Unit Two Test Questions

Question 1

if life insurance policy stays in operation for two full years, company can no longer contest whether you have proper coverage

Answer 1

incontestability clause

Question 2

pledge or guarantee to pay debt or be liable for default of another

Answer 2

surety

Question 3

special surety defenses

Answer 3

Fraud by debtor, misrepresentation by debtor, changes in loan term, releases of principle debtor, bankruptcy of principle debtor, insolvency of principal debtor, death of principle debtor, lack of enforcement by creditor, creditors failure to give notice of default, failure of creditor to resort to collateral

Question 4

perfected security interest in inventory does buyer take subject to lien

Answer 4

if buyer buys whole company liens move to them, liens do not follow inventory to customers only to proceeds like cash

Question 5

debts that are not dischargable in barkrupcy

Answer 5

mortgage, car liens, student loans, alimony, child support

Question 6

priority of purchase money security interest

Answer 6

the security interest in the goods a seller sells on credit that become collateral for the creditor/seller, takes president over other liens

Question 7

cheapest life insurance, written for specific time, no cash value

Answer 7

term life insurance

Question 8

insurance that protects goods in transit over land, in air, or on rivers, lakes and coastal waters

Answer 8

inland marine insurance

Question 9

hostile fire vs friendly fire

Answer 9

hostile one that becomes uncontrollable, burns with excessive heat, or escapes from the place where it is intended to be, friendly loss is caused by the smoke or heat of a fire that has not broken out of its ordinary container or become uncontrollable

Question 10

how often can someone file for bankruptcy

Answer 10

every 8 years

Question 11

document which may be requested by a paid-up debtor, stating that a security interest is no longer claimed under the specified financing statement

Answer 11

termination statement

Question 12

grace period to pay premium for life insurance

Answer 12

30 days

Question 13

perfecting a security interest in inventory

Answer 13

must be recorded at UCC, attachment not enough

Question 14

insurance that covers less than 10000, collected by agent every month

Answer 14

industrial life insurance

Question 15

coverage of a homeowners policy

Answer 15

protection against losses from fire, liability coverage for accidents or injuries that occur on the premises of the insured, and injuries to others outside of the home caused by the insured or family members, protection from theft

Question 16

freezes all creditors and law suits when you file for bankrupcy

Answer 16

automatic stay of proceedings

Question 17

what does article 9 of the UCC govern

Answer 17

secured interests on personal property

Question 18

a beneficiary who purchases a policy must have an insurable interest in the life of the insured, must exist at the time the policy is obtained

Answer 18

insurable interest

Question 19

agent authorized by the principle to do all acts that can lawfully be delegated to a representative

Answer 19

universal agent

Question 20

commercial device used to guarantee payment to a seller, primarily in an international business transaction, req issuer, beneficiary, customer of issuer

Answer 20

valid letter of credit

Question 21

brief statement that gives sufficient information to alert third persons that a particular creditor may have a security interest in the collateral described

Answer 21

financing statement

Question 22

requirements of a valid financing statement

Answer 22

name of the debtor, name of secured party and the collateral covered by the financing statement

Question 23

perfecting a security interest in a vehicle

Answer 23

does not need to be recorded, lien shown on title

Question 24

rights of the trustees in banruptcy

Answer 24

trustee gets paid after child support and before other creditors

Question 25

perfection of security interest n consumer goods

Answer 25

a purchase money security interest in consumer goods is perfected from the moment it attaches, no other action is required for protection

Question 26

principal whose identity is made known by the agent as well as the fact that the agent is acting on the principals behalf

Answer 26

disclosed principal

Question 27

principal whose existence is made known but whose identity is not

Answer 27

partially disclosed principal

Question 28

principal on whose behalf an agent acts without disclosing to the third person the fact of agency or the identity of the principal

Answer 28

undisclosed principal

Question 29

doctrine that the principal or employer is vicariously liable for the unauthorized torts committed by an agent or employee while acting within the scope of the agency or the course of the employment

Answer 29

respondeat superior

Question 30

doctrine in which the employer has historically been allowed to terminate the employment contract at any time for any reason or for no reason

Answer 30

employment at will doctrine

Question 31

principal is liable in court of law for negligence of his agents of employees while they are working within their scope of authority

Answer 31

respondeat superior

Question 32

written authorization to an agent by the principal

Answer 32

power of attorney

Question 33

insurance that has a cash value later as the policy ages, you can borrow money from this policy, rates dont change

Answer 33

whole life insurance

Question 34

you can get double damages if a company doesnt pay you commission earned wthin 45 days

Answer 34

michigan sales rep commission act

Question 35

the case that created the disparate impact theory, discrimination against people without high school diploma

Answer 35

griggs vs duke powers