Deck 37: Personal Property, Bailment, and Insurance

Question 1

Which of the following is true of mislaid property with regard to the person who finds it?

A) The finder becomes the owner of the property.
B) The finder has the right to share it with the original owner.
C) The finder is not entitled to possess the property.
D) The finder is absolved of any responsibility of the mislaid property.

Answer 1

C

Question 2

What does the Uniform Transfers to Minors Act establish?

A) rights for what a minor is allowed in case of inheritances without involving custodians
B) rights for what a minor can accept from an adult
C) procedures for adults to make gifts of money and securities to minors
D) procedures for making gifts of money and securities between minors

Answer 2

C

Question 3

________ occurs if two or more persons commingle fungible goods.

A) Confusion
B) Accession
C) Bailment
D) Easement

Answer 3

A

Question 4

Which of the following is considered a constructive delivery of a gift?

A) giving the key to a safe-deposit box where the gift is kept
B) paying for the total value of the good being gifted in cash
C) contracting a third-party to deliver goods to the donee
D) gifting someone in person to ensure acceptance of the gift

Question 5

When John Lacey's car was stolen,he lodged a complaint with the police.After a while,the police were able to trace the car to a professional auto thief and return it to John.When John got his car back,he realized that the thief had installed a new engine,changed the upholstery,and put in a new stereo player in his car.Which of the following is true with regard to the new engine,upholstery,and stereo player the thief installed in John's car?

A) These improvements have to be returned to the thief.
B) These improvements now rightfully belong to John.
C) The improvements have to be paid for by John if he wants to retain them.
D) The improvements will be confiscated by the police.

Question 6

Lenny stays in a resort during his vacation.While checking out,he mistakenly leaves his cellphone in the suite he stayed in.A resort employee takes the cellphone to the manager who takes possession of it.Which of the following is true regarding the rights over the cellphone?

A) The resort manager has superior rights over Lenny for the possession of the cellphone.
B) The resort manager has no obligation to return the cellphone to Lenny even if he comes back to reclaim it.
C) The title of the cellphone's ownership is now changed to the resort manager.
D) The resort manager should return the cellphone to Lenny if he comes back to reclaim it.

Question 7

Which of the following is true of a gift causa mortis?

A) It cannot be revoked before the death of the donor.
B) It does not require the actual death of the donor.
C) It represents an irrevocable present transfer of ownership.
D) It takes precedence over a prior conflicting will.

Question 8

________ is a method of acquiring ownership,when a manufacturer purchases raw materials and then manufactures a finished good.

A) Gifting
B) Producing
C) Capturing
D) Leasing

Question 9

Which of the following is a similarity between real and personal property?

A) both properties can include intangible properties
B) both properties are movable properties
C) both properties can be owned concurrently by two or more persons
D) both properties can be removed by a seller prior to a sale of the property

Question 10

The voluntary transfer of title to property without payment of consideration by the donee is known as a(n)________.

A) adverse possession
B) future interest
C) gift
D) purchase

Question 11

A gift that is made in contemplation of death is known as a(n)________.

A) profit-à-prendre
B) estate pour autre vie
C) gift inter vicos
D) gift causa mortis

Question 12

Tangible property such as automobiles,furniture,and equipment,and intangible property such as securities,patents,and copyrights are collectively referred to as ________.

A) real property
B) immovable property
C) personal property
D) fixtures

Question 13

Which of the following methods of acquiring ownership is least in use today?

A) purchase
B) capture
C) gift
D) production

Question 14

Jerry owns a farmhouse with plenty of cattle.One of the cows on the farm gives birth.Which of the following methods of acquiring ownership justifies Jerry's ownership of the newborn calf?

A) confusion
B) possession
C) accession
D) inheritance

Question 15

________ represent rights that cannot be reduced to physical form,such as stock certificates,certificates of deposit,bonds,and copyrights.

A) Real properties
B) Intangible properties
C) Fixtures
D) Immovable properties

Question 16

Property is considered ________ property when its owner negligently,carelessly,or inadvertently leaves it somewhere.

A) lost
B) real
C) vanished
D) mislaid

Question 17

Mislaid property refers to property that is ________.

A) involuntarily misplaced somewhere and then forgotten by an owner
B) taken away from an owner without his or her knowledge
C) voluntarily placed somewhere by the owner and then inadvertently forgotten
D) voluntarily placed by an owner somewhere with the intention of discarding it completely

Question 18

A(n)________ is an increase in the value of personal property because it is added to or improved by natural or manufactured means.

A) arraignment
B) accession
C) lien
D) bailment

Question 19

Which of the following is true of ownership titles when confusion occurs?

A) Title to the goods can never be shared between the owners involved.
B) Title to goods commingled without permission goes to the innocent party.
C) Title to goods cannot be acquired by confusion.
D) Title to goods can only be acquired if goods were commingled by accident.

Question 20

Which of the following is true about fixtures?

A) They are categorized as real property.
B) They are easily portable.
C) They are typically removed prior to a sale.
D) They can only have one owner at a time.

Question 21

Which of the following is true of a bailment?

A) Only personal property can be used in a bailment.
B) Intangible property cannot be used in a bailment.
C) Only physical deliveries can become a bailment.
D) All bailments must be expressed in writing to be effective.

Question 22

Peter borrowed Carl's car,as his own car had broken down,and he needed to go to the city,urgently.While in the city he parked the car in a clearway zone,from where it was towed away by the authorities.In such a bailment agreement,Peter is negligent of ________.

A) duty of great care
B) duty of slight care
C) duty of reasonable care
D) duty of ordinary care

Question 23

A transaction in which an owner transfers his or her personal property to another to be held,stored,or delivered,or for some other purpose is known as a(n)________.

A) arraignment
B) easement
C) bailment
D) accession

Question 24

A ________ is a gratuitous bailment that arises when the bailee is requested to care for the bailor's property as a favor.

A) bailment for the partial benefit of the bailee
B) mutual benefit bailment
C) bailment for the sole benefit of the bailee
D) bailment for the sole benefit of the bailor

Question 25

Peter borrowed Carl's car,as his own car had broken down,and he needed to go to the city,urgently.Carl,a close friend of Peter,did not charge any fee from Peter for using the car.What kind of agreement existed between Peter and Carl over the car?

A) bailment for the sole benefit of the bailor
B) bailment for the sole benefit of the bailee
C) bailment for the partial benefit of the bailor
D) mutual benefit bailment

Question 26

In which of the following processes is the title of goods not transferred?

A) an adverse possession
B) a bailment
C) a sale
D) an acquisition

Question 27

Trans Cargos is a transportation service company that offers shipment services for businesses.The company receives an order from a consignor to ship a consignment from one city to another.During its transportation in a cargo truck,the consignment gets destroyed due to a hurricane.Which of the following is true about the liability of the destroyed goods?

A) Trans Cargos is entirely responsible for the destroyed goods.
B) Trans Cargos is liable to pay half the value of the destroyed goods.
C) Trans Cargos is not liable to the consignor for the destroyed goods.
D) Trans Cargos is liable to pay a minimum guarantee payment to the consignor.

Question 28

A(n)________ is a document of title issued by a common carrier stating that the bailor has title to the bailed goods.

A) bill of lading
B) accession
C) delivery order
D) freight forwarder

Question 29

Storel,Inc.,a warehouse company,offers storage solutions for businesses.A Storel warehouse is hired by Trendy Apparels for a large consignment of goods.Trendy Apparels,however,failed to reclaim the goods from the warehouse,and it also failed to pay Storel for the expenses related to storage and handling.Which of the following is true of Storel's rights to claim the charges?

A) Storel must surrender to goods to Trendy Apparels and sue it for the expenses.
B) Trendy Apparels has no legal obligation to pay for the charges.
C) Storel can sell the goods in possession to cover the expenses.
D) Storel must surrender the goods to the court and wait for the legal proceedings.

Question 30

Which of the following is true of lost property?

A) The finder obtains title to the property against the owner.
B) The finder has no legal obligation to return the property to its rightful owner.
C) The property should be equally shared between the finder and the true owner.
D) The finder obtains title to the property over everyone except the true owner.

Question 31

Which of the following best describes bailment at will?

A) bailment for a period of one year
B) bailment for a period not less than two years
C) bailment that cannot be terminated by the bailor
D) bailment without a fixed term

Question 32

Which of the following is true of ownership rights of an abandoned property?

A) The finder and owner must share ownership of the property.
B) The finder acquires title to the property, even against its original owner.
C) The owner can reclaim his or her property completely from the finder.
D) The owner of the premises where property is abandoned is entitled to possession but does not acquire title.

Question 33

Which of the following duty is owed by the parties in a mutual benefit bailment?

A) duty of great care
B) duty of slight care
C) duty of ordinary care
D) duty of utmost care

Question 34

What is the difference between an insurance broker and an insurance agent?

A) An insurance agent works exclusively for one company, while an insurance broker works for a number of insurance companies.
B) An agent requires a commission payment after the deal is made, while a broker requires the service charge to be paid before the deal is made.
C) An agent represents the insured, while a broker represents the company.
D) An agent is authorized to sell insurance directly, while a broker can only mediate an insurance contract.

Question 35

Under the common law,innkeepers owe a ________ regarding loss caused to the personal property of transient guests.

A) duty of negligible care
B) duty of slight care
C) duty of strict liability
D) duty of ordinary care

Question 36

________ is a means for persons and businesses to protect themselves against the risk of loss.

A) Abatement
B) Ademption
C) Insurance
D) Easement

Question 37

Property that an owner has discarded with the intent to relinquish his or her rights in it is known as ________ property.

A) real
B) lost
C) mislaid
D) abandoned

Question 38

Which of the following best describes a warehouse receipt?

A) A receipt received by a warehouse after the bailor has retrieved the bailed goods and payment has been made.
B) A document of title issued by a warehouse company stating that the bailor has title to the bailed goods.
C) An inventory list provided to the warehouse company by the bailor for the bailed goods.
D) A certificate of authenticity issued to a warehouse stating that it is certified to hold goods.

Question 39

The Rosberg family had asked their neighbors,the Lowells,to feed their cat while they were away on a vacation.The Lowells fed the cat as they had been asked to but eventually,the cat ran away and never returned.Which of the following is true in this case of bailment agreement?

A) The Lowells are solely liable for the loss of the cat.
B) The Lowells are not liable for the loss of the cat.
C) The Lowells are partially liable for the loss of the cat.
D) The Lowells can be sued for negligence of duty.

Question 40

________ is a requirement that a person who purchases insurance have a personal stake in the insured item or person.

A) Delivery of possession
B) Endorsement
C) Adverse possessory interest
D) Insurable interest

Question 41

The ________ refers to the duty of the insurer to protect the insured against lawsuits or legal proceedings that involve a claim within the coverage of the insurance policy.

A) duty of strict liability
B) duty to pay
C) duty of reasonable care
D) duty to defend

Question 42

Helen has a $40,000 automobile collision policy with a $750 deductible.If her car is involved in an accident costing $15,000 in damages,________ is the amount she will have to pay to receive coverage for the damages from the insurer.

A) $750
B) $39,250
C) $40,000
D) $14,250

Question 43

Roger Ray runs a motel in a rented property and sublets a part of its garage to the owner of a nearby fuel station.Three months later,the motel catches fire from a fuel leak in the garage and Roger's motel suffers severe damages.If Roger owns a standard fire insurance policy for years,the insurer can use the ________ to refuse covering the damage caused by the fire.

A) deductible clause
B) exclusions from coverage clause
C) incontestability clause
D) copay clause

Question 44

A(n)________ is a document that modifies an insurance policy and becomes part of the insurance policy.

A) endorsement
B) easement
C) injunction
D) convention

Question 45

What happens to the life insurance proceeds upon the death of the insured who has not named a beneficiary?

A) The proceeds are given to the state.
B) The proceeds remain with the insurer for the full-term of the insurance.
C) The proceeds are given to charitable organizations.
D) The proceeds go to the insured's estate.

Question 46

Able Adams has a number of rare paintings at home that he inherited from his paternal family,many of whom were patrons and collectors of the arts.Able knows that the value of these paintings makes them likely targets of theft and he needs to insure these items specifically by using a ________.

A) homeowner's policy
B) standard fire insurance
C) personal articles floater
D) personal liability coverage

Question 47

Which of the following statements is true of collision insurance?

A) It covers the insured's vehicle against damages caused by another vehicle.
B) It covers damages and losses the injured causes to third parties.
C) It gives protection from car thefts, natural calamities, vandalism, and riots.
D) It protects the driver and passengers of a vehicle who are injured by an uninsured motorist.

Question 48

Which of the following statements is true of a personal articles floater?

A) The insured can insure specific body parts using this policy.
B) The coverage includes insurance of intangible properties.
C) The coverage does not include loss or damage cause during travel.
D) The coverage includes specific valuable items.

Question 49

The ________ policy protects real and personal property against loss resulting from lightning,smoke,water damage,and related perils.

A) health insurance
B) standard fire insurance
C) disability insurance
D) life insurance

Question 50

Henry works as an assembly line worker at MM Corporation.Two weeks back,he suffered multiple fractures while trying to repair a block in the machinery.The doctors have advised him to take two months of rest to recuperate from this accident.However,Henry is reassured that the ________ that he is eligible for will provide him with a monthly income until he is fit to return to work.

A) life insurance
B) disability insurance
C) health insurance
D) homeowner's policy

Question 51

________ is a form of property insurance that insures an automobile from loss or damage due to causes other than collision.

A) Omnibus insurance
B) Comprehensive insurance
C) Coinsurance
D) No-fault automobile insurance

Question 52

Which of the following is true of liability insurance?

A) It protects the insured's vehicle from theft and damages due to natural calamities.
B) It protects the driver and passengers of a vehicle who are injured by an uninsured motorist.
C) It covers the damages caused by the insured to third parties.
D) It covers the insured's vehicle against damages from causes other than collision.

Question 53

A(n)________ is a comprehensive insurance policy that includes coverage for the risks covered by a fire insurance policy as well as personal liability insurance.

A) homeowners' policy
B) life insurance policy
C) umbrella insurance
D) omnibus policy

Question 54

Which of the following clauses protects the insurers from intentional or unintentional material or informative misrepresentation from an insurance applicant?

A) exclusions from coverage clause
B) incontestability clause
C) deductible clause
D) coinsurance clause

Question 55

Hillary had purchased a term life insurance policy and nominated her mother as the beneficiary,while William,her colleague,had a universal life insurance with himself as the beneficiary.Hillary and William recently got married and wish to nominate each other as beneficiaries in their individual life insurance policies.In the context of the given scenario,which of the following statements is true?

A) Hillary and William will have to purchase two new policies to nominate each other as beneficiaries.
B) Hillary and William will have to seek an endorsement to make the requisite changes in their current individual life insurance policies.
C) Hillary will be able to nominate William as the beneficiary, but William cannot to do so because he did not enlist a beneficiary earlier.
D) William will have to nominate both Hillary and her mother as beneficiaries for his insurance policy because existing beneficiaries cannot be denied coverage.

Question 56

Which of the following is a difference between a deductible clause and coinsurance clause in insurance policies?

A) Deductible clause requires the insured to pay a specified amount before the proceeds are payable, while coinsurance clause requires the insured to pay a part of an insured loss.
B) Deductible clauses require the insured to pay a part of the insured loss, while coinsurance clauses prevent insurers from being liable if the applicant conceals material information.
C) Deductible clauses stipulate the risks that are not covered by the insurance policy, while coinsurance clauses require paying a specified amount to get the insurance proceeds.
D) Deductible clauses require the insured to pay a part of the insured loss, while coinsurance clauses require paying a specified amount to get the insurance proceeds.

Question 57

A(n)________ is a clause in an insurance policy that provides that insurance proceeds are payable only after the insured has paid a specified amount toward the damage or loss.

A) incontestability clause
B) coinsurance clause
C) exclusions from coverage clause
D) deductible clause

Question 58

Which of the following is true of the suicide clause in a life insurance policy?

A) The beneficiary can claim the proceeds if the insured commits suicide within a certain period and not after that.
B) The suicide clause assigns no validity period on the life insurance policy.
C) The beneficiary can claim the proceeds only if the insured commits suicide after the validity period set forth by the insurer.
D) The beneficiary cannot claim the insurance proceeds if the insured commits suicide after the validity period set forth by the insurer.

Question 59

Which of the following statements is true of insurance policy?

A) It is not possible to cancel an insurance policy until the date of maturity.
B) It can be obtained even if one has no insurable interest in that property.
C) It remains in effect even during the overdue grace period.
D) It cannot be modified once issued.

Question 60

What is the copay clause in an insurance policy?

A) a clause in a life insurance contract that provides no coverage if the insured commits suicide before a stipulated date
B) a clause in an insurance policy that expressly stipulates the risks that are not covered by the insurance policy
C) a clause that prevents insurers from contesting statements made by insureds in applications after the passage of a stipulated number of years
D) a clause that requires the insured to pay a percentage of an insured loss along with the remainder being paid by the insurer

Question 61

For a gift to be effective,the donor need not necessarily have a donative intent.

Question 62

A bailment does not involve transferring title to the goods to the bailee.

Question 63

For a bailment to be effective,the bailee must knowingly accept the personal property.

Question 64

A finder of abandoned property obtains possession but not the title.

Question 65

A carrier has a lien on the goods in its possession covered by a bill of lading for necessary charges and expenses.

Question 66

A finder of lost property obtains title to the property against the whole world except the true owner.

Question 67

A warehouse company can sell the stored goods of the bailor if the charges are not paid on time.

Question 68

Purchase is the least common method of acquiring title to personal property in today's world.

Question 69

A manufacturer that purchases raw materials and produces a finished product owns that product.

Question 70

Property is considered mislaid property if it is taken away from the owner without his or her knowledge.

Question 71

Intangible property is not considered personal property.

Question 72

A bailment at will cannot be terminated by a bailee before the expiration of the term.

Question 73

Constructive delivery,or symbolic delivery,is sufficient for delivering a gift to a donee.

Question 74

In the case of a mutual benefit bailment,the bailee owes a duty of reasonable care to protect the bailed goods.

Question 75

Under the common law,an innkeeper owes no liability regarding loss caused to the personal property of transient guests.

Question 76

In the case of bailment for the sole benefit of the bailor,the bailee owes a duty of great care to protect the bailed property.

Question 77

Personal property that is permanently affixed to land or buildings is called a fixture.

Question 78

Both personal property and real property can be bailed.

Question 79

Common carriers are liable for the loss of goods caused by natural disasters.

Question 80

Possession occurs when the value of personal property increases by natural or manufactured means.