Assignment
MULTIPLE CHOICE
1. Assuming that the true owner cannot be found identify which of the following is most likely to be considered mislaid property.
A. A wallet found on the seat of an airplane.
B. A pair of sunglasses found on the floor of an airplane.
C. A purse in the overhead storage bin above a seat in an airplane.
D. An unopened bag of peanuts on the floor of an airplane.
2. Karen is going downtown to shop. She pulls her car into an unattended parking lot, stops, pays for and receives a ticket automatically in the automatic entry gate, parks her car, and leaves. Karen keeps her keys and may get her car at any time. Several hours later, when Karen returns, she learns her car has been stolen. Assuming the facts are correct what would be the proper conclusion?
A. This is a bailment.
B. This is not a bailment because there is no personal property.
C. This is not a bailment because there was no taking of possession by a bailee.
D. This is not a bailment because there was no compensation paid.
3. Donna completed a children's book in September 2013. She is going to self-publish the book herself and sell it online and in local stores. It will be printed and ready for publication in November 2014. She wants her book to be copyrighted, but knows that the official process can take up to a year to complete. In the meantime, what can Donna do to obtain copyright protection for her book?
A. There is nothing Donna can do to protect her book until she receives an official copyright, and she cannot publish the book until she has an official copyright.
B. Publish the book, apply for copyright protection, and wait for the statutory period for anyone to file an objection that her book is not eligible for copyright protection.
C. Publish the book and mark it as copyrighted with her name and the date.
D. Publish the book and mark it "copyright pending", but this will only protect her book for 3 months even if it takes longer to receive an official copyright.
4. Shirley invented a new product in March 2013. She publicized the invention and shared the product with the public to stimulate demand that same month. She also needed time to finance the obtaining of a patent for the product. In May of 2014, she finally had the ability to patent the product. Determine if she still can obtain a legal patent, and if so, for how long?
A. No, because she waited for over one year after the product was used by the public before attempting the patent.
B. No, because she publicized her invention.
C. Yes, she can obtain a patent for 20 years from the date of the invention.
D. Yes, she can obtain a patent for 20 years from the date of the patent application.
5. What effect can indorsements have on the character of negotiable instruments?
A. A draft begun as bearer paper can be converted to order paper, but not nice versa.
B. Indorsements can convert order paper to bearer paper, but not vice versa.
C. Indorsements can convert order paper to bearer paper, and can convert bearer paper to order paper.
D. Indorsements can convert order paper to bearer paper, and can convert bearer paper to order paper, so long as the instrument expressly allows such conversions.
E. Indorsements cannot change either bearer or order paper to the other classification under any circumstances.
6. JKL, Inc. operates a retail appliance store. JKL borrows $100,000 from First Bank, giving the bank a security interest in all of its current and after-acquired inventory.
First Bank perfected its security interest. Later, JKL buys some additional inventory from Wholesalers, Inc. JKL cannot pay for the inventory purchase, so it gives Wholesalers a security interest in this inventory. Wholesalers perfects its security interest. JKL defaults on both these loans. Assuming any required notice is properly and timely given, who has priority in this after-acquired inventory?
A. First Bank has priority, because it was first to attach the after acquired property.
B. First Bank has priority, because it had a perfected purchase money security interest and security interest in all after-acquired inventory.
C. Wholesalers has priority, because this was after-acquired inventory.
D. Wholesalers has priority, because this was a purchase money security interest.
7. Dad has a negotiable instrument that he gives to his daughter as a birthday present. Dad is a holder in due course of that instrument. Circumstances arise such that the daughter can collect that instrument only if she has holder in due course status. Which of the following best describes this situation?
A. The daughter is not a holder in due course, so she cannot collect on this instrument because she did not give value for the instrument.
B. The daughter is protected by the Shelter Principle and can collect on this instrument as a holder in due course because her dad had holder in due course rights.
C. The daughter qualifies as a holder in due course automatically, and in addition she can claim the holder in due course status of her father and collect the instrument.
D. Because the instrument is a gift, the daughter acquires holder in due course status automatically.
8. Identify which of the following parties are liable only after a negotiable instrument has been presented and dishonored, and proper notice has been given?
A. Drawer, maker, acceptor, and qualified indorser.
B. Maker, acceptor, and unqualified indorser.
C. Acceptor and qualified indorser.
D. Maker and unqualified indorser.
9. Determine which of the following is true?
A. Only the maker of a note can has primary liability upon signing an instrument.
B. Only the drawee of a note has primary liability once the instrument is accepted by the drawee.
C. The maker of a note has primary liability upon signing the instrument as does the drawee after acceptance of the instrument.
D. Only the drawee of an instrument has primary liability upon acceptance of the instrument unless the maker is a holder in due course, in which case only the maker has primary liability.
10. John bought a television from Jake's Appliance Center for his personal use. John could not pay cash for it, so he signed a note and gave Jake's a security interest in the television. Jake's did not file a financing statement. About 6 months later, John sold this television to a neighbor, Jane, who did not know about Jake's security interest in it. John stopped making payments on the note to Jake's, and now Jake's wants to repossess the television from Jane. Can Jake's repossess this television from Jane?
A. Yes; Jake's security interest survives this sale to Jane.
B. No; Jane is a buyer in the ordinary course of business, who takes the television free of encumbrances.
C. No; Jane is a buyer of secondhand consumer goods, who takes the television free of any encumbrances.
D. No; Jake's did not perfect the security interest, so it is not valid against third parties like Jane.
E. No; Jake's security interest did not attach, so it is not valid against anyone, including Jane.
11. Finest Office Corp employed General Construction, Inc (GCI) to renovate an office for $5,000. Finest signed a promissory note to GCi for $5000. GCI transferred the note to Happy Collection Agency. Happy Collection Agency knows that GCI has not performed on the contract. Happy Collection is a HDC of the note in what amount?
A. $ 0
B. $ 5,000
C. $ 10,000
D. $ 15,000
12. Determine the most important difference when a business uses Chapter 11 rather than Chapter 7 bankruptcy.
A. In Chapter 11, petitions must be voluntary, whereas Chapter 7 petitions can be either voluntary or involuntary.
B. In Chapter 11, the business survives, whereas in Chapter 7 the business does not survive.
C. In Chapter 11, all creditors are assured of receiving some payment, whereas in Chapter 7 some creditors may receive nothing.
D. In Chapter 11, there is never a trustee, whereas in Chapter 7 there is always a trustee.
13. Betty issued a check payable to the order of John for $2,000 for a debt she owed to John. John properly indorsed the note, but changed the amount on the check to $20,000, and negotiated it to Extreme Sports, Limited, to pay a bill John owed to Extreme for purchases of goods. Extreme deposited the check in its ABC Bank account but could not collect on the check due to "insufficient funds". To which party(ies) is Betty liable for payment of the $20, 000?
A. Extreme Sports, Limited.
B. ABC Bank.
C. Extreme Sports and ABC Bank.
D. No one.
14. Mary and Alice, friends, own a beachfront cottage as joint tenants. Because of gambling losses in Las Vegas, Alice must suddenly sell her half to Teri, which she does without telling Mary. Analyzing the concepts involved identify the proper ownership.
A. Mary and Alice as joint tenants.
B. Mary and Alice as tenants in common.
C. Mary.
D. Teri and Mary as joint tenants.
15. Grandpa calls Billy and says, "I want you to have my toy train set. I'll bring it by next week." Billy says that he would love to have it. Grandpa dies unexpectedly that afternoon, and in his will leaves everything to Alicia, Billy's cousin. What conclusion would be correct?
A. Billy gets the train because of the agreement with Grandpa.
B. Billy gets the train because there was donative intent on Grandpa's part and Billy agreed to accept the train.
C. Alicia gets the train because Grandpa had not yet taken the train to Billy.
D. Billy gets at least part interest in the train because Grandpa cannot treat his cousins unequally in his will.
E. Alicia and Billy now each have a half interest in the train because although Grandpa had not delivered the train to Billy, he and Billy agreed that Billy would get the train.
16. Chocolate!!, Inc is a new corporation that needs to borrow money to meet its payroll. Dana, president and owner of Chocolate!! requests Evermore Credit Union to loan the funds to Chocolate!! If Evermore insists Dana sign the loan application, thus making her personally liable for payment of the loan if Chocolate!! defaults, Dana will be:
A. A surety for the loan.
B. A guarantor for the loan.
C. A maker of the loan note.
D. A principal of the loan with primary liability.
17. The Truth-in-Lending Act (TILA) regulates the credit and credit card industries. Which of the following transactions are subject to disclosures under TILA?
A. Consumer credit transactions between 2 corporations.
B. Consumer credit transactions between a consumer and a lending corporation.
C. An installment sales agreement between 2 consumers in which a consumer buyer agrees to pay for a used car in more than 4 installments.
D. All sales transactions involving credit.
18. Wayne issues a draft payable to Molly. Molly indorses the draft in blank on the back and gives it to Jerry. Which of the following statements correctly describes the status of this instrument?
A. The draft started out as bearer paper, but Molly converted it to order paper.
B. The draft started out as order paper, but Molly converted it to bearer paper.
C. The draft started out as bearer paper and it is still bearer paper.
D. The draft started out as order paper and it is still order paper.
19. On April 1, Joan bought a vacuum cleaner from a door-to-door salesperson for $500. She signed a valid written sales contract for the purchase. After using the vacuum several times, on April 2, Joan decided she did not like the vacuum. Although it was not defective, she wants to return the vacuum for the full purchase price. What are Joan's options?
A. Joan can return the vacuum for the full purchase price, providing the return is permitted by state law.
B. Joan cannot return the vacuum; she signed a valid sales contract and the vacuum is not defective.
C. Joan can return the vacuum, but not for the full purchase price as she has used the vacuum.
D. Joan cannot return the vacuum for 3 reasons: she signed a valid contract, the vacuum is not defective, and Joan has used the vacuum.
20. Hank purchased a farm for $800,000 with a down payment of $160,000 and taking out a mortgage with ABC Bank for the remaining $640,000. Hank later defaulted on the mortgage loan. ABC began foreclosure proceedings on the farm in accordance with state foreclosure statutes. Which of the following is true about Hank's rights and obligations?
A. Hank has a legal obligation to pay the mortgage and thus may possibly lose the farm in foreclosure due to X's default.
B. ABC may properly initiate foreclosure on the farm since Hank defaulted on the loan.
C. Hank has a right of redemption to reclaim the farm provided X pays the full amount owed on the mortgage prior to foreclosure if state law permits a right of redemption.
D. Hank will lose the farm if Hank does not exercise right of redemption prior to foreclosure in accordance with state statutes.
E. All of the above are true statements.
21. Which of the following instruments is NOT a negotiable instrument?
A. An undated check.
B. A postdated check.
C. An antedated check.
D. A check on which the number amount is written as $87.00, and the handwritten number amount is written as "Eighty-nine dollars".
E. All of the above may be negotiable.
22. All but one of the following could be patented. Which one could not be patented?
A. An abstract concept or scientific principle.
B. A design for a totally new product to be manufactured.
C. An asexually reproduced plant.
D. Living material invented by a person.
ESSAY
PLEASE NOTE:
This fact pattern presents a hypothetical case on a Search-and-Seizure issue that may or may not have been dealt with in the court system and there may or may not be any case law dealing specifically with this issue. I have not researched this issue but am concerned that the practice set out below could be in violation of the 4th Amendment. The practice happens regularly, often involving young drivers who are pulled over for traffic violations.
Please consider the questions presented and respond as if you were a lawyer responding to an inquiry from a young driver who was subject to this practice and who wondered whether it was constitutional.
THE FACTS AND QUESTIONS:
A driver, who is in his mid-twenties, is pulled over by a Maryland State Trooper for speeding on Hwy 50. After checking the driver's license and car registration, the Trooper asks the driver for permission to search his car. The driver refuses. In response the Trooper instructs the driver to wait while he, the Trooper, calls for the K-9 Unit to the scene. The K-9 Unit consists of dogs trained in the detection of drugs or other contraband.
During this time, the driver is not free to leave. After 20 minutes the K-9 Unit arrives. The dog is led around the car and detects no drugs and the driver is free to go.
Is it the right of the driver to refuse to give permission to law enforcement to search his vehicle?
Absent probable cause, is this action by the State Trooper consistent with protections accorded by the 4th Amendment regarding search and seizure?
If contraband was found, would it be admissible at trial?
Supposing that instead of 20 minutes, the driver was held for nearly an hour before the K-9 Unit arrived.
Would this be considered proper police procedure and not in violation of 4th Amendment protections?
If contraband was found, should that contraband be admissible at trial?