15 Flashcards
15 (42 cards)
What is the reasonable person test?
A standard to determine what a reasonable person would do under specific circumstances.
What is a breach of warranty?
A breach that results in damages but does not constitute a breach of contract.
Define undue influence.
A situation where a power dynamic exists, such as between a teacher and student.
What is a fundamental breach?
A breach that goes to the root of the contract.
What is the obligation to mitigate?
The obligation to limit damages by taking reasonable steps to reduce loss.
What is a creditor?
An entity or person to whom money is owed.
What are assets in the context of loans?
Properties or items used as security for a loan.
What is the personal property security act search?
A government search to ensure there are no charges on a vehicle.
Fill in the blank: In the personal property security act, the three stages in creating a secure relationship are _____, attachment, and perfection.
Enter into contract
What happens during attachment in the personal property security act?
The debtor receives value under the contract.
What is perfection in the context of secured transactions?
The process that protects a creditor’s claim against a debtor’s sold goods.
What is a guarantee on a loan?
A secondary obligation that requires payment only if the primary borrower defaults.
What is indemnity in loan agreements?
A primary obligation that allows a guarantor to pay a loan even if not named on it.
What does the Bank Act allow farmers to use as security for a loan?
Anticipated crops or inventory.
What does the builder’s lien act pertain to?
It relates to claims against property for unpaid construction work.
What is insolvency?
The inability to make payments when they are due.
What is bankruptcy?
A legal status where a debtor loses control of assets, which are managed by a creditor.
Who are preferred creditors?
Creditors who have priority claims, such as those owed taxes.
What are secured creditors?
Creditors who have a right to an asset in case of default.
What are general unsecured creditors?
Creditors without any claim to specific assets, like those for cell phone bills.
What is the ratio of secured to unsecured creditors?
Example ratio: 7:2:1
this is a ratio that shows the amount on the dollar of what someone owes each of their creditors.
Order is
1. Secured creditors (creditors that have assets as securities backing the loan
2. Preferred Creditors (creditors w legal priority like if u owe taxes)
3. Unsecured creditors (do not have collateral like phone bill)
What is the purpose of the Co. Creditor Arrangement Act?
To allow big companies to restructure without liquidation by creditors.
What does the Sale of Goods Act do?
The Sale of Goods Act is a set of laws that govern contracts where goods (physical items) are bought and sold. It protects both buyers and sellers by setting rules about quality, ownership, and rights when something goes wrong in a sale.
Goods must be
- fit for described prupose
- title passed at time of purchase
- - Must be of merchanable quality
- must match description
- goods must match sample
What does the Sale of Goods Act apply to?
Situations where goods are bought and sold, excluding real estate.
