Ch23 Test Bank Docx Personal Property And Bailments

Business Law, 17e (Langvardt)

Chapter 23 Personal Property and Bailments

1) Property means something that can be owned.

2) In the United States, property ownership by citizens is protected by the Constitution.

3) Real property cannot be turned into personal property.

4) Tangible property is property that has a physical existence; for example, a car or a computer is tangible property.

5) If property is controlled by the government, like a park, then it is private property.

6) The most common ways of obtaining ownership of property are by producing it or purchasing it.

7) A person becomes the owner of abandoned property by possessing the property.

8) The finder of lost property has better rights to the property than anyone, including the original owner.

9) A person who has leased personal property has ownership rights and can also subsequently sell the property to a third person.

10) Title to personal property may be obtained by accession, which is the intermixing of goods that belong to different owners.

11) Property can be transferred by a will, if it is validly executed.

12) Under the Uniform Transfers to Minors Act, a minor is an individual under the age of 18.

13) In order to create a bailment, the bailor and bailee need not agree in writing to the existence of the bailment.

14) Bob parked his new Porsche with the restaurant valet. The valet gave Bob a claim receipt. A bailment has been created.

15) A bailment is the delivery of personal property by the owner of the property rights to another individual who accepts it under conditions to return it later to the owner or to a designated third party.

16) If the bailee returns the goods in a damaged condition, there is a rebuttable presumption of negligence on the part of the bailee.

17) If the bailee delivers the bailed property to the third-party claimant and the claimant is not entitled to possession, the bailee is not liable to the bailor.

18) Common carriers are not permitted to limit their liability for damage to bailed goods.

19) An involuntary bailee has the right to use or destroy the property.

20) The warehouse receipt or the bill of lading must be nonnegotiable.

21) ________ is the intermixing of different owners' goods in such a way that they cannot later be separated.

A) Confusion

B) Accession

C) Conversion

D) Bailment

22) When property ownership is discussed in the United States, which one of the following is true?

A) We are talking about the bundle of rights that the law recognizes and enforces.

B) We are only talking about property held as life estates.

C) We are talking about all claims to property, including those that the law recognizes and those the law does not.

D) We are only talking about land over one acre in size or over a certain value.

23) Personal property is defined by a process of ________.

A) exclusion

B) tangibility

C) consideration

D) inheritance

24) When personal property is used in conjunction with real property in such a way as to be treated as part of the real property, it is known as a ________.

A) consideration

B) gift

C) fixture

D) bailment

25) Which of the following is an example of personal property?

A) Land

B) Commercial Office Building

C) House

D) Books

26) Which of the following is the most common method of obtaining ownership of property?

A) Claiming abandoned property

B) Producing the property

C) Inheriting the property

D) Discovering the property

27) Three friends (Mr. Blue, Mr. Green & Mr. Yellow) go on a hunt for a brown bear. Mr. Blue organized the hunt. All three hunters saw a brown bear. Mr. Blue fired his gun toward the bear but missed. Mr. Yellow fired his gun and was first to hit the bear, but only wounded the bear. Mr. Green fired his gun and killed the bear. Who owns the dead bear?

A) Mr. Blue

B) Mr. Green

C) Mr. Yellow

D) All three hunters

28) Anya leaves her expensive handbag in the washroom of a restaurant. Melissa follows her inside, quietly hides the handbag inside her coat, and leaves the washroom. She refuses to tell Anya the truth, even when Anya frantically starts searching for her handbag as soon as she discovers its loss. Melissa is guilty of:

A) conversion.

B) bailment.

C) confusion.

D) fixture.

29) Jacobs put an old typewriter in the trash. The trash collector, Land, took the typewriter, fixed it up, and sold it to Jones for $750. Jacobs contends that he is entitled to some or all of the $750 that Land received from Jones. Based on these facts:

A) Land is entitled to the value of the improvements he made, but Jacobs is entitled to the difference between the $750 Land received and the value of the improvements Land made.

B) Land is entitled to keep the full $750 because Jacobs abandoned the typewriter.

C) Jacobs is entitled to the $750 because Land paid Jacobs no consideration for the typewriter.

D) Jacobs is entitled to recover the typewriter from Jones.

30) Rachel was jogging when she slipped and fell on the jogging track and her diamond bracelet fell off her wrist. She got and up resumed her jog, unaware of what had happened. A little later, Judy came jogging on the same track and discovered the bracelet. Which of the following is true of the case?

A) The bracelet is lost property that Judy can hold until the owner claims it.

B) The bracelet is abandoned property.

C) The bracelet has two rightful owners.

D) The bracelet now belongs to the local authorities.

31) Sarah is hiking in the Clearwater National Forest and her wristwatch falls off her wrist. Sarah does not notice this, and the watch falls onto the trail. Later, Hans finds the watch. How may this watch best be described?

A) Lost property

B) Mislaid property

C) Abandoned property

D) Bailment property

32) In which of the following cases does a finder have no rights to the property?

A) Abandoned property

B) Lost property

C) Mislaid property

D) Inherited property

33) Dan leased a site from Mark for a term of two years. Bob is interested in purchasing the site and makes a great offer to Dan for it. In this case:

A) Dan cannot sell the land because he does not have ownership.

B) Dan cannot sell the land, unless he stays on it for more than five years.

C) Dan can sell the land because he has leased it from Mark.

D) Dan can sell the land if the amount offered is equal to the value of the site.

34) Some states have a statute that allows finders of property to clear their title to the property. These are called:

A) leasings.

B) statutes of limitations.

C) estray statutes.

D) exculpatory clauses.

35) Which of the following is a transfer of the right to possess and use personal property belonging to another without gaining any ownership rights?

A) Conversion

B) Bailment

C) Inheritance

D) Lease

36) Amber gave her boyfriend, Hunter, an expensive set of stereo speakers for his birthday. Two days later, Hunter broke up with Amber and began dating Kelly. Amber is both heartbroken and furious. Is she entitled to get the speakers back from Hunter?

A) Yes, because Hunter provided Amber no consideration.

B) No, because she intended to make a gift of the speakers and actually delivered them to Hunter.

C) No, because this was a gift causa mortis.

D) Yes, because a donor is entitled to revoke her gift within a reasonable time.

37) Which of the following is the most essential requirement while making a valid gift?

A) Intention

B) Delivery

C) Consideration

D) Acceptance

38) Which of the following is true of conditional gifts?

A) They are considered completed gifts.

B) They come with certain restrictions.

C) They cannot be revoked.

D) They need to be delivered.

39) A gift causa mortis is a gift made in:

A) case of a birth.

B) anticipation of birth.

C) fear of death.

D) contemplation of death.

40) Which of the following is an example of a gift inter vivos?

A) Tom is promised a watch by his uncle in case he dies during an operation.

B) Eva receives a car as a birthday gift from her father.

C) Casey inherits a mansion according to his late grandfather's will.

D) A charity home receives a grant from its dead benefactor's trust.

41) Why is a conditional gift considered to be an incomplete gift?

A) It may be revoked by the donor.

B) It involves money transactions.

C) The donee may refuse the gift.

D) The donor is liable to the donee in the future.

42) Debbie gives Barry a Cartier watch as a gift for their engagement. A week later, Debbie suddenly leaves the country, leaving Barry a note that she cannot marry him. Assume that Debbie had no good reason to break off the engagement. Under the traditional rule:

A) Debbie will be able to recover the watch because she does not intend Barry to keep the gift.

B) Debbie will be able to recover the watch because the gift was made on the implied condition of marriage.

C) Debbie cannot recover the watch, because she is in a foreign country.

D) Debbie cannot recover the watch because it is a valid gift delivered to Barry.

43) A gift inter vivos is a gift:

A) made in contemplation of death.

B) between two living persons.

C) between a deceased person and a living one.

D) made in consideration for money.

44) The Uniform Transfers to Minors Act:

A) permits the donor to deliver the property to a custodian who acts for the benefit of the minor under the Act.

B) prohibits an adult from making a gift to a minor unless the minor is the child of the donor.

C) provides a method for making gifts to minors, who are defined by the Act as children under the age of 16.

D) provides a complicated and abstract method of transferring money to minors.

45) Which of the following characterizes the Uniform Transfers to Minors Act?

A) The custodian must be the transferor himself.

B) It defines a minor as anyone under the age of 21.

C) It only covers the transfer of real property to a minor.

D) It has been adopted in a few states.

46) Carl gave his car to be serviced and washed at Harold's carwash. Unknown to either of them, Danny replaces the engine in the car with a new four-speed transmission. Danny now claims that the car belongs to him. Which of the following is true?

A) Carl remains the actual owner, as he always was.

B) Danny has rights over the car since he improved it.

C) The car belongs to Harold because he is the owner of the carwash.

D) Danny can sue both Harold and Carl if they do not pay him.

47) What is the term for a voluntary transfer of property to a donee from the donor?

A) Conveyance

B) Trust

C) Gift

D) Title

48) Which of these is an essential element of a bailment?

A) The bailee has no responsibility for the bailed property.

B) There has to be a written agreement between the two parties.

C) The bailee is allowed to make changes to the bailed property.

D) The bailor owns personal property or holds the right to possess it.

49) Karen parked her car in a parking lot. She paid the $2 fee and left for several hours. She kept her keys and had access to her car during that time. When Karen returned, she saw that her car had been damaged. Has a bailment been created here?

A) This is a bailment, because Karen paid a fee to park in the lot.

B) This is a bailment, because the car is personal property.

C) This is not a bailment, because there was no transfer of exclusive possession to a bailee.

D) This is not a bailment, because there is no contract here.

50) Davidson borrowed a motorcycle from his friend, Harley. Harley did not know that the motorcycle had a defect that could cause the brakes to malfunction. While Davidson was riding the motorcycle, the brakes malfunctioned. This caused an accident and Davidson was injured. What duty of care, if any, did Harley owe to Davidson under the traditional common law rule?

A) The duty of reasonable care—the same duty a bailor owes to a bailee in a bailment for mutual benefit.

B) The highest duty of care because this was a bailment for the benefit of the bailor.

C) A duty to tell Davidson of any known defects in the motorcycle because this was a bailment for the benefit of the bailee.

D) No duty of care, because this was a gratuitous bailment.

51) Chloe took her watch to a jeweler to have it repaired. While the jeweler had possession of the watch, a thief broke into the shop. The thief stole Chloe's watch and other jewelry pieces. Which of the following is true?

A) Because this was a bailment for the benefit of the jeweler, the jeweler is strictly liable to Chloe for the value of the watch.

B) This was a mutual benefit bailment, meaning that the jeweler is liable to Chloe if he did not use reasonable care to protect the watch.

C) No bailment existed between Chloe and the jeweler.

D) Because this was a bailment for the benefit of Chloe, the jeweler cannot be held liable to her.

52) You need to drive to Spokane to pick up your parents. Your car is being repaired and is therefore unavailable. You ask your good friend Ed if he will lend you his car. You take Ed's car and drive to Spokane. This is:

A) a mutual benefit bailment.

B) a bailment exclusively for the benefit of the bailee.

C) a bailment exclusively for the benefit of the bailor.

D) no bailment because no consideration was paid to Ed.

53) In which of the following circumstances would the bailee be expected to exercise ordinary care?

A) Harold promises to look after Kate's puppy in exchange for her cleaning his car.

B) Dave looks after Stacey's dog while she is on vacation with her friends.

C) Nigel borrows a rare book from his professor to write a class report.

D) Melissa helps Mrs. Henderson clean her garage on Sunday afternoon.

54) Arthur borrows a new pair of stereo speakers from Jim, his classmate, who stays in the campus hostel. After about a week, Arthur goes to the hostel and leaves the speakers with Ryan, who lives on the floor adjacent to Jim's, asking him to give them to Jim. Ryan forgets to do so and loses the speakers. In such a situation:

A) Ryan is liable to Jim; he should have been more careful.

B) Arthur is liable to Jim; he is the bailee.

C) Jim is not liable to anyone because he returned the speakers.

D) It was Jim's responsibility to take the speakers back.

55) Marjorie leaves her bag in the checkroom of a hotel that has an attendant. When she returns a few hours later, she finds her bag missing, the attendant on another duty, and a new sign outside the checkroom stating "Goods left at owner's risk." Which of the following is true if Marjorie tries to recover damages from the hotel?

A) She will be unsuccessful because there was no bailment.

B) She will be unsuccessful because the sign clearly says that goods are not the hotel's responsibility.

C) She will be successful because the attendant did not inform her of the policy earlier.

D) She will be successful because guests can claim any damages from the hotel they are staying in.

56) What level of care must a bailee exercise in a bailment for his own exclusive benefit?

A) Greater than ordinary care

B) Less than ordinary care

C) Ordinary care

D) The same level of care that a prudent person exercises over his/her own property

57) What is the best possible solution for a bailee if there is a third-party, who claims to have superior rights to those of the bailor for possession of the bailed property?

A) He should give the bailed property to the third person.

B) He should give the bailed property to the bailor.

C) He should bring the third-party claimant into a lawsuit along with the bailor.

D) In such a case, the bailee will always get possession of the bailed property.

58) In a bailment, the bailee is liable for loss or damage to the bailed property while it is in the hands of the bailee:

A) under all circumstances; the bailee is the "insurer" of the goods.

B) only if the bailee did not exercise proper care.

C) unless the bailee has given some consideration.

D) only if he has a personal interest in the safety of the property.

59) Boris borrowed Martha's lawnmower to cut his grass. Boris will be liable for damage to the lawnmower if he:

A) owns a lawnmower and borrowed another from Martha.

B) has not given Martha any consideration.

C) did not use greater than ordinary care to protect it.

D) he failed to notify Martha when he was done with the lawnmower.

60) What is a lien?

A) Compensation by a bailee for any damages to the bailed property.

B) The charges for delivery of any bailed property.

C) A charge against property to secure the payment of a debt.

D) A bailment for mutual benefit.

61) Nina lent her car, which she knew had bad brakes, to Heidi. However, she did not inform Heidi about the defect. As Heidi was driving down the highway, she was in an accident due to the faulty brakes. In this case:

A) Nina is not liable to Heidi because she was never asked about the brakes.

B) Nina is liable to Heidi because she did not inform her of the defect.

C) Heidi is liable to Nina because she had damaged Nina's car.

D) Heidi is liable to Nina because she gave no consideration in return for the car.

62) A hotelkeeper is liable for loss or damage to property if it can be proved that it was caused by:

A) the bailor's negligence.

B) an act of a government authority.

C) the nature of the goods.

D) the bailee's or hotel's own conduct.

63) Which of the following characterizes common carriers?

A) They have the same degree of responsibility as private carriers.

B) They are near-absolute insurers of the goods they carry.

C) They do not have a government license.

D) They are not allowed to carry perishable goods.

64) Which of the following characterizes a warehouseman?

A) He is a bailor of the stored goods.

B) He does not have a lien against the bailee of the stored goods.

C) He need not exercise care for the stored goods, as it is the bailee's responsibility to do so.

D) He can terminate the contract if the goods are about to deteriorate.

65) ________ is the states' power to regulate to promote the public health, safety, morals, and welfare.

A) Police power

B) Preemption

C) Nullification

D) Substantive regulation authority

66) Which of the following statements about a state's police power is false?

A) The state can impose reasonable regulations on the use of property.

B) The state can tax property.

C) The state can take property for public use.

D) The state does not have to pay the owner compensation for any property it takes.

67) Which of the following is defined as all objects and rights, other than real property, that can be owned?

A) Tangible property

B) Personal property

C) Intangible property

D) Public property

68) Which of the following is defined as the earth's crust and all things firmly attached to it?

A) Tangible property

B) Personal property

C) Real property

D) Public property

69) Which of the following is not an example of real property?

A) Land

B) Office building

C) Stock

D) House

70) Which of the following statements is false?

A) When marble is quarried, it is still real property.

B) Perennial vegetation is usually treated as part of the real property on which it is growing.

C) When trees and shrubs are severed from the land, they become personal property.

D) Crops that have to be planted each year are treated as personal property.

71) Property that has no physical existence is called:

A) private property.

B) public property.

C) intangible property.

D) tangible property.

72) Which of the following is not an example of intangible property?

A) Patent

B) Trademark

C) Copyright

D) USB flash drive

73) The distinction between tangible and intangible property is important for tax purposes because:

A) tangible property is subject to a state's tax, but intangible property is not.

B) tangible property is subject to tax in the state where its owner lives, whereas intangible property is usually taxable in the state where it was created.

C) tangible property is subject to tax in the state where it is located, whereas intangible property is usually taxable in the state where it was created.

D) tangible property is subject to tax in the state where it is located, whereas intangible property is usually taxable in the state where its owner lives.

74) Property owned by the government is:

A) private property.

B) public property.

C) real property.

D) classified property.

75) Property owned by an individual, a group of individuals, or a corporation is:

A) public property.

B) real property.

C) private property.

D) classified property.

76) Which of the following statements about ownership of a wild animal is false?

A) If a person fatally wounds a wild animal, he becomes the owner.

B) If a captured wild animal escapes and is caught by a second person, it still belongs to the first capturer, regardless of whether the second capturer was aware of prior ownership.

C) Wild animals caught in a trap or net are considered to be the property of the person who set the trap or net.

D) The first person to take possession of a wild animal normally becomes the owner.

77) In the case in the text, Grande v. Jennings, the court held that the found money belonged to the previous owner's estate because it classified the money as:

A) mislaid.

B) abandoned.

C) treasure trove.

D) lost.

78) In Lindh v. Surman, the case in the text, the majority of the court:

A) held that Lindh was entitled to the ring because his reasons for breaking off the engagement were objectively reasonable under the circumstances presented.

B) held that Surman was entitled to keep the ring because Lindh, without a justifiable excuse, broke off the engagement for the second time.

C) adopted a fault approach to the resolution of engagement ring disputes.

D) adopted a no-fault approach to the resolution of engagement ring disputes.

79) In the case in the text, Weissman v. City of New York, the court held that the exculpatory clause:

A) was enforceable even though it was offered on a take-it-or-leave-it basis.

B) was enforceable because both parties were aware of its terms and agreed to it.

C) was too vague to shield a bailor from liability for its negligence.

D) was unenforceable because the court found it to be unconscionable.

80) An artisan lien entitles the improver of property:

A) to his demanded compensation rate.

B) to compensation based on how much value it added to the property.

C) to retain possession in order to secure the agreed-on price or the value of the work performed.

D) to sell the property.

81) In which of the following circumstances would a common carrier be liable for damaged goods?

A) An act of God damaged the goods.

B) An act of vandalism damaged the goods.

C) An act of a public enemy damaged the goods.

D) An act of the person who shipped the goods damaged the goods.

82) In which of the following circumstances would a hotelkeeper be liable for lost or damaged property?

A) The hotel owner fails to advise guests to put their valuables in the hotel vault.

B) An act of a governmental authority damaged the goods.

C) An act by a member of the guest's party damaged the goods.

D) The nature of the goods caused them to be damaged.

83) Which of the following statements about safety-deposit boxes is false?

A) Most courts have concluded that the renter of the box is a bailor and the bank is a bailee.

B) The bank is not the insurer of the contents of the box.

C) The bank is obligated to use due care.

D) The bank is not required to explain loss of or damage to the property entrusted to it.

84) Under tariff rules, a common carrier may limit her liability to a shipper's declaration of value, provided that the rates are:

A) not on a take-it-or-leave-it basis.

B) in writing.

C) are determined by what is reasonable in the trade.

D) dependent on value.

85) In Gyamfoah v. EG&G Dynatrend, the case in the text, the court found that:

A) EG&G proved that the watches were never delivered to the warehouse.

B) EG&G met its burden of proving that the loss was not a result of its own negligence.

C) Gyamfoah failed to rebut the presumption of negligence.

D) Gyamfoah proved by a preponderance of the evidence that EG&G was liable for the loss.

86) Kato checked out a book (Freeloading for Fun and Profit) from the library. While he was reading it, he discovered three $50 bills in the book. Is the money lost, mislaid, or abandoned property? Why is this determination significant?

87) While eating dinner at a restaurant, Elvis placed his backpack on an empty chair located next to his table. When Elvis left the restaurant, he forgot to pick up the backpack. A few minutes later, Priscilla discovered the backpack and took possession of it. What rights to the backpack do Elvis, Priscilla, and the restaurant have?

88) Watley took his old bicycle to the municipal dump. Vandelay retrieved it from the dump and repaired it. Newman stole the bicycle from Vandelay's garage, made substantial improvements to it, and then sold it to Banya. Banya did not know that the bicycle had been stolen. Who owns the bicycle? Explain your reasoning.

89) Gil has stolen a "Lancer" from Yu and changed the look and interior of the car. Gil is now using it for his personal purposes. After some months, Yu comes to know about his car and demands it back. However, Gil demands for the amount he spent on modifications. Is Yu liable to pay that?

90) Wilma, who thought she had a terminal disease, signed over the title to her new Cadillac to her cousin, Kenny, and told him that she wanted him to have the car "after I'm gone." Kenny took the keys and began to use the car. A week later, Wilma was told that her diagnosis had been an error and that she was not terminally ill. Wilma wants her car back. Can she recover it from Kenny? Why or why not?