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ACC 552 > Midterm-gouge > Flashcards

Midterm-gouge Flashcards

1
Q

MODUSWON

A

M – Money – fixed amount

O – Order or bearer – “payable to order” or “payable to bearer” * unless a check

D – Demand or stated time

U – Unconditional – no conditions, 4 corners rule

S – Signed

W – Writing , not oral

O – Order or promise to pay conspicuous statement - “I/We promise” or “Pay”

N – No other promises

If not all 8 present, law of assignment applies.

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2
Q

How many parties in an order to pay

A

DC Orders to pay

3 parties

Drawer – signs document

Drawee – bank

Payee – gets money

“draft” order payable on sight, time, demand

“check” order, payable on demand, drawn on bank only

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3
Q

how is draft payable

A

payable on sight, time, demand

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4
Q

how is check payable

A

payable on demand drawn on bank only

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5
Q

what are the two orders to pay

A

draft check

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6
Q

what are the two promises to pay

A

note CD

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7
Q

How many parties in a promise to pay

A

NC 2 parties

Marker – signs

Payee – gets money

“note” promise, payable on demand or time

“cd” promise, payable on demand or time

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8
Q

how is a note payable

A

payable on demand or time

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9
Q

how is cd payable

A

payable on demand or time

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10
Q

Certificate of deposit, CD

A

an instrument contains a bank acknowledgement for receipt of money and a bank promise to repay the sum. A certificate of deposit is a note of the bank.

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11
Q

who are the parties in a check

A

Drawer – signs document Drawee – bank Payee – gets money

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12
Q

who are the parties in a note

A

Marker – signs Payee – gets money

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13
Q

particular fund doctrine

A

allows specification of a particular account or fund for payment

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14
Q

payable on demand if 1) and 2)

A

1) does not state any time of payment 2) states that it is payable on demand or at sight, or

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15
Q

payable at a definite time 1) and 2)

A

1) payable after period of time lapsed and after sight or acceptance
2) fixed date or dates
3) time readily ascertainable when issued subject to
(i) prepayment,
(ii) acceleration,
(iii) extension by holder, or

extension to a further definite time by maker

or acceptor or automatically upon

or after a specified act or event

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16
Q

Instrument rules for conflicting terms 1) over typewritten 2) over printed 3) over figures

A

1) handwritten 2) typewritten 3) words

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17
Q

Holder in Due Course

A

takes an instrument for value,

in good faith

and without notice

free of all claims of existing parties,

and free of all personal defenses,

subject only to real defenses .

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18
Q

How can one become a Holder in Due Course

A

Become HDC by meeting code requirements

or Inheriting via the shelter rule

for VALUE

in GOOD FAITH

WITHOUT NOTICE of valid defense

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19
Q

Does a gifted instrument make one a Holder in Due Course?

A

No

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20
Q

What is a holder of an instrument

A

“a person who is in possession of an instrument drawn, issued, or indorsed to him or his order or to bearer or in blank”

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21
Q

An “in blank” instrument means

A

no indorsement is required for negotiation

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22
Q

negotiation

A

“a transfer of possession, whether voluntary or involuntary, of an instrument to a person that becomes its holder if possession is obtained from a person other than the issuer of the instrument”

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23
Q

how to qualify as an instrument holder

A

instrument possessor of an instrument that runs to her An instrument “runs” to a person if (1) issued or (2) transferred negotiation

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24
Q

The beauty of negotiable instruments is

A

an instrument free of defenses claimed by anybody against paying it

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25
Q

What is the holder in due course’s preferred position

A

1) an instrument free of claims or defenses by previous possessors. 2) treat the instrument almost as money

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26
Q

Who must indorse if “Pay A or B”

A

A or B

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27
Q

Who must indorse if “Pay A and B”

A

A and B

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28
Q

Endorsement in trust

A

Pay A for B Pay A in trust for B

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29
Q

shelter rule

A

transferee of an instrument acquires the same rights that the transferor had. even if not a HDC, can still acquire that status if some previous holder (someone “upstream”) was an HDC.

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30
Q

7 Real Defenses Against HDC

A

MFDDIFM My friends don’t do interviews for me

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31
Q

MFDDIFM

A

7 Real Defenses Against HDC

M – minority (infancy)

F – fraud in the execution

D – discharge in bankruptcy

D – discharge other that is known about

I – incapacity, illegality, Duress

F – forgery

M – material alteration

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32
Q

Check

A

a draft, other than a documentary draft, payable on demand and drawn on a bank - cashier’s check - teller’s check - money order

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33
Q

Cashier’s check

A

means a draft where drawer and drawee are the same bank or branches of the same bank

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34
Q

Teller’s check

A

draft drawn by a bank (i) on another bank, or (ii) payable at or through a bank

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35
Q

Traveler’s check

A

an instrument that (i) is payable on demand, (ii) is drawn on or payable at or through a bank, (iii) is designated by the term “traveler’s check” or by a substantially similar term, and (iv) requires, as a condition - countersignature by a person whose specimen signature appears on the instrument.

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36
Q

not negotiable

A

conspicuous statement, to the effect that the promise or order is not negotiable

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37
Q

bearer paper

A

pay bearer - like cash - transfer by possession - negotiated by delivery

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38
Q

bearer paper

A

pay bearer - like cash - transfer by possession - negotiated by delivery

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39
Q

order paper

A

pay to the order of - negotiated by indorsement and delivery

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40
Q

allonge

A

firmly attached piece of paper with indorsements

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41
Q

what is a signature placed on back of check called and what does it do?

A

indorsement incur possible liability

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42
Q

accommodation

A

add indorsement to lend your credit getting liability but nothing else

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43
Q

6 types of indorsements

A
  • blank vs special - restrictive vs nonrestrictive - qualified vs unqualified
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44
Q

FRONT

Pay to the Order of David, 7/7/2021,

Signed by Luna

BACK blank

What kind of paper?

A

The back is blank and therefore “blank paper” or “order paper to pay David.

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45
Q

FRONT

Pay to the Order of David, 7/7/2021,

Signed by Luna

BACK David

Classify endorsement

A
  • blank
  • nonrestrictive
  • unqualified

Converted blank (order) paper to bearer paper

To negotiate, delivery it.

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46
Q

FRONT

Pay to the Order of David, 7/7/2021, Signed by Luna

BACK David

Classify endorsement

A
  • blank
  • nonrestrictive
  • unqualified

Converted blank (order) paper to bearer paper

To negotiate, delivery it.

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47
Q

FRONT

Pay to the Order of David, 7/7/2021, Signed by Luna

BACK

David

Pay Leia

A
  • special
  • nonrestrictive
  • unqualified

“Pay Leia” – this is a “special endorsement”.

Converted bear paper to order paper

To negotiate, Bob indorses (signs) and delivers

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48
Q

FRONT

Pay to the Order of David, 7/7/2021, Signed by Luna

Back

David

For deposit only

To acct#123

A

For deposit only – Restrictive endorsement

  • blank
  • restrictive
  • unqualified
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49
Q

FRONT

Pay to the Order of David, 7/7/2021, Signed by Luna

Back

David

For deposit only

To acct#123

A

For deposit only – Restrictive endorsement

  • blank
  • restrictive
  • unqualified
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50
Q

Back

Bruce

Without recourse

A

Without recourse – Qualified endorsement removes liability

not everyone will take that instrument

  • blank
  • nonrestrictive
  • qualified
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51
Q

two types of liability affecting instrument transferors

A

Drafts (checks) and notes are, after all, contracts contract liability and warranty liability.

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52
Q

contract liability

A

Makers and acceptors are primary parties and are unconditionally liable to pay the instrument. Drawers and indorsers are secondary parties and are conditionally liable. The conditions creating liability—that is, presentment, dishonor, and notice

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53
Q

holder

A

possesses

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54
Q

transferor

A

person who gives

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55
Q

transferee

A

person who receives

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56
Q

warranty liability

A

The transferor’s contract liability is limited.

  • signers with additional conditions met
  • can even be disclaimed
  • a holder who has not been paid suit based on one of five warranties
  • A person who transfers an instrument for consideration warrants all of the following to the transferee and, if the transfer is by indorsement, to any subsequent transferee:

(1) The warrantor is entitled to enforce the instrument.
(2) All signatures authentic and authorized.
(3) No alterations.
(4) No defenses or claims
(5) No knowledge of insolvency maker or acceptor or, in the case of an unaccepted draft, the drawer.

Breach of one of these warranties must be proven at trial if there is no general contract liability.

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57
Q

Money

A

a medium of exchange currently authorized or adopted by a domestic or foreign government

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58
Q

Defense against torts

A

Contributory negligence (not anymore)

Comparative negligence

Assumption of risk

Privilege

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59
Q

Doctrine of res ipsa loquitur

A

the thing speaks for itself

I went to get appendix out, now I jingle when I walk.

Someone is negligent.

Mere occurrence infers negligence and proximate cause

Duty

Breach

Causation - inferred

Damages - inferred

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60
Q

Prima Facie Tort case

A

prove elements

Duty

Breach

Causation

Injury

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61
Q

Standard of care is different in situations

A

Kids – same age, IQ, except if minor engaged in adult activity

Disability – same disability comparison

Superior skills – same skills

Mental deficiency – reasonable person is never mentally deficient

Emergency – activity measure against person facing same emergency

Affirmation action – duty of parent, babysitter, does not apply to a stranger

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62
Q

Negligent

A

Does not have to be intentional

Conduct creates unreasonable risk of harm

Failure to exercise reasonable care under circumstances

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63
Q

Reasonable person standard

A

conduct measured against one that always acts

prudently, non-negligently with due care

under all circumstances

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64
Q

Negligence Elements

A
  1. Duty – reasonable fictious person – objective test
  2. Breach
  3. Proximate Causation – two part test
    1. But/for test – but for my breaching my duty, you wouldn’t have been harmed.
    2. Foreseeable that harm would be caused
    3. Can’t be superseding cause
  4. Injury/harm
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65
Q

Strict liability

A

not intentional,

not negligent,

abnormally dangerous activity that makes strictly liable.

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66
Q

Prima facie

A

sufficient to establish a fact, first glance

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67
Q

Types of torts

A

Person – assault, battery, injury, infliction of emotional distress, defamation, invasion of privacy

Property rights – trespass, nuisance, conversion

Intentional tort – interfering with economic (a contract or fraudulent misrepresentation)

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68
Q

Tort defense (2)

A

Consent – You said I could

Privilege – self defense, defense of others, defense of property – all reasonable

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69
Q

deadly force

A

for you or others, property no deadly force

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70
Q

Assault

A

in civil law is a threat.

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71
Q

Battery

A

when make contact.

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72
Q

Defamation

A

communicate to 3rd party

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73
Q

Tort Elements

A

– all must present, prima facia case, all must be pleaded and proven.

  1. Duty - Duty that defendant owed plantiff
  2. Breach - Defendant Breach of duty
  3. Causation - (proximate, primary cause) – defendants breach caused injury
  4. Injury - Damages (injury, financial, emotional) – proof plaintiff suffered injury
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74
Q

Tort

A

wrongful civil conduct or

lack of conduct

directed towards someone

that can be compensated.

It is not a crime or breach of contract.

There is some overlap with crimes.

It is a voluntary act

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75
Q

Intentional torts

A

Substantive area of law

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76
Q

Tort Types

A

Intentional

  • No hostile motive.
  • Foreseeable - Mean to bring about consequences of actions

Negligent - careless

Strict Liability – no fault, so dangerous carries strict liability.

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77
Q

Types of civil liability

A

breach of contract

discrimination

torts

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78
Q

Crime

A

act or omission that violates the law and

punishable by the government.

Commission or Omission.

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79
Q

Crime

A

Actus reus = guilty act

Mens rea = guilty mind

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80
Q

Felony

A

serious crime: jail, death, or imprisonment

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81
Q

Misdemeanor

A

less serious, probably fine

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82
Q

Corporate crime

A

large fine

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83
Q

Crime

Burden of proof

A

beyond a reasonable doubt

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84
Q

Crime Defenses

A

Self defense – defense of self, family or others

Defense of property – reasonable force

Duress

Mistake

Entrapment (Coercion of government)

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85
Q

fundamental law in country

A

US Constitution

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86
Q

bill of rights

A

First 10 Amendments

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87
Q

Due Process (5 & 14)

A

notice of what I did wrong, opportunity to be heard

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88
Q

Equal Protection (14)

A

treat similarly situated people, similarly

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89
Q

Free Speech (1)

A

has limitations

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90
Q

Self-incrimination (5)

A

Can’t be compelled to testify against yourself.

  • Can be forced to be in lineup, give blood sample, handwriting, voice samples.
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91
Q

Speedy trial (6)

A

only federal

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92
Q

Arbitration

A

settle dispute by neutral person that is not a judge, no court

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93
Q

Stare decisis

A

let the decision stand – keep decisions consistent

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94
Q

Differences between civil and criminal cases

A

Civil

Complaint

Brought by person or individual

Criminal

Indictment

Brought by government

Crime against society

Grand jury

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95
Q

District Court

A

1 judge

1 jury

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96
Q

Court of Appeals

A

3 judges

No jury

No trial

No additional evidence

Review record of trial judge and reverse, remand, what they want

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97
Q

US Supreme Court

A

9 justices

No trial

No jury

No additional evidence

Review record of trial judge and reverse, remand, what they want

Constitutional, death sentence, difficult to go

Writ of certiorari – cert petition – will you please hear my case.

Circuit courts are divided, please decide.

Issue two words: cert granted

Otherwise: cert denied

If not appeal by right, through writ of certiorari.

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98
Q
A
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99
Q

Supremacy Clause

A

Every court must follow Supreme Court decision.

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100
Q

Ethical fundamentalism

A

looking to central authority for rules

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101
Q

business ethics

A

What is right or wrong in Business setting

Corporations are not people, how held accountability morally

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102
Q

Truth is a defense

A

True

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103
Q

Supreme law

A

Constitution

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104
Q

Sources of law

A

Supreme – Constitution

Case law, treaties, executive orders of President, legislation, rules, regulations, ordinances.

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105
Q

Law classifications

A

Substantive – guts of law, tort, criminal, and contract are substantive areas.

Procedural – how to

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106
Q

Civil

A

Brings the lawsuit is plaintiff

Wrong doer is defendant

Issue a complaint (sue).

Burden of proof: preponderance of evidence, more probably true than not (51%).

Money or equity (do something or stop doing something)

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107
Q

Criminal

A

Plaintiff is government.

Wrong doer is defendant.

Prosecute not sure.

Indictment – piece of paper

Burden of proof: huge, beyond a reasonable doubt.

Prison, jail, fine,

108
Q

Law vs justice

A

Not guilty is not innocent.

We want them to be same but not always.

  1. Is there a moral obligation to help?
  2. Do you have legal obligation to prevent his demise?
109
Q

Sanctions

A

remedies: punishments, fines, prison.

110
Q

Primary purpose of law

A

to ensure rights are enforced.

Accomplished via sanctions.

111
Q

Legal vs moral

A

Some overlap, not science, constantly changing.

Depends on society, judges, legislature

All we care about is it legal

112
Q

Res ipsa loquitur

A
  1. “the thing speaks for itself”, the accident implies negligence.
  2. The event would not normally occur if there was no negligence.
113
Q

Primary functions of law

A

Maintaining stability in the social, political, and economic system.

Protecting ownership of private property.

Preservation of the state.

114
Q

Essential elements of crime

A

mens rea – guilty mind

actus reus – guilty act

115
Q

mens rea

A

guilty mind

116
Q

actus reus

A

guilty act

117
Q

oral top check limit

A

14 days

118
Q

written stop check

A

6 months

renew 6 months

119
Q

contract can delegate ____

A

duties

obligator becomes delegator

delegates to delegatee

120
Q

contract can assign ______

A

rights

offerer can assign

assigner assigns to assignee

121
Q

minor in adult activity

A
122
Q

quasi contract

A

implied contract

if don’t make contract, an unjust enrichment

123
Q

to modify common law contract

is consideration needed

A

yes

124
Q

to modify a UCC contract

is consideration needed

A

no

125
Q

parole evidence rule

A

can’t give evidence outside the document

only supplemental to support

126
Q

Damages

A

money most of the time

or

specific performance

127
Q

Damages

A

injunctive

punitives

nominal

liquidated

128
Q

UCC

What can be omitted

A

Price

Delivery

Quantity

129
Q

Statute of Frauds

A

MYLEGS-IS

M - mary for money

Y - year - not fully performed within a year

L - land - transfer land interest

E - executor - pay descendants death from personal funds

G - goods > $500 - movable personal property

S - surety - promise to pay debts if other doesn’t

I - insurance

S - securities

130
Q

8 ways to terminate offer

A
  1. lapse of time
  2. acceptance
  3. revoke - prior to acceptance
  4. reject
  5. counter-offer (reject + new offer)
  6. death/insanity (exception in an option contract)
  7. subject destroyed
  8. subsequent illegality
131
Q

Mutual Assent

A

Offer + Acceptance

132
Q

3 elements

of offer

A

communicated to offeree (received)

intent (not solicitation, will you buy car?)

definite (terms)

133
Q

newspaper ad

A

solicitation, not offer

134
Q

auction

A

solicitation for bids

135
Q

when offer accepted

i.e. terminated

A

mailed/sent

stamped/addressed, even if never receive

136
Q

what offer types are effective on receipt

A

revocation

rejection

counter offer

137
Q

mirror image rule

for

offers

A

offer A, accept A

not accept A+1

138
Q

5 types of conduct that invalidate offer or acceptance

A

duress

undue influence

fraud

innocent representation

mistake

139
Q

physical duress

for

offer or acceptance

A

void contract

140
Q

mental duress

for

offer or acceptance

A

voidable

141
Q

Undue Influence

for

offer or acceptance

A

voidable

relationship that has trust or dominance

142
Q

Fraud in execution

for

offer or acceptance

A

void

143
Q

fraud in inducement

A

voidable

material mispresentation that was justifiable relied on

144
Q

Innocent misrepresentation

for

offer or acceptance

A

voidable

145
Q

mutual mistake

for

offer or acceptance

A

void

146
Q

unilateral mistake

for

offer or acceptance

A

void

147
Q

negligent misrepresentation

for

offer or acceptance

A

voidable

made without knowledge of falsity

without due care to determine truthfulness

148
Q

Consideration

A

inducement for a promise

something of value

bargain for exchange

149
Q

gratitutios promise

A

not enforceable

150
Q

past consideration

A

is no consideration

151
Q

value

A

legal sufficiency

legal detriment to promisee

legal benefit to promiser

adequacy means nothing

pre-existing duty - not consideration

152
Q

bargained for exchange

A

parties negotiated

and

mutually agreed upon terms

153
Q

3 big mouth consideration exceptions

A
  1. statute of limitations

if promise to pay anyhow, have to pay, even if no consideration

  1. debt dischanged in bankruptcy

if promise to pay after dischange, have to pay with no consideration

  1. promissory estoppel

charity pledge, if relied upon, have to pay

154
Q

promise under seal

A

binding,, not used

155
Q

enforceable promised by statute

A

contract mods - UCC

renunciation

term offers

156
Q

unenforceable

A

if bargain illegal, not enforceable

statute violation - gambling, licensing

public policy - tort, corruption, unconsionable

157
Q

3 types of incapacitated people

for

contract capacity

A

kids, crazies, drunks

158
Q

minor contract capacity

A

voidable at option of minor

exception, life necessities

no luxury items

159
Q

when can minor ratify a contract

A

at majority (18), reasonable time

upon ratification, liable from beginning

160
Q

when can minor disaffirm K

A

while minor or at majority (reasonable time)

exception

land cannot be disaffirmed until age of majority

161
Q

incompetent contract capacity

A

voidable

liable for life necessities

exception

K when court appointed guardian - void

during lucid interval may ratify or disaffirm

162
Q

incapacitated contract capacity

A

lack capacity, not slightly drunk

liable for life necessities, no luxury items

163
Q

3rd party in contracts

contract rights assignment

A

assignor assigns to assignee

assignee stands in for assignor

voluntary

don’t have to give notice to obligators

164
Q

privity

A

contractual relationship

165
Q

3rd party in contracts

contract duty delegation

A

closely scrutinized

can’t be too personal

166
Q

3rd party beneficiaries

A

gift, creditor, son

167
Q

novation

A

new contract performed when original duties are delegated

delegatee bound by contract

168
Q

4 ways to legally terminate contract

A
  1. performance (tender) done
  2. act/agreement (mutual rescission - contract to end contract)
  3. operation of law - subsequent illegality
  4. breach (materiality) - anticipatory - before end
169
Q

conditions may excuse performance

A

not a breach

  1. express - spoken
  2. implied in fact - parties understand
  3. implied in law - fairness
  4. concurrent promises
  5. condition precedent - present before - not raining before paint
  6. condition subsequent - terminates existing duty
170
Q

remedies

A

compensate injured party for loss from breach

171
Q

remedy types

A

monetary damages - most common

specific performance - very rare - order someone to do something, land

injunction - command to do or not to do - rare

restitution - return consideration to good guy

172
Q

monetary damages

A

compensatory - reliance

amount lost +/-

offset damages - mitigation

recoverable if foreseeable

nominal - win but get $1 + attorney fees

punitives - penalties never against government, wanton, willful, malicious conduct, breach of conduct, tort

liquidated - decide in advance, reasonable amount

173
Q

natural person

A

living human with certain rights

174
Q

legal or artificial person

A

group considered by law to be acting as a single individual

capable of rights and duties

175
Q

executory contract

A

not completed

176
Q

executed contract

A

completed

177
Q

contract

A

set of promises

gives one party a remedy if breached

oral, written, implied

178
Q

express vs implied

contract

A

express - in words

implied - by action

179
Q

formal vs informal

contract

A

formal - depends on form, a check, under seal, other countries use

informal - everything else

180
Q

unilateral vs bilateral

contract

A

unilateral - 1 promise

bilateral - 2 promises

181
Q

void contract

A

no legal effect - pay to kill someone, nope

182
Q

voidable contract

A

1 party (good guy) can avoid (bad guy)

183
Q

unenforceable contract

A

all elements but statute of limitations ran out

184
Q

Quasi contract

A

does not have all the elements

law creates so one party not unjustly enriched

  • reasonable value of benefit conferred
185
Q

4 contract elements

A

LACC

L - legality - subject matter

A - mutual assent (offer + acceptance)

C - capacity

C - consideration

all 4 must be present for contract

186
Q

promissory estoppel

A
187
Q

sale

A

transfer of goods for a price (some services)

do not need possession

parties perform in good faith

188
Q

non-sale transactions

A

bailments, gifts, security agreements

189
Q

lease

A

personal not real property

190
Q

merchant to merchant sale

A

stricter rules

higher conduct standard

191
Q

merchant

A

deals in goods

skilled or

employs agent with skills

192
Q

UCC Mutual Assent

elements that can be left out

A

price - figure out from market

delivery - sellers place of business or residence if none, unless specified

quantity - output + requirement

193
Q

UCC Acceptance vs common law

A

UCC more reasonable

194
Q

irrevocable offers

A

option

firm offer

195
Q

option

A

irrevocable offer

open for specified period

requires consideration

196
Q

firm offer

A

irrevocable offers

keep open 3 months

signed

in writing

offeror has to be a merchant

197
Q

merchant to merchant sales

A

receive written order - affirmative duty to respond in 10 days to object

if oral, admit in court, code will enforce

special manufactured goods, code will enforce

198
Q

perfect tender rule

A

exact conformity to contract specifications

if not buyer may

1) reject
2) accept anyway
3) accept/reject

199
Q

contract performance complete

A

1) fully perform your part
2) tender performance
3) excused

200
Q

tender performance

A

seller puts and holds

conforming goods

at buyer’s disposal

gives reasonable notification

at reasonable hour

if not agreed, single delivery

201
Q

3 modifications on buyers right to reject

A

1) limit rejection to nonconforming goods
2) seller can cure (fix) promptly, in time allowed
3) agree to modify in installments or not at all

202
Q

buyers right of inspection

A

can inspect before accept and pay

conditional acceptance until inspection in timely manner

203
Q

Excuses for Performance

A

1) Casualty of goods - no fault - avoided
2) nonhappening of event - strike
3) substituted performance

204
Q

do future goods constitute a future sale

A

NO

205
Q

Under UCC does title = possession

A

NO

206
Q

Shipment Contract

A

Seller delivers to carrier where title passes

207
Q

Destination Contract

Title Transfer

A

Title passes at destination

208
Q

No Goods Movement

Title Transfer

A

Upon identification of goods

209
Q

bonafide purchaser

A

for value

in good faith

without notice

BFP wins over minor

210
Q

BFP and void title

A

BFP loses

211
Q

BFP and voidable title

A

BFP wins

212
Q

Sale on Approval

Risk of Loss

A

seller bears risk until buyer accepts

213
Q

Sale or return

Risk of Loss

A

Buyer maintains risk until goods returned

214
Q

Consignment

A

sale or return

buyer maintains risk

215
Q

COD

A

Shipping contract

seller get to carrier

title to buyer

216
Q

Seller breach

Risk of loss

A

risk stays with seller

until

buyer accepts or

seller cures

217
Q

Buyer breach

Risk of Loss

A

Risk of Loss on buyer

for commerciably reasonable time

(fresh fish vs widgets)

218
Q

Bulk Sale

A

Law deals with fraud

not ordinary in course of business

liquidates and runs

219
Q

caveat emptur

A

let the buyer beware

220
Q

warranty

seller obligations to buyer

A

title

quality

condition

performance

if breach - breach of contract

221
Q

3 types of seller warranties

A

express != opinion

warranty of title - UCC title, goods, not encumbered

implied by law - (not necessarily agreed)

222
Q

implied warranty of merchantability

A

obligation that goods

reasonably fit

for general purpose

manufactured and sold

used, how old, cost, condition

223
Q

implied warranty of fitness for particular purpose

A

same as first except reliance on seller to furnish suitable goods

224
Q

disclaim or modify warranty

A

positive

explicit

conscicous

unequivocable

225
Q

disclaim or modify

express warranty of title

A

specific language

specific circumstances

seller refrain from making promises

clear, unambigous language

226
Q

implied warranty of merchantability

disclaim or modify

A

must mention merchantability

conspicuous writing

does not have to be in writing

227
Q

implied warranty of fitness for a particular purpose

disclaim or modify

A

in writing

conspicuous

228
Q

buyer must examine

A

if examine and should have caught defect, no remedy

229
Q

can there be both

implied and expressed warranty

A

yes

has to be consistent

230
Q

Warranty Hieararchy

A

exact or technical specs override sample or model

sample overrides consistent language

express has precedent over implied

231
Q

Magnuson-Moss Act

A

protection for buyers of consumer goods

FTC enforces

1) cannot disclaim implied with written warranty

2)

232
Q

privity

A

contractual relationship

233
Q

horizontal privity

A

between noncontracting parties

determines who sues

234
Q

vertical privity

A

determine who is liable in supply chain

235
Q

buyer responsibility on warranty breach detection

A

notify seller in reasonable time

236
Q

strict warranty liability

A

don’t have to be negligent

not a breach of contract

look at product defectiveness

if defective, sue

imposes liability on party in business

dealer, merchant

occassional seller

237
Q

Fictious Payee Rule

A

gets money by creating fake names

ghost payroll

principal bears risk

238
Q

burden of proof

product defectiveness

A

prove is defective

not how or why

239
Q

Sellers duty for warranty

A

provide adequate warnings of danger

safe instructions for use

240
Q

elements of

strict liability warranty

A

product sold in defective condition

in business of selling product

defect made unreasonably dangerous

existed when left hands of seller

injured (physical or property)

defect is proximate cause

  • reliance not needed
  • notice of defect given
  • not governed by UCC
241
Q

defenses of strict liability warranty

A

contributory negligence - not material (defective)

comparative - maybe

assumption of risk - yes

misuse, abuse - yes

242
Q

statute of depose

A

from date of manufacture and sale where action cause filed

reasonable time, not liable forever

243
Q

Seller Remedies

A
  • if delivers on credit, sue for unpaid price
  • reclaim only if buyer insolvent at time of delivery
244
Q

Buyer remedies

A

Specific performance is rare

recover for breach of warranty

245
Q

Every indorser promises to pay an instrument unless?

if 3 conditions met

A

add without recourse

with signature

  1. demand for payment (presentment)
  2. dishonor
  3. notice of dishonor
246
Q

protest

A

certificate of dishonor

under the hand and seal of US Counsel or Vice Counsel

drawn or payable outside US

247
Q

delay execused in notice or presentment

A

1) holder hasn’t noticed it is due (acceleration clause)
2) beyond holders control (dates of ordinary deligence)

248
Q

holder execused entirely if

A

already discharged

account closed / stop payment

249
Q

only present execused when

A

maker dead or bankrupt

primary party refuses payment

250
Q

Imposter Rule

A

Indorsement effective even if induced drawer or maker to amke check

be more careful

A impersonates B

C thinks A is B

251
Q

instrument liability based on warranty (2)

A

transferor

presentment

252
Q

transferor instrument warranty

A

goot title

genuine signature

no material alterations

no defenses

no knowledge of insolvency of maker or drawer

253
Q

presentment transfer warranty

A

good title

good signatures

no material alterations

254
Q

terminate liability of negotiable instrument (3)

A

payment or satisfaction

tender of payment

cancellation, renunciation, rip it up

255
Q

contracting bank

A

agent of paper owner

contractual relationship

duty of care (ordinary/timely)

seasonable respect endorsements

same warranties

final payment

256
Q

bank and drawer that dies

A

10 days after notice to pay or certify death

unless instructed by executor to stop

257
Q

depositary banks

A

deposit check

receive provisional credit

until final credit (check clears)

258
Q

clearing house

A

association of banks

259
Q

must check bank statement for errors

A

and notify bank

260
Q

Contract Termination

A

• Lapse of Time - after a reasonable period of time
• Offeree’s Rejection - Once the offeree rejects the offer, cannot come back later and accept the offer.
• Counter Offer - A counter offer or counter proposal in response to an offer, the original offer terminates. Offer ancillary or non-material terms may not terminate the offer.
• Revocation by Offeror - offeror may revoke an offer at any time before the offeree accepts it.
• Destroy Subject Matter of Contract - Before the offer is accepted, the subject of the offer is destroyed. - If the offer has already been accepted, this could serve to void the contract.
• Death or Mental Incapacity - offeror dies or loses mental capacity at any time before an offer is accepted, the offer is revoked.
Note: The offer does not become effective again if the offeror regains mental capacity.
• Illegality - if the subject of the offer (the activity or product) becomes illegal. If the offer has been accepted, the subject matter becoming illegal will void the contract.

261
Q

debts as consideration

legal duty

3 exceptions

1 special problem

A

Under the legal duty rule,
payment lesser amount not consideration for full discharge doing only what he has a pre-existing legal duty to do. creditor can sue for the rest

first exception different performance. debtor does different than obligated, the creditor’s promise enforceable.

second exception honest dispute actually owes. payment lesser consideration

third exceptionan honest dispute as to how much. payment less discharge of the debt in full

special problem arises disputed amount writes check amount less supposed to be in full payment

262
Q

oral contract exception for land

and

Statute of Frauds

A

Under the Statute of Frauds, contracts for the sale of an interest in land must be written down.

The exception here is where an oral contract for the sale of land has been partially performed. If a seller performs his side of the contract by conveying good title to the buyer, the seller can recover the purchase price from the buyer even though the contract is oral. For example:

263
Q

Land

Partial Performance

Statute of Frauds

A

Under the Statute of Frauds, sale land interest written.

Exception where oral partially performed. If seller conveying good title recover the purchase price contract is oral.

Buyer’s part performance valuable improvement or takes possession and pays contract enforceable.

264
Q

Sale of Goods and Services under UCC

A

According to U.C.C. Section 2-201, any contract for the sale of goods > $500 in writing.

statute not governing for primarily sale of services.

oral contract for the sale of goods of $500 or more will be enforced

(1) buyer receives/accepts goods, oral contract enforceable. buyer receives/accepts part of the goods, contract enforceable as goods accepted/received.
(2) buyer partial payment contract enforceable goods for paymentmade
(3) seller specially manufacture goods not suitable for others and the seller substantial beginning in the manufacturing enforceable

If a contract involves the sale of goods and services together, the Statute of Frauds will govern if the contract is primarily for the sale of goods and will not govern if the contract is primarily for the sale of services.

265
Q

contracts in a year

A

contracts cannot be performed within one year of the contract being made must be in writing.

one-year time period measured date contract made

any theoretical possibility performed in year contract outside statute no matter how remote the chance

If Roy dies within a year of making the contract theoretically possible

The exception contract fully performed. If an oral contract that cannot be fulfilled within one year has been fully performed, the contract is fully enforceable (regardless of how long performance actually took).

266
Q

Contracts of Suretyship

A

promise to third person to creditor to pay for another writing

3 exceptions:

  1. third person promise to the debtor instead of creditor, not in writing
  2. third person promises to be primarily responsible outside the statute,
  3. Main Purpose rule promises only to be responsible for the debt if the debtor defaults. main purpose for his own benefit, not in writing

ACC 552 (2 decks)

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