Question 1

Donovan obtains from Equity Insurance Company a policy that provides that if the parties cannot agree on the amount of a loss covered by the policy, an estimate of the value by an impartial third party can be de-manded. This is​

Accepted Answer

The clause described is an appraisal clause, which provides for the use of an impartial third party to estimate the value of a loss if the parties cannot agree on the amount covered by the policy.

Question 2

Marcy owns land in North Dakota under which deposits of oil shale are discovered. Marcy sells the rights to the shale to Oil Mining & Refining Inc. Once the oil in the rock is removed, it will be considered​

Accepted Answer

Once the oil is removed from the rock, it is no longer attached to the land and becomes a movable asset. Therefore, it is considered personal property.

Question 3

Greg obtains from Helpful Insurance Company a policy that provides that Greg has thirty days after a premium's due date to pay it before the policy will be canceled. This is​

Accepted Answer

The clause described is an antilapse clause because it provides a grace period for the payment of premiums before the policy lapses or is canceled. Multiple insurance, appraisal, and incontestability clauses are different types of policy provisions.

Question 4

Mena applies for a homeowners' insurance policy on her house with Neighbors Insurance Company through Obie, an agent who works for Neighbors. In this transaction, Obie is​

Accepted Answer

Obie is a representative or agent of the insurance company, not Mena. Therefore, he is Neighbors's agent, and not Mena's agent.

Question 5

During a storm in Tornado Alley, a house is destroyed, but its owner Dorothy survives. Dorothy plans to return to the site to salvage her possessions, but she delays. Meanwhile, Elliott combs through the ruins and removes all useful items. Dorothy learns of the recovery and files a suit against Elliott, claiming that the items are hers. Elliott responds that the destroyed house was abandoned and therefore he has good title to whatever he took possession of. What is the court likely to rule, and why?

Accepted Answer

The answer of During a storm in Tornado Alley, a...

Question 6

Estimable Credit Company loans funds to Farmland Granaries, LLC, to buy a silo. Estimable obtains an insurance policy from Grangers Insurance, Inc., to cover the silo. Farmland also obtains a policy from Grangers to cover the silo. Later, Farmland sells the silo to Hi-Yield Harvest Company but keeps the policy. Hi-Yield also obtains a pol-icy from Grangers to cover the silo. Estimable agrees to finance Hi-Yield's purchase of the property. A fire totally destroys the silo. Who can recover for the loss?

Accepted Answer

The answer of Estimable Credit Company loans funds to Farmland...

Question 7

Commerce & Business Insurance, Inc., has a valid reason to cancel a policy issued to DIY Auto & Truck Parts Company. In most states, Commerce & Business could cancel the policy on​

Accepted Answer

In most states, Commerce & Business Insurance, Inc. would need to provide advance written notice to cancel a policy issued to DIY Auto & Truck Parts Company. This means that they cannot cancel the policy without providing written notice ahead of time. Oral notice or no notice at all is not sufficient. Arbitration is not usually required in order to cancel a policy.

Question 8

Miranda delivers her bridesmaid's dress to Nina for alterations. Nina promises that the dress will be ready within five business days. Miranda agrees to pay the charge when she picks up the dress. This is​

Accepted Answer

This is an express bailment because the terms of the agreement, such as the delivery of the dress, the promise of alterations, and the payment upon pickup, were explicitly stated and agreed upon by both parties.

Question 9

Anna obtains a business liability insurance policy for her Brew & Bagels Coffee Shop from ChoiceFirst Insurance Company. When an event occurs that gives rise to a claim, each party has a duty to​

Accepted Answer

Both parties have a duty to cooperate in an investigation to determine the facts related to the claim. This helps ensure that the claim is handled appropriately and fairly. Filing a lawsuit or finding a third party to impose liability is not the initial duty of either party in the event of a claim. Paying premiums or refunds is not relevant to the duty in the event of a claim.

Question 10

Ruby stores her furniture with Stow-Away, Inc., under a contract that limits the dollar amount of its liability. A fire due to Stow-Away's negligence destroys the furniture. The loss is most likely to be imposed on

Accepted Answer

Stow-Away would be liable for the loss due to their negligence, but the liability would be limited to the amount specified in the contract.

Question 11

Nero and Omar agree to buy natural gas to sell to Power Fuel Company and to share storage costs until Power Fuel can take delivery. The gas is commingled so that Nero's cannot be distinguished from Omar's. This is​

Accepted Answer

Confusion is the mixing or commingling of identical goods belonging to two or more owners in such a way that the individual shares of the owners in the commingled mass cannot be distinguished. In this case, Nero and Omar have commingled their natural gas, making it impossible to determine which gas belongs to whom.

Question 12

GR8 Vision, Inc., hires Haul-Way Company to transport fifty large-screen HDTVs from GR8's warehouse in San Diego to an Ideal Electronics retail store in Phoenix. The bailee is​

Accepted Answer

The bailee is the party that has temporary possession of the goods, which in this case is Haul-Way Company, the transporter. GR8 Vision is the bailor, the party that has entrusted the goods to be transported, and Ideal Electronics is the consignee, the party that will receive the goods at their intended destination. Therefore, the correct answer is B.

Quiz 23: Personal Property, Bailments, and Insurance

Donovan obtains from Equity Insurance Company a policy that provides that if the parties cannot agree on the amount of a loss covered by the policy, an estimate of the value by an impartial third party can be de-manded. This is​

Marcy owns land in North Dakota under which deposits of oil shale are discovered. Marcy sells the rights to the shale to Oil Mining & Refining Inc. Once the oil in the rock is removed, it will be considered​

Greg obtains from Helpful Insurance Company a policy that provides that Greg has thirty days after a premium's due date to pay it before the policy will be canceled. This is​

Mena applies for a homeowners' insurance policy on her house with Neighbors Insurance Company through Obie, an agent who works for Neighbors. In this transaction, Obie is​

Commerce & Business Insurance, Inc., has a valid reason to cancel a policy issued to DIY Auto & Truck Parts Company. In most states, Commerce & Business could cancel the policy on​

Miranda delivers her bridesmaid's dress to Nina for alterations. Nina promises that the dress will be ready within five business days. Miranda agrees to pay the charge when she picks up the dress. This is​

Anna obtains a business liability insurance policy for her Brew & Bagels Coffee Shop from ChoiceFirst Insurance Company. When an event occurs that gives rise to a claim, each party has a duty to​

Ruby stores her furniture with Stow-Away, Inc., under a contract that limits the dollar amount of its liability. A fire due to Stow-Away's negligence destroys the furniture. The loss is most likely to be imposed on

Nero and Omar agree to buy natural gas to sell to Power Fuel Company and to share storage costs until Power Fuel can take delivery. The gas is commingled so that Nero's cannot be distinguished from Omar's. This is​

GR8 Vision, Inc., hires Haul-Way Company to transport fifty large-screen HDTVs from GR8's warehouse in San Diego to an Ideal Electronics retail store in Phoenix. The bailee is​

Donovan obtains from Equity Insurance Company a policy that provides that if the parties cannot agree on the amount of a loss covered by the policy, an estimate of the value by an impartial third party can be de-manded. This is

Marcy owns land in North Dakota under which deposits of oil shale are discovered. Marcy sells the rights to the shale to Oil Mining & Refining Inc. Once the oil in the rock is removed, it will be considered

Greg obtains from Helpful Insurance Company a policy that provides that Greg has thirty days after a premium's due date to pay it before the policy will be canceled. This is

Mena applies for a homeowners' insurance policy on her house with Neighbors Insurance Company through Obie, an agent who works for Neighbors. In this transaction, Obie is

Commerce & Business Insurance, Inc., has a valid reason to cancel a policy issued to DIY Auto & Truck Parts Company. In most states, Commerce & Business could cancel the policy on

Miranda delivers her bridesmaid's dress to Nina for alterations. Nina promises that the dress will be ready within five business days. Miranda agrees to pay the charge when she picks up the dress. This is

Anna obtains a business liability insurance policy for her Brew & Bagels Coffee Shop from ChoiceFirst Insurance Company. When an event occurs that gives rise to a claim, each party has a duty to

Nero and Omar agree to buy natural gas to sell to Power Fuel Company and to share storage costs until Power Fuel can take delivery. The gas is commingled so that Nero's cannot be distinguished from Omar's. This is

GR8 Vision, Inc., hires Haul-Way Company to transport fifty large-screen HDTVs from GR8's warehouse in San Diego to an Ideal Electronics retail store in Phoenix. The bailee is