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Reg 2 > R7 > Flashcards

R7 Flashcards

1
Q

What are the duties of an agent (5)

A

Loyalty - solely in principal interest
Obedience - agent must obey principals reasonable instructions
Reasonable care - must not be negligent
Account - duty to account for money and property received and paid out
Subagent - owes duty of care to both agent and principal

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2
Q

What are the damages that the principal can recover from the agent? (4)

A

Tort damages, contract damages, secret profits, and withhold compensation

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3
Q

What does duties does the principal owe the agent? (3)

A

Compensation - unless otherwise agreed on
Reimbursement/indemnification - expenses
Remedies of agent - if principal breach duties, agent can bring action against principal for damages

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4
Q

Define actual authority

A

Authority agent reasonably believed that he or she possess bc of principal communication to the agent

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5
Q

What are the 2 types of Actual Authority

A
  1. Express - principal specifically rants power
  2. Implied - agent reasonably believes they have authority based on dealings between principal and agent (necessary to run the business or carry out agency
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6
Q

What are the 2 main ways both actual and apparent authority are terminated?

A
  1. operation of law

2. death of principal or agent

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7
Q

Define Apparent Authority

A

Power that a third party reasonably believes agent has based on prior dealings:

Title and failure to give notice of agents termination

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8
Q

What the requirements of ratification (3)

A

Ratification can bind the principal in contract . Requirements:

  1. Agent must have indicated that they are acting on behalf of principal
  2. All material facts must be disclosed to principal
  3. Principal must ratify the entire transaction
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9
Q

Define disclosed principal liability

A

Principal’s existence and ID are known to third party, agent is not liable to 3rd party under contract

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10
Q

Define Partially disclosed party liability

A

3rd party does not know agent is an agent or does not know principal’s ID, agent is liable under contract with 3rd party along with principal

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11
Q

Define respondeat Superior

A

Employer can be held liable for employee’s torts committed within scope of employment (while employee is performing services for employer))

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12
Q

What are the elements of a contract?

A

Agreement (Offer and acceptance) - “meeting of the minds”, offer must be communicated to the offeree

Consideration - legal value

Lack of defense

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13
Q

What is the Statue of frauds (MY LEGS)

A

Contracts that need to be in writing

Marriage
Year - contracts that are longer than one year
Land
Estate 
Goods for more than $500 
Surety contracts

*Need only be singed by one party but can be enforce only against the one who signed

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14
Q

What are the differences between an Accord and satisfaction and substitute contract

A

Accord - agreement to substitute one contract for another

Satisfaction - execution (performance) of the accord until the accord is completed

Substitute contract - discharges the original contract discharge
immediately

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15
Q

what is a novation

A

Occurs when a new contract substitutes a new party for an old party in an existing contract and all parties agree that old party is immediately released from liability

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16
Q

What are the Damages the on breaching party may be entitled to? (4)

A

Compensatory (money, compensated to where the non breaching party would be if there would be no breach)

Specific Performance (land and unique items) - court order requiring to perform

Liquidated damages - damages agreed to in the contract, reasonable and not penalty

Punitive - punish defendant, not available for breach of contract

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17
Q

What are the exceptions to the statute of frauds?

A

Specifically manufactured goods (goods not suitable for sale of others)
Written confirmations
Admission in court
Performance

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18
Q

Where is the risk in sale on approval vs sale or return contracts

A

Sale on approval - ROL on seller until buyer gives approval

Sale or return - Buyer has title and risk of loss unless and until the goods are returned to the seller

19
Q

What are the types of warranties? (4)

A

Express warranty - statement of fact or promise made by seller, description of the goods made by seller, or any sample or model shown by seller made or shown at a time

Implied warranty of title - implied in every sale is a promise that seller has good title and a right to transfer it (no patent or trademark) no “as is”

Implied warranty of merchantability - sale by merchant, goods are fit for ordinary purposes. have general disclaimer “as is”, can be oral

Implied of fitness for particular purpose - arises when buyer relies on seller to select goods suitable for buyers particular purpose for the goods. (does not need to be a merchant)

20
Q

Define surety and parties involved

A

Person who is liable for debt of another… suretyship involves Creditor (obligee), Debtor (obliger), and surety

21
Q

What is the gratuitous surety and compensated surety

A

gratuitous - not compensated for their promise to creditor (if creditor does anything that varies surety’s risk –> discharge)

compensated surety - one who is paid for promise to creditor (chares by creditor that increase risk will release surety)

22
Q

What are the 3 rights of the surety

A

Exoneration - if the debtor fails to pay, surety may bring a suit for exoneration to compel the debtor to pay (do prior to paying creditor

Subrogation - once the surety pays the creditor, surety may enforce any right that creditor had against debtor

Reimbursement - entitled to reimbursement from debtor for any amounts that surety paid “indemnification”

23
Q

What happens when a debtor owes creditor money that doesn’t have sufficient funds to pay

A
  • file bankruptcy

- creditors’ composition (agreement among debtor and at least 2 creditors that debtor payless than full on claim)

24
Q

What is a mechanics lien?

A

A mechanic/artisan who works on property and either improves it or repairs it automatically has lien on the property

25
Q

What is a fraudulent conveyance?

A

when debtor transfers property with the intent to hinder, delay, or defraud the creditors (void or voidable)

26
Q

What is PMSI

A

Purchase Money Security interest - special type of security interest that has priority over the other types of security interests in the same collateral

27
Q

What are the 3 categories of collateral?

A

consumer goods (personal use)
inventory (goods held for sale)
Equipment (pther goods used in the business)

28
Q

Under UCC - Secured transactions: when does a security interest become enforceable?

A

Debtor has rights in the collateral

29
Q

What are the 3 requirements of attachment?

A
  1. Parties agree to create a security interest (either take possession or written agreement)
  2. secured party must have given value in exchange for the security interest
  3. Debtor must have rights in the collateral
30
Q

Under the UCC - how can the seller recover the full contract price from the buyer?

A

When the goods are destroyed while risk of loss is with the buyer

31
Q

In an F.O.B place of shipment contract, when does the risk of loss pass to the buyer?

A

Passes when the goods are placed in the hands of a carrier at the sellers loading dock

32
Q

What is anticipatory repudiation?

A

Material breach of contract, giving the non-breaching party the right to sue immediately

33
Q

What is Fraud in the Execution?

A

Party is deceived into signing something that does not look like contract (ball player signs autograph but actually a contract)

Contract is void

34
Q

What is Fraud in the inducement?

A

Defrauded party is aware of contract but lied to

Voidable contract

35
Q

What is the duress?

A

Threat of physical duress - void contract

Economic or social duress - voidable contract

36
Q

What is undue influence?

A

defendants abuse of position or confidence (spouse, trustee, guardian, attorney) to take advantage of others weakness

37
Q

What are the defenses causing a contract to be VOIDED? (5)

A

Adjudicated incompetency
Illegality
Mutual mistake

Physical (duress)
Execution (fraud)

38
Q

What is a unilateral mistake?

A

mistake by one party

Exception: unilateral mistake as to material fact is a defense IF the other party knew or should have known of the mistake

39
Q

What will result in a discharge of a party to a contract?

A
  • Prevention of performance

- Accord and satisfaction

40
Q

What circumstance will discharge contractual duties by operation of law?

A

Impossibility of performance

41
Q

What are the three methods of ratifying a contract entered into by a minor?

A
  1. Expressly ratifying the contract after reaching the age of majority
  2. Failing to disaffirm the contract within a reasonable time after reaching the age of majority
  3. Impliedly ratifying the contract after reaching the age of majority
42
Q

What are the 3 things included in a financing statement?

A
  1. Name and address of a debtor and secured party
  2. Description or indication of the collateral by financing statement
  3. If collateral is real property, description of property
43
Q

What requires an agent for a corporation to have written agency agreement?

A

Purchasing an interest in undeveloped land for the principal

Reg 2 (7 decks)

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