Principles of Business Test Questions
Course Introduction
Principles of Business is an introductory course that provides a comprehensive overview of the foundational concepts and practices that govern the business world. Students explore topics such as the various forms of business ownership, organizational structures, the role of entrepreneurship, marketing, management, and finance. The course emphasizes critical thinking and decision-making skills, and highlights the ethical, legal, and global considerations that influence business operations. By the end of the course, students will develop a deeper understanding of how businesses are created, operate, and grow within the modern economy.
Recommended Textbook
Business Law Today Standard Text and Summarized Cases 11th Edition by Roger LeRoy Miller
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Page 2
Chapter 1: The Legal Environment
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Sample Questions
Q1) Businesspersons are expected to make decisions that are ethically sound.
A)True
B)False
Answer: True
Q2) Reba is a state court judge. In her court, legal and equitable remedies have merged.In these circumstances, distinguishing between these types of remedies is
A) notimportant because legal remedies cannot be granted today.
B) not important because equitable remedies cannot be granted today.
C) importantso that statistical data on the remedies can be compiled.
D) important so that the proper remedy can be requested.
Answer: D
Q3) A judge's function is to make the law.
A)True
B)False
Answer: False
Q4) In most states, the courts no longer grant "equitable" remedies.
A)True
B)False
Answer: False
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Chapter 2: Constitutional Law
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Q1) A federal law regarding the labeling of pesticides directly conflicts with a state law. The state law will be rendered invalid due to
A) the supremacy clause.
B) the commerce clause.
C) the equal protection clause
D) the due process clause.
Answer: A
Q2) The Fifth Amendment prohibits unreasonable searches and seizures of persons or property.
A)True
B)False
Answer: False
Q3) The First Amendment protects commercial speech more extensively than noncommercial speech.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Courts and Alternative Dispute Resolution
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Q1) Any relevant material, including information stored electronically, can be the object of a discovery request.
A)True
B)False
Answer: True
Q2) The role of the courts is to interpret and apply the laws.
A)True
B)False
Answer: True
Q3) Cases involving diversity of citizenship arise only between citizens of different states.
A)True
B)False
Answer: False
Q4) Interrogatories are written questions for which written answers are prepared by a judge.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Tort Law
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Q1) Specifically targeting the customers of a competitor is always a legitimate business practice.
A)True
B)False
Q2) Ladd throws a rock intending to hit Minh but misses and hits Nasir instead. On the basis of the tort of battery, Nasir can sue
A)Ladd.
B)Minh.
C)the rightful owner of the rock.
D)no one.
Q3) False imprisonment occurs when a person restrains another intentionally and without justification.
A)True
B)False
Q4) An individual's privacy is invaded if his or her likeness is used for commercial purposes without permission.
A)True
B)False
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Page 6
Chapter 5: Product Liability
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Q1) A manufacturing defect is a departure from a product unit's design specifications that results in products that are physically flawed.
A)True
B)False
Q2) Island Breeze Company designs and makes desk, window, and ceiling fans. In a product liability suit based on negligence, Island Breeze could be liable for vio-lating its duty of care with respect to all of the following except
A)the design of the fans.
B)the production process used to make the fans.
C)the warnings on the labels of the fans.
D)a consumers unforeseeable misuse of a fan.
Q3) Sea & Sail Corporation makes boats and boating supplies. Theresa files a product liability suit against Sea & Sail, alleging a design defect. In deciding whether to hold the boat maker liable, the court may consider an available alternative design based on the design's
A) popularity among industrial designers.
B) attractiveness to consumers.
C) commonality of use.
D) effect on the product.
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Page 7
Chapter 6: Intellectual Property Rights
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Q1) Protection of trade secrets extends both to ideas and to their expression.
A)True
B)False
Q2) A personal name is protected under trademark law if it acquires a secondary meaning.
A)True
B)False
Q3) Bubbly Cola features Sparkly Colas trademark without its owners permission.
Bubblys use of the mark is actionable provided
A)consumers are confused.
B)Bubblys use is intentional.
C)Bubblys use reduces the value of Sparklys mark.
D)Sparklys mark is registered.
Q4) Milo publishes a book titled No Equals, which includes aChapter from Paige's copyrighted book Olympic Champions. Milo's use of theChapter is actionable provided that
A) consumers are confused.
B) Milo's use is intentional.
C) Milo's use reproduces Paige's chapter exactly.
D) Milo does not have Paige's permission.
Page 8
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Chapter 7: Internet Law, Social Media, and Privacy
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Q1) Oversight Corporation monitors employees' electronic communications made in the ordinary course of business. This is
A) a violation of the rights of Oversight's employee.
B) within Oversight's rights as an employer.
C) a subject for dispute resolution by the communications providers that Oversight uses.
D) a "business-extension exception" under the Electronic Communications Privacy Act.
Q2) Social media users can post trademarked images or copyrighted materials without infringing the owners' rights, even if it is done without permission.
A)True
B)False
Q3) Federal law prohibits the Federal Trade Commission from cooperating and sharing information with foreign agencies in investigating and prosecuting those involved in spamming.
A)True
B)False
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9
Chapter 8: Criminal Law and Cyber Crime
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Q1) Mike is arrested at a warehouse in North Industrial Park and is charged with the crime of theft. Mike will be prosecuted by
A)the owner of the warehouse.
B)the owner of the property that Mike is charged with stealing.
C)a public official.
D)any third party unrelated to Mike, the property, or the crime.
Q2) Kimberly, the owner of Little Cinema, trusts Max to manage the theater's daily cash flow. One night, without Kimberly's knowledge or consent, Max takes and keeps $1,000 from the receipts. This is most likely
A) embezzlement.
B) larceny.
C) robbery.
D) burglary.
Q3) The Fourth Amendment protects against unreasonable searches by the government.
A)True
B)False
Q4) Falsifying public records or altering a legal document is larceny.
A)True
B)False
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Chapter 9: Business Ethics
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Q1) Steaks n' Fries Restaurant Company's decision makers view a particular risk in the consumption of Steaks n' Fries' products as open and obvious. Continuing to market the products without explicitly telling consumers of the risk could be justified from a perspective of
A) duty-based ethics.
B) corporate social responsibility.
C) religious ethical principles.
D) outcome-based ethics.
Q2) Peak & Vale Accountants provides other firms with accounting services.Questions of what is ethical involve the extent to which Peak & Vale has A) a legal duty beyond those duties mandated by ethics.
B) an ethical duty beyond those duties mandated by law.
C) any duty beyond those mandated by both ethics and the law.
D) any duty when it is uncertain whether a legal duty exists.
Q3) Frances, an executive with GMO Seed & Feed, Inc., has to decide whether to market a product that could offer substantial benefits but might also have potentially serious side effects for a small per-centage of users. How should Frances de-cide whether to sell the product? How does the standard of ethics that is applied affect this answer?
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Chapter 10: Nature and Classification
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Q1) Randy promises to give Stewart her iPod in exchange for Stewart's promise to pay Randy $50. This bilateral contract was created when
A) Randy offered to sell her iPod to Stewart.
B) Randy decided to sell her iPod.
C) Stewart promised to pay Randy $50.
D) Stewart became aware that Randy was willing to sell her iPod.
Q2) An implied contract is not an actual contract.
A)True
B)False
Q3) Flo tells Ginger during a phone call that she will buy her textbook from last semester for $65. Ginger agrees. These parties have
A) no contract.
B) an express contract.
C) an implied contract.
D) a quasi contract.
Q4) In contract law, intent is determined by the subjective theory of contracts. A)True
B)False
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Page 12
Chapter 11: Agreement
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Sample Questions
Q1) A preliminary agreement cannot constitute a binding contract.
A)True
B)False
Q2) Liz offers to sell Jock her iPad for $500 without any accessories. Under the mirror image rule, Jock's response will be considered an acceptance ifthe terms of the acceptance
A) exactly mirror those of the offer.
B) change the items offered, but do not change the price.
C) change the price, but do not change the items offered.
D) change both the price and the items offered.
Q3) Megan gives out a business card with an e-mail address on it. It is reasonable to infer that Megan has consented to A) transact business electronically.
B) submit to the recipient'sjurisdiction.
C) respond to e-mail sent to that address.
D) nothing.
Q4) An "offer" to sell an item on an online auction site generally is treated an invitation to negotiate.
A)True
B)False
Page 13
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Chapter 12: Consideration, Capacity, and Legality
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Q1) All contracts between adults and minors are void.
A)True
B)False
Q2) Mica, a minor, signs a contract to pay National Health Club a monthly fee for twenty-four months to use its facilities. Six months later, after reaching the age of majority, Mica continues to use the club. This act is
A) a disaffirmance.
B) an emancipation.
C) a ratification.
D) a restitution.
Q3) Under the doctrine of promissory estoppel, a promise will not be enforced unless it is supported by consideration.
A)True
B)False
Q4) Whether a contract with an unlicensed professional is legal and enforceable depends on the purpose of the licensing statute.
A)True
B)False
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Chapter 13: Defenses to Contract Enforceability
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Q1) Under the Statute of Frauds, all contracts must be in writing to be enforceable.
A)True
B)False
Q2) Lewis, an employee of Silos, Inc., makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently, Siloss bid is significantly low. Any contract with AgriCo-op that includes the mistake may be rescinded
A)if AgriCo-op knew or should have known of the mistake.
B)if Lewiss supervisor did not know of the mistake.
C)if Silos knew or should have known of the mistake.
D)under no circumstances.
Q3) Dixon agrees to sell to Elmore, for $1,500, a remote parcel of land. They believe the land to be worthless, but beneath it is shale rock containing oil. A court would
A)not rescind the contract.
B)rescind the contract on the basis of fraud.
C)rescind the contract on the basis of mistake.
D)rescind the contract on the basis of undue influence.
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Chapter 14: Third Party Rights and Discharge
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Questions
Q1) The assignment of the same contract right to two different parties automatically cancels both assignments.
A)True
B)False
Q2) Refer to Fact Pattern 14-1.If bad weather destroys Flora's crops, the obligation to deliver produce to Harvesters is A) breached.
B) discharged.
C) not affected.
D) suspended.
Q3) Bea takes out a life insurance policy with Vida Insurance Corporation that names her spouse Wendell as the beneficiary. This is
A) a delegation.
B) an assignment.
C) a third party incidental beneficiary contract.
D) a third party intended beneficiary contract.
Q4) A special form is required to create a delegation of duties.
A)True B)False
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Chapter 15: Breach and Remedies
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Q1) Under the doctrine of mitigation of damages, the duty owed depends on the nature of the contract.
A)True
B)False
Q2) A breach of contract entitles the nonbreaching party to sue for monetary damages.
A)True
B)False
Q3) Ridgeview Mining Inc. agrees to deliver ten tons of coal to Static Energy Corporation. The agreement states that delivery is to be within "9" days, although the parties intend "90" days. Ridgeview cannot convince Static to amend the contract. Ridgeview should seek
A) damages.
B) reformation.
C) rescission.
D) specific performance.
Q4) The failure of one party to perform a contract entitles the other party to rescind it.
A)True
B)False
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Page 17
Chapter 16: International Law in a Global Economy
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Q1) The Foreign Sovereign Immunities Act spells out what a "foreign state" includes.
A)True
B)False
Q2) International contracts rarely include arbitration clauses.
A)True
B)False
Q3) Michael, a citizen of Ireland, and Nina, a citizen of the United States, enter into a contract. When Nina breaches the contract, Michael obtains an award of damages in an Irish court. He asks a U.S. court to enforce the award. The U.S. court defers to and enforces the Irish courts decree. This is
A)a travesty of justice.
B)the act of state doctrine.
C)the doctrine of sovereign immunity.
D)the principle of comity.
Q4) Congress can use a variety of devices to restrict or encourage exports.
A)True
B)False
Q5) Quotas are limits on the amounts of goods that can be exported.
A)True
B)False
Page 18
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Chapter 17: The Formation of Sales and Lease Contracts
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Q1) Under the UCC, a sale is the passing of title from a seller to a buyer for a price.
A)True
B)False
Q2) In contracts involving a sale of unborn animals to be born within twelve months, identification takes place when the animals are conceived.
A)True
B)False
Q3) If the parties to a contract for a sale of goods have not agreed on a price, a court will determine a reasonable price at the time for delivery.
A)True
B)False
Q4) Bram buys a bulldozer from Construction Equipment Corporation, which he leases to Earth Movers, Inc. In this situation, the lessee is A)Bram.
B)Construction Equipment Corporation.
C)Earth Movers. Inc.
D)none of the choices.
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Chapter 18: Performance and Breach of Sales and Lease Contracts
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Q1) MotorCo Inc. makes and sells auto parts to retail repair services, vehicle sales outlets, and consumer parts stores. On one MotorCo box is a label that reads "Contains one gross (144) sparkplugs, assorted sizes." This statement is
A) an implied warranty of fitness for a particular purpose.
B) an implied warranty of merchantability.
C) an express warranty.
D) none of the choices.
Q2) Fuel Connector Products, Inc., agrees to sell Go-Flo, Inc., a certain quantity of hose couplings and fittings, but the contract does not specify a place of delivery. Go-Flo is expected to pick up the goods. The place of delivery is
A)Fuel Connectors place of business.
B)Go-Flos place of business.
C)the current location of the hose couplings and fittings.
D)the U.S. Postal Service office nearest to Go-Flos place of business.
Q3) To specifically disclaim an implied warranty of fitness for a particular purpose, a seller or lessor must mention the word fitness.
A)True
B)False
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Chapter 19: Negotiable Instruments
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Q1) Discharge in bankruptcy is no defense on any instrument regardless of the status of the holder.
A)True
B)False
Q2) Avril receives a payroll check from Business Solutions, Inc., and indorses it by signing her name on the back of the check. This is
A) a blank indorsement.
B) a qualified indorsement.
C) a restrictive indorsement.
D) a special indorsement.
Q3) A symbol can serve as a valid signature.
A)True
B)False
Q4) Idina wants to buy a promissory note from Jill. The note is due on April 1. To become an HDC, Idina must buy the note
A) before midnight on April 1.
B) before noon on April 1.
C) before 8:00 A.M. on April 1
D) within thirty days of April 1.
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Chapter 20: Banking in the Digital Age
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Q1) The Uniform Commercial Code regulates checks.
A)True
B)False
Q2) Refer to Fact Pattern 20-1. Britney is responsible for
A) $0.
B) $50.
C) $500.
D) $3,000.
Q3) A bank that encodes information on an item after its issue warrants to any subsequent bank that the information is correct.
A)True
B)False
Q4) A forged signature is effective as the signature of a drawer to the extent that is resembles the drawer's actual signature.
A)True
B)False
Q5) When a bank draws a check on itself, the check is called a cashier's check.
A)True
B)False
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Chapter 21: Security Interests and Creditors Rights
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Q1) Gina borrows from Hilltop Bank the funds to buy a car. The car secures the debt. Gina defaults on the loan. Hilltop takes possession of the car, planning to sell it to recover some of the unpaid debt. Before Hilltop sells the car or enters into a contract for its sale, Gina can pay the bank what she owes and take back the car. This is
A) a deficiency judgment.
B) a floating lien.
C) the right of redemption.
D) the right of retention.
Q2) The payment of John's debt to Kirsten is guaranteed by John's personal property. Kirsten is most likely to perfect her interest by
A) attaching a bright label to John's property.
B) calculating the precise amount of John's debt.
C) correcting grammatical errors in the parties' written agreement.
D) filing a financing statement with the appropriate authority.
Q3) A buyer in the ordinary course of business has priority even if a previously perfected security interest exists as to the goods.
A)True
B)False
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Chapter 22: Bankruptcy
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Q1) Franco files a petition in bankruptcy. The initial proceeding on this petition will be in A) a federal bankruptcy court.
B) a state bankruptcy court.
C) the highest court in the state in which Franco is located.
D) the United States Supreme Court.
Q2) In a repayment plan case, the plan must provide for payment of all claims in full, whether or not they are entitled to priority.
A)True
B)False
Q3) Leif has fifteen creditors. To force Leif into bankruptcy proceedings, at least three creditors must join the petition and their unsecured claims must add up to at least
A) $500.
B) $15,325.
C) $100,000.
D) $500,000.
Q4) Rulings from bankruptcy courts are final-they cannot be appealed.
A)True
B)False
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Chapter 23: Agency Relationships in Business
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Q1) If a principal is undisclosed, the agent may be liable to the principal for a third party's nonperformance of a contract.
A)True
B)False
Q2) Quince owns a used-car lot where Ray works as a salesperson. Quince tells Ray not to make any warranties for the cars. To make a sale to Sylvia, however, Ray adds a 50,000-mile warranty. Later, Sylvia sues Quince for breach of warranty. Quince's right to hold Ray liable for any damages he has to pay is the right of A) avoidance.
B) cooperation.
C) indemnification.
D) reimbursement.
Q3) Employment laws apply only to the employer-employee relationship. A)True
B)False
Q4) An agency can terminate once its purpose is achieved.
A)True
B)False
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Chapter 24: Employment, Immigration, and Labor Law
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Q1) GameCraft, Inc., employs four hundred workers at three locations in three states. Workers who lose their jobs with GameCraft have a right to continued health-care coverage under the company's group plan unless they
A) are fired for gross misconduct.
B) are laid off for budgetary reasons.
C) have their hours decreased from full-time to part-time.
D) quit their jobs voluntarily.
Q2) Employers that have fifty or more employees must provide certain employees with up to twelve weeks of paid family or medical leave during any twelve-month period.
A)True
B)False
Q3) Children aged fourteen and fifteen are allowed to work in hazardous occupations. A)True B)False
Q4) Private retirement plans set up by employers are covered by the Employment Retirement Income Security Act.
A)True
B)False
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Chapter 25: Employment Discrimination
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Q1) Employers can require employees to participate in any religious activity.
A)True
B)False
Q2) Emylee, an employee of Farm Supplies, Inc., files a sexual-harassment suit against her employer, alleging sexual harassment by her supervisor Gowan. Farm Supplies may be liable if it had effective harassment policies and complaint procedures that were followed by
A) none of the employees.
B) Emylee.
C) all of the employees except Emylee.
D) Gowan.
Q3) Punitive damages are not available in cases of intentional discrimination in violation of Title VII of the Civil Rights Act.
A)True
B)False
Q4) State employers are immune from private suits brought by employees under the Age Discrimination in Employment Act.
A)True
B)False
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Chapter 26: Sole Proprietorships and Private Franchises
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Q1) A franchisee can operate as an independent businessperson but still obtain the advantages of a national organization.
A)True
B)False
Q2) As a general rule, the validity of a provision permitting the franchisor to establish and enforce certain quality standards is questionable.
A)True
B)False
Q3) Any suit against the business or its employees does not lead to unlimited personal liability for the owner of a sole proprietorship.
A)True
B)False
Q4) A franchisor's decision to terminate a franchise may be made in the normal course of business operations.
A)True B)False
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Chapter 27: All Forms of Partnership
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Q1) Sebastian was the manager of Thai Bistro, a restaurant specializing in Southeast Asian foods. Sebastian opened a bank account in Thai Bistro's name, signing the account signature card as "owner." Umeko, who was often at Thai Bistro and had free access to its office, told others that she was "an owner" and "a partner." She also opened a bank account in Thai Bistro's name, and signed the account signature card as "owner." Sebastian told Vijay, the owner of Wong Noodles, Inc., that Umeko was a member of a partnership that owned Thai Bistro. On this basis, Wong Noodles delivered its goods to Thai Bistro on credit. In fact, Thai Bistro was owned by a corporation. When the unpaid account totaled more than $10,000, Wong Noodles filed a suit against Umeko to collect. On what basis might Umeko be liable for the debt?
Q2) A partnership is a pass-through entity and a taxpaying entity.
A)True
B)False
Q3) In a general partnership, the senior partner controls decisions on ordinary matters connected with partnership business.
A)True
B)False
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Chapter 28: Limited Liability Companies and Special
Business
Forms
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Q1) Oni's Adventure Travel and Paquito's Wild River Tours form a joint venture. Oni can participate in the venture's management
A) only to the extent that she assumes liability for the venture's debts.
B) only to the extent of her investment in the venture.
C) to any extent.
D) to no extent.
Q2) Normally, a member who dissociates from a limited liability company (LLC) has the right to force the LLC to dissolve.
A)True
B)False
Q3) A joint stock company is usually treated like a partnership.
A)True
B)False
Q4) Limited liability companies cannot enter into contracts or hold title to property. A)True
B)False
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Chapter 29: Corporations
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Q1) The board of directors hires officers to run the daily business of a corporation.
A)True
B)False
Q2) Stocks represent the borrowing of funds by firms.
A)True
B)False
Q3) Ernst is a director of Fine Art Dealers, Inc. Ernst is trained in art valuation. Fine Art makes several purchases in which it pays too much for artwork. Ernst approves all the transactions without reading the details. Ernst is most likely liable for breach of
A) the duty of care.
B) none of the choices.
C) the duty of loyalty.
D) the business judgment rule.
Q4) A straight majority vote of the shares represented at a shareholders' meeting is usually required to pass resolutions.
A)True
B)False
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Chapter 30: Investor Protection, Insider Trading, and Corporate Governance
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Q1) Bonds & Stocks Corporation, and its officers, directors, and shareholders, buy and sell securities. SEC Rule 10b-5 applies to the purchase or sale of
A) a security by a financial corporation only.
B) a security involving a corporate insider only.
C) a security involving short-swing profits only.
D) any security.
Q2) Global Resources Corporation, and its officers, directors, and shareholders, buy and sell securities. Section 10(b) of the Securities Exchange Act of 1934 applies to the purchase or sale of a security
A) only by an investment company.
B) only involving short-swing profits.
C) only involving a tipper and tippee.
D) in almost any circumstances.
Q3) For a defendant to be convicted in a criminal prosecution under the securities laws, there can be no reasonable doubt that the defendant knew he or she was acting wrongfully.
A)True
B)False
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Chapter 31: Antitrust Law and Promoting Competition
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Q1) Precision Parts Corporation and Aligned Gears, Inc., are competitors selling certain machine parts that are otherwise generally unattainable in their geographic market. This market includes the states of Minnesota, North Dakota, and South Dakota. Precision Parts and Aligned Gears agree that Precision Parts will no longer sell in Minnesota and that Aligned Gears will no longer sell in North and South Dakota. Have Precision Parts and Aligned Gears violated any antitrust law? If so, which one? Explain. If they had divided their market by type of customer rather than geographic are, would the result be the same? Why or why not?
Q2) A trade association practice or agreement that restrains trade is analyzed under the rule of reason.
A)True
B)False
Q3) Any conspiracy-even if it occurs outside the United States-that has a substantial effect on U.S. commerce is within the reach of the Sherman Act.
A)True
B)False
Q4) Labor unions can organize and bargain without violating antitrust law.
A)True
B)False
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Chapter 32: Consumer and Environmental Law
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Q1) Phil has a credit-card from Credible Cards, Inc. Credible Cards decides to make changes to Phil's credit-card terms. Credible Cards
A) must give Phil at least thirty days' notice before changing the terms.
B) must give Phil at least forty-five days' notice before changing the terms.
C) need not give Phil any notice before changing the terms.
D) is not allowed to change the terms.
Q2) The government can recover the cost to clean up a hazardous waste disposal site from the persons who were even remotely responsible.
A)True
B)False
Q3) The Truth-in-Lending Act applies to persons who, in the ordinary course of their business, lend money, sell on credit, or arrange for the extension of credit.
A)True
B)False
Q4) An information label must be attached to every new car to include the fuel economy estimate for the vehicle.
A)True
B)False
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Chapter 33: Liability of Accountants and Other Professionals
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Q1) To obtain damages for fraud, an innocent party does notneed to have been injured.
A)True
B)False
Q2) Tyson accuses Ulman, an attorney, of committing malpractice. Malpractice is
A) constructive fraud.
B) a defalcation.
C) none of the choices.
D) professional negligence.
Q3) Digital Systems Corporation files a suit against Ethan, its former accountant, alleging constructive fraud. Digital Systems need not prove
A) misstatement of a material fact.
B) intent to deceive.
C) justifiable reliance.
D) an injury.
Q4) Professionals are required to adhere to certain standards of performance within their profession.
A)True
B)False
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Chapter 34: Personal Property and Bailments
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Q1) In contemplation of death during risky surgery, Donnelly, a guitarist, gives his guitars to Cathy. The surgery is successful, and Donnelly does not die. The gift of the guitars is
A) not revoked because it was a gift causa mortis.
B) not revoked because it was a gift inter vivos.
C) revoked because it was a gift causa mortis.
D) revoked because it was a gift inter vivos.
Q2) Yogi loans his laptop to Zoey. This is A) a bailment.
B) acquiring ownership by possession.
C) a gift.
D) accession.
Q3) Mallorys sister Naomi gives Mallory a leather working kit. Mallory uses the kit to make a saddle. Mallorys acquisition of the saddle is by A)gift.
B)accession.
C)confusion.
D)production.
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Chapter 35: Real Property and Landlord-Tenant Law
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Q1) Lee leases a house from Megan for a two-year term. To ensure the validity of their lease, it should include
A) a provision for the landlord's future interest.
B) a due date for the payment of the property taxes.
C) a requirement that Dora perform structural repairs to the house.
D) a requirement that Evan carry liability insurance.
Q2) Roderick possesses five hundred acres of forested property. Roderick has the right to use the land, including cutting its timber, for life. Roderick also has the right to lease the land for a period not to exceed his life. This ownership interest is
A) a fee simple absolute.
B) a leasehold estate.
C) a life estate.
D) an easement.
Q3) A periodic tenancy is created by a lease that does not specify how long it is to last, but does specify that rent is to be paid at certain intervals.
A)True
B)False
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Chapter 36: Insurance, Wills, and Trusts
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Q1) The insured can cancel a policy at any time.
A)True
B)False
Q2) Anna obtains a business liability insurance policy for her Brew & Bagels Coffee Shop from Choice First Insurance Company. When an event occurs that gives rise to a claim, each party has a duty to
A) cooperate in an investigation to determine the facts.
B) file a suit against the other so that a court can settle the claim.
C) find a third party on whom to impose liability.
D) pay any outstanding premium or refund any unearned amount.
Q3) Without an insurable interest, there is no enforceable insurance contract.
A)True
B)False
Q4) Paxton makes a gift of real estate in his will to Orinda. This gift is
A) a bequest.
B) a devise.
C) a legacy.
D) a residuary.
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