BL II EXAM 3
BL II Exam 3 Quiz
Test your knowledge on commercial paper, secured transactions, and bankruptcy with our comprehensive BL II Exam 3 quiz. This quiz includes 50 questions designed to challenge your understanding of key concepts and legal principles.
- Multiple choice questions
- Covers important legal topics
- Perfect for law students and professionals
A signature generally must signed or ________ by an authorized agent to impose liability on the signor.
Notarized
Witnessed
Genuine
Made under oath
Because of the _________ of the signature, the capacity in which a person signs commercial paper is usually obvious.
Authenticity
Location
Font
Size
An agent who fails to bind his/her principal because of lack of authority will usually be personally liable to which of the following?
Third parties only
A principal
A surety
A principal or a surety
The _______ is the primary party to a draft.
Endorser
Maker
Drawer
Drawee
____ is the primary party to a note.
Endorser
Maker
Drawer
Drawee
A ____________ party to an instrument is the person who endorses a negotiable instrument.
Performance
Primary
Secondary
Presentment
Which of the following is the maker of notes or accepters of drafts?
Secured parties
Primary parties
Secondary parties
Brokers of record
Executing a note essentially assumes the note has been ______ by the maker.
Obligated
Negotiated
Presumed
Accepted
After obtaining a judgment, a judgment creditor cannot pursue enforcement procedures against a debtor who fails to repay voluntarily.
True
False
Many secured debts become uncollectible.
True
False
Secured creditors cannot lose their claim to the secured property.
True
False
A secured creditor has an interest in one or more items of the debtor's personal property.
True
False
The type of personal property that can be used collateral in a secured transaction is loosely defined and limited by Article 9.
True
False
Article 9 does not limit the personal property in which a security interest can be taken to tangible personal property.
True
False
In determining the classification of goods, it is necessary to take into account the status of the debtor who is buying the property.
True
False
It is necessary for value to be given for a creditor to create a security interest.
True
False
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.
Guarantor's
Artisan's
Mechanic's
Judicial
An artisan’s lien cannot be claimed by which of the following?
A manufacturer
A common carrier of goods
A jeweler who repaired a watch
The owner of a storage facility
A(n) __________ is a security interest in personal property in favor of one who has performed services on the personal property
Security Deposit.
Mechanic's lien.
Artisan's lien.
Color of title.
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) _____________.
Foreclosure sale
Suretyship
Artisan's lien
Mechanic's lien
A party who limits his or her promise to a single transaction or to a single creditor is a(n) ____________.
Obligee
General guarantor
Special guarantor
Creditor
A party whose promise is not limited to a single transaction or to a single creditor is a(n) ____________.
Obligee
General guarantor
Special guarantor
Creditor
A third party who promises a creditor to be liable for a principal's payment is either a surety or a(n) _____________.
Obligor.
Obligee.
Principal debtor.
Guarantor.
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?
Co-surety
Special guarantor
General guarantor
Co-principal
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.
True
False
The trustee is the person who handles the assets and obligations of the debtor during the bankruptcy proceeding.
True
False
The debts of partnerships, limited liability companies, and corporations that go through liquidation proceedings are not usually discharged.
True
False
Not all businesses have a right to liquidation proceedings.
True
False
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.
True
False
A debtor's plan of reorganization must provide a means for its execution under Chapter 11
True
False
Creditors must receive as much in a Chapter 13 reorganization plan as they would receive in Chapter 11 liquidation.
True
False
In a Chapter 13 proceeding, the rights of a bank which holds a home mortgage may be modified.
True
False
Administrative agencies are sometimes called the first branch of government.
True
False
Administrative agencies exist at federal levels of government only.
True
False
One way for administrative agencies to keep the businesses they regulate informed about agency rule is opinion letters.
True
False
An administrative agency's authority to engage is rulemaking is a legislative function.
True
False
If there is a question about the reach of an administrative agency's power, the issue is decided by the judiciary branch of government.
True
False
The Agency Procedure Act controls all aspects of agency activity.
True
False
The first major administrative agency created at the federal level was the Interstate Commerce Commission.
True
False
Congress cannot create new administrative agencies in response to new social problems and new technologies.
True
False
Legislative rules impact the conclusions or determinations of administrative agencies.
True
False
Interpretive rules issued to administrative agencies are guidelines only.
True
False
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.
True
False
Blue Sky Laws are aimed to provide tax incentives to environmentally conscious corporations.
True
False
Disgorgement is compelling the return of illegally obtained money.
True
False
One purpose of the Securities Exchange Commission is to interpret case laws pertaining to the issuance and trading of securities.
True
False
Protecting the public from investing in corporations that never intended to do business is one of the purposes of the Securities Act of 1933.
True
False
The primary mechanism by which a corporation distributes a new security is called indemnification.
True
False
The SEC interprets the term "security" broadly so that it applies to a wide variety of corporate offenders.
True
False
A corporation’s registration statement does not include information about the financial condition of the corporation.
True
False
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