Question 1

Artisans who retain goods are liable for conversion if they:

Accepted Answer

A)  return the goods before the debt has been paid. 
B)  keep the goods without the right to a lien. 
C)  lose the goods to the debtor in a fraudulent manner. 
D)  sell the goods for the unpaid charges. 
A)  return the goods before the debt has been paid. 
B)  keep the goods without the right to a lien. 
C)  lose the goods to the debtor in a fraudulent manner. 
D)  sell the goods for the unpaid charges.

Question 2

The provider of materials or labor is not entitled to a lien if:

Accepted Answer

A)  the property is a public property. 
B)  the materials are provided without reference to a particular property. 
C)  the materialman is not a general contractor. 
D)  the property is under a land sales contract or mortgage. 
A)  the property is a public property. 
B)  the materials are provided without reference to a particular property. 
C)  the materialman is not a general contractor. 
D)  the property is under a land sales contract or mortgage.

Question 3

A surety could avoid liability for a principal's default by using the principal's bankruptcy as a defense.

Accepted Answer

A) True 
 B)False

Question 4

_____ implies that the creditor has no right to a deficiency and the debtor has no right to any surplus.

Accepted Answer

A)  The deed of trust 
B)  Mortgage 
C)  Strict foreclosure 
D)  Possessory lien 
A)  The deed of trust 
B)  Mortgage 
C)  Strict foreclosure 
D)  Possessory lien

Question 5

Rita cosigned a promissory note for $500 at the Federal Credit Union for her friend Sue.Sue defaults on the note,and the credit union collects $500 from Rita on her suretyship obligation.Rita then not only gets the right to collect $500 from her but also gets the Federal Credit Union's rights against Sue.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true of a land contract?

Accepted Answer

A)  The seller agrees to convey the title when the full price is paid. 
B)  The trustee holds legal title to the property put up as security. 
C)  If a buyer defaults, the seller does not have the right to declare a forfeiture. 
D)  The title to property is conveyed if partial payment has been made. 
A)  The seller agrees to convey the title when the full price is paid. 
B)  The trustee holds legal title to the property put up as security. 
C)  If a buyer defaults, the seller does not have the right to declare a forfeiture. 
D)  The title to property is conveyed if partial payment has been made.

Question 7

If a principal posts security for the performance of an obligation to a creditor,the creditor must not surrender that security without the consent of sureties.

Accepted Answer

A) True 
 B)False

Question 8

In a deed of trust transaction,when a trustee sells the property and the proceeds generate a surplus,it _____.

Accepted Answer

A)  is paid to the borrower 
B)  is paid to the lender 
C)  is paid to the trustee 
D)  goes to the state 
A)  is paid to the borrower 
B)  is paid to the lender 
C)  is paid to the trustee 
D)  goes to the state

Question 9

Which of the following defenses goes to the merits of a primary contract and can be used by a surety?

Accepted Answer

A)  Lack of consideration 
B)  Lack of capacity 
C)  Insanity 
D)  Bankruptcy 
A)  Lack of consideration 
B)  Lack of capacity 
C)  Insanity 
D)  Bankruptcy

Question 10

A guarantor is a person who:

Accepted Answer

A)  joins with the person who is primarily liable in promising to make the payment or to perform the duty. 
B)  does not join in making a promise, but makes a separate promise and agrees to be liable on the happening of a certain event. 
C)  is paid for serving as a surety, such as a bonding company. 
D)  acts as a surety without compensation, such as a friend who cosigns a note as a favor. 
A)  joins with the person who is primarily liable in promising to make the payment or to perform the duty. 
B)  does not join in making a promise, but makes a separate promise and agrees to be liable on the happening of a certain event. 
C)  is paid for serving as a surety, such as a bonding company. 
D)  acts as a surety without compensation, such as a friend who cosigns a note as a favor.

Exam 42: Introduction to Security

Artisans who retain goods are liable for conversion if they:

The provider of materials or labor is not entitled to a lien if:

A surety could avoid liability for a principal's default by using the principal's bankruptcy as a defense.

_____ implies that the creditor has no right to a deficiency and the debtor has no right to any surplus.

Which of the following is true of a land contract?

If a principal posts security for the performance of an obligation to a creditor,the creditor must not surrender that security without the consent of sureties.

In a deed of trust transaction,when a trustee sells the property and the proceeds generate a surplus,it _____.

Which of the following defenses goes to the merits of a primary contract and can be used by a surety?

A guarantor is a person who:

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Propertypart Two Contracts

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Consideration

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remediespart Three Sales

Formation and Terms of Sales Contracts

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contractspart Four Agency and Employment

The Agency Relationship-Creation, duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws-Part Five Business Organizations

Which Form of Business Organization

Partnerships

Formation and Termination of Corporations

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountantspart Six Property

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance-Part Seven Commercial Paper

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Fund Transfers-Part Eight Credit Transactions

Security Interests in Personal Property

Bankruptcy-Part Nine Government Regulation

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

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