Business law quiz

TRUE/FALSE 1. All bailments are created equally. 2. The storage of goods in a warehouse and the shipment of goods by a common carrier are examples of special bailments. 3. To be engaged in warehousing, an enterprise must have appropriate storage buildings. 4. A warehouse an insurer of goods. 5. The rights and duties of warehousers are regulated by the UCC. 6. A public warehouser has a specific lien against the goods stored for reasonable costs incurred from the storage. 7. A warehouse receipt is not considered a document of title. 8. A warehouse receipt may be either negotiable or nonnegotiable. 9 A transferee of a nonnegotiable warehouse receipt acquires only the title and rights that the transferor had actual authority to transfer. 10. A negotiable warehouse receipt states that the goods received will be delivered to the bearer or to the order of any named person. Multiple choice In a guaranty contract, the obligor is called a: a.surety. b.principal. c.guarantor. d.creditor. 2. A guaranty of payment creates a(n): a.contract of surety. b.contract of credit. c.letter of credit. d.absolute guaranty. 3. Which of the following is correct concerning suretyship and guaranty? a. A surety is always liable from the moment the principal is in default. b.A guarantor is always liable from the moment the principal is in default c. Both a. and b. d.None of the above. 4. A(n) __________ is an undertaking by one person, for consideration, to pay another person a sum of money in the event of a specified loss. a.absolute guaranty b.indemnity contract c.guaranty of payment d.surertyship 5. When a surety pays a debt that it is obligated to pay, it automatically acquires the claim and the rights of the creditor through: a.assignment. b.exoneration. c.subrogation. d.default. An agreement or provision in an agreement that one party shall not be held liable for loss is: a.contribution. b.exoneration. c.indemnity. d.subrogation. A surety that has made payment of a claim for which it was liable as a surety is entitled to which of the following from the principal? a.Indemnity b.Exoneration c.Assignment d.Subrogation If there are two or more sureties and one pays more than its proportionate share of the debt, such surety has the right against the co-sureties known as: a.indemnity. b.exoneration. c.subrogation. d.contribution. Pasquale and Paul were sureties on the debt of Rose. Each had a $100,000 responsibility. Upon Rose's default, Pasquale paid $50,000 to the creditor. How much may Pasquale recover from Paul under the concept of contribution? a.Zero b.$50,000 c.$10,000 d.$25,000 Which of the following contract defenses cannot be raised as a defense against suretyship obligations? a.Lack of capacity b.The absence of consideration c.Mistake d.All of the above defenses may be raised. Insurance TRUE/FALSE Insurance is a contract by which one party for a stipulated consideration promises to pay another party a sum of money on the destruction of, loss of, or injury to something in which the other party has an interest, or to indemnify that party for any loss or liability to which that party is subjected. An insurance broker generally is an independent contractor who is not employed by any one insurance company. Generally, the terms broker and agent are synonymous because both work directly for the insurer. A contract of insurance ordinarily is stated in a writing called a policy. A person has to be an owner or lienholder to have an insurable interest in a property. A person has an insurable interest in property if destruction of that property would cause a monetary or pecuniary loss to that person. To collect on property insurance, an insurable interest in the property must exist at the time that the loss is suffered. 8. A person who obtains life insurance generally can only name a beneficiary that has an insurable interest in the life of the insured. 9. The fact that a partnership is terminated after a life insurance policy is obtained by one partner on another invalidates the policy. 10. Any false statement in an application binds the insured.      

Sample solution