Chapter 4: Commercial Law Flashcards
1
Q
Sales Contracts
A
Types of sales contracts:
- Unilateral/Bilateral
- Sale on approval
- Sale to a customer who wants to try the goods before buying them
- Sale on return
- Sale to a person who intends to resell the goods but who has the right to return them if they do not sell
- Auction sales
- Public offering of goods for sale
2
Q
Formation of Sales Contracts
A
- Offer
- Acceptance
- Consideration
3
Q
Excuses for Nonperformance
A
- Loss of identified goods
- Substituted performance
- Failure of a presupposed condition
4
Q
Negotiable Instruments
A
Must meet four requirements:
- Must be signed by the maker, or drawer
- Must contain an unconditional promise to pay a certain sum of money
- Must be payable on demand or at a definite time
- Must be payable to order or to a bearer
5
Q
Types of Commercial Paper
A
- Draft (check)
- Certificate of Deposit (COD)
- Promissory note
- Trade acceptance
6
Q
Endorsements
A
Major types of endorsements:
- Special endorsement
- Blank endorsement (general endorsement)
- Restrictive, or collection endorsement
- Qualified endorsement
- Unqualified endorsement
7
Q
Documents of Title
A
Bill of Lading: Historically, the written document acknowledging receipt of goods on a ship for transport.
8
Q
Documents of Title
A
Bill of lading serves these purposes:
- As a contract for the transportation of goods
- As a receipt of the goods by the carrier for delivery
- Under certain circumstances, as the title to the goods
- To identify the terms of agreement
9
Q
Secured Transactions
A
Five elements:
- Debtor
- Secured creditor
- Collateral
- Security agreement
- Security interest
10
Q
Forms of Secured Transactions
A
- Pledge
- Chattel mortgage
- Conditional sale
11
Q
Forms of Collateral
A
- Consumer goods
- Equipment
- Farm products
- Inventory
- Property on paper
12
Q
Attatchment
A
Three requirements:
- A consensual security agreement between the debtor and creditor
- The creditor must give value
- The debtor must have rights in the collateral
13
Q
Perfecting a Security Interest
A
A valid financing statement has three elements;
- Names and addresses of the debtor and creditor
- The debtor’ signature
- A general description of the collateral property
14
Q
Default
A
Creditors’ rights:
- Right to sue in the underlying debt
- Right to strict foreclosure
- Right to regain possession
- Right to sell the collateral
- Right to dispose of the collateral as desired
15
Q
Consumer Protection Laws
A
State laws generally prohibit one or more of the following:
- Unfair acts
- Deceptive acts
- Unfair methods of competition
