Question

1.

Petunia purchases a piece of property with a deed that states "neither the owner of this property nor his/her heirs, successors or assigns shall ever erect a slaughter house on this property". This clause is known as:

	a.	a restrictive covenant
	b.	a non-possessory interest in land
	c.	an easement
	d.	an illegal covenant

2.

To be negotiable, a check must be in writing. This means:

	a.	a check must be written on standard size paper of 6" x 2.5"
	b.	a check must be written on an official bank form
	c.	a check can be written on anything tangible and portable
	d.	both (a) and (b) are required but not (c)

3. Which type of defense can be raised against both holders and holders in due course?

a. personal

b. omni defense

c. real

d. non of the above

4. Jed is a tree farmer. Every November, he allows the local boy scouts to chop down 100 trees and sell them for Christmas to raise money for the boy scouts. What interest has Jed given to the boy scouts?

	a.	license
	b.	easement
	c.	profit
	d.	right of redemption

5.

An accommodation party:

	a.	must receive consideration
	b.	may be primarily liable on the instrument
	c.	is always secondarily liable on the instrument
	d.	does not agree to pay the instrument if the maker doesn't

Answer 1

1 (A) restrictive covenant

Anyone who buys property in a deed-restricted area must agree to the restrictions. he/ she can not use the property in intended use. he can not further design and build the property.

2. (D)

cheque should be in specific format given by bank and is of standard size. any tangible paper which is compact will not work here.

3(C ) real defense

real defense can be raised against both holders and holders in due course. A real defense is a justification for a maker or drawer not to honor a negotiable instrument.

4 (C) profit interest

reason he allows the local boy scouts to chop down 100 trees and sell them for Christmas to raise money for the boy scouts. it represents the profit interest is given to scout boy.

5 (B) may be primarily liable on the instrument

An accommodation party will always be primarily liable on an instrument not secondary liable. An accommodation party who signs an instrument guaranteeing payment is primary liable on the instrument.