Business Law (R5-R6)

Question 1

Common law

Answer 1

derived from the courts - contracts involving real estate, insruance, services, and employment (RISE) are governed by the common law

Question 2

UCC

Answer 2

Uniform Commercial Code Sales Article - it is a statutory law that governs laws for sale of goods (anything moveable)

Question 3

FRAUD

Answer 3

MAIDS - Misrep of material fact, scienter, intent to induce reliance, actual reliance, and damages

Question 4

to be effective, consideration for a contract must be

Answer 4

legally sufficient

Question 5

unilateral control

Answer 5

only one promise is made by the offeror given in exchange for performance - contract not formed until performance is completed

Question 6

quasi contract

Answer 6

not a contract at all, its a remedy that allows a plaintiff to recover a benefit unjustly conferred upon the defendant - a remedy to prevent unjust enrichment

Question 7

bilateral contract

Answer 7

two promises, contract is formed as soon as promises are exchanged

Question 8

acceptance

Answer 8

only the person to whom offer was made can accept - accept in any way unless specified

Question 9

mail box rule

Answer 9

contract is formed on dispatch even if accepted letter is never recieved

Question 10

opting out of mailbox rule

Answer 10

means that it is not accepted until received

Question 11

considering (pricing of contracts) has two elements

Answer 11

something of legal value given by each party and must be a bargained for exchange

Question 12

contract is void

Answer 12

it is not valid and cannot be enforced from the beginning - they lack elements of a legal contract

Question 13

formation defenses making a contract void:

Answer 13

fraud in execution, physical duress, illegality, adjudicated mentally incompetent.

Question 14

contract voidable

Answer 14

contract is initially valid and enforceable, but can be declared invalid if taken to court.

Question 15

examples of formation defenses for voidable contract

Answer 15

fraud in inducement, innocent misrep, economic durress, undue influence, mutual mistake, unilateral mistake, minority, or intoxicaton

Question 16

statute of frauds : requires contract in writing

Answer 16

1. marriage
2. not performed within a year
3. involving interests in land
4. contracts by executors
5. for sale of goods over $500
6. contracted to act as a surety (to pay debt of another)

Question 17

the UCC imposes good faith on merchants by

Answer 17

the duty to observe reasonable commercial standards

Question 18

under the UCC (article 2) a written contract must contain indication of what

Answer 18

the quantity of goods being sold

Question 19

commercial implacability

Answer 19

a contract will be discharged for implacability if it is extremely more burdensome than anticipated because of an unforeseen event happening.

Question 20

warranty of title

Answer 20

guarantee from the seller that the goods are delivered free from all liens of which buyer is unaware

Question 21

implied warranty of fitness

Answer 21

the seller knows the particular purpose for which the buyer will use the goods and knows the buyer is relying on the sellers judgement to select suitable goods

Question 22

under the UCC what is available to the buyer when the seller breaches contract (anticipatory breach of contract)

Answer 22

demand assurances of performance or cancel the contract. there is no right to punitive damages under the law

Question 23

under the UCC, what is available to the seller when the buyer materially breaches a sales contract

Answer 23

right to cancel the contract and right to recover damages

Question 24

who cannot file CH 7 bankruptcy vs 11

Answer 24

RIBS: railroads, savings institutions, insurance companies, banks and small business investment companies BIBS: (railroads can for 11)

Question 25

what property can be acquired after filing a bankruptcy estate

Answer 25

The estate includes income generated from estate property and property the debtor receives from a bequest, devise, inheritances, property settlement, divorce, or beneficial interest in life insurance within 180 days after filing of the petition.

Question 26

who cannot be petitioned involuntarily into bankruptcy.

Answer 26

farmers and nonprofits

Question 27

4 types of warranties

Answer 27

express, implied of title, implied of merchantability, and implied of fitness for particular purpose

Question 28

express

Answer 28

how: by fact, promise, or descriptions by whom: any seller disclaimer: cannot disclaim

Question 29

implied warranty of title

Answer 29

how: by sale of goods who: any seller disclaimer: by specific language or circumstances showing seller does not claim title

Question 30

implied warranty of merchantability

Answer 30

how: by sale of goods of the kinds who: merchant only disclaimer: by disclaimer mentioning "merchantability"

Question 31

void examples of defense

Answer 31

fraud in the execution, physical duress, illegality, or adjudicated incompetency

Question 32

voidable examples of defense

Answer 32

fraud in the inducement, innocent misrepresentation, economic duress, undue influence, mutual mistake, unilateral mistake, minority, or intoxication

Question 33

accord

Answer 33

an agreement to substitute one performance for another and satisfaction is the execution of the accord - this discharges the original duty

Question 34

substituted contract

Answer 34

similar to an accord but the duties under the original are discharged immediately

Question 35

novation

Answer 35

available as a defense to a party who has been released from a contract so it occurs when a new contract substitutes a new party for an old party in an existing contract (but all parties must agree to the release)