Business Law (R5-R6) Flashcards
Common law
derived from the courts - contracts involving real estate, insruance, services, and employment (RISE) are governed by the common law
UCC
Uniform Commercial Code Sales Article - it is a statutory law that governs laws for sale of goods (anything moveable)
FRAUD
MAIDS - Misrep of material fact, scienter, intent to induce reliance, actual reliance, and damages
to be effective, consideration for a contract must be
legally sufficient
unilateral control
only one promise is made by the offeror given in exchange for performance - contract not formed until performance is completed
quasi contract
not a contract at all, its a remedy that allows a plaintiff to recover a benefit unjustly conferred upon the defendant - a remedy to prevent unjust enrichment
bilateral contract
two promises, contract is formed as soon as promises are exchanged
acceptance
only the person to whom offer was made can accept - accept in any way unless specified
mail box rule
contract is formed on dispatch even if accepted letter is never recieved
opting out of mailbox rule
means that it is not accepted until received
considering (pricing of contracts) has two elements
something of legal value given by each party and must be a bargained for exchange
contract is void
it is not valid and cannot be enforced from the beginning - they lack elements of a legal contract
formation defenses making a contract void:
fraud in execution, physical duress, illegality, adjudicated mentally incompetent.
contract voidable
contract is initially valid and enforceable, but can be declared invalid if taken to court.
examples of formation defenses for voidable contract
fraud in inducement, innocent misrep, economic durress, undue influence, mutual mistake, unilateral mistake, minority, or intoxicaton
statute of frauds : requires contract in writing
- marriage
- not performed within a year
- involving interests in land
- contracts by executors
- for sale of goods over $500
- contracted to act as a surety (to pay debt of another)
the UCC imposes good faith on merchants by
the duty to observe reasonable commercial standards
under the UCC (article 2) a written contract must contain indication of what
the quantity of goods being sold
commercial implacability
a contract will be discharged for implacability if it is extremely more burdensome than anticipated because of an unforeseen event happening.
warranty of title
guarantee from the seller that the goods are delivered free from all liens of which buyer is unaware
implied warranty of fitness
the seller knows the particular purpose for which the buyer will use the goods and knows the buyer is relying on the sellers judgement to select suitable goods
under the UCC what is available to the buyer when the seller breaches contract (anticipatory breach of contract)
demand assurances of performance or cancel the contract. there is no right to punitive damages under the law
under the UCC, what is available to the seller when the buyer materially breaches a sales contract
right to cancel the contract and right to recover damages
who cannot file CH 7 bankruptcy vs 11
RIBS: railroads, savings institutions, insurance companies, banks and small business investment companies BIBS: (railroads can for 11)
what property can be acquired after filing a bankruptcy estate
The estate includes income generated from estate property and property the debtor receives from a bequest, devise, inheritances, property settlement, divorce, or beneficial interest in life insurance within 180 days after filing of the petition.
who cannot be petitioned involuntarily into bankruptcy.
farmers and nonprofits
4 types of warranties
express, implied of title, implied of merchantability, and implied of fitness for particular purpose
express
how: by fact, promise, or descriptions
by whom: any seller
disclaimer: cannot disclaim
implied warranty of title
how: by sale of goods
who: any seller
disclaimer: by specific language or circumstances showing seller does not claim title
implied warranty of merchantability
how: by sale of goods of the kinds
who: merchant only
disclaimer: by disclaimer mentioning “merchantability”
void examples of defense
fraud in the execution, physical duress, illegality, or adjudicated incompetency
voidable examples of defense
fraud in the inducement, innocent misrepresentation, economic duress, undue influence, mutual mistake, unilateral mistake, minority, or intoxication
accord
an agreement to substitute one performance for another and satisfaction is the execution of the accord - this discharges the original duty
substituted contract
similar to an accord but the duties under the original are discharged immediately
novation
available as a defense to a party who has been released from a contract so it occurs when a new contract substitutes a new party for an old party in an existing contract (but all parties must agree to the release)
