Question

1. If a principal is undisclosed, which of the following statements is not true?

a. The agent's actual authority is the same as if the principal's identity were disclosed.

b. The principal may ratify an unauthorized act by the agent.

c. The principal is personally liable on contracts that the agent enters into with authority.

d. The agent is personally liable on contracts that he is authorized to enter on the principal's behalf.

2. Which of the following is a reason to deny a debtor a discharge in bankruptcy?

a. Debtor owes his home state and the federal government tax payments from the past two years.

b. Debtor received a discharge in bankruptcy five years ago.

c. Debtor owes debts arising from fraud.

d. Debtor owes debts arising from willful and malicious injury to others.

3. Mern Corp. sells computers and computer software to the public. Mern sold and delivered a personal computer to Whyte on credit. Whyte executed and delivered to Mern a promissory note for the purchase price and a security agreement covering the computer. If Whyte purchased the computer for personal use and Mern fails to file a financing statement, which of the following is correct?

a. Mern does not have a perfected security interest because it failed to file a financing statement.

b. The computer was a consumer good while in Mern's possession.

c. Mern's security interest is not enforceable against Whyte because Mern failed to file.

d. Perfection of Mern's security interest occurred at the time of attachment.

4. Becky borrows $100,000 from Bank to open a new restaurant. She gives Bank a security interest in all of her equipment, including equipment to be acquired in the future. Bank perfects the interest by filing a financing statement covering all of the collateral in a proper place. Becky uses all of the money Bank gave her to purchase equipment, but still needs pots and pans. Her brother Alex offers to lend her $1,000 for pots and pans if she will give him her guitar until she repays him. Alex promises to return the guitar on repayment. Becky agrees, Alex gives her $1,000, she gives Alex her guitar, and she buys the pots and pans. Four months later, Becky defaults in payments to both Bank and Alex. Bank repossesses all of Becky's equipment, including the pots and pans. Which of the following statements is correct?

a. Alex's interest in the pots and pans is superior to Bank's because it is a purchase money security interest.

b. Bank's security interest in the pots and pans is superior to Alex's interest in the pots and pans.

c. Bank did not have to file to perfect its security interest in the equipment because it has a purchase money security interest.

d. Alex had to file to perfect his security interest.

Please answer the 4 questions.

Answer 1

1. If a principal is undisclosed, which of the following statements is not true

c. The principal is personally liable on contracts that the agent enters into with authority

2. Which of the following is a reason to deny a debtor a discharge in bankruptcy?

c. Debtor owes debts arising from fraud.

3. Mern Corp. sells computers and computer software to the public. Mern sold and delivered a personal computer to Whyte on credit. Whyte executed and delivered to Mern a promissory note for the purchase price and a security agreement covering the computer. If Whyte purchased the computer for personal use and Mern fails to file a financing statement, which of the following is correct?

d. Perfection of Mern's security interest occurred at the time of attachment.

4. Becky borrows $100,000 from Bank to open a new restaurant. She gives Bank a security interest in all of her equipment, including equipment to be acquired in the future. Bank perfects the interest by filing a financing statement covering all of the collateral in a proper place. Becky uses all of the money Bank gave her to purchase equipment, but still needs pots and pans. Her brother Alex offers to lend her $1,000 for pots and pans if she will give him her guitar until she repays him. Alex promises to return the guitar on repayment. Becky agrees, Alex gives her $1,000, she gives Alex her guitar, and she buys the pots and pans. Four months later, Becky defaults in payments to both Bank and Alex. Bank repossesses all of Becky's equipment, including the pots and pans. Which of the following statements is correct?

d. Alex had to file to perfect his security interest.