Deck 48: Introduction to Property, Property Insurance, Bailments, and Documents of Title

Question 1

A furnace is often classified as a "fixture."

Answer 1

True

Question 2

Barbara put her old clothes in a box in the bedroom of her roommate.The roommate now owns the clothes, because they are presumed to be a gift.

Answer 2

False

Question 3

A bailment may be made of either real or personal property.

Answer 3

False

Question 4

The delivery necessary for a gift may be accomplished constructively.

Question 5

A thief stole Harold's car and installed a DVD player in it.Later the police caught the thief and returned the car to Harold.Harold now owns the DVD player by accession.

Question 6

Sales of tangible personal property involve the transfer of title.

Question 7

To be effective, a gift requires delivery.

Question 8

Land and interests in land are considered "real property."

Question 9

Claudia hires Greg to plant a tree in her yard.Greg discovers a bracelet buried in the ground.Greg owns the bracelet since he is the finder.

Question 10

Bailments for the bailee's sole benefit are usually limited to the gratuitous loan of personal property for use by the bailee.

Question 11

If Harold buys a tomato plant, he owns the tomatoes produced by the plant based on "confusion."

Question 12

The transfer of personal property involves formalities not required in the transfer of real property.

Question 13

The most frequently used documents of title are the warehouse receipts issued by warehousers and the bills of lading issued by carriers.

Question 14

Sam finds $1,000 on his way home from school one day.In many states he will become the owner of the money even as to the true owner, if he makes a fruitless search for the owner pursuant to state statute.

Question 15

The finder of lost property is entitled to possession of it, even against the true owner.

Question 16

In the United States, property occupies a unique status because of the protection expressly granted to it by the Fourth Amendment to the Constitution, which provides that "No person shall be ...deprived of life, liberty, or property without due process of law."

Question 17

Mark finds a camera under a park bench at Disneyland.Mark can keep the camera if the true owner cannot be found, because it is lost property.

Question 18

Property consists only of a physical thing, such as real estate or an automobile.

Question 19

An example of a bailment for the bailor's sole benefit is when Sherri, without compensation, lends her Cappuccino maker to Ed for Ed's party.

Question 20

An heir of a person who dies receives title to the property of the decedent by reason of a gift.

Question 21

All bills of lading are negotiable and may be transferred like a check.

Question 22

A lease for office space is considered to be personal property.

Question 23

Patent rights are considered to be personal property.

Question 24

An insurable interest in property is a financial interest or factual expectancy in someone's property that justifies insuring such property.

Question 25

The regulation of insurance has, under federal legislation, been left to the states.

Question 26

Intangible property does not exist in a physical form.

Question 27

Fire insurance policies are standardized in the United States, either by statute or by order of the state insurance departments, so coverage cannot be enlarged to cover any other perils.

Question 28

Coinsurance is common in property insurance as a means of sharing risk between the insurer and insured.

Question 29

The holder of a negotiable document of title to whom the document has been duly negotiated has legal title to the goods covered by the document.

Question 30

At the end of a bailment, a bailee may correctly deliver the bailed property to a third party (other than the bailor) in certain cases.

Question 31

The anthropology department of Towers University is doing an excavation on property that belongs to the Browns.If, in the process of excavation, the university finds some valuable lost items, they will belong to the Browns and not to the university.

Question 32

Melissa cannot transfer control of the goods held by a bailee by transferring a document of title.

Question 33

When goods have been commingled, it is sometimes possible to get title by confusion.

Question 34

The basic principles of contract law apply to insurance policies.

Question 35

Harold says in the presence of three other people that he is giving his automobile to his nephew, and then hands the keys to the car to the nephew.Delivery of the auto has taken place.

Question 36

Bailed property must be tangible.

Question 37

Albert offers his nephew, Tom, his 1976 car which would only need about $1,000 in repairs to put it in running order.Tom has no right to reject the car.

Question 38

Property insurance may be either a valued policy or an open policy.

Question 39

No warranties are given out by the person who negotiates or transfers a document of title.

Question 40

A friendly fire is one that is contained to an intended place, such as a fireplace, stove, or barbecue grill.

Question 41

An $80,000 fire insurance policy covers a building, which is valued at $100,000, and there is an 80% co-insurance clause.If the building is totally destroyed by fire, the policyholder will receive:

A)$80,000.
B)$100,000.
C)$20,000
D)$64,000

Question 42

To prevent the use of the insurance policy for wagering purposes, the person who is to be indemnified under the contract must have:

A)good faith.
B)an insurable interest.
C)a binder.
D)a coinsurance clause.

Question 43

Defenses of the insurer include:

A)misrepresentation.
B)judgment pro rata.
C)concealment.
D)Both (a) and (c) are correct.
E)Both (b) and (c) are correct.

Question 44

The failure by an applicant to disclose material facts that an insurer does not know but has a right to know is called:

A)misrepresentation.
B)concealment.
C)waiver.
D)fidelity.

Question 45

An inter vivos gift is a gift:

A)of live animals.
B)contingent upon the donee's surviving the donor.
C)made by a donor during her lifetime.
D)None of the above.

Question 46

Transfer of title to personal property can occur by which of the following ways?

A)By sale.
B)By gift.
C)By will or descent.
D)By accession.
E)All of the above.

Question 47

What is the method by which title is acquired when an article of personal property that belongs to one person is joined to an article that belongs to another?

A)Gift.
B)Will or descent.
C)Purchase.
D)Accession.

Question 48

A gift causa mortis is a gift:

A)made by a donor after death in her will.
B)that is conditional.
C)made in the contemplation of the donor's imminent death.
D)Both (b) and (c) are correct.
E)Both (a) and (b) are correct.

Question 49

A type of insurance in which the insured and the insurer share a risk of loss due to fire is:

A)co-insurance.
B)non-forfeiture insurance.
C)no-fault insurance.
D)reinsurance.

Question 50

Which of these elements determine the existence of a bailment?

A)A separation of ownership and possession of the property.
B)A duty on the party in possession to redeliver the property to the owner or to dispose of it according to the owner's directions.
C)Neither of the above.
D)Both (a) and (b) are correct.

Question 51

The UCC does not cover:

A)negotiable instruments.
B)investment securities.
C)sales of goods.
D)gifts.

Question 52

Harvey's Car Rental rents Darlene an intermediate-size car at $149 per week for her business trip.What is the relationship between Harvey's and Darlene?

A)A bailment for mutual benefit.
B)A bailment for the sole benefit of the bailee.
C)A bailment for the sole benefit of the bailor.
D)The temporary transfer of title to Darlene.

Question 53

The fixture test of purpose or use applies only if the item:

A)is affixed to the realty in some way.
B)can be removed without material injury to the realty.
C)Both (a) and (b).
D)is distinct from the realty but could be affixed to it.

Question 54

An example of property that is intangible is a:

A)song.
B)computer.
C)book.
D)pencil.

Question 55

Which of the following is NOT personal property?

A)Trees that have been cut into logs.
B)An air-conditioning system before it is installed in a house.
C)Building materials.
D)A 140-acre farm.

Question 56

Temporary insurance coverage prior to the issuance of the actual policy may be obtained by use of a(n):

A)premium agreement.
B)coinsurance clause.
C)option clause.
D)binder.

Question 57

Which of the following is tangible real property?

A)Corn harvested and stored in a grain bin.
B)The mortgage on an office building.
C)A copyright.
D)The freight elevator in an office building.

Question 58

Personal property so firmly attached to real property that an interest in it arises under real property law is known as a(n):

A)fixture.
B)tangible property.
C)intangible property.
D)None of the above.

Question 59

Which of the following is a requirement of a valid gift?

A)An adult donor.
B)Payment of money.
C)A writing.
D)Delivery.

Question 60

Another term for personal property is:

A)patent.
B)chattel.
C)realty.
D)fixtures.

Question 61

Warranties in insurance contracts:

A)are of great importance.
B)may be expressly included in the contract, be clearly incorporated by reference, or be implied.
C)may be used to avoid liability in all states, whether or not the breach of warranty is material.
D)are becoming increasingly easy to use as a basis for an insurer to avoid liability on a policy when an insured breaches.

Question 62

Mary cleaned her dorm room in the spring and left a pile of books in Sara's room.Mary told everybody that the books were a gift to Sara.Does Sara have to dispose of them?

A)Yes, because there was a present intent and delivery.
B)Yes, because they are constructively in Sara's possession.
C)No, because Sara did not accept the books.
D)No, because there was no agreement between the two parties.

Question 63

The rights of a holder of a negotiable document of title to whom it has been duly negotiated include:

A)title to the document.
B)title to the goods.
C)all rights accruing under the law of agency or estoppel.
D)All of the above.

Question 64

For an insurance applicant's misrepresentation to have legal consequences:

A)the insurer need not have relied on it as an inducement to enter the contract.
B)the misrepresentation must be material.
C)the applicant must have known it was false at the time the applicant made the statement.
D)All of the above.

Question 65

Collin insures his building for $250,000.At the time of its total loss, the property is valued at $220,000.Under:

A)an open policy, Collin would recover $220,000.
B)an open policy, Collin would recover $250,000.
C)a valued policy, Collin would recover $220,000.
D)Both (a) and (c).
E)Both (b) and (c).

Question 66

Explain the difference between lost, mislaid, and abandoned property and who has rights to it.

Question 67

Mark wants to give Susan his car.How can he effectively "deliver" it?

A)By giving Susan the keys.
B)By giving her an indorsed title certificate.
C)By making her take it for a period of time.
D)By providing it under a bailment.
E)Both (a) and (b) are correct.

Question 68

Property may be classified as:

A)tangible and intangible.
B)real or personal.
C)physical and imaginary.
D)Both (a) and (b).

Question 69

Marilyn brought her $300 silk dress to University Dry Cleaners to be cleaned.On the back of the ticket she received in exchange for the dress was written, "Liability limited to ten times the cost of cleaning." Marilyn's dress was lost and University now claims it owes her only $96.50, ten times the cost of cleaning.Is that true?

A)No, because Marilyn is not a bailor.
B)No, because they are common carriers.
C)No, because the limitation was not communicated to her.
D)No, because the limitation is unconscionable.

Question 70

Carol took her earrings off at Marcia's beauty shop and put them on the counter.She left the shop without remembering the earrings.Betty finds them and wants to keep them.Can she?

A)Yes, since she is a finder.
B)Yes, she now is the true owner.
C)No, since the earrings were personal property.
D)No, Marcia would have the right to keep them as against anyone but Carol.

Question 71

Dr.Olson is a board-certified ophthalmologist who constructs some specially designed examining tables to use in looking at his patient's eyes.The tables are firmly attached to the floor of the space he rents for his office.If Dr.Olson decides to move his office, which of the following is correct?

A)The tables are fixtures that cannot be removed.
B)The tables are trade fixtures.
C)Dr.Olson may remove the tables if they can be removed without materially damaging the realty.
D)Both (b) and (c) are correct.

Question 72

Margaret told Bill she would give him her concert tickets.Later she changed her mind and decided she wanted to use the tickets after all.Is Margaret required to give Bill the tickets?

A)No, because there was no intent to make a present transfer.
B)No, because there was no delivery.
C)No, because there was no acceptance.
D)All of the above are correct.

Question 73

Showplace insures its $160,000 building with two insurers: with Hometown Insurance for $60,000 and with National Insurance for $120,000.The building suffers a fire loss of $75,000.From whom and for how much can Showplace collect?

Question 74

Why are delivery and acceptance both necessary for a valid gift? Explain.

Question 75

Insurance protects a business from:

A)tort liability.
B)strict liability.
C)negligence.
D)damage from natural causes.
E)All of the above.

Question 76

A bill of lading serves as:

A)a receipt for damages.
B)evidence that a binder exists.
C)a document of title.
D)a contract for employment.

Question 77

If Jim, Ken, and Lee each deposit 10,000 bushels of wheat in a grain elevator, they would own one-third of the mixture by:

A)accession.
B)adverse possession.
C)prescription.
D)confusion.

Question 78

Which of the following statements is true of insurance policies?

A)The basic principles of contract law apply to insurance policies.
B)Insurance companies tend to standardize their policies.
C)Some states forbid standardization of insurance policies.
D)All of the above.
E)(a) and (b), but not (c).

Question 79

Which of the following is/are the criteria for a common carrier?

A)The carriage must be part of its business.
B)The carriage must be for remuneration.
C)The carrier must represent to the general public that it is willing to serve the public in the transportation of property.
D)All of the above.

Question 80

Larry leaves his hat under the seat at the movie theater.Is this a bailment?

A)No, because the theater manager does not have physical possession of the goods.
B)No, because Larry did not pay the theater to keep his hat.
C)Yes, if the theater manager finds it.
D)Yes, since the theater controls the building.