commercial law

Question 1

Perfection

Answer 1

The moment in time when a creditor’s

security interest becomes protected.

Question 2

Acceptance

Answer 2

A contract does not come into existence until an offer has been made by one party (the offeror) and accepted by another party (the offeree).

Question 3

Nullity

Answer 3

Something which may be treated as nothing, as if it did not exist or never
happened

Question 4

Consensus/Ad Item

Answer 4

This occurs when all parties have reached

an agreement or meeting of the minds

Question 5

Deed

Answer 5

A document under seal

Question 6

Inquiry

Answer 6

A response by the offeree that does not unconditionally accept the terms of the offer but proposes to modify or vary the terms of the offer

Question 7

Repossession

Answer 7

The act of taking back possession of property that has been in the
possession of another

Question 8

Revoke

Answer 8

It can be done anytime before the acceptance of an offer, generally this must be done directly to the offeree

Question 9

Consideration

Answer 9

This is the price, which must be something of value, paid in return for a promise

Question 10

Attachment

Answer 10

The moment in time when a debtor’s property becomes subject to a security
interest

Question 11

Quantum MerUit

Answer 11

This is a legal doctrine that states no one should unjustly benefit from the labour of another

Question 12

Minor

Answer 12

A person who has not attained the age of majority according to the law of his/her province

Question 13

Due Diligence

Answer 13

The steps taken by a lawyer/assistant to learn as much as possible about a business BEFORE a client purchases/ lends money

Question 14

Collateral

Answer 14

Property pledged to secure a loan or debt, usually funds

Question 15

Void Contract

Answer 15

An unenforceable/defective agreement

Question 16

Assignment of Book Debts

Answer 16

– Contract where borrower gives lender security over accounts owing in exchange for a loan. Both current and fixture obligations

Question 17

Guardian

Answer 17

A person legally appointed to care/watch over a minor

Question 18

Financing Change Statement

Answer 18

Document used to make changes to a registration as PPR. Changes to the Financing Statement.

Question 19

Collateral

Answer 19

Is the personal property to which the debtor give a security interest.

Question 20

Verification Statement

Answer 20

Is the Statement verifying your registration once registered at Personal Property

Question 21

Counter Offer

Answer 21

Is a response made by the offeree that does not unconditionally accept the terms of the offer but proposes to modify or vary the terms of the offer.

Question 22

Lapse

Answer 22

Termination of an Offer. Expiry of an offer.

Question 23

Pledge

Answer 23

When a creditor only gains the right to sell the item if the borrower does not repay the loan

Question 24

Operating Lease

Answer 24

Goods are simply rented to the lessee during the lease period

Question 25

Lease to Purchase

Answer 25

Title to the goods will be transferred to the lessee at the end of the lease period

Question 26

Indemnity

Answer 26

a subordinate agreement to the primary contract, by which one party to the contract promised to protect the other party to the contract against injury or loss resulting from actions carried out to fulfill the primary contract

Question 27

Formal Contract

Answer 27

A contract that is sealed by the party to be bound

Question 28

Simple Contract

Answer 28

may be verbal or written, but are not under seal

May also be called parol contracts.

Question 29

Express Contract

Answer 29

Parties have expressly stated their agreement, either verbally or in writing

Question 30

Implied Contracts

Answer 30

A contract that is inferred from the conduct of the parties

Question 31

Valid Contract

Answer 31

Is a contract that is legally binding on both parties

Question 32

Void Contract -

Answer 32

Does not qualify as a legally binding contact because an essential element is missing.

Question 33

Voidable Contract

Answer 33

Is valid, but one party has the option to end the contract.

Question 34

Unenforceable Contract

Answer 34

Required to be in writing and is not. It may be valid in all other respects, but the courts will not force a party to perform such a contract

Question 35

Illegal Contract

Answer 35

Involves the performance of an unlawful act.

The parties to such an agreement cannot be required to perform it.

Question 36

Bilateral Contract

Answer 36

• A contract in which both parties make commitments and assume obligations.

Question 37

Unilateral Contract

Answer 37

There is no exchange of promises.

Contract only comes into effect when one party actually performs what has been requested by the other.

Question 38

Breach of Contract

Answer 38

Failure to perform an obligation owed to another under a contract

Question 39

Breach of Condition

Answer 39

Failure to perform an essential term of a contract, entitling the injured party to treat the contract as ended

Question 40

Breach of Warranty

Answer 40

Failure to perform a term of a contract, entitling the injured party to damages

Question 41

Mitigation of Loss

Answer 41

The expectation that a person injured by a breach of contract will take reasonable steps to reduce any losses that the breach caused.

Question 42

Liquidated Damages

Answer 42

A sum of money stipulated in a contract to settle a potential breach

Question 43

Specific Performance

Answer 43

A court order that requires a person to fulfill the terms of a contract

Question 44

Privity of Contract

Answer 44

A contractual relationship between two parties

Question 45

Rescission

Answer 45

The cancellation of a contract

Question 46

Trust Indenture

Answer 46

A document containing the terms and conditions governing a trustee’s conduct and the trust beneficiaries’ rights