47- Larry agrees to sell Janet his lawnmower for $70. Janet writes Larry a check for the full amount, which bounces when Larry presents it to his bank for deposit. Which of the following statements is true?

Multiple Choice

• Janet has a voidable title in the lawnmower.
• Janet is a good-faith purchaser.
• Janet has a void title in the lawnmower.
• Janet is a buyer in the ordinary course of business.

49- If the seller has justifiably withheld delivery of the goods because of the buyer's breach, the buyer may recover any money or goods he has delivered to the seller over and above the agreed amount of __________ damages.

Multiple Choice

• liquidated
• compensatory
• important
• punitive

50- Matthew has been complaining to his neighbor Richard that his lawn mower is broken. One day while Matthew is away from home attending a baseball game, Richard repairs the lawn mower. When Matthew returns, Richard informs Matthew that he has repaired the mower, and that although he will not charge him for labor, he will need $50 from Matthew for the parts he used to make the repairs. Matthew refuses to pay and Richard takes the lawn mower, stating that he will not return it until Matthew pays the $50. Is Richard acting legally?

Multiple Choice

• Yes, since he made improvements to the lawn mower for which he was not paid
• Yes, if the parts were necessary for the repair and if the cost for the parts was reasonable
• No, because Richard is not an innkeeper or an artisan
• No, because Richard did not make the repairs at Matthew's request

52- Jerry wants to purchase a house in San Francisco, California. To do so, he borrows $2,000,000 from First Interest Bank (First Interest). He signs a note for $2,000,000 and gives the bank a $2,000,000 mortgage on the house as security for his repayment of loan. Within ten (10) years, Jerry fails to repay the entire loan. After the foreclosure of the property, which of the following rights does Jerry have against First Interest?

Multiple Choice

• Foreclosure
• Indemnification
• Subrogation
• Redemption

54- Isabella's home is damaged both by a forest fire and by water from the fire hoses. What is likely to be covered?

Multiple Choice

• Neither the fire damage nor the water damage
• Only the fire damage
• Only the water damage
• Both the fire damage and the water damage

55- Mikael operates an upholstering business. He goes to Hansen's house to reupholster a sofa for Hansen. After the work was complete, Hansen refused to pay the agreed price. Mikael wants to assert a lien against the sofa in order to collect the money due to him. Is Mikael entitled to a lien in this case?

Multiple Choice

• Yes, since Hansen owes a debt to Mikael
• No, because there is no surety involved in the transaction
• Yes, because he is an artisan who improved personal property
• No, since Hansen did not give up the possession of the sofa

59- Which of the following terminates the insurer's duty to perform under the policy?

Multiple Choice

• The insured's breach of warranty
• An increase in the value of the insured property
• A decrease in the value of the insured property
• A case of innocent misrepresentation by the insured

60- Benjamin has a property insurance policy covering his home. He gets a job in a laboratory and brings his work materials home to do experiments, which require highly explosive chemicals to be kept on the premises. Must the insurer cover an explosion?

Multiple Choice

• Yes, unless the policy excluded damages caused by an explosion
• Yes, if Benjamin's behavior was not illegal
• Yes, under all circumstances
• No, if the policy had an increase of hazard provision

62- Ethan sells lawn furniture and various shade coverings. Ethan contracts with Jamie for 5 new patios sets and coverings for her new outdoor patio at her restaurant. Jamie has expressed to Ethan that she is prepared to pay for the contract in three payment installments and Ethan agrees. Jamie's intentions are to keep delaying payment until she can hire a bankruptcy attorney to handle her current financial distress. If the buyer has misrepresented his solvency to the seller in writing within three months before the delivery of the goods:

Multiple Choice

• the 10-day limitation on the seller's right to reclaim the goods does not apply.
• the seller should actually repossess the goods within the 10-day period.
• the seller's right to reclaim the goods is not subject to the rights of prior purchasers in the ordinary course of the buyer's business.
• the seller's right to reclaim the goods is not subject to the rights of creditors with a perfected lien on the buyer's inventory.

63- Under the Uniform Commercial Code, __________ means that a buyer has given any consideration sufficient to support a simple contract.

Multiple Choice

• bona fide
• pure
• good faith
• value