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Business Law 1 Flashcards

1
Q

What are common laws?

When are they used for?

A

Reusing laws for similar situations

Real estate, insurance, services or employment

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2
Q

Three parts to a contract

A

Offer and acceptances

Exchange of consideration

no defenses

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3
Q

What is a Quasi-Contract?

A

Remedy for unenforceable contracts. Getting back consideration for incomplete contract

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4
Q

What terms must be presented to have a complete offer under UCC and COMMON LAW?

A

UCC: Quantity (sale of goods)

Common Law: Offeree, price, time, quantity, nature of work

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5
Q

How can you revoke an offer

How can you prevent an offeror from revoking an offer?

A

Communicate or implued through conduct like selling it to someone else

Offeror can revoke at any time even if they gave a set time to accept. The offeree can buy time (option) to prevent revocation. Just giving money saves the spot

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6
Q

When are rejections and acceptances effective?

A

Rejection: when received

Acceptance: When sent

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7
Q

How to reject offer? (3)

A

communicate

counter

DIDI - death incompetence illegal destroyed

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8
Q

Is an agreement to give a gift enforcable?

Exception

A

No

Charity (if they rely on it)

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9
Q

Five main reasons that a contract is VOID

A
  • Subject matter is destroyed
  • Fraud in the execution
  • Duress (physical)
  • Illegality
  • Incompetence
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10
Q

Statute of limitation under common law and UCC

A

Common law: 4-6 years from the date of breach

UCC: 4 years

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11
Q

Statue of Fraud: contracts required in writing

A
  • M - Marriage as considerations
  • Y - Over a Year agreement
  • L - Land (house, warehouse, lease or rentals or sales)
  • E - Executor agreement to pay estate debts out of personal funds
  • G - Sale of goods for more than $500
  • S - Surety (pay debt of another)
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12
Q

Is a contract void if the recipient dies?

A

No, an estate would take over as recipient

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13
Q

What is Accord and Satisfactions

A

When a new agreement is presented to replace an old one, the original agreement is discharged upon completion of new agreement (parties may still sue in regards to original agreement until new agreement is complete)

LIKE NOVATION BUT FOR ACTS

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14
Q

What is a novation?

A

Changing parties in an agreement

LIKE ACCORD AND SAT. BUT FOR PARTIES

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15
Q

What is Parole Evidence

A

Prohibited information made on or before agreement date (judicial purposes)

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16
Q

Difference in Remedy rules for Common Law and UCC

A

UCC: Have to perform exactly

Common law: If things arent done rihgt there may be additional payments for the difference for services (specific performance for other)

17
Q
  • Liquidated Damages
  • Punitive damages
  • Rescission - exception
A
  • Damages imposed for break in contract, must be reasonable
  • Punishment for fraud
  • When both parties in a contract go back to before they agreed to the contract, unless if their has been substantial performance (common law)
18
Q

FOB RULES

A

FOB shipment: buyer is in risk of loss until the carriers delivers the goods (FOB seller)

FOB destination: the seller is in risk of loss until the carrier delivers the goods
(FOB buyer

19
Q

Implied Warranties

A
  • Express warranty: Oral & Written (Something making the buyer wanted to buy)
  • Implied Warranty of Title (seller owns gods and has right to sell)
  • Implied warranty of merchantability (Goods must fit ordinary purpose)
  • Warranty of fitness (Fit buyers purpose)
20
Q

Three parties in agency

A

Principal, Agent, Third Party

21
Q

AGENCY rules for principal and agent:
- capacity?

  • Age limit?
  • consideration
A

Prinicpal needs to have mental capcity but agent doesn’t

principal can’t be a minor but agent can be

No consideration is needed for this type of relationship

22
Q

Duties that an agent owes to a principal

A

LORA

Loyalty, obedience, reasonable care, duty of account

23
Q

what is an agency coupled with an interest?

A

When someone defaults on a loan and agrees to transfer duties to debtor (making the debtor an agent)

24
Q

Define:
- Actual Authority
- Apparent Authority
- Ratification

A
  1. Agent has the power and the right to engage in the contract on behalf of the principal
  2. Agent has power to bind principal to third parties does not have the right to do it
  3. Agent has no power or right, but principal chooses to be bound by unauthorized act, BUT PRINCIPAL ACCEPTS
25
Q

When is actual authority terminated?

A
  1. fired or quit (may require pay of monetary damages)
  2. accomplishment of agreement
  3. by law (“BIDLID”)
    - principal Bankruptcy discharge
    - Incapacity of principal
    - Death
    - failure of License
    - Illegal
    - Destruction
26
Q

main different between apparent and actual authority

A

Apparent: Third party beleives agent has power

Actual: Agent beleives agent has power

*both power to bind the principal

27
Q

Termination of Apparent Authority and exception

A
  • Termination of authority must be commincated by principal to third parties
  • terminations by law don’t require third party notices (BIDLID)
28
Q

Define Estoppel …

A

Estoppel to deny existence of agency, this is when third parties believe someone is your agent and you don’t correct it. Now you can’t deny if they act in your behalf as an agent

29
Q

When are principals liable for torts committed by the agent?

A

When the agent was an employee performing within the scope of employment (Respondeat Superior) but this could still hold the agent liability also

30
Q

WHo is directly liable for some elses debts and who is only liable if the debtor defaul ts?

A
  • Surety
  • Guarantor
31
Q

Legal options when debtor defualts on loan with no collateral, Surety or guarantor

A

Lien: on property of debtor (a claim on the asset to back up debt, kind of like a collateral but imposed by the court)

Garnishment: Garnish (obtain) debtors property in the hands of a third party

Writ of seizure and sale where the court seizes the debtors property and allows the creditor to sell it

32
Q

What is the homestead exemption?

A

Some states allow for debtors the right not to be seized if a creditor wants to take their primary house

33
Q

Describe the steps in a typical Secured transactions

A
  1. DEBT: Creditor loans money to debtor
  2. ATTACHMENT: Debtor places “personal property or fixtures” as collateral for the creditor to sell in the case of debtor default
  3. PERFECTION: Creditor makes sure to have first dibs on the collateral (letting third parties know that you have first rights to the collateral property)
34
Q

What is a PMSI creditor?

PMSI Creditor advantage in a secured transaction?

A
  • “Purchase money security interest” gives the creditor right to the financed item as collateral
  • They take priority if the debtor defualts (ex. Mercedes has right to seize car and sell it if you defualt on thier loan) (same applies if you use a bank directly)
35
Q

five ways to perfect attachments in secured transactions

A
  • Filing
  • Possession
  • control
  • Automatic Perfection
  • Temporary Perfection
36
Q

Proceeds from the sale of collateral

A
  1. Pay any expenses associated with the sale of collateral like REPOSITION expense
  2. Pay off any creditors wiht a security interest in the collateral in order of priority
  3. Pay the debtor any surplus amounts received from the proceeds

REG (6 decks)

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