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Business Law for Mortuary Science & Funeral Service Law > Quarter 2 Final Exam Study Guide > Flashcards

Quarter 2 Final Exam Study Guide Flashcards

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1
Q

Article II

A

Concerns sale of tangible, movable, personal property

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2
Q

Article III

A

Concerned with negotiable instruments

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3
Q

Contract to Sell

A

Concerned with future goods meaning not yet in existence or owned by seller at the time of transaction

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4
Q

Contract of Sale

A

Concerned with existing goods

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5
Q

In a Contract to Sell (future goods), the title would pass _________

A

At some point in the future, usually upon delivery to buyer

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6
Q

In a Contract of Sale (existing goods), the title would pass _______

A

Immediately when parties agree on the goods and the price

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7
Q

Risk of loss passes from seller to buyer when ________

A

the title passes from seller to buyer

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8
Q

Statute of Frauds of the UCC mandates _______

A

Contracts must be in writing to be enforceable

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9
Q

States of Frauds of the UCC applies to a Sale of Goods for any merchandise that cost _______

A

$500 or more

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10
Q

Consignment

A

Owner (consigner) gives to consignee to sell on their behalf; not really a sale

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11
Q

Consignee

A

One who receives goods

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12
Q

Consignor

A

One who ships goods

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13
Q

Bill of Sale

A

A document that shows evidence of title/ownership to personal property; usually for buyers benefit to show ownership. Similar to a deed transferring real property and is not the contract.

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14
Q

An exception to a Statute of Frauds under the UCC is _____

A

Non-resalable goods (specifically manufactured goods for specific buyer)

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15
Q

Bearer Paper

A

Payable to the order of cash or bearer or to oneself

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16
Q

Order Paper

A

Payable to the order of a named person; must be a legal entity

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17
Q

Drafts

A

An order to pay

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18
Q

Promissory Notes

A

A promise to pay

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19
Q

Drawer

A

Executes (signs) a draft, makes the order to pay

(funeral home owner writes a check to an employee: the owner is the drawer)

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20
Q

Drawee

A

The one ordered to pay a draft
(The bank)

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21
Q

Payee

A

One to whom a payment is made

(employee)

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22
Q

Maker

A

Executes (signs) a promissory note

(Susan creates a promissory note to pay Joe $10: Susan is the maker)

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23
Q

Endorser

A

One who endorses an instrument on the reverse side

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24
Q

Endorsee

A

One who has an instrument made payable to them through an endorsement

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25
Q

Blank Endorsement

A

An endorsement that only needs the signature of the endorser

26
Q

Special Endorsement

A

An endorsement MADE PAYABLE TO ANOTHER person

27
Q

Restrictive Endorsement

A

An endorsement that limits the use of negotiation for a particular PURPOSE

28
Q

Qualified Endorsement

A

An endorsement that limits the liability of the endorser for payment; “Without Recourse”

29
Q

Negotiation

A

Transferring ownership of the negotiable instrument from one person to another

30
Q

Issuing

A

The first negotiation to the original payee

31
Q

How many requirements are there for an instrument to be negotiable?

A
  1. Signed Writing
  2. Order to pay if it is a draft/promise to pay if it’s a note
  3. Unconditional
  4. Sum certain in money, an national medium of exchange which is legal tender where payable
  5. Payable on demand (Immediately upon presentation or on a fixed future date)
  6. Payable to the order of a named payee or bearer
  7. Payee and drawee must be identified as real entities
32
Q

Bonds

A

A sealed written contract obligation secured by a deed of trust on corporate property; Can be issued by a corp/government entity

33
Q

Coupon Bond

A

Detachable Stubs each being payable on a certain date; IS NEGOTIABLE

34
Q

Registered Bond

A

A bond payable to a named person listed on the records of the corporation; IS NON-NEGOTIABLE

35
Q

Real Estate Mortgage Note

A

A promissory note secured by REAL property

36
Q

Collateral Note

A

A promissory note secured by PERSONAL property

(Personal property: property that is not permanently affixed to land: e.g., equipment, furniture, tools and computers.)

37
Q

Debenture

A

A promissory note issued by a corporation under seal but is NOT secured

  • promissory note under seal but not secured
38
Q

Certificate of Deposit (CD)

A

An acknowledgement by a bank of the recipient of money and a promise to pay it back with interest

39
Q

Cashier’s Check

A

A draft in which the same bank is both drawer and drawee; it is drawn on bank’s own funds

40
Q

Certified Check

A

A draft in which money is segregated out of an account and put in a separate account; bank stamps CERTIFIED on front

41
Q

Bank Draft

A

A draft that utilizes two banks; one is drawer, the other is a drawee

42
Q

Inland Draft

A

A domestic draft that is both drawn and payable within the U.S.

43
Q

Foreign Draft

A

An international draft that is either drawn or payable outside the U.S.

44
Q

Sight Draft

A

A draft payable immediately upon demand at the sight of drawee
(Ex. Check has current or past date on it so you can take it to the bank and deposit it.)

45
Q

Time Draft

A

A draft payable on a fixed future date or certain number of days after date

46
Q

Trade Acceptance

A

A draft involving sales of goods

47
Q

In a Trade Acceptance, who is the drawer?

A

Seller

48
Q

In a Trade Acceptance, who is the payee?

A

Seller

49
Q

In a Trade Acceptance, who is the drawee?

A

Buyer

50
Q

How are order papers negotiated?

A

By endorsement and delivery
(sign the back of the check and take it to the bank)

51
Q

How are bearer papers negotiated?

A

By delivery alone
(take cash to the bank to deposit it; no signature needed)

52
Q

Where do you make an endorsement?

A

Along the trailing edge on the back of the instrument

53
Q

Allonge

A

Paper firmly attached to an instrument so as to become a part of it

54
Q

Who is primarily liable for payment on the instrument?

A

The maker of the note or the drawee/acceptor of a draft

Maker: drawer; who made draft/note
Drawee: bank

55
Q

Who is secondarily liable for payment on the instrument?

A

Endorsers or drawers
- endorser: who first signed the check
- drawer: who made the check

56
Q

What conditions need to be met for someone to be secondarily liable?

A

Presentment, Dishonor, or Notice of Dishonor

57
Q

Holder in Due Course (HDC)

A

A holder who has superior rights on instrument

58
Q

What qualifications are needed to be a HDC?

A

Taking the instrument on/before due date, in good faith, for value, and without notice of any defenses

59
Q

What are limited defenses for non-payment (in exception of a HDC)?

A
  1. Ordinary Contract Defenses
  2. Conditional Delivery
  3. Payment
  4. Theft
  5. Fraud including execution of instrument
  6. Improper completion
  7. Non-Delivery
60
Q

What are universal defenses for non-payment (including a HDC)?

A
  1. Minority
  2. Fraud as to nature of instrument
  3. Discharge in bankruptcy
  4. Forgery

Business Law for Mortuary Science & Funeral Service Law (21 decks)

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