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WINTER2006-MIDTERM

WINTER2006-MIDTERM - Name Date I The person who estabiishes...

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Unformatted text preview: Name: Date: I. The person who estabiishes a trust is known as: A) Trustor B) Trustee C) Beneficiary D) Both “a” and “b” E) All of the above 2. The doctrine of stare decisis says that courts should always follow the legislative history when deciding common law cases. 3. One strength of utilitarianism is that it is easy to apply and that it provides definite answers to moral questions. 4. Earl leased an apartment from Kent. He signed a lease that established a 6-month rental period. This lease creates A) a periodic tenancy. B) a month-to-month tenancy. C) a tenancy at will. D) a tenancy at sufferance. 5. Maggie, the tenant under a one—year lease of an apartment, assigned the tease to her friend, Cosmo. Which of the following is a legally accurate statement? A) Maggie's assignment of the lease is the same thing as the granting of a subiease. B) If Cosmo fails to pay rent during the year covered by the lease, Maggie will still be liable for payment. C) The assignment extinguishes any further obligations Maggie may have under the lease. D) None of the above. 6. Bob DeSlob is CEO of Westlake Inc. that manufactures and sells widgets. Bob has decided that a safety feature recommended by the widget designers is too expensive and so will not be used in manufacturing Westlake widgets. The expense wouid cause the price of the widgets to rise far above Westlake's competitors' prices. This justification illustrates: A) Stakeholder theory. B) Profit maximization. C) Rule utlitiarianism. D) Kant's categorical imperative. Page 1 7. If a governmental taking is not for a public use, it is unconstitutional. 8. Courts always interpret statutes by following the plain meaning of their words. 9. Commercial speech receives the same constitutional protection as political speech. 10. The Fifth Amendment's due process guarantee is an independent check on Congress. ll. The preperty in a particular trust consists solely of $1,000,000 in common stock. Which of the following should be allocated to trust income? A) A cash dividend. B) A stock dividend. C) Capital gains from the sale of stock. D) Appreciation in the value of stock that the trust still holds. 12. Larry leased an apartment to Terry. The lease agreement prohibits Terry from assigning or subletting the property. Such a provision: A) is generally unenforceable. B) is unenforceable, provided that Terry does not need to sublet the property. C) is unenforceable, provided that Larry does not need to sublet the property. D) is generally enforceable. 13. A trust that is established in a person's will and that takes effect only upon that person's death is called a(n): A) Inter vivos trust. B) Spendthrift trust. C) Totten trust. D) Testamentary trust. 14. If a person dies intestate, his real property will be distributed: A) To the state in which the property is located. 13) To the state of the person‘s domicile. C) According to the law of the state in which the property is located. D) According to the law of the state of the person's domicile. Page 2 15. If an ambiguity or conflict arises when people read andfor interpret a will, courts will: A) Look for evidence of the intent of the testator within the will itself. B) Ask the family members or beneficiaries for their preference(s). C) Appoint a legal conservator or probate referee to decide the intent of the testator. D) None of the above. 16. Archibald and Priscilla, an unmarried couple, co-own a house. This means that A) their co-ownership must be a tenancy by the entirety. B) regardless of what form their co-ownership takes, Priscilla will become sole owner of the house if Archibald dies and Archibald will become sole owner if Priscilla dies. C) their tenancy may be--but does not have to be--a joint tenancy. D) their interests in the house must stem from a tenancy in common, because the facts state that they own--ratlier than rent--the house. 17. A will in which a person states his intention to forgo or obtain certain life-prolonging medical procedures is called a(n): A) Nuncupative will. B) Holographic will. C) Revocable will. [3) Living will. 18. Teresa rented an apartment from Len for one year, beginning January 15‘. When Teresa tried to take possession of the rental unit, Paul, a prior renter, was stiil there. Teresa asked Len to help her get Paul out. Len simply shrugged, telling Teresa that it was now her prohiem. A) Teresa must bring an eviction action against Paul. B) Len breached the implied warranty of habitability. C) Len breached the implied warranty of possession. D) Len breached the implied warranty of possession, but only if the lease agreement specifically states that Len will ensure that Teresa will have possession of the rental unit. 19. Corporations engaging in political expression are entitled to the same First Amendment protection as an individual engaged in such speech. 20. A document that gives person A the right to act for person B in the event person A becomes incapacitated is known as a: A) durable power of attorney. B) living trust. C) right of succession. D) codicil. Page 3 21. Debra is talking to Alex, her stock broker. Debra asks Alex if she can trust his advice to purchase Acme Co. stock. Alex replies: “Of course you can.“ Debra asks: “Why can I trust you?” Alex says with a smile, “because I am a trustworthy person.” Alex is engaging in: A) Circular reasoning. B) A bandwagon fallacy. C) czrgumentum ad baculum. D) Criminal sanctions are the best way to curb irresponsible corporate behavior. 22. Horrace has a one-year lease with Tom for a one-bedroom apartment. After three months, Horrace tells Tom that he wishes to break the lease. Tom told Horrace that he would allow Horrace to break the lease. After trying to re~rent the apartment for three months, Tom had no luck finding a new tenant. He then asked Horrace to pay him three months of rent. A) Torn will not collect anything. Tom expressly accepted Horrace‘s offer to terminate the lease. B) Tom will collect the rent. Horrace is not discharged from the lease term and Tom tried to mitigate the damage by looking for a new tenant. C) Torn will collect the rent. Horrace is not discharged fiom the lease term. It is irrelevant as to whether Torn tried to mitigate damages. D) None of the above. 23. Terry leased an apartment from Leonard for one year. After living in the apartment for six months, Terry decided to give the balance of the term to Paul. A) Paul likely has subleased the apartment from Terry. B) Paul likely has received an assignment of the iease from Terry. C) Either “a" or “b”. D) Neither “a” nor “b". 24. Under the stakeholder theory of corporate social responsibility, employees' interests are considered. 25. Carol, an Acme Co. employee, regularly takes pens, paper, and other office supplies from the Acme office supply cabinet and brings them home for her husband to use in his home office. Carol defends this action by saying that: “I don't get paid enough, and besides, no one will miss the supplies." This statement is an example of A) Circular reasoning. B) False analogy. C) Deontology. D) A non sequitur. Page 4 26. The Takings Clause applies only in situations where the federal government or the states ”take" private property through formal condemnation procedures. 27. Joan, a workers' rights activist, writes a letter to the CEO of Acme, Inc. threatening a boycott of its goods if it does not provide healthier working conditions for their workers. Joan is using: A) Bandwagon fallacy. B) argumentum ad baculum. C) nrgumentum ad hominem. D) Circular reasoning 28. Donald is the trustee of a trust set up by Simpson, with Adams as beneficiary. The trust property consists almost entirely of income—producing real property--office buildings, apartment complexes, etc. By putting a "P" or an ”I" in the appropriate space, indicate whether the following fund transactions should be allocated to principal or to interest. _1. Rental income received from tenants on trust property. :2. Capital gains realized from the sale of trust real estate. 3. Property tax payments on trust property. 4. Building management fees for trust pmperty _____5. Costs of ordinary repairs to trust property. ”“6 Property insurance premiums on trust property. m7. The cost of long-term permanent improvements to trust property. 29. Larry transferred his property (Blackacre) to his son, Phil, for the life of Mary (Phil‘s wife) then to Jay (Phil's son). Mary died. Phil claims that this property transfer is invalid and, therefore, Phil is entitled to the property in fee simple absolute. Discuss. Page 5 30. Mini Inc., entered into a 5-year lease with Rein Realtors. The lease was signed by both parties and immediately recorded. The leased building was to be used by Mini in connection with its business operations. To make it suitable for that purpose, Mini attached a piece of equipment to the wall of the building. Which of the following is most important in determining whether the equipment became a fixture? A: Whether the equipment can be removed without materiai damage to the building. B: Whether the attachment is customary for the type of building. C: The fair market value of the equipment at the time the tease expires. D: The fact that the equipment was subject to depreciation. 31. Which of the following factors is least significant in determining whether an item of personal property has become a fixture? A: The extent of injury that would be caused to the tea! property by the remove! of the item. B: The value of the item. C: The manner of attachment. D: The adaptability of the item to the reai estate. 32. Jane and her brother each own a 50% interest in certain real property as tenants in common. Jane’s interest A: Is considered personal property. B: Will pass to her brother by operation of law upon Jane‘s death. C: Wili pass upon her death to the person Jane designates in her will. D: May not be transferred during Jane’s lifetime without her brother’s consent. 33. On Julyr I, 2601, A, B, C, and D purchased a parcel of land as tenants in common, each owning an equal share. On July 10, A died leaving a will. Subsequently, B died intestate. After A and B’s death, A: C and D will each own a U2 interest in the land. B: C and D will each own a 1/4 interest in the land. C: C and D will each own a 1/3 interest in the land. D: The tenancy in common will terminate. 34. In a notice-type recordation jurisdiction, failure by the mortgagee to record its mortgage A: Releases the mortgagor (borrower) from the underlying obligation to pay. B: Permits a subsequent mortgagee without knowledge of the prior mortgage to have a superior security interest. C: Permits a subsequent purchaser for value with knowledge of the mortgage to take the property free of the prior security interest. D: Permits a subsequent mortgagee with knowledge of the prior mortgage to have a superior security interest provided he promptly records his mortgage. Answer Key T/g 7 24‘ 9x w“ ., (Oct 2. False Mk” ,9} « 3. True 4. A 5. B % .7 .., 7 6- B . 2.52% l X .. .. 7. True 7 ' 8. False fFZ/Cj ; X f 9. False 10. True W“ 11. A :7 O I E) Q 12. o 13. D / 14. c 5"? fife 15. A //£‘“ “27/ 16. C 4/ ///7 17. D f” / 13. c A” g .:,)4©// 19. True /"_ :3 20. A K/Le/K l :7? 21. A .//// 22. A 23. B 24. True 25. D 26. False 27. B 28. 1-1; 2-P; 34; 44; 5-1; 6&1; 9~P 29. Larry transferred 3 life estate to Phil. A life estate allows Phil to use the subject property for the life of a particular person (in this case, Mary). At the end of the measuring life, the property either reverts to the owner, or, as in this case, transfers to another person. In this case, Jay receives the property automatically after Mary died. J ay has a fee simple absolute. so p“ 3; g 32 e 33 B 3% {'3’ Page 6 ...
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