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Regulation > R8 > Flashcards

R8 Flashcards

1
Q

What is the difference between a Surety and a Guarantor?

A
  • Surety: Liable Immediately for the Debt of Another.

* Guarantor: Liable Only if Debtor Does not Pay.

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2
Q

Does a Suretyship agreement need to be in writing?

A

Yes, Per the Statute of Frauds MAID S

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3
Q

​What is a Gratuitous Surety?

A
  • Not Compensated.
  • Released by Any Variation in Risk
  • Promise to be surety must be made before loan is granted.
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4
Q

What is a Compensated Surety?

A
  • Received Payment for their promise.
  • Released by Material changed in risk.
  • Consideration is Compensation.
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5
Q

What are a Surety’s Rights when a debtor defaults in a suretyship situation?

A
  • Immediately Demand Payment from the Surety
  • Immediately Demand Payment from the Debtor
  • Immediately Go After Collateral
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6
Q

What are a Surety’s Rights against Debtors?

A
  • Exoneration: Suit to Compel Principal to pay
  • Subrogation: Enforcemnt of creditor’s rights against principal
  • Reimbursement: Suit against Principal after Payment
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7
Q

What are a Surety’s Rights against Co-Sureties?

A
  • Co Sureties are Jointly and Severely Liable
  • Exoneration: Suit to Compel Co Sureties to pay Pro Rate
  • Contribution: After Surety has paid, entitled to contribution for their pro rate share.
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8
Q

What are a Surety’s Rights against Creditors?

A
  • No Right of Notice
  • No Right to Compel Collection
  • No Right to Compel Creditor to Apply Security Held
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9
Q

What is the pro rata formula for Co-sureties in Contribution?

A

•Debt Paid X (Amount of Suretyship Agreed to / Total Value of Solvent Sureties).

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10
Q

What are the Defenses of a Surety?

A

•Defrauded Principal
•Duress upon Principal
•Illegality of the Principal’s Obligation
•Discharge of Principal’s Obligation◦Payment and Tender of Payment
◦Release of Principal Debtor
◦Covenant Not to Sue
◦Incapacity or Bankruptcy

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11
Q

How do creditors without security interests in debtor’s property gain rights?

A

•Judicial Liens or Garnishment of Property

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12
Q

What is an Agency Relationship?

A

•A principal appoints another person or entity to act on their behalf.

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13
Q

What is required to Create an Agency Relationship?

A
  • Principal with Contractual Capacity
  • Consent of the Parties
  • Writing not required unless to buy or sell land or impossible to perform in one year
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14
Q

What duties does an agent owe to a principal?

A
  • Loyalty
  • Obedience
  • Reasonable Care
  • Account for Books and Records
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15
Q

What are a principal’s remedies against an agent?

A
  • Tort Damages
  • Contract Damages
  • Recovery of Secret Profits
  • Withhold Compensation
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16
Q

What Duties does a Principal owe to an agent?

A
  • Compensation

* Reimbursement

17
Q

When is an agency relationship terminable?

A
  • Terminable at will.

* Exception: Agency Coupled with an interest.

18
Q

How is agency terminated by operation of law?

A
  • Death of either principal or the agent
  • Incapacity of the principal
  • Discharge in bankruptcy
  • Failure to acquire a necessary license
  • Destruction of the subject matter of the agency
  • Subsequent Illegality
19
Q

When is an Agent Liable to Third Parties?

A
  • All Unauthorized Contracts.

* If Principal is undisclosed or partially undisclosed.

20
Q

Can a 3rd party pull out of a contract if they thought they were doing business with the agent, i.e. undisclosed principal?

A

•Negative.

21
Q

What is the doctrine of Respondeat Superior?

A
  • Principal is not liable for the torts committed by the agent.
  • Exception: Employer acting in scope of employment.
22
Q

What is a corporation’s filing with the state called?

A

-Articles of Incorporation

23
Q

What is included in the articles of incorporation?

A
  • Name of the Corporation
  • Name and address of the corporation’s registered agent
  • Names and addresses of each of the incorporators
  • Number of Shares authorized to be issued.
24
Q

What is the ultra vires act?

A

•Directors or officers held liable for business outside the clause of business.

25
Q

How is a corporate Veil pierced?

A
  • Shareholders commingle personal funds
  • Corporation was inadequately capitalized
  • Committing fraud on existing creditors.
26
Q

What are Fundamental Changes that require Shareholder approval?

A
  • D Dissolution
  • A Amendments to the articles of incorporation
  • M Mergers, Consolidations, and Compulsory Share Exchanges
  • S Sale of substantially all the corporation’s assets outside the regular course of business.
27
Q

What is the Sherman Act?

A
  • Prohibits restraints of trade and monopolies.

* Criminal.

28
Q

What is the Clayton Act?

A
  • Aimed at anticompetitive behavior.

* Civil; not criminal.

29
Q

What is the Robinson-Patman Act?

A

•Applies to price discrimation of commodities of like grade and quality.

30
Q

What is the Federal Trade Commission?

A
  • Makes illegal unfair methods of competition.

* Misleading Advertisements.

31
Q

What does it take to make a document of title negotiable?

A
  • Give Present Value
  • Take in good faith
  • Be without any notice
  • Regular Course of Business
32
Q

What are the delivery requirements for documents of title?

A
  • Bearer: Delivery Only

* Order Documents: Delivered and properly endorsed.

33
Q

What are the three warranties of transferor?

A
  • Document is Genuine
  • No knowledge of fact impairing value
  • Negotiation or transfer is rightful and effective
34
Q

What is the liability of carriers and warehousers?

A
  • Common carriers have high standard of care.
  • Treated as an insurer
  • Liable for all damages to the goods that occur during shipment regardless of cause.

Regulation (8 decks)

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