2. Business Law Flashcards
Parol evidence rule
rule excludes evidence of prior or contemporaneous oral agreements which would vary OR contradict the written contract
If oral agreement happened first, then written contract with different obligations was signed, then the prior oral agreement cannot be used in suit against the other party.
Generally, an agency relationship is terminated by operation of law when
Principals Dies
Principal is declared insane or incapacitated
Agent does not have valid required license to carry out necessary duties.
Section 179 Deduction
Expense up to $1,160,000 of eligible property. However, if you spend more than $2,890,000 on qualifying property that year, your deduction will be reduced on a dollar-for-dollar basis.
Limited to net income before deduction for the year
For example, if your business purchases $3,000,000 of property, you’ll have gone over the cap by $110,000. So your maximum Section 179 expense will be $1,050,000 ($1,160,000 minus $110,000).
Fraudulent Conveyence
When a debtor tries to transfer assets out of reach of the creditors
A debtor’s remaining in possession of property transferred, a debtor’s retention of an equitable benefit in property conveyed, and the fact that a conveyance occurred in secret are all indicators of a fraudulent conveyance.
Partnership Dissassociation
Third parties must be made aware of dissolution in order for any future contracts to be voidable.
Otherwise, all the partners individually will be jointly liable.
If partner leaves unlawfully, still must honor it and pay out interest - but can retain assets and keep name the same.
Warranty Rules
Can NOT disclaim any personal injury liability.
Involuntary Petition Restrictions for Bankruptcy
NOT allowed: Farmers, banks, insurance companies, charitable orgs, individuals owing less than 16,750
Adjudicated Incompetent: effect on contracts
Subsequent to adjudication, VOID
Prior to official adjudication, VOIDABLE
Dissolution of Partnership
Completed Time period
Completed event from contract
Unanimous vote
General Partner departure
Illegality
Court Ruling
Assignable Contract
a legal agreement that allows one party to transfer their rights, obligations, and responsibilities to another party before the contract expires. The party giving away the contract is called the assignor, and the party receiving it is called the assignee. The assignee is then entitled to all the benefits of the contract, but must also fulfill any obligations or requirements
Express Warranty
statement made by the seller that become the basis of the bargain. An affirmation or promise made by seller that relates to goods that attaches the basis of the sale such that the goods will conform to the promises.
Partnership Basis
Adjusted basis of property given is the basis for the partnership (inside). If there is a liability on the property, then the OUTSIDE basis is reduced by their share of the liability.
Discharge of Contracts by operation of law
Death or incapacity of the party obligated to perform a personal service contract
Impossibility or Destruction of subject matter
The illegality of the services to be performed
Discharge in bankruptcy
Accord, novation are not under the operation of law.
Power of Attorney
A power of attorney may be either “special” or “general” in nature.
A “special” power of attorney permits the agent to do specified acts only. Therefore, a power of attorney can be written in such a way as to limit authority to specific transactions.
A power of attorney is effective when signed by the person transferring power, need NOT by both.
A power of attorney may be established for a period of indefinite duration.
A power of attorney expires upon the death of the person transferring power.
Attachment of Security Interest
Occurs when:
Value is given by the secured party
Debtor attains right to collateral
signed security agreement
