Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

REG > Part II: Uniform Commercial Code (UCC) > Flashcards

Part II: Uniform Commercial Code (UCC) Flashcards

1
Q

Under the UCC, for a writing to be an enforceable contract…

A

there must be a quantity supplied.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What sales of goods does the UCC govern?

A

Any sale of goods, at any amount.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What sales of goods does the statute of frauds govern?

A

Governs only sales contracts above $500.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Under the UCC, what is the easiest way for the seller to accept the buyer’s order?

A

Ship the goods.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

good faith

A
  1. Obligation of both parties to act w/honesty and fairness.

2. Under the UCC, both parties must act in good faith or the contract is unenforceable.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What article of the UCC governs sales?

A

Article 2.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Who bears the risk of loss in a normal sales contract?

A

The merchant seller does until the buyer takes possession of the goods.
(like FOB destination)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Who bears the risk of loss in a shipment contract?

A

The merchant seller does until the goods are delivered to a common carrier.
(like FOB shipping point)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Who bears the risk of loss in a destination contract (contract for the goods to be sent to)?

A

The merchant seller bears the risk of loss until the goods reach the specified destination.
(like FOB destination)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

warranty of title

A

seller delivers the goods free from any lien that the buyer didn’t know about when they purchased the goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

disclaimer of implied warranty of title

A

The seller disclaims that they are selling only the right they have.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

implied warranty of fitness

A

seller is aware of the purpose the buyer is using the goods for, and knows the buyer is relying on the seller’s skill and judgment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

implied warranty of merchantability

A

goods are fit for their normal and intended purpose

1. Implied by law. Triggered upon sale.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q
  1. To win a case under a breach of the implied warranty of merchantability…
A

the seller has to have been a merchant.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

strict liability

A

When the merchant is strictly liable for injuries caused by products they sell when the products were being used for their intended purpose.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

C.O.D. (cash on delivery) agreement

A
  1. Buyer is not permitted to inspect goods before payment, but the goods can be rejected by the buyer if they are nonconforming.
  2. If the buyer doesn’t reject nonconforming goods, this is considered acceptance.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

In the absence of a C.O.D. contract, the buyer…

A

has an absolute right to inspect goods before payment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

causality to identified goods rule

A

If a seller has set aside goods for a deal, but the risk of loss has not yet transferred to the buyer and then some goods are destroyed in transit (no-fault of the seller), the buyer is allowed to inspect the remaining goods, or avoid the contract altogether.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

written assurance & breach

A
  1. If a buyer thinks a seller might not perform a contract, the buyer can demand written assurance from that seller that the seller will perform.
  2. If the seller does not provide the assurance, the contract is breached and the buyer can pursue remedies.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

exception to $500 rule under the statute of fraud

A

special ordered goods. The seller who made the custom-made item is entitled to recover the full contract amount plus incidental damages.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

In an action for breach of contract, the statute of limitations would start from…

A

the date of the contract breach.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

If a seller justifiably withholds delivery of goods and the buyer has made a deposit and there is no liquidated damage clause, the seller can keep…

A

the lesser of up to a $500 deposit or 20% of the purchase price.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What type of damages are usu. awarded in a UCC contract breach? Compensatory? Punitive? Or both.

A

Compensatory. Punitive damages usu. not awarded.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What UCC article accounts for negotiable instruments?

A

Article 3.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

negotiable

A

rights can be assigned, and it allows rights under a contract to be separated from payment rights

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

types of negotiable instruments

A
  1. orders to pay

2. promises to pay

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

orders to pay

A
  1. checks or drafts.

2. They are 3 party instruments that have a drawer who orders a drawee to pay a payee.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

check

A

The check writer is the drawer and is ordering the bank (the drawee) to pay the payee.

29
Q

draft

A

type of check for merchants in a sale of goods agreement

30
Q

promises to pay

A
  1. notes, installment notes, or certificates of deposit

2. These are 2 party instruments: there is a maker, who promises to pay a payee.

31
Q

requirements to be a negotiable instrument

A
  1. Must be in writing.
  2. Must be signed by the maker or drawer.
  3. Must contain an unconditional promise or order to pay.
  4. Amount payable must be a certain and definite amount.
  5. Payable on demand or at a definite time, not after a certain event happens.
  6. Must contain words of negotiability.
32
Q

words of negotiability

A
  1. Needs to be either payable to order or the bearer.
  2. order means it is specific such as “pay to the order of John Smith.”
  3. bearer- person who has the instrument; a specified person or the bearer.
33
Q

If a negotiable instrument is made subject to another agreement…

A

it is no longer negotiable.

34
Q

indorsement

A

transfer of negotiable instruments

35
Q

blank indorsement

A
  1. don’t specify any particular holder to receive the payment
  2. Turns the order paper into bearer paper and can be transferred by anyone at anytime simply by having possession of the instrument.
36
Q

special indorsement

A

specifies a person to whom payment is to be made.

37
Q

qualified indorsement

A

usu. includes the words without recourse which means the endorser disclaims any liability

38
Q

restrictive indorsements (3 types)

A
  1. conditional
  2. prohibitive
  3. for deposit or collection
39
Q

conditional

A

payment is conditional upon an event

40
Q

prohibitive

A

to prohibit the further transfer of the instrument

41
Q

for deposit or collection

A

this makes the indorsee bank a collection agent of the indorser
2. These restrictive indorsements do NOT prevent further negotiation of the instrument.

42
Q

holder in due course (HDC)

A

has more rights than just an assignee in seeking payment

43
Q

holder

A

someone in possession of an instrument that

“runs to them” (either b/c of a blank or special indorsement)

44
Q

To qualify for HDC status:

A
  1. Party must be a holder.
  2. Must take the instrument for value.
    - -Consideration is required, or the holder took the instrument in payment for antecedent debt.
  3. In good faith
  4. W/out notice that the instrument is overdue, previously dishonored, or of any claim or defense.
45
Q

If the holder of an instrument does not present a check w/in 30 days of it being written, the drawer is…

A

NOT liable for any difference over the FDIC insured amount of $100,000.

46
Q

Do drawers of a negotiable instrument have primary or secondary liability?

A

Secondary liability.

47
Q

primary liability

A

refers to an obligation for which a party is directly responsible

48
Q

secondary liability

A

refers to an obligation that is the responsibility of another party if the party that is directly responsible fails to satisfy the obligation

49
Q

letters of credit

A

for sellers to provide themselves assurance that they will be paid for delivering goods

50
Q

Are letters of credit transferable to 3rd parties?

A

No.

51
Q

Are domestic letters of credit revocable?

A

Yes.

52
Q

Are intl. letters of credit revocable?

A

No.

53
Q

document of title

A

any document that proves the person in possession has title to or is entitled to receive the goods

54
Q

bill of lading

A

document of title that provides evidence that a common carrier has received goods

55
Q

Must a document of title have words of negotiability?

A

Yes. It must be made out to the bearer or to the order of the consignee or person delivery.

56
Q

Who has absolute liability for loss or damage for goods?

A

Common carrier, except for unforeseen circumstances such as natural disaster, act of public enemy (not a normal robbery), fraud by shipper, or normal spoilage.

57
Q

bearer and bill of lading

A

Just like a negotiable instrument, the document can be used by any rightful holder who gains possession.

58
Q

Is forgery or fraud always a universal defense?

A

Yes.

59
Q

secured/security interest

A

gives a creditor collateral

60
Q

3 necessary elements to create a secured interest:

A
  1. Creditor must give value.
  2. The debtor must have rights in the collateral (it must be theirs).
  3. Creditor must take possession of collateral or obtain an agreement w/debtor.
61
Q

What is to perfect a secured interest on top of the already-present 3 elements of creation?

A

A financing statement must be included, unless the sale is made to a consumer

62
Q

If a security interest does not attach…

A

it is not effective against the debtor or third parties.

63
Q

A filing statement is valid if it contains…

A
  1. the names of the debtor.
  2. the names of the secured party. and
  3. a description of the collateral.
64
Q

purpose of filing an F/S in a secured interest

A

to take priority over other creditors in the same collateral

65
Q

If a debtor moves to another jurisdiction, someone w/a secured interest against them has how many months to file a financing agreement in a new jurisdiction?

A

4 months.

66
Q

In the 4 month period after the debtor moves, which secured interest has superiority- the old or the new, if filed?

A

The old.

67
Q

After the 4 month period after the debtor moves, which secured interest has superiority- the old or the new, if filed?

A

The new, if filed.

The old, if not filed.

68
Q

collection of collateral

A

When a debtor defaults, the secured creditor may repossess the collateral on its own as the repossession is performed w/out disturbing the peace.

69
Q

Ways in which the secured party can try to recover the loss on debtor default.

A
  1. Selling the collateral.

2. The judicial process.

REG (47 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions