Flashcards in Business Law Deck (49):
When do you use ucc vs common law?
Ucc= when dealing with goods
Common law for dealing with realty or services
What are the four parts to make a valid contract?
offer and acceptance,
consideration (computer for $400),
nothing to indicate either party lacks legal capacity,
legal purpose (selling & buying of a computer.
Whats a bilateral contract?
A promise for a promise.
Ex. a promise to sell something for a promise to buy that thing
What does executory and executed mean?
Executory = the contract isn't completed yet - the exchange of cash for a computer hasn't taken place yet.
Executed = the contract has been completed - the exchange of cash for the computer has taken place.
In determining whether the consideration requirement to form a contract has been satisfied, the consideration exchanged by the parties to the contract must be
When does the first promise serve as valid consideration for the second promise?
To give consideration, a person must promise to do something new or something not already obligated to do.
Do physical threats do render a contract void?
Under the parol evidence rule, oral evidence will be excluded if it relates to...
A contemporaneous oral agreement relating to a term in the contract.
Before any interest in goods (title or risk of loss) can pass from a seller to a buyer, the goods must be in ____ and ____ to the contract—UCC 2-105(2).
existence and identified
T or F: For goods in existence at the time the contract is entered into, identification occurs at the time the parties enter into the contract.
How are goods identified for Fungible Goods?
Identification occurs when the goods are shipped, marked, or otherwise designated for the buyer, i.e., set aside in the warehouse
How are goods identified for Future Goods?
identification occurs when those rocking chairs are shipped, marked, or otherwise designated for the buyer
Place of shipment (seller's city, business, or warehouse, or "shippoint."). Title and risk of loss pass upon delivery (possession) of conforming goods to the carrier
F.O.B. Shipping Point
Place of shipment. Title and risk of loss pass upon seller's delivery of conforming goods alongside the vessel in the manner usual in that port, or on a dock designated and provided by the buyer
Title and risk of loss pass from seller to buyer when the seller delivers (possession) identified conforming goods to the carrier, obtains a negotiable bill(s) of lading covering transportation to a named destination, procures an insurance policy, and forwards to buyer all document
This follows the same rule as in C.I.F., except procurement of an insurance policy is not required on seller's part.
This term requires the buyer to pay cash upon tender of the goods. If goods are shipped COD, then the timing of the buyer's right to inspection is affected
Title and risk of loss pass from seller to buyer once goods arrive at the final destination.
In UCC Article 2, when there is absence of a place of delivery where does delivery occur?
At the seller's place of business or residence if no place of business exists.
1. determine if there is a title document
2. If not, title passes at the moment the contract is made. Note that in nonshipment contracts for goods, identification and passage of title occur at the same time.
3. If there is a document , and the document is negotiable or nonnegotiable, then title passes to buyer upon buyer's receipt of the document
This describes title passage for delivery or non-delivery?
Title passage for non-delivery
1. If FOB shipping point - title passes to buyer when carrier picks up goods
2. If FOB destination - title passes to buyer when goods arrive at final destination.
This describes title passage for delivery or non-delivery?
Title passage for delivery contracts
1. determine whether contract is delivery or non-delivery
2. determine whether seller is merchant or non-merchant
3. If seller is merchant risk of loss passes when buyer has possession
4. If seller is non-merchant, risk if loss passes when seller tender's goods to buyer.
This describes risk of loss passage for delivery or non-delivery?
Risk of loss passage for non-delivery
1. FOB shipping point - risk of loss passes when carrier is in possession of goods
2. FOB destination - risk of loss passes when goods arrive at buyer's warehouse
Risk of loss passage for Delivery
If seller breach occurs, when does title and risk of loss pass?
When buyer accepts incorrect goods or when buyer receives correct goods
What are the three requirements for a security interest to attach?
1. it has to be written and describe the collateral
2. The secured party must give something of value
3. The debtor must have rights in the collateral
Define security agreement
Agreement which creates security interest
Define Security Interest
interest in the collateral which secures payment of an obligation
Describe when a creditor can have a valid oral security agreement.
When the creditor is in possession of the collateral
Define Chattel Paper
Writing(s) which evidence both a security interest in good(or software) and a monetary obligation to pay - example of a security agreement.
Time when security interest becomes valid: requires security agreement and debtor with interest in the property and creditor gives value.
A means by which a secured party gains priority to a debtor's collateral over other third parties who also claim to have an interest in the same collateral.
What are the methods of perfection?
1. Attachment (automatic upon creation of security interest);
2. Possession - Control;
Is equipment covered by the automatic perfection rule?
Does inventory require a filing for perfection?
A manufacturer can perfect without filing when there is a purchase money security interest in goods purchased by whom?
What is the general rule of priority between two perfected security interests
First in time of perfection is first in rights
What is this: If the debtor is able to pay, the surety may require the debtor to pay before the surety pays.
A contract involving two parties in which the first party agrees to indemnify and reimburse the second party for covered debts or losses should they take place. Is this an indemnity contract or surety contract?
_____ is the highest form of land ownership. It means the owner has the right to sell, mortgage, will, and lien the property.
A lease agreement must include what?
A description of the leased premises
A joint tenancy requires that all tenants acquire their interests at the same time. If someone acquired his interest after the fact, they would be a _______, not a joint tenant.
tenant in common.
Must a purchase price and description of the land be included in a deed?
No, just description of the land
Which type of deed will give a real property purchaser the greatest protection?
What is a defect in marketable title to real property?
A purchaser who obtains real estate title insurance will be covered how?
Be insured against all defects of record other than those excepted in the policy.
By recording the mortgage, a bank protects its rights against what?
the claims of subsequent bona fide purchasers for value. The purpose of recording is to keep the rights of the original parties intact and protect against future transfers or recorded rights.
a statutorily filed lien by a creditor when he or she has rendered services, labor, or material to repair or improve real estate but the purchaser has not paid him or her is known as what?
A mechanics lien
What are the 3 requirements for a valid deed?
1. must be in writing;
2. must be signed by the grantor;
3. must include a description of the land.