D)  in charge of determining the appropriate premium for an insurance policy.

Question 10

Adrian applies for a life insurance policy that is expressly contingent on him passing a physical examination. The effective date of the policy is the date

Accepted Answer

A)  Adrian submits the application, but before passing his physical.
B)  the life insurance company accept the first premium.
C)  the life insurance company issues the policy.
D)  continuously from the application date if Adrian pays the first premium and passes his physical.

Question 11

An absolute defense against payment exists if the insurer can show that the insured lacked an insurable interest.

Accepted Answer

A) True 
 B)False

Question 12

Gretel, an inventor, has tools in her workshop, including hammers, a table saw, and drills. She has a patent on her most recent invention, a kitchen gas grill. She licenses the patent to Housewares, Inc. Her tangible personal property includes​

Accepted Answer

A)  the tools.
B)  the license.
C)  the patent.
D)  all of the choices.

Question 13

Nero and Omar agree to buy natural gas to sell to Power Fuel Company and to share storage costs until Power Fuel can take delivery. The gas is commingled so that Nero's cannot be distinguished from Omar's. This is​

Accepted Answer

A)  accession.
B)  confusion.
C)  conversion.
D)  a bailment.

Question 14

Earth's Bounty Farms arranges to have Fresh Express, Inc., a common carrier, transport a load of almonds from California to Delaware. Greg is Fresh Express's driver. Fresh Express will not be liable to Earth's Bounty for failing to deliver the almonds on time if​

Accepted Answer

A)  authorities are stopping and searching all trucks leaving California.
B)  Fresh Express's dispatcher mistakenly delays Greg's departure.
C)  Fresh Express's truck is broken into and the almonds are stolen.
D)  Greg has to wait two days in Sacramento for the truck to be repaired.

Question 15

The owner of the place where property was mislaid becomes the caretaker of the property.

Accepted Answer

A) True 
 B)False

Question 16

Refer to Fact Pattern 23-1. Truck & Transfer can avoid liability​

Accepted Answer

A)  by proof that Truck & Transfer was not negligent.
B)  by proof that Truck & Transfer's loading dock is in a high-crime area.
C)  by proof that United Home was negligent in hiring TTC.
D)  under any circumstances.

Question 17

A bailment agreement must be express.

Accepted Answer

A) True 
 B)False

Question 18

Emily checks her luggage at Flyaway Airlines's ticket counter before boarding her flight to Houston. Subject to a bailment is​

Accepted Answer

A)  Emily.
B)  Emily's luggage.
C)  Emily's ticketed seat on the flight.
D)  none of the choices.Fact Pattern 23-1 Truck & Transfer Inc.agrees to pick up two containers for United Home Products Corporation and store their contents, to be delivered later.While Truck & Transfer un-loads one container, the other disappears from the company's loading dock.

Question 19

An insurance company can cancel an insured's policy at any time.

Accepted Answer

A) True 
 B)False

Question 20

The implied warranties of merchantability and fitness for a particular purpose extend to bailments that include rights to use the bailed goods.

Accepted Answer

A) True 
 B)False

Exam 23: Personal Property, Bailments, and Insurance

​Refer to Fact Pattern 23-1. These facts give rise to

When there is an ambiguity in an insurance policy, the provision generally is interpreted against the insurance company.

Ester sells stock in Fast Food Franchise Inc. to Gayle. Ester does not hand the stock certificates to Gayle, but gives her the key to a safety-deposit box in Heartland Bank in which the certificates are locked. This is​

Miranda delivers her bridesmaid's dress to Nina for alterations. Nina promises that the dress will be ready within five business days. Miranda agrees to pay the charge when she picks up the dress. This is​

GR8 Vision, Inc., hires Haul-Way Company to transport fifty large-screen HDTVs from GR8's warehouse in San Diego to an Ideal Electronics retail store in Phoenix. The bailee is​

For estray statutes to apply, property must be mislaid, not merely lost.

To be effective, a gift causa mortis must meet only two requirements: intent and acceptance.

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​

Phil is an insurance broker. This means that Phil is​

Adrian applies for a life insurance policy that is expressly contingent on him passing a physical examination. The effective date of the policy is the date

An absolute defense against payment exists if the insurer can show that the insured lacked an insurable interest.

Gretel, an inventor, has tools in her workshop, including hammers, a table saw, and drills. She has a patent on her most recent invention, a kitchen gas grill. She licenses the patent to Housewares, Inc. Her tangible personal property includes​

Nero and Omar agree to buy natural gas to sell to Power Fuel Company and to share storage costs until Power Fuel can take delivery. The gas is commingled so that Nero's cannot be distinguished from Omar's. This is​

Earth's Bounty Farms arranges to have Fresh Express, Inc., a common carrier, transport a load of almonds from California to Delaware. Greg is Fresh Express's driver. Fresh Express will not be liable to Earth's Bounty for failing to deliver the almonds on time if​

The owner of the place where property was mislaid becomes the caretaker of the property.

Refer to Fact Pattern 23-1. Truck & Transfer can avoid liability​

A bailment agreement must be express.

Emily checks her luggage at Flyaway Airlines's ticket counter before boarding her flight to Houston. Subject to a bailment is​

An insurance company can cancel an insured's policy at any time.

The implied warranties of merchantability and fitness for a particular purpose extend to bailments that include rights to use the bailed goods.

Refer to Fact Pattern 23-1. These facts give rise to

Ester sells stock in Fast Food Franchise Inc. to Gayle. Ester does not hand the stock certificates to Gayle, but gives her the key to a safety-deposit box in Heartland Bank in which the certificates are locked. This is

Miranda delivers her bridesmaid's dress to Nina for alterations. Nina promises that the dress will be ready within five business days. Miranda agrees to pay the charge when she picks up the dress. This is

GR8 Vision, Inc., hires Haul-Way Company to transport fifty large-screen HDTVs from GR8's warehouse in San Diego to an Ideal Electronics retail store in Phoenix. The bailee is

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

Phil is an insurance broker. This means that Phil is

Gretel, an inventor, has tools in her workshop, including hammers, a table saw, and drills. She has a patent on her most recent invention, a kitchen gas grill. She licenses the patent to Housewares, Inc. Her tangible personal property includes

Nero and Omar agree to buy natural gas to sell to Power Fuel Company and to share storage costs until Power Fuel can take delivery. The gas is commingled so that Nero's cannot be distinguished from Omar's. This is

Earth's Bounty Farms arranges to have Fresh Express, Inc., a common carrier, transport a load of almonds from California to Delaware. Greg is Fresh Express's driver. Fresh Express will not be liable to Earth's Bounty for failing to deliver the almonds on time if

Refer to Fact Pattern 23-1. Truck & Transfer can avoid liability

Emily checks her luggage at Flyaway Airlines's ticket counter before boarding her flight to Houston. Subject to a bailment is