Fact Pattern 30-1A (Questions A8-A9 Apply)

question 21

Multiple Choice

Fact Pattern 30-1A (Questions A8-A9 apply)
Stacy sells her all-terrain vehicle (ATV) to her brother Terrill for $1,000.Twelve days later,Stacy files a petition in bankruptcy for relief through a liquidation.
-Refer to Fact Pattern 30-1A.Regarding the sale of the ATV,the trustee may

• A)cancel it as a fraudulent transfer.
• B)cancel it as a voidable preference.
• C)not cancel it because it is a sale,not a gift.
• D)not cancel it,but can sue Terrill's estate for the return of the $1,000.

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Definitions:

Misrepresentation

Misrepresentation occurs when a false statement of fact is made that induces another party to enter into a contract, potentially leading to legal consequences.

Third Restatement of Torts

An influential set of principles released by the American Law Institute, providing a comprehensive update and clarification on tort law in the United States.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another, often in financial matters or trusteeship.

Fraud

is the act of gaining a financial or personal advantage over others through deceit or trickery, often considered a criminal offense.