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Question 1

Exceptions to the Parole Evidence Rule

Answer 1

Failure of a condition of precedent

Lack of contractual capacity

Modification made subsequent to the execution of the contract

Question 2

Parol evidence rule

Answer 2

prohibits the introduction of evidence that additional terms were agreed upon before the contract was signed

In effect, it dictates that a written contract will have the final say on what agreements are present. A contemporaneous oral agreement is one that allegedly existed before or at the time the written contract was signed, and evidence pertaining to one cannot be introduced.

Question 3

4 Proofs of a Common Law Fraud

Answer 3

1. A false statement of fact or misrepresentation
2. Knowledge of the false statement by the defendant
3. Reliance by the plaintiff
4. A loss suffered by the plaintiff

Question 4

What are 2 methods of discharge of the original contract?

Answer 4

Accord and Satisfaction

Mutual Recission

Question 5

Accord

Answer 5

agreement to accept a different performance

Question 6

Rescission

Answer 6

A rescission is the undoing of a contract. Both sides are returned to their original positions, and the contractual obligations on both sides are discharged.

Question 7

Creditor Beneficiary

Answer 7

2 conditions:

1. one party to a contract in question owed the creditor money
2. the contract in question was made specifically to satisfy that debt

Question 8

What kinds of contracts can be assigned?

Answer 8

Any can be assigned unless the contract or law prohibits assignment or the assignment would alter or materially increase the risks or duties of the obligor.

Question 9

Incidental beneficiary

Answer 9

Not intended to be the primary beneficiary of a contract. Incidental beneficiaries cannot enforce the contract; only intended beneficiaries can sue.

Question 10

Intended beneficiary

Answer 10

When a party to the contract at issue owes the creditor money and the contract at issue was made to satisfy that debt

Question 11

Who appoints a trustee in a Chapter 7 bankruptcy?

Answer 11

The US Trustee appoints an interim trustee after the order for relief is entered.

Under a Chapter 11 bankruptcy, the debtor in possession generally becomes the trustee.

Question 12

Is there a debtor-in-possession allowance under Chapter 7?

Answer 12

No because the business will be liquidated an terminated.

Chapter 11 relief allows a debtor to retain control of their business because the business will ultimately be reorganized and will continue.

Question 13

In bankruptcy, are consumer debts an exception to the general rule of preferential payments?

Answer 13

Yes. Consumer debts up to $5,475 may be made without showing a preference, as can alimony and child support payments.

If the payment is > $5,475, the 90-day rule would make the payment preferential if the credit card balance is antecedent debt.

Question 14

Creditor treatment in bankruptcy

Answer 14

A debtor who declares bankruptcy may not give one creditor better treatment than others.

Question 15

Order of priority for Chapter 7 claimed filed within 90 days of bankruptcy filing:

Answer 15

1. Administrative expenses
2. Unpaid wages earned for 90 days prior to filing the petition up to $10,950 per employee
3. Unpaid contributions to employee benefit plans, up to $10,950 per employee
4. Taxes
5. Utility bills with the general creditors

Question 16

In Chapter 7, who gets paid first, IRS or general creditors?

Answer 16

IRS

Question 17

Which debts will be discharged under the voluntary-liquidation provisions of Chapter 7 of the Federal Bankruptcy Code?

Answer 17

So long as the debt itself has arisen before the filing, it will usually be discharged if it is based on simple negligence.

Claims based on fraud or other intentional wrongdoing by the debtor will not be discharged.

Question 18

Most debts are discharged after a bankruptcy proceeding. Notable exceptions are:

Answer 18

Alimony
Child Support
Federal Tax Liens
Judgment Liens based on 
   Intoxication Torts

Question 19

Chapter 7 180 Day Rule

Answer 19

Most assets must be surrendered if they existed at the time of filing, some assets (including inherited assets) must be added to the bankruptcy estate if acquired within 180 days of the filing.

Question 20

Is a judgment creditor’s debt dischargeable under Chapter 7?

Answer 20

Yes. It is not on the statutory list of non-dischargeable debts.