Reference no: EM133293186

1. According to the Uniform Commercial Code (UCC) classifications of collateral, general intangibles include __________.

patents, copyrights, software, and franchises

stocks, bonds, and commodity contracts

checks, notes, drafts, and certificates of deposit

bills of lading, dock warrants, dock receipts, and warehouse receipts

2. Which of the following regarding the distribution of the debtor's estate is incorrect?

Priority claims are paid after secured creditors realize on their collateral.

Each class must be paid in full before the next class is entitled to receive anything.

Payments are made to the ten (10) priority classes, in order, to the extent there are funds available.

To the extent there are insufficient funds to satisfy all the creditors within a class, each class member receives an equal share of his claim.

3. What is the liability faced by an insurer if it breaches its policy obligations by means of a good faith but erroneous denial of coverage?

Compensatory damages

Punitive damages

Special damages

Liquidated damages

4. Most commercial contracts and promissory notes today that are signed by multiple parties provide for the parties to be "__________" liable, thus making the surety relationship the predominate one.

jointly and severally

secondarily and non-exclusively

conditionally and severally

collaterally and non-exclusively

5. Which of the following is essentially an installment contract for the purchase of land?

The acceleration clause

The UCC-1 financing statement

The revolving credit contract

The land contract

6. Mako Marina, LLC (Mako) sells and services boat motors. On April 1, 2020, Mako financed the purchase of its entire inventory with Shark Finance Company, LLC (Shark). Shark required Mako to execute a security agreement and financing statement covering the inventory and proceeds of sale. On April 14, 2020, Shark filed the financing statement pursuant to the Uniform Commercial Code (UCC). On April 27, 2020, Mako sold one of the motors to Jeremy for use in his charter business. Jeremy, who had once worked for Mako, knew that Mako regularly financed its inventory with Shark. Mako has defaulted on its obligations to Shark. The motor purchased by Jeremy is __________.

subject to Shark's security interest because he should have considered that Shark financed the inventory purchased by Mako

subject to Shark's security interest because he purchased the motor for commercial use

not subject to Shark's security interest because he is regarded as a buyer in the ordinary course of Mako's business

not subject to Shark's security interest because Shark failed to file the financing statement until more than ten (10) days after April 1, 2020.