Common Law Flashcards
Common Law
Agent
- Independent contractor is not an agent
- Consideration is NO required
- Written agreement is NOt required except:statute of frauds (service + 1 year/selling real estate)
Sole Proprietorship
One individual doing business
Unlimited liability
No state filing General
General Partnership/Limited Partnership
General—Unlimited liability
Limited—
General partner( at least one),
Limited partner(investor)
state filing
Adding new General or Limited partners requires written consent of all limited
partners
assign interest>no unanimous consent
assign property>unanimous consent
Limited Liability Company/Limited Liability Partnership
LLP—Personal asset not at risk state filing articles of organization
ability to ‘pierce the corporate veil’
owners will be accused after bankruptcy if the LLC has been created with bad intent such as ‘thinly capitalized’
nonmember can be a manager
Blue sky law
state security law
Dividend
Once declared, dividends become company’s debt and may not be rescinded unless
fraud or illegality was involved in their declaration.
Shareholder’s rights
Right to inspect books and records (not allowed if improper motive)
General partners are jointly liable for
partnership torts
Priority
bond holder>shareholder>unsecured judgement creditor>unsecured creditor
dissenting stockholder’s
appraisal right generally applies to which
of the following corporate actions?
Consolidations - Yes
Short term mergers - Yes
dissenting stockholder:Who has not voted for the decision
appraisal right :to be bought of stocks they owned
Which of the following must take
place for corporation to be voluntarily
dissolved?
Passage(approval) by the board of directors of
a resolution to dissolve
For suing CPA who issue unqualified opinion on MM FS, plaintiff need to prevail
1933:
1934:
1933: MM, Monetary loss
1934: MM, Monetary loss, Reliance on FS, and Scienter
1933 is easier to claim
Exempt securities: don’t need to register to SEC
Governmental purposes
Not- for- profit organizations
Short- term paper
Registry Exemption for Regulation Crowdfunding
- Can raise up to $1 million within 12 months
- Investors: Any number of either accredited or unaccredited
- securities cannot be resold within 1 year
Registry Exemption for Rule 504
(NO MORE 505)
must be notified within 15 days of first sale
- can sell up to 5M
- Accredited/UnAccredited no limit
- Holding Period: At least 1 yea
- NO general Ad
Registry Exemption for Rule 506
(NO MORE 505)
must be notified within 15 days of first sale
- Unlimited amount of money can be raised w/o time limit
- General Ad for Accredit investors
- Holding period:At least 1 year.
- Accredited:unlimited
- Unaccredited:Less than 35
1934 ACT
- for secondary offerings
- registration required for
a. With listed securities or
b. Assets in excess of $10 million and have at least 500 shareholders
2. Securities exchanges
3. Brokers and dealers engaged in interstate commerce
Offer termination
- Counteroffer: Effective when received
- Offeror usually can revoke anytime before acceptance
- Option Contracts: Offeree pays consideration to keep an offer open. (Counteroffers have no effect on options.)
- Sale of Subject Matter to Another (only when the offeree learns of it)
Mailbox Rule
Acceptance is valid when sent/dispatch if offeree uses an equally fast method to accept the offer. When offeree uses a slower method, acceptance t a k es effect when received.
同じ方法か、それより早い方法で返事をした時がacceptの日付。返信方法に規定がない場合は、常にmailbox ruleを覚えておく
If offerer stipulate means of acceptance,
offeree needs to follow that method.
if offeree replied in different method, that will be counter offer.
Bilateral vs. Unilateral
- Bilateral: A promise for a promise
2. Unilateral: A promise in exchange for an act
Actual Fraud 詐欺
- Material
- Scienter (intention to deceive)
- Reliance
Constructive Fraud (gross negligence) 重過失
- Material
- Reckless disregard for the truth 調べてない
- Reliance
STATUTE OF FRAUDS
Need only be signed by one party, but can only be enforced against the one who signed(どちらかがサインしてれば契約成立。しかしサインしてない人は訴えられない)
- Sale of Goods of $500 or more
- Real estate contracts *Impossible to perform in 1 year (from the day made contract)
- Promise to pay the debt of another surety ship 保証人契約は書面
Exceptions of STATUTE OF FRAUDS
- Contract fully performed by both parties (executed contract)
- Contract fully performed by one party and the other is required only to pay money
- Buyer has entered land and made substantial improvements
Minors: Can disaffirm most contracts 契約解除できる
Minorsからはできる、大人側は相手が子供だからという理由で解除できない
Cannot disaffirm real estate contracts while a minor
PAROL EVIDENCE RULE
読まずにサインした人が悪い、というルール
Cannot contradict a written contract in court with oral or written evidence
Evidence relating to things before or during the writing is inadmissible以前の口頭の約束は証拠として採用されない
Creditor Beneficiary
受益債権者
A and B make contract intending to benefit C.
If there is a breach, C can sue both of them.
Novation
When creditor releases teh old debtor
Assignment: Most contract rights can be assigned and duties delegated
- Cannot alter performance materially
* Personal service contract requires special skill cannot be assigned
S Corp’s shareholder
OK: Individual, estate and trust
NO:General Partnership
Which is NOT subject to registration requirements of the Securities Act of 1933?
- interstate commerce 州内の居住者だけにofferされたものはexempt
- NPO
- Stock split
- Commercial paper
- Small offerings
- Life insurance contracts (except secuirty issued by insurance company)
No additional consideration is needed when modifying an existing sales of
Goods contract.
In contract law, additional consideration is needed to modify a real estate
or employment contract.
Firm Offers
MUST be made by MERCHANTS(retailer, whole saller)
- Must be written (not oral).
- Must be made by a merchant.
- Must state that offer is irrevocable.
- Duration: If not stated in offer, then duration is a reasonable time, (not to
exceed 3 months) - No consideration needed
Sales (option contract requires consideration)
Place of Delivery: Not stated, then
seller’s place (not buyer’s place)
Sales contract statue of frauds
Contract in Writing: Sale of goods of $500 or more
Must state major terms of the contract and quantity
Merchant=retailer, wholesaler
Exceptions: No writing required (even if $500 or more) IF.
1.special goods
2. Part already received
3.Merchants Confirming Letter Rule: When a confirming letter is issued
between two merchants and neither merchant objects within 10 days, both
parties are bound by the terms of the contract as if both parties had signed
the letter.
Goods Held by Seller:
Title passes when contract is made and seller completes performance agreed
upon.
Merchant Sellers: ROL passes when buyer receives goods.
Non-merchant Sellers: ROL passes upon tender of delivery.
Negotiability
Commercial paper(Notes/check)を譲渡する事。negotiabilityが無ければ譲渡された人はお金をもらえない
Negotiability:SUMBOD
- signed by Maker or Drawer
- Unconditional(他の人に土地が売れたら、そのお金で払う、みたいのはダメ)
- Paid in Money(not in gold etc)
- must be payable to Order or Bearer eg: Pay to Fox is not good!
exception: Pay to cash(勘定科目)はBearer paperだと想定する! - draft is payable on demand
Once negotiability is established, it’s always negotiable.
Once non-negotiability is established on face, it’s always non-negotiable.
Order/Bearer example
- Pay to the order of bearer
- Payable to Madonna
- Payable to Madonna or bearer
- Payable to the order of Bush
- Bearer
- Neither of them
- Bearer
- Order
Blank endorsement makes the instrument
bearer paper for next negotiation
Special endorsement makes the instrument
order paper for the next negotiation
Front of instrument says Pay to the order of Tom Heath. On the back Tom endorses
Pay to Ivan fox, Tom Heath. Need not, but may say Pay to the order of Ivan Fox.もう表でnegotiabilityが確立されているので、裏ではbearer/order等は書かなくてもよい。
“Without Recourse ”
Doesn’t guarantee payment by the primary party
これをしてなければ、makerが破産した時自分がliableになってしまう。それが嫌ならこの言葉を書くべき。