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Business Law
Q:
Agent Greta receives money from clients of her principal Wayne on the fifteenth of each month. In the absence of an agreement, how frequently must Greta account to Wayne for the money she receives?
A. Typically during the financial year end.
B. Immediately upon receiving the money.
C. Within a year of receiving the money.
D. Within a reasonable period of time after the money is received.
Q:
Agent Smith buys and sells used computer equipment on behalf of New Life Technologies, Inc. In the absence of an agreement, Smith may delegate which of the following tasks, if any, to Elizabeth?
A. The authority to buy and sell used computer equipment.
B. Keeping a record of transactions Smith undertakes on behalf of New Life.
C. The authority to estimate the fair market value of used computer equipment.
D. The authority to fix the selling price of used computer equipment.
Q:
Geoffrey is an agent of Smith's Meat Products Limited. While delivering products, the company's van breaks down. What legal theory, if any, would allow Geoffrey to contract a garage for the repair of the principal's van?
A. Express authority
B. Actual authority
C. Apparent authority
D. Incidental authority
Q:
Charlena gives Megan the post of Vice-President of Procurement to express appreciation for Megan's hard work in stocking the shelves at Charlena's store, Thrift City. Megan uses her business card with the title on it to purchase a new truck in Thrift City's name from Highway Auto. What authority, if any, has Charlena given Megan?
A. Express authority
B. Implied authority
C. Apparent authority
D. Operation of law authority
Q:
Repair Garage rents tools and stalls to auto mechanics, who are independent contractors, to repair cars. Repair Garage allows Joe to print business cards reading "Repair Garage - Joe, certified mechanic." A customer is unhappy with the repairs Joe made to her car and sues Repair Garage. What legal theory, if any, would allow Repair to be sued by the customer?
A. Express authority
B. Implied authority
C. Apparent authority
D. Incidental authority
Q:
The insanity of the agent, but not of the principal, will terminate the authority of the agent.
Q:
A durable power of attorney preserves the authority of an agent when the principal becomes incapacitated.
Q:
An agency coupled with an interest may not be revoked without the consent of the agent.
Q:
The best way to give notice of an agency termination is by certified mail.
Q:
Thomas is named "office manager" by Bigger Co., but his precise duties are not described. What type of authority would authorize Thomas to purchase office supplies?
A. Express authority
B. Implied authority
C. Apparent authority
D. Operation of law authority
Q:
When the purpose for which the agency was created is achieved, the agency is terminated.
Q:
Brink Hospital employs independent contractor emergency room physicians but may be liable for their torts under the doctrine of apparent authority.
Q:
If Jake puts his business funds and client funds in the same account it is called commingling, and and Jake may be held personally liable for any resulting losses.
Q:
An agent may not recover compensation for illegal services unless they were rendered at the request of the principal.
Q:
An agent may terminate an agency relationship by revocation.
Q:
The means test requires that one looks at the degree of control, or right to control, that the hiring person exercises over the hired person.
Q:
The scope of employment involves the range of activities for which the servant is engaged.
Q:
Most of the time, vicarious liability is applied to negligence cases, because workers are not usually hired to commit intentional torts.
Q:
The principal or employer is ordinarily liable for an agent's or employee's crimes, even if the principal or employer does not actually aid or participate in their commission.
Q:
The courts have created a test, called the control test, to uncover the true nature of the employment relationship for cases falling under statutory liability.
FALSE
Consequently, the courts have created a test, called the economic reality test, to uncover the true nature of the employment relationship for cases falling under statutory liability.
Q:
If Ray fails to notify customers that Brice no longer represents Ray, Brice has lingering apparent authority.
Q:
Non-agent-employees have the authority to, and usually do, deal with third parties on behalf of the principal.
Q:
An independent contractor has no power to bind the proprietor to a contract, unless expressly authorized to do so.
Q:
Vicarious liability is based on the principle of respondeat superior.
Q:
Under the 2005 Bankruptcy Act, debtors require to fulfil which of the following conditions file for Chapter 7 bankruptcy?
A. They must provide a federal income tax return for the most recent tax year.
B. Their income should be more than the state median income.
C. They should be involved in a fishing or farming business.
D. They should be commodity brokers or stock brokers.
Q:
Agency is a legal relationship in which one party, the agent, transacts business for and under the control of the second, the principal.
Q:
In 1978, Chapters 11 and 13 of the Bankruptcy Code were created which:
A. made it easier for creditors to obtain bankruptcy relief.
B. allowed businesses and individuals to reorganize and keep going.
C. made it more difficult to declare bankruptcy.
D. allowed creditors to keep all of the debtor's assets.
Q:
A system in which debtors are forced to sell most of their property and use the cash to pay their creditors a portion of the amount owed each one.
A. Family Farmer or Fishing Business Debt Adjustment
B. Reorganization
C. Liquidation
D. Individual Debt Adjustment
Q:
The debtor can discharge any cash advance paid to a creditor under an open-ended credit plan.
Q:
In a reorganization, a qualified debtor creates a plan that alters the repayment schedule.
Q:
Membership on a creditors' committee normally consists of the creditors who hold the seven largest secured claims against the debtor.
Q:
The disclosure statement must be approved by the court before there can be a vote by creditors on the reorganization plan.
Q:
The creditors' committee holds a hearing on the confirmation of the reorganization plan after which the debtor is discharged from any debts that arose before the date of confirmation.
Q:
Under the Fishing Business Debt Adjustment Act, the reorganizational plan of the debtor must make certain that all priority claims, such as taxes and bankruptcy costs, are paid in full.
Q:
When a debtor files for bankruptcy under the Fishing Business Debt Adjustment Act, it does not automatically create a stay on the collection of most debts.
Q:
In bankruptcy, the proceeds of life insurance policies that have yet to mature are subject to creditors' claims.
Q:
Under the Bankruptcy Code, states are allowed to use exemptions created by the state legislature rather than the federal exemptions.
Q:
When a voluntary or involuntary petition is filed under Chapter 7 of the Bankruptcy Code, an automatic stay goes into effect prohibiting the creditors from collecting debts on amounts owed for back taxes, family support, and student loans.
Q:
In the priority list that indicates which categories of debts are paid first, administrative expenses incurred during the administration of bankruptcy are paid before secured debts.
Q:
Bankruptcy exemptions are uniform across all states.
Q:
An order for relief is the court's command that the liquidation begin.
Q:
The Bankruptcy Code allows debtors to keep a maximum of $18,450 in equity in the debtor's place of residence.
Q:
Bankruptcy petitions are filed in state district courts that are within the federal court structure.
Q:
Creditors may be able to force debtors such as farmers, into involuntary bankruptcy if the debtor fails to pay bills generally as they become due
Q:
In an involuntary bankruptcy filing, the petition itself becomes the order for relief and is effective the moment it is filed with the court.
Q:
Judy's Print Shop has filed for a Chapter 11 bankruptcy and Judy wonders if her creditors, with whom she has had an increasingly abrasive relationship, will have any say in her reorganization plan. Discuss the role of the creditors in Chapter 11-reorganization.
Q:
Barnaby is a farmer who receives two-thirds of his total income from the sale of oranges. After two consecutive years of early frosts that destroyed his orange harvest, Barnaby found himself deep in debt. Seventy percent of his debt resulted from farm expenses. Can he file for Chapter 12 bankruptcy? Why or why not?
Q:
Tom has filed for a Chapter 13 bankruptcy and one of his creditors is attempting to organize the other creditors into a group to petition the bankruptcy judge to allow them to prepare a debt readjustment plan for Tom. Will the bankruptcy judge allow this action by creditors?
Q:
Under the first federal bankruptcy law in the United States that was enacted in 1800, only creditors could begin a bankruptcy proceeding and only merchants could qualify as debtors.
Q:
Permanent bankruptcy legislation was enacted in the United States in 1800.
Q:
People who are able to make a down payment and have a steady income may become eligible for a mortgage loan as soon as two years following a discharge in bankruptcy.
Q:
Fritz is a professional painter and owns a truck worth $10,000 and tools worth $3000. He owns a very modest house worth $17,000. He has numerous unsecured debts totaling $500,000 and considers filing for bankruptcy. Discuss the bankruptcy alternatives for Fritz.
Q:
Stan has debt problems. He has unpaid alimony and child support payments. Big Bank is threatening to repossess his car because he is behind on his payments, and a variety of creditors are threatening to sue. He wants to discharge most of his debts and begin with a clean slate. Discuss what action will help Stan's situation.
Q:
Joan's bankruptcy proceeding consists of the following debts: back taxes of $10,000, credit card debt of $25,000, home utility bills of $300, and a $10,000 car loan. Also there are bankruptcy administrative expenses of $1000. Discuss the order in which these debts will be settled.
Q:
Josh, a college student, has been told by his friends that filing for bankruptcy after graduation will discharge all his student loans. Discuss if this is correct.
Q:
Overwhelmed by his debt, Jaime decided that he would file for Chapter 7 bankruptcy the following month. Fifteen days before he filed, Jaime took out a $3,000 cash advance on one of his credit cards, and used the money to purchase and install a hot tub in his bathroom. Jaime believed that he would be able to discharge the debt for the hot tub when he went through the bankruptcy proceeding. Was he correct in his belief? Why or why not?
Q:
Morgan and Flynn owned a partnership business that was facing financial difficulties. The debts of the business were getting out of hand. However, neither Morgan nor Flynn wanted to close down the business and felt that, with a few changes, they could turn the business around and make a profit. Which chapter of the Bankruptcy Code should they file under? Why?
Q:
Trudy has a steady income but is behind on her payment of debts. Trudy wants to pay her debts, but needs some relief from her creditors. Discuss what type of Bankruptcy Procedure would best fit her case.
Q:
Vernon owns a family run farming business. He earned $100,000 in the current financial year. He owes $70,000, which forms a part of his farm expenses, to creditors but he wants to keep the business running. Which type bankruptcy should Vernon file for?
A. Chapter 7 only
B. Chapter 11 and chapter 7
C. Chapter 7 and Chapter 12
D. Chapter 12
Q:
According to Chapter 13 of the Bankruptcy Code, which of the following statements is correct?
A. Involuntary filings are permitted.
B. Debtor should be able to pay entire amount they owe to each creditor.
C. Debtor must have an already established steady income.
D. Corporations and partnerships can file.
Q:
The maximum time period that is allowed for Chapter 13 debtors to complete the payment plan is _____ years.
A. eight
B. ten
C. five
D. twelve
Q:
Which of the following can take advantage of Chapter 13 provisions?
A. Self-employed people
B. Corporations
C. Partnerships
D. Educational institutions
Q:
Under the Individual Debt AdjustmentChapter 13, Bankruptcy Code a debtor must begin payments within a period of:
A. three days.
B. thirteen days.
C. thirty days.
D. thirty-three days.
Q:
Under chapter 13 of the Bankruptcy Code what happens if the debtor submits the repayment plan to the court and the court has yet to hold its hearing?
A. The debtor is not required to start payments within the stipulated period of thirty days.
B. The debtor pays the trustee.
C. The debtor makes payments individually to the creditors.
D. The debts of the debtor are discharged.
Q:
In a _____ a qualified debtor creates a plan that alters the repayment schedule.
A. firm offer
B. requirements contract
C. reorganization
D. contract for sale
Q:
Sear Enterprises wants to continue in business but needs some relief from creditors' claims. Sear Enterprises should consider filing under _____ of the Bankruptcy Code.
A. Chapter 7
B. Chapter 11
C. Chapter 12
D. Chapter 13
Q:
A debtor who continues to run a business and performs most of the functions that a trustee performs in other types of bankruptcy is called a(n):
A. debtor in bankruptcy.
B. debtor in possession.
C. unimpaired debtor.
D. suspended debtor.
Q:
The only individuals specifically excluded from filing under Chapter 11 are ____.
A. commodity brokers and stockbrokers
B. chartered accountants.
C. lawyers and judges.
D. real estate developers.
Q:
The _____ filed for the reorganization plan must be approved by the court before there can be a vote by creditors on the reorganization plan.
A. disclosure statement
B. confirmation
C. presentment
D. shelter provision
Q:
The court vests the responsibility of liquidating the assets of the debtor for the benefit of all interested parties in the:
A. debtor in possession.
B. creditor in possession.
C. case trustee.
D. primary trustee.
Q:
A self-operating postponement of collection proceedings against the debtor, which goes into effect the moment the order for relief occurs is a(n):
A. federal exemption.
B. involuntary petition.
C. automatic stay.
D. means test.
Q:
Which chapter of the bankruptcy codes allows federal homestead exemption?
A. Chapter 11
B. Chapter 7
C. Chapter 13
D. Chapter 12
Q:
Which of the following is a duty vested in a trustee by the court, when the debtor is a business?
A. He may be authorized to operate the business for a limited period of time.
B. He may be authorized to make payments made by the debtor within 90 days before the filing of the petition.
C. He may be authorized to sell the debtor's properties and handover the proceeds of the sales to the debtor.
D. He may be authorized to pay off the debts according to the personal priority list.
Q:
Stan commits securities fraud and takes $5,000,000 from a variety of investors. Stan is convicted of a crime and then sued by the investors. Stan files for bankruptcy. What relief will the bankruptcy filing grant Stan?
A. Automatic stay on all cash advances paid to a creditor under an open-ended credit plan.
B. Automatic stay and discharge of any debt created with the securities fraud.
C. Automatic stay but no discharge of any debt created by the securities fraud.
D. Automatic stay and discharge of all debts incurred.
Q:
Suri purchased a new laptop for $2,500 from Gadget World. To pay for it, she borrowed money from ATS Finance, which took a security interest in the laptop by entering into a security agreement with Suri. How will the security interest be perfected in this case?
Q:
Friendly Furniture Co. wants to repossess a sofa in Ed's living room, but Ed refuses to allow the repossession crew into his house. Discuss what options Friendly has.
Q:
Joseph owes $15,000 to Carmel Enterprises, $8,500 to Vulcan Co., $11,000 to David and $11,500 to Sigma Enterprises. He has not been making payments on these debts for the past 20 months. Which of these creditors can force Joseph into involuntary bankruptcy?
A. Carmel Enterprises only
B. Carmel Enterprises and David only
C. Carmel Enterprises, Sigma Enterprises, David, and Vulcan Co.
D. Sigma Enterprises, David and Vulcan Co. only
Q:
Iko purchased a house through Stockholm Bank Pvt. Ltd. A year later, Iko wanted to make improvements on the mortgaged property and borrowed money from Jeremy, mortgaging the same property again. Jeremy is unaware of the mortgage of the house by Stockholm Bank and records the mortgage. Analyze the situation in case Iko is unable to repay both the mortgagees.
Q:
The Raymonds financed the purchase of their house through Reed Bank, a local bank with branches in Houston, where the Raymonds lived. The family made their mortgage payments punctually each month at the nearby branch. However, without prior warning, Reed Bank assigned the mortgage to Stanley Savings Bank located in Washington. Discuss the rights of Reed Bank in making this assignment and if the Raymonds can avoid the inconvenience of dealing with Stanley Savings Bank.
Q:
Hayley loans David $20,000 by taking a mortgage on David's land on February 1st, but does not record a mortgage. On April 1, Gavin loans David $15,000 taking a mortgage on the same land and records the mortgage on April 4th. Hayley then records her mortgage on April 8. Discuss the proceedings in case David is unable to pay either of the lenders.