Business Law 2
By
Mike Wilson, Esq.
About the Author
Mike Wilson is a freelance writer and college instructor who has
had wide legal and educational experience.
He graduated with his bachelor of arts degree in English from the
University of Kentucky in 1976, and three years later received his
juris doctorate from the same school. He has been a partner in
a law firm and a solo practitioner and has worked in general
and family mediation. He has also been a full-time instructor
in Paralegal Studies at Sullivan College in Kentucky. He was
given the “Teacher of the Year” award in 1997.
Mr. Wilson has had a number of papers published on law-related
topics in both scholarly and popular journals.
All terms mentioned in this text that are known to be trademarks or service
marks have been appropriately capitalized. Use of a term in this text should not be
regarded as affecting the validity of any trademark or service mark.
Copyright © 2015 by Penn Foster, Inc.
All rights reserved. No part of the material protected by this copyright may be
reproduced or utilized in any form or by any means, electronic or mechanical,
including photocopying, recording, or by any information storage and retrieval
system, without permission in writing from the copyright owner.
Requests for permission to make copies of any part of the work should be
mailed to Copyright Permissions, Penn Foster, 925 Oak Street, Scranton,
Pennsylvania 18515.
Printed in the United States of America
1
LESSON ASSIGNMENTS
5
LESSON 1: PROPERTY
7
LESSON 2: SALES AND CONSUMER PROTECTION
21
LESSON 3: NEGOTIABLE INSTRUMENTS
37
LESSON 4: INSURANCE, SECURED
TRANSACTIONS, AND BANKRUPTCY
47
LESSON 5: TORTS AND CRIMES
59
GRADED PROJECT
67
SELF-CHECK ANSWERS
73
Contents
INSTRUCTIONS TO STUDENTS
iii
Welcome to Business Law 2, the second of two courses on
the legal environment of business. This course will complete
the exploration of the legal aspects of business that you
began with Business Law 1. In addition, this course offers
a good overall picture of the American legal system and
how it affects business on a daily basis.
This study guide, based on your textbook, Business Law with
UCC Applications, is divided into five lessons. This study
guide provides your assignments for each lesson, self-checks
and their answers, and your exams. Each lesson has several
assignments. To ensure you understand the material along
the way, self-checks follow each assignment. The answers for
each self-check are at the back of this study guide.
OBJECTIVES
When you complete this course, you’ll be able to
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Explain laws pertaining to ownership and transfer of
property
Describe the general principles involved in wills, trusts,
and estates
Discuss the formation of sales and lease contracts and
the legal issues arising from those types of contracts
Explain the purpose and types of negotiable instruments
and the role they play in business
Explain the rights of secured and unsecured creditors
and the consequences of bankruptcy
Define risk management and discuss the purpose of different types of insurance, including life, property,
automobile, and health
Discuss the principles of torts, the different types of
torts, and criminal law as it relates to business
Instructions
INTRODUCTION
1
YOUR TEXTBOOK
Your textbook for this course, Business Law with UCC
Applications, Thirteenth Edition, by Gordon W. Brown
and Paul A. Sukys, offers a solid introduction to the basic
principles of business law. The study guide will help you
understand the material, but your exams are based on your
textbook and will test your understanding of the material
covered in the textbook.
Your textbook’s table of contents in brief begins on page xvii
and lists all the chapters and topics covered by the textbook.
A more detailed table of contents appears on page xix.
At the end of each chapter, the textbook offers a summary
of the material covered, a list of key terms, questions for
review and discussion, and cases for analysis. Each chapter
also contains a quick quiz with answers at the end of the
chapter. A glossary appears at the end of the textbook.
The appendices at the back of your textbook provide
the U.S. Constitution and excerpts from the Uniform
Commercial Code.
Each chapter offers cases selected to illustrate the legal
principles covered in the textbook. Some cases are fictional,
but many are summaries from actual cases, affording you the
opportunity to review real scenarios that pertain to the material covered in this course. When reading the case
summaries, remember that they involve individuals and businesses facing real problems. The rule of law affects all people
as they engage in the activities of their daily lives, whether
directly or indirectly.
Although the assignments and self-checks may seem like a
lot to digest at first, don’t worry. The purpose of having
several different types of questions is to expose you to more
material, so when you take your exams, you’ll be prepared.
2
Instructions to Students
COURSE MATERIALS
This course includes the following materials:
1. Your textbook, Business Law with UCC Applications,
which contains the assigned readings, including case
summaries and helpful review questions
2. This study guide, which includes
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A list of lesson assignments
Introductions to your lessons with discussion of the
most crucial portions of the textbook, including,
when relevant, new developments in business law
Self-checks after each assignment and answers to
the self-checks
A STUDY PLAN
Think of this study guide as a blueprint for your course.
Read it carefully. Use the following procedures to receive the
maximum benefit from your studies:
1. Read the lesson introduction in the study guide to get an
overview of what you’ll learn from the textbook, as well
as objectives.
2. Read the instructions for the assignment in the study
guide. First read the assignment in your study guide.
Then read the assigned pages in your textbook to grasp
the content in your textbook.
3. After you’ve finished each assignment, answer the
questions provided in the self-check exercise in your
study guide. This will serve as a review of the material
covered in the assignment. Then check your answers
with those given in the back of the study guide. If you
miss any questions, review the material covering those
questions. The self-checks are designed to reveal weak
points that you need to review. Don’t send your answers
to the school.
Instructions to Students
3
4. Complete the online textbook chapter quizzes, as well as
the Quick Quizzes that appear throughout each textbook
chapter that are assigned at the end of each reading
assignment in your study guide. The link to the online
textbook chapter quiz is given at the end of each assignment. Answers to the Quick Quizzes are at the end of
each textbook chapter, and feedback will be provided to
you after you take each online textbook chapter quiz.
5. After you’ve completed the self-check and the quizzes, go
to the next assignment, following the procedure outlined
in steps 2–4.
6. Complete the first exam. After you take your exam, you
can move on to the next lesson.
7. Follow this procedure for all five lessons.
At any time, you can e-mail your instructor for assistance or
information regarding the materials.
Now you’re ready to begin Lesson 1. Good luck!
Remember to regularly check “My Courses” on your student homepage.
Your instructor may post additional resources that you can access to
enhance your learning experience.
4
Instructions to Students
For:
Read in the
study guide:
Read in
the textbook:
Assignment 1
Pages 9–12
Chapter 29
Assignment 3
Pages 17–19
Chapter 31
Assignment 2
Pages 12–16
Examination 060372
Chapter 30
Material in Lesson 1
Lesson 2: Sales and Consumer Protection
For:
Read in the
study guide:
Read in
the textbook:
Assignment 4
Pages 23–27
Chapter 13
Assignment 6
Pages 32–36
Chapter 15
Assignment 5
Pages 28–31
Examination 060373
Chapter 14
Material in Lesson 2
Lesson 3: Negotiable Instruments
For:
Assignment 7
Assignment 8
Assignment 9
Read in the
study guide:
Pages 38–41
Pages 42–43
Pages 44–46
Examination 060374
Read in
the textbook:
Chapter 16
Chapter 17
Chapter 18
Material in Lesson 3
Assignments
Lesson 1: Property
5
Lesson 4: Insurance, Secured Transactions,
and Bankruptcy
For:
Read in the
study guide:
Read in
the textbook:
Assignment 10
Pages 48–51
Chapter 19
Assignment 12
Pages 55–58
Chapter 21
Assignment 11
Pages 52–54
Examination 060375
Lesson 5: Torts and Crimes
For:
Assignment 13
Assignment 14
Read in the
study guide:
Pages 60–62
Pages 62–66
Examination 060376
Chapter 20
Material in Lesson 4
Read in
the textbook:
Chapter 5
Chapter 6
Material in Lesson 5
Graded Project 06038200
Note: To access and complete any of the examinations for this study
guide, click on the appropriate Take Exam icon on your “My Courses”
page. You should not have to enter the examination numbers. These
numbers are for reference only if you have reason to contact Student
Services.
6
Lesson Assignments
INTRODUCTION
Lesson 1
Property
Lesson 1 introduces you to the law of property. You’ll learn
that law divides property into two types: real property and
personal property. You’ll study the law as it pertains to each
type of property. You’ll also study bailment, which is the temporary transfer of personal property to another. You’ll learn
about landlord-tenant law. Finally, you’ll study the law that
governs the transfer of property on death and law concerning
trusts.
OBJECTIVES
When you complete this lesson, you’ll be able to
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Explain ownership of personal property
Describe the law concerning property that has been lost,
misplaced, or abandoned
Discuss laws related to stolen and gifted personal
property
Describe intangible personal property, such as patents,
copyrights, trademarks, and trade secrets
Define bailment and describe types of bailment and how
each type differs in terms of legal duties created
Discuss special bailment situations involving innkeepers,
carriers, and warehousers
Discuss real property and the main types of estates in
real property
Explain how the law on real property treats trees and
vegetation, air rights, subterranean rights, water rights,
and fixtures
Define and give examples of easements
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Explain different types of co-ownership, including joint
tenancy, tenancy in common, tenancy by the entirety,
community property, and tenancy in partnership
Explain the methods by which title to real property is
acquired, including the differences in acquiring property
by deed, reason of death, or adverse possession
Discuss how zoning laws affect property rights
Explain eminent domain and its use by government to
acquire real property for a public purpose
Define the relationship between a landlord and a tenant,
and describe a landlord’s duties and a tenant’s duties
Differentiate among leasing, licensing, and lodging
Explain the features of different types of leasehold
interests, including tenancy at will, tenancy for years,
periodic tenancy, and tenancy at sufferance
Discuss common terms appearing in a lease agreement
and the process of eviction
Explain probate law and how it may relate to business
Discuss advance directives and what happens to
property when a person dies without a will
Explain laws that pertain to wills, laws that protect
the interest of spouses or children in the estates of
decedents, how wills are executed and changed, and
grounds for contesting a will
Discuss problems arising when people die simultaneously and what’s involved in settling an estate
Discuss the law of trusts and common types of trusts
Business Law 2
ASSIGNMENT 1
Read this introduction to Assignment 1. Then read Chapter 29
of your textbook.
Chapter 29 introduces you to personal property and the different ways to own personal property. When an individual
owns property, that property is owned in severalty. When
more than one person owns property, that property is owned
in cotenancy. Cotenants can own as tenants in common or as
joint tenants (also called tenants with right of survivorship).
Joint tenants are distinguished from tenants in common in
that when one joint tenant dies, his or her share passes to
the survivor automatically.
Nine states recognize a form of ownership called community
property, in which property (except a gift or inheritance)
acquired by either spouse during the marriage belongs to
both spouses equally. Spouses may bequeath their share of
community property by will to whomever they choose, but if
they die without a will, the property passes by survivorship to
the surviving spouse.
There are special rules for lost and abandoned property.
Someone who finds lost property becomes the owner after
making reasonable but unsuccessful efforts to find the original owner. When property is stolen, a thief doesn’t thereby
acquire title and is incapable of transferring title to anyone.
Abandoned property, if proven abandoned by clear and convincing evidence, belongs to whoever finds it. The right to
abandoned shipwrecks outside the boundaries of a state is
governed by the law of finds or the law of salvage. If an
abandoned shipwreck is found in the submerged land of any
state, the Abandoned Shipwreck Act of 1987 applies rather
than the law of finds or the law of salvage.
Personal property can be gifted. The donor is the person
making the gift, and the donee is the person receiving the
gift. The gift is complete if the donor intended to make a gift
and delivered the gift, and the donee accepted the gift.
The Uniform Transfers to Minors Act establishes procedures
to protect the rights of minors who are donees. Minors are
assured that gifts to them will be either used for their benefit
Lesson 1
9
or turned over to them when they become adults. The IRS
has special kiddie tax rules that determine how much of the
income is taxed to the child and how much to the parent.
Intellectual property is a kind of intangible property. Patents
give inventors exclusive rights, for a time, to processes,
machines, chemical formulas, and articles of manufacture.
Copyrights protect the work of authors, artists, musicians,
and software designers from unauthorized reproduction,
republication, or sale. The owner of a trademark can register
that trademark and thereby protect the exclusive right to use
that trademark. However, companies may lose trademark
protection if the trademark becomes a popular generic term
by use of a large segment of the public.
Bailment involves transfer of possession of personal property
temporarily with the intent that it be returned later. The
bailor is the person transferring possession. The bailee is
the person temporarily receiving possession. Bailments are
distinguished by whom they benefit. Bailment could benefit
only the bailor—for example, asking a friend to mail you a
package as a favor. Bailment could benefit only the bailee—
for example, your neighbor borrowing your wheelbarrow.
Mutual-benefit bailments benefit both parties—for example,
leaving your clothes at the dry cleaners (you benefit from
having your clothes cleaned, and the cleaner benefits by
receiving payment for the service).
Traditionally the type of care a bailee had to exercise with
regard to the property transferred depended on the type of
bailment. If the bailment benefited only the bailee, great care
was required. If it benefited only the bailor, slight care was
required. If it benefited both, ordinary care was required.
Today, many jurisdictions simply apply a reasonable care
standard to all types of bailments.
Ordinarily, a plaintiff claiming property damage caused by
negligence has the burden to prove negligence. However,
when property in the possession of a bailee is damaged, the
burden of proof is shifted to the bailee to prove that he or she
wasn’t negligent.
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Business Law 2
Certain types of bailees have special additional duties. Under
common law, innkeepers have a duty to provide accommodations if they’re available and serve as insurers for their
guests’ property. Innkeepers must use reasonable care in
protecting guests from harm, must respect guests’ privacy,
and must not discriminate based on race, creed, color,
sex,
or ethnicity, pursuant to the Civil Rights Act of 1964.
Innkeepers may, however, turn away those whose presence
might endanger the other guests.
Common carriers also are a special type of bailee. With certain exceptions, common carriers, whether negligent or not,
are insurers of all goods accepted for shipment. They’re not
responsible for acts of god, acts of public enemies, acts of
public authorities, acts of the shipper, or damages caused by
the inherent nature of the item being shipped.
Warehousers are also a type of bailee. A public warehouse is
a warehouse that any member of the public may pay to store
goods in. A private warehouse is a warehouse not open to the
public. Warehousers must use reasonable care and are liable
for damage caused by failure to exercise reasonable care.
Warehousers who aren’t paid have a lien on goods stored in
the warehouse and may retain possession of them until paid.
The lien covers the storage charge and other charges, such
as transportation, insurance, and expenses incurred to preserve the goods. The lien is lost if the warehouser voluntarily
gives up possession of the goods or wrongfully fails to deliver
possession.
Review and Application
When you finish reading the chapter,
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Answer the Quick Quiz questions on pages 638 and 649.
Check your answers on page 652. These quizzes will not
be scored so don’t send them to the school; they’re for
you to gauge your progress. If there are any questions
you don’t understand, refer back to the textbook and
reread the assignment.
Lesson 1
11
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Complete the online textbook chapter quiz at
londonessays.com
udent_view0/chapter29/chapter_quiz.html. Feedback on
your answers will be provided once you finish the quiz
and click the Submit Answers button.
Take a moment to complete Self-Check 1. You can check
your answers by turning to the back of this study guide.
If you have trouble with any of the material, review those
sections in your text.
Self-Check 1
At the end of each section of Business Law 2, you’ll be asked to pause and check
your understanding of what you’ve just read by completing a “Self-Check” exercise.
Answering these questions will help you review what you’ve studied so far. Please
complete Self-Check 1 now.
Answer the “Questions for Review and Discussion” on page 650 of your textbook.
Check your answers with those on page 73.
ASSIGNMENT 2
Read this introduction to Assignment 2. Then read Chapter 30
of your textbook.
Chapter 30 introduces you to real property. Real property is
land and things permanently attached to land. Real property
includes things on the surface, such as buildings, fences,
and trees; things below the surface, such as minerals; and
the airspace above the surface. Landowners own the airspace
as high as they can effectively possess or reasonably control.
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Business Law 2
Trees are a kind of vegetation, but not all vegetation is real
property. Trees, shrubs, vineyards, and perennial crops are
treated as real property, but annual crops are personal
property.
Fixtures are items that were formerly personal property but
that have become attached to real property. Whether an item
is a fixture depends on various factors a court will consider.
Those factors include whether the item has been temporarily
or permanently installed, whether the item has been adapted
to the intended use of the real property, and the intent of the
party at the time the item was attached to the real property.
Easements are rights to use property for a limited purpose—
for example, an easement for ingress and egress, which
means a right to cross someone else’s property to go into
and come out of your own property. An easement can be
created by grant (expressly conveying the easement to someone), reservation (retaining an easement right in property
one has outconveyed), or implication (implied under the
circumstances).
In law, estate is used in various ways. One use of estate is to
describe the degree of ownership of real property. A leasehold
estate gives one the right to occupy property as a tenan. A
freehold estate is a greater degree of ownership and consists
primarily of two types: a life estate, which is the right to own
for life, and a fee simple, which is an absolute and unlimited
ownership. Fee simple estates pass on death to whoever
takes the decedent’s estate.
Dower for widows and curtesy for widowers are common-law
rights to a life estate in one-third of the real estate owned by
the spouse during the marriage. Many states have eliminated
or modified dower and curtesy rights.
Tenancy by the entirety may be held only by a husband and a
wife. On the death of one, his or her interest passes to the
surviving spouse. A tenancy in partnership is another type of
ownership that exists in some states.
Ownership of real property may be acquired in three ways.
First, ownership may be acquired by deed. The conveyance
may be a sale or a gift. Different types of deeds can be distinguished by the extent that title is warranted by the grantor.
Lesson 1
13
These types include general warranty deeds, special warranty
deeds, bargain-and-sale deeds, and quitclaim deeds. Second,
ownership may be acquired by reason of death, and the property
may pass by will or by descent in the case of intestacy. Third,
ownership may be acquired by adverse possession, which occurs
when a nonowner, for a period set by applicable state statutes,
continuously, openly, and without permission of the owner possesses property. After the requisite period has run, the possessor
becomes the new owner.
Zoning is governmental regulation of the use of property.
Properties are classified or zoned into various categories, and
only certain types of use are permitted in each zone. If one has
established a use that was permitted at the time, but due to
changes in zoning is no longer permitted, the use is called a nonconforming use and the owner may continue such use. A variance
is permission granted by zoning authorities to engage in a use
not normally permitted under applicable zoning ordinances.
Eminent domain is the power government has to take private
property for a public purpose. An example would be taking land
to build a road or a public park. The government must pay fair
value for the land it takes.
A leasehold is an interest in real estate, but the landlordtenant relationship also is a contract in which the owner of the
real estate allows the tenant to have possession for a period in
exchange for consideration. To create the relationship, five things
are necessary: (1) consent of the landlord to the occupancy, (2)
transfer of possession and control to the tenant in subordination
to the landlord’s rights, (3) a landlord’s right to return of the
property at the end of the lease, which is called a reversion, (4)
creation of an ownership interest in the tenant called a leasehold,
and (5) satisfaction of all the other elements necessary to create a
contract (mutual assent, competent parties, consideration and
lawful purpose).
A license gives permission to someone to perform acts on property that would otherwise be trespass but doesn’t confer a
possessory estate and is usually not transferable. It doesn’t
require consideration and need not delineate the space to be
occupied or used. In contrast, a lease gives exclusive possession,
describes the property leased, states the term of the lease and
rent to be paid, and, in some cases, may have to
14
Business Law 2
be in writing. A lease also is different from lodging. A lodger is a
type of licensee with the right to use property but not to possess
it.
There are four types of tenancy. A tenancy for years is an estate
for a fixed time period—it may be less than a year. A periodic tenancy is a fixed-period tenancy that continues for successive
periods until one of the parties chooses to terminate the arrangement. A tenancy at will is a tenancy for which no term has been
fixed. Tenancy at sufferance is a way of describing someone who
wrongfully remains in possession after his or her tenancy expires.
To create a lease, the parties must define the bounds of the property being leased, identify the term of the lease, and agree on a
definite rent.
A tenant may transfer the right to occupy property by assignment
or by sublease. Assignment is a transfer of the tenant’s rights
under the lease. A sublease is a new lease between the tenant and
the sublessee. If the transfer of the right to occupy property is for
less than the remainder of the term, or there’s any sort of reversion right retained by the tenant, the arrangement will be treated
as a sublease. Leases may require that the landlord’s approval be
obtained before assignment or subleasing may occur.
When dwellings are rented, most states imply a warranty by the
landlord that the property is habitable.
Landlords have certain duties under leases. These duties include
a duty to refrain from violating laws against
discrimination, to make repairs necessary to maintain the habitability of the premises, and to deliver peaceful possession or quiet
enjoyment. Landlords may not commingle security deposits and
must return the balance of any security deposit to the tenant at
the end of the lease.
Tenants also have duties, including paying the rent; complying
with any conditions and covenants in the lease, such as keeping
the property clean; not committing waste, which is damaging the
property being rented; and returning to the landlord all fixtures
(other than trade fixtures) added by the tenant during the term of
the lease.
Landlords are responsible for harm caused by defects in common
areas if the landlord was negligent. Tenants are responsible for
harm caused by defects in areas controlled by the tenant.
Lesson 1
15
Landlords have the right to evict tenants who violate the
terms of the lease. Some states permit landlords to enter
wrongfully held premises and retake possession if it can be
done peacefully. The common law name for a lawsuit brought
to evict is ejectment. Unlawful detainer is a legal proceeding
with the same purpose but accomplishes its objective more
quickly. Strict notice requirements apply.
Review and Application
When you finish reading the chapter,
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Answer the Quick Quiz questions on pages 658, 661,
666, 671, and 674. Check your answers on page 677.
These quizzes will not be scored so don’t send them to
the school; they’re for you to gauge your progress. If
there are any questions you don’t understand, refer back
to the textbook and reread the assignment.
Complete the online textbook chapter quiz at
londonessays.com
udent_view0/chapter30/chapter_quiz.html. Feedback on
your answers will be provided once you finish the quiz
and click the Submit Answers button.
Take a moment to complete Self-Check 2. You can check
your answers by turning to the back of this study guide.
If you have trouble with any of the material, review those
sections in your text.
Self-Check 2
Answer the “Questions for Review and Discussion” on page 676 of your textbook.
Check your answers with those on page 75.
16
Business Law 2
ASSIGNMENT 3
Read this introduction to Assignment 3. Then read Chapter 31
of your textbook.
Chapter 31 introduces you to will, trusts, and estates. The
text will explain probate law and how it may relate to business. Probate is the court supervised administration of a
decedent’s estate. Each state’s law is different on the procedures involved, so you’ll need to check your state’s law when
addressing probate matters. A decedent’s property is distributed according to the instructions in the decedent’s will, or if
there’s no will, according to the law of intestate succession.
Probate is relevant to business entities in a variety of ways.
All businesses are owned by people in one way or another,
and their interest in a business—whether sole proprietorship,
partnership, or stock in a corporation—passes on death to
someone. In addition, businesses who are creditors may have
claims against estates for business-related debts. Also, the
death of a partner dissolves a partnership, absent an agreement to the contrary, and the deceased partner’s estate has
the right to be paid the value of the partner’s share or have
the partnership liquidated and be paid from the net proceeds.
Advance medical directives are written instructions for future
medical care in the event the patient becomes unable to give
such instructions. The most common use of advance medical
directives is a living will, which expresses a person’s wishes
regarding whether he or she, if in a terminal condition or persistent vegetative state, wishes to be allowed to die a natural
death rather than being kept alive by artificial means.
Another way to accomplish these purposes is to execute a
health care proxy, which authorizes another person to make
medical decisions in the event of incapacity.
A durable power of attorney is a power of attorney that’s not
affected by the disability of the principal.
A will, also called a last will and testament, is a document
that governs transfer of one’s property at death. A person
who dies with a will is testate, a person who dies without a
will dies intestate. A person who makes a will is a testator.
Any competent adult may make a will. Competency to make a
Lesson 1
17
will requires that the testator generally knows the nature and
extent of the property he or she owns, knows who would be
the natural recipients of the estate, is free from delusions
that might influence the terms of the will, and intends to
make a will.
State laws differ on the formal requirements for executing a
will, but in general, it must be in writing, signed by the testator, and witnessed in the testator’s presence by the number
of witnesses required under state law.
State laws create various types of protection for the family
when a decedent dies. These include family allowances, the
homestead exemption, exempt property, dower and courtesy,
and the right of a surviving spouse to elect against the will
and take a forced share of the estate. These devices are
described in your text.
In general, children may be omitted from a will. Omitted
children must prove they were mistakenly rather than intentionally omitted to receive a share of the estate. To avoid
confusion about whether the omission was a mistake, a
testator should state specifically that a child is being omitted
intentionally. To the extent children have rights in an estate,
adopted children are treated the same as children of the
body.
Sometimes people make wills and change their minds. Wills
may be revoked by burning, tearing, canceling, or obliterating
the will with intent to revoke. They also may be revoked by
executing another will. In some states, marriage, divorce, or
annulment may revoke a will in whole or in part.
When people die owning assets, their estate must be probated. Heirs are notified, and an executor or administrator
is appointed to settle the estate. Settling the estate involves
collecting the assets, paying debts, paying taxes, and distributing what remains according to the will or the law of
intestate succession if the person dies without a will.
A trust divides ownership between a trustee, who holds legal
title, and a beneficiary, who holds equitable or beneficial title.
This allows the trustee to control the property for the benefit
of the beneficiary.
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Business Law 2
Review and Application
When you finish reading the chapter,
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Answer the Quick Quiz questions on pages 680, 689,
692, and 694. Check your answers on page 697. These
quizzes will not be scored so don’t send them to the
school; they’re for you to gauge your progress. If there
are any questions you don’t understand, refer back to
the textbook and reread the assignment.
Complete the online textbook chapter quiz at
londonessays.com
udent_view0/chapter31/chapter_quiz.html. Feedback on
your answers will be provided once you finish the quiz
and click the Submit Answers button.
Take a moment to complete Self-Check 3. You can check
your answers by turning to the back of this study guide.
If you have trouble with any of the material, review those
sections in your text.
Then review the material you’ve learned in this study guide
and the assigned pages in your textbook for Assignments
1–3. When you’re sure that you completely understand the
information presented in those assi