Business Law Flashcards
Are contracts for services governed by common law or UCC?
Common Law
Are contacts to sell good and real estate governed by common law or UCC?
UCC
What is a unilateral contact?
Is a promise in exchange for performance by only one party. The unilateral contract can only be accepted by performing an act.
What does the parol evidence rule apply to?
It applies to prior or contemporaneous oral agreements that contradict the terms of final written agreements.
When are contract generally assignable?
Unless the terms prohibit assignment, or the rights are personable to the person rendering them, or the assignment will materially increase or alter the risk or duties of the obligor, contract rights are generally assignable.
What type of contracts cannot be assigned without consent of the other party to the contract?
Assignment of personal contracts are not permitted because we hire individuals or particular companies for personal services; they are not generic like vehicles, real estate, and business.
What duty is owed from the principal to an agent?
Duty to indemnify.
When is a principal liable for a contract?
A principal, whether disclosed, undisclosed, or partially disclosed, will be liable for the contracts of his agent if these agreements are within the scope of the agent’s express, implied, or apparent authority.
When is an agent liable for a contract?
Acting on behalf of an undisclosed principal, remains personally liable for performance of the contract even though the agreement was within the agent’s scope of authority.
In regards to a co-surety, what is the definition of a contribution?
Contribution is a right one co-surety has against another. There cannon be right between sureties if there is only a single surety.
What would be a viable defense to successfully limit the surety liability to a creditor?
The incapacity of the surety. When a surety losses capacity, the surety can usually avoid liability.
Does a surety have a right to compel the creditor to collect from the principal debtor and to proceed against the principal collateral?
No. A surety is primarily liable on a debt upon debtor’s default. If the creditor wishes to collect from the suety, the creditor may do so.
What are the requirements to create an enforceable security interest?
A security agreement must exist, the secured party must be given value, the debtor must have right in the collateral.
What requirements are needed for the security interest to attach?
Underlying debt/obligation, either a security agreement or possession of the collateral by the creditor, debtor must have interest in the property.
At what point is a security interest perfected?
With the filing of the financing statements, the security was perfected because it also attached prior.
What information needs to be included in the filing of financing statement?
Description of the collateral, the name of the debtor, and the address of the debtor.
What requirements are needed for an involuntary bankruptcy petition under ch. 7.
An involuntary petition may succeed if the aggregate unsecured claims of the petitioners equals or exceeds $15,775.
What is the order of priority of claims to be paid in a bankruptcy?
- Administrative expense
- Unpaid wages
- unpaid contribution to employee benefits
- Taxes
- General creditors
Can corporations and partnerships go through a chapter 7 liquidation?
yes, but they do not qualify for a general discharge from all remaining debts as natural persons do.
What is a prospectus, regarding the securities act of 1933?
Describes the issuing corporation, risks, and type of security being sold.
What is preliminary prospectus, permitted under the SEC regulations, known as?
Red herring prospectus
What is a tombstone advertisement?
Makes known the availability of a prospectus.
What must be proven by a purchaser of a security under Section 11 of the 1933 Act?
- Material misstatement
- They can trace the shares to the registration statement
- They suffered damages
What does rule 147A require?
Rule 147A requires only that all purchasers be state residents.
