REG- 9

Question 1

Under what conditions are liquidated damages valid?

Answer 1

Only if they are reasonable in terms of the actual loss caused and the actual losses accused would be difficult to execute.

Question 2

If there is no liquidated damage clause and the buyer has made a deposit or payment, how much may the seller keep?

Answer 2

$500 or 20% of the purchase price, whichever is less.

Question 3

Are Punitive Damages available in suits for breach of contract and not provided for under the UCC breach of contract of sales and goods?

Answer 3

Not usually.

The goal of contractual damages is to give the wronged party the “benefit of the bargain”, not to punish the person who has breached the contract. Punitive damages are usually available only in other types of lawsuits, such as intentional toast suites.

Question 4

What does Article 3 of the UCC govern?

Answer 4

Negotiable Instruments:

• Drafts
• Certificates of Deposit
• Promissory Notes
• Checks

Question 5

Negotiable Instrument

Answer 5

A writing signed by the maker or drawer giving an unconditional promise or order to pay a sum certain in money on demand or at a definite time payable to order or bearer

Question 6

What makes an instrument negotiable?

Answer 6

• payable on demand or at a definite time
• in a sum certain in money
• payable to order or to bearer
• signed by the maker or drawer

Question 7

Under the Negotiable Instruments Article of the UCC, the proper party to whom a check is presented for payment is
	A. 	The drawer.
	B. 	The maker.
	C. 	The holder.
	D. 	The drawee.

Answer 7

D. The drawee

A check is a draft drawn on a bank, making the bank the drawee. We go first to the drawee for payment on a draft/check.

Question 8

What elements are required to be a holder in due course?

Answer 8

• The holder must take the instrument for value (payment of interceded debt is value)
• take the instrument in good faith
• take the instrument without notice the instrument is overdue or has been previously dishonored or of any claim or defense

Question 9

Who may invoke the testimonial privilege, CPA or client?

Answer 9

Only the client can invoke the accountant-client privilege, for it exists to protect the client rather than the accountant