BL II EXAM 3

A signature generally must signed or ________ by an authorized agent to impose liability on the signor.

Because of the _________ of the signature, the capacity in which a person signs commercial paper is usually obvious.

An agent who fails to bind his/her principal because of lack of authority will usually be personally liable to which of the following?

The _______ is the primary party to a draft.

____ is the primary party to a note.

A ____________ party to an instrument is the person who endorses a negotiable instrument.

Which of the following is the maker of notes or accepters of drafts?

Executing a note essentially assumes the note has been ______ by the maker.

After obtaining a judgment, a judgment creditor cannot pursue enforcement procedures against a debtor who fails to repay voluntarily.

Many secured debts become uncollectible.

Secured creditors cannot lose their claim to the secured property.

A secured creditor has an interest in one or more items of the debtor's personal property.

The type of personal property that can be used collateral in a secured transaction is loosely defined and limited by Article 9.

Article 9 does not limit the personal property in which a security interest can be taken to tangible personal property.

In determining the classification of goods, it is necessary to take into account the status of the debtor who is buying the property.

It is necessary for value to be given for a creditor to create a security interest.

Mel has a(n) __________ lien on Ellen’s car after he replaced her clutch. The lien will stay in place until Ellen pays for the car repairs.

An artisan’s lien cannot be claimed by which of the following?

A(n) __________ is a security interest in personal property in favor of one who has performed services on the personal property

Security for a creditor without involving an interest in the property, where the security for the creditor is provided by a third person's promise to be responsible for the debtor's obligation, is a(n) _____________.

A party who limits his or her promise to a single transaction or to a single creditor is a(n) ____________.

A party whose promise is not limited to a single transaction or to a single creditor is a(n) ____________.

A third party who promises a creditor to be liable for a principal's payment is either a surety or a(n) _____________.

Alice is the president of ABC Corporation, and has promised Local Bank that she will be liable if ABC defaults on the $150,000 line of credit with Local Bank. Alice would be considered which of the following under this agreement?

After a debtor is discharged on a debt in a Chapter 7 proceeding, the creditor may try to collect the debt by calling the debtor, and may file suit against the debtor on the claim.

The trustee is the person who handles the assets and obligations of the debtor during the bankruptcy proceeding.

The debts of partnerships, limited liability companies, and corporations that go through liquidation proceedings are not usually discharged.

Not all businesses have a right to liquidation proceedings.

Under Chapter 11, holders of claims or interests in the debtor's property are permitted to participate in the approval process of a proposed plan of reorganization.

A debtor's plan of reorganization must provide a means for its execution under Chapter 11

Creditors must receive as much in a Chapter 13 reorganization plan as they would receive in Chapter 11 liquidation.

In a Chapter 13 proceeding, the rights of a bank which holds a home mortgage may be modified.

Administrative agencies are sometimes called the first branch of government.

Administrative agencies exist at federal levels of government only.

One way for administrative agencies to keep the businesses they regulate informed about agency rule is opinion letters.

An administrative agency's authority to engage is rulemaking is a legislative function.

If there is a question about the reach of an administrative agency's power, the issue is decided by the judiciary branch of government.

The Agency Procedure Act controls all aspects of agency activity.

The first major administrative agency created at the federal level was the Interstate Commerce Commission.

Congress cannot create new administrative agencies in response to new social problems and new technologies.

Legislative rules impact the conclusions or determinations of administrative agencies.

Interpretive rules issued to administrative agencies are guidelines only.

The primary purpose of government regulation of securities is to protect the public investors from fraud and other misleading acts in the investment in securities.

Blue Sky Laws are aimed to provide tax incentives to environmentally conscious corporations.

Disgorgement is compelling the return of illegally obtained money.

One purpose of the Securities Exchange Commission is to interpret case laws pertaining to the issuance and trading of securities.

Protecting the public from investing in corporations that never intended to do business is one of the purposes of the Securities Act of 1933.

The primary mechanism by which a corporation distributes a new security is called indemnification.

The SEC interprets the term "security" broadly so that it applies to a wide variety of corporate offenders.

A corporation’s registration statement does not include information about the financial condition of the corporation.