Midterm-gouge Flashcards
(266 cards)
1
Q
MODUSWON
A
M – Money – fixed amount
O – Order or bearer – “payable to order” or “payable to bearer” * unless a check
D – Demand or stated time
U – Unconditional – no conditions, 4 corners rule
S – Signed
W – Writing , not oral
O – Order or promise to pay conspicuous statement - “I/We promise” or “Pay”
N – No other promises
If not all 8 present, law of assignment applies.
2
Q
How many parties in an order to pay
A
DC Orders to pay
3 parties
Drawer – signs document
Drawee – bank
Payee – gets money
“draft” order payable on sight, time, demand
“check” order, payable on demand, drawn on bank only
3
Q
how is draft payable
A
payable on sight, time, demand
4
Q
how is check payable
A
payable on demand drawn on bank only
5
Q
what are the two orders to pay
A
draft check
6
Q
what are the two promises to pay
A
note CD
7
Q
How many parties in a promise to pay
A
NC 2 parties
Marker – signs
Payee – gets money
“note” promise, payable on demand or time
“cd” promise, payable on demand or time
8
Q
how is a note payable
A
payable on demand or time
9
Q
how is cd payable
A
payable on demand or time
10
Q
Certificate of deposit, CD
A
an instrument contains a bank acknowledgement for receipt of money and a bank promise to repay the sum. A certificate of deposit is a note of the bank.
11
Q
who are the parties in a check
A
Drawer – signs document Drawee – bank Payee – gets money
12
Q
who are the parties in a note
A
Marker – signs Payee – gets money
13
Q
particular fund doctrine
A
allows specification of a particular account or fund for payment
14
Q
payable on demand if 1) and 2)
A
1) does not state any time of payment 2) states that it is payable on demand or at sight, or
15
Q
payable at a definite time 1) and 2)
A
1) payable after period of time lapsed and after sight or acceptance
2) fixed date or dates
3) time readily ascertainable when issued subject to
(i) prepayment,
(ii) acceleration,
(iii) extension by holder, or
extension to a further definite time by maker
or acceptor or automatically upon
or after a specified act or event
16
Q
Instrument rules for conflicting terms 1) over typewritten 2) over printed 3) over figures
A
1) handwritten 2) typewritten 3) words
17
Q
Holder in Due Course
A
takes an instrument for value,
in good faith
and without notice
free of all claims of existing parties,
and free of all personal defenses,
subject only to real defenses .
18
Q
How can one become a Holder in Due Course
A
Become HDC by meeting code requirements
or Inheriting via the shelter rule
for VALUE
in GOOD FAITH
WITHOUT NOTICE of valid defense
19
Q
Does a gifted instrument make one a Holder in Due Course?
A
No
20
Q
What is a holder of an instrument
A
“a person who is in possession of an instrument drawn, issued, or indorsed to him or his order or to bearer or in blank”
21
Q
An “in blank” instrument means
A
no indorsement is required for negotiation
22
Q
negotiation
A
“a transfer of possession, whether voluntary or involuntary, of an instrument to a person that becomes its holder if possession is obtained from a person other than the issuer of the instrument”
23
Q
how to qualify as an instrument holder
A
instrument possessor of an instrument that runs to her An instrument “runs” to a person if (1) issued or (2) transferred negotiation
24
Q
The beauty of negotiable instruments is
A
an instrument free of defenses claimed by anybody against paying it
25
What is the holder in due course's preferred position
1) an instrument free of claims or defenses by previous possessors. 2) treat the instrument almost as money
26
Who must indorse if "Pay A or B"
A or B
27
Who must indorse if "Pay A and B"
A and B
28
Endorsement in trust
Pay A for B Pay A in trust for B
29
shelter rule
transferee of an instrument acquires the same rights that the transferor had. even if not a HDC, can still acquire that status if some previous holder (someone “upstream”) was an HDC.
30
7 Real Defenses Against HDC
MFDDIFM My friends don’t do interviews for me
31
MFDDIFM
7 Real Defenses Against HDC
M – minority (infancy)
F – fraud in the execution
D – discharge in bankruptcy
D – discharge other that is known about
I – incapacity, illegality, Duress
F – forgery
M – material alteration
32
Check
a draft, other than a documentary draft, payable on demand and drawn on a bank - cashier's check - teller's check - money order
33
Cashier's check
means a draft where drawer and drawee are the same bank or branches of the same bank
34
Teller's check
draft drawn by a bank (i) on another bank, or (ii) payable at or through a bank
35
Traveler's check
an instrument that (i) is payable on demand, (ii) is drawn on or payable at or through a bank, (iii) is designated by the term "traveler's check" or by a substantially similar term, and (iv) requires, as a condition - countersignature by a person whose specimen signature appears on the instrument.
36
not negotiable
conspicuous statement, to the effect that the promise or order is not negotiable
37
bearer paper
pay bearer - like cash - transfer by possession - negotiated by delivery
38
bearer paper
pay bearer - like cash - transfer by possession - negotiated by delivery
39
order paper
pay to the order of - negotiated by indorsement and delivery
40
allonge
firmly attached piece of paper with indorsements
41
what is a signature placed on back of check called and what does it do?
indorsement incur possible liability
42
accommodation
add indorsement to lend your credit getting liability but nothing else
43
6 types of indorsements
- blank vs special - restrictive vs nonrestrictive - qualified vs unqualified
44
FRONT
Pay to the Order of David, 7/7/2021,
Signed by Luna
BACK blank
What kind of paper?
The back is blank and therefore “blank paper” or "order paper to pay David.
45
FRONT
Pay to the Order of David, 7/7/2021,
Signed by Luna
BACK David
Classify endorsement
- blank
- nonrestrictive
- unqualified
Converted blank (order) paper to bearer paper
To negotiate, delivery it.
46
FRONT
Pay to the Order of David, 7/7/2021, Signed by Luna
BACK David
Classify endorsement
- blank
- nonrestrictive
- unqualified
Converted blank (order) paper to bearer paper
To negotiate, delivery it.
47
FRONT
Pay to the Order of David, 7/7/2021, Signed by Luna
BACK
David
Pay Leia
- special
- nonrestrictive
- unqualified
“Pay Leia” – this is a “special endorsement”.
Converted bear paper to order paper
To negotiate, Bob indorses (signs) and delivers
48
FRONT
Pay to the Order of David, 7/7/2021, Signed by Luna
Back
David
For deposit only
To acct#123
For deposit only – Restrictive endorsement
- blank
- restrictive
- unqualified
49
FRONT
Pay to the Order of David, 7/7/2021, Signed by Luna
Back
David
For deposit only
To acct#123
For deposit only – Restrictive endorsement
- blank
- restrictive
- unqualified
50
Back
Bruce
Without recourse
Without recourse – Qualified endorsement removes liability
not everyone will take that instrument
- blank
- nonrestrictive
- qualified
51
two types of liability affecting instrument transferors
Drafts (checks) and notes are, after all, contracts contract liability and warranty liability.
52
contract liability
Makers and acceptors are primary parties and are unconditionally liable to pay the instrument. Drawers and indorsers are secondary parties and are conditionally liable. The conditions creating liability—that is, presentment, dishonor, and notice
53
holder
possesses
54
transferor
person who gives
55
transferee
person who receives
56
warranty liability
The transferor’s contract liability is limited.
- signers with additional conditions met
- can even be disclaimed
- a holder who has not been paid suit based on one of five warranties
- A person who transfers an instrument for consideration warrants all of the following to the transferee and, if the transfer is by indorsement, to any subsequent transferee:
(1) The warrantor is entitled to enforce the instrument.
(2) All signatures authentic and authorized.
(3) No alterations.
(4) No defenses or claims
(5) No knowledge of insolvency maker or acceptor or, in the case of an unaccepted draft, the drawer.
Breach of one of these warranties must be proven at trial if there is no general contract liability.
57
Money
a medium of exchange currently authorized or adopted by a domestic or foreign government
58
Defense against torts
Contributory negligence (not anymore)
Comparative negligence
Assumption of risk
Privilege
59
Doctrine of res ipsa loquitur
the thing speaks for itself
I went to get appendix out, now I jingle when I walk.
Someone is negligent.
Mere occurrence infers negligence and proximate cause
Duty
Breach
Causation - inferred
Damages - inferred
60
Prima Facie Tort case
prove elements
Duty
Breach
Causation
Injury
61
Standard of care is different in situations
Kids – same age, IQ, except if minor engaged in adult activity
Disability – same disability comparison
Superior skills – same skills
Mental deficiency – reasonable person is never mentally deficient
Emergency – activity measure against person facing same emergency
Affirmation action – duty of parent, babysitter, does not apply to a stranger
62
Negligent
Does not have to be intentional
Conduct creates unreasonable risk of harm
Failure to exercise reasonable care under circumstances
63
Reasonable person standard
conduct measured against one that always acts
prudently, non-negligently with due care
under all circumstances
64
Negligence Elements
1. Duty – reasonable fictious person – objective test
2. Breach
3. Proximate Causation – two part test
1. But/for test – but for my breaching my duty, you wouldn’t have been harmed.
2. Foreseeable that harm would be caused
3. Can’t be superseding cause
4. Injury/harm
65
Strict liability
not intentional,
not negligent,
abnormally dangerous activity that makes strictly liable.
66
Prima facie
sufficient to establish a fact, first glance
67
Types of torts
Person – assault, battery, injury, infliction of emotional distress, defamation, invasion of privacy
Property rights – trespass, nuisance, conversion
Intentional tort – interfering with economic (a contract or fraudulent misrepresentation)
68
Tort defense (2)
Consent – You said I could
Privilege – self defense, defense of others, defense of property – all reasonable
69
deadly force
for you or others, property no deadly force
70
Assault
in civil law is a threat.
71
Battery
when make contact.
72
Defamation
communicate to 3rd party
73
**Tort Elements**
**– all must present, prima facia case, all must be pleaded and proven.**
1. Duty - Duty that defendant owed plantiff
2. Breach - Defendant Breach of duty
3. Causation - (proximate, primary cause) – defendants breach caused injury
4. Injury - Damages (injury, financial, emotional) – proof plaintiff suffered injury
74
Tort
wrongful civil conduct or
lack of conduct
directed towards someone
that can be compensated.
It is not a crime or breach of contract.
There is some overlap with crimes.
It is a voluntary act
75
Intentional torts
Substantive area of law
76
Tort Types
**Intentional**
- No hostile motive.
- Foreseeable - Mean to bring about consequences of actions
**Negligent** - careless
**Strict Liability** – no fault, so dangerous carries strict liability.
77
Types of civil liability
breach of contract
discrimination
torts
78
Crime
act or omission that violates the law and
punishable by the government.
Commission or Omission.
79
Crime
Actus reus = guilty act
Mens rea = guilty mind
80
Felony
serious crime: jail, death, or imprisonment
81
Misdemeanor
less serious, probably fine
82
Corporate crime
large fine
83
Crime
Burden of proof
beyond a reasonable doubt
84
Crime Defenses
Self defense – defense of self, family or others
Defense of property – reasonable force
Duress
Mistake
Entrapment (Coercion of government)
85
fundamental law in country
US Constitution
86
bill of rights
First 10 Amendments
87
Due Process (5 & 14)
notice of what I did wrong, opportunity to be heard
88
Equal Protection (14)
treat similarly situated people, similarly
89
Free Speech (1)
has limitations
90
Self-incrimination (5)
Can’t be compelled to testify against yourself.
* Can be forced to be in lineup, give blood sample, handwriting, voice samples.
91
Speedy trial (6)
only federal
92
Arbitration
settle dispute by neutral person that is not a judge, no court
93
Stare decisis
let the decision stand – keep decisions consistent
94
Differences between civil and criminal cases
Civil
Complaint
Brought by person or individual
Criminal
Indictment
Brought by government
Crime against society
Grand jury
95
District Court
1 judge
1 jury
96
Court of Appeals
3 judges
No jury
No trial
No additional evidence
Review record of trial judge and reverse, remand, what they want
97
US Supreme Court
9 justices
No trial
No jury
No additional evidence
Review record of trial judge and reverse, remand, what they want
Constitutional, death sentence, difficult to go
Writ of certiorari – cert petition – will you please hear my case.
Circuit courts are divided, please decide.
Issue two words: cert granted
Otherwise: cert denied
If not appeal by right, through writ of certiorari.
98
99
Supremacy Clause
Every court must follow Supreme Court decision.
100
Ethical fundamentalism
looking to central authority for rules
101
business ethics
What is right or wrong in Business setting
Corporations are not people, how held accountability morally
102
Truth is a defense
True
103
Supreme law
Constitution
104
Sources of law
Supreme – Constitution
Case law, treaties, executive orders of President, legislation, rules, regulations, ordinances.
105
Law classifications
Substantive – guts of law, tort, criminal, and contract are substantive areas.
Procedural – how to
106
Civil
Brings the lawsuit is plaintiff
Wrong doer is defendant
Issue a complaint (sue).
Burden of proof: preponderance of evidence, more probably true than not (51%).
Money or equity (do something or stop doing something)
107
Criminal
Plaintiff is government.
Wrong doer is defendant.
Prosecute not sure.
Indictment – piece of paper
Burden of proof: huge, beyond a reasonable doubt.
Prison, jail, fine,
108
Law vs justice
Not guilty is not innocent.
We want them to be same but not always.
1. Is there a moral obligation to help?
2. Do you have legal obligation to prevent his demise?
109
Sanctions
remedies: punishments, fines, prison.
110
Primary purpose of law
to ensure rights are enforced.
Accomplished via sanctions.
111
Legal vs moral
Some overlap, not science, constantly changing.
Depends on society, judges, legislature
All we care about is it legal
112
Res ipsa loquitur
1. “the thing speaks for itself”, the accident implies negligence.
2. The event would not normally occur if there was no negligence.
113
Primary functions of law
Maintaining stability in the social, political, and economic system.
Protecting ownership of private property.
Preservation of the state.
114
Essential elements of crime
mens rea – guilty mind
actus reus – guilty act
115
mens rea
guilty mind
116
actus reus
guilty act
117
oral top check limit
14 days
118
written stop check
6 months
renew 6 months
119
contract can delegate \_\_\_\_
duties
obligator becomes delegator
delegates to delegatee
120
contract can assign \_\_\_\_\_\_
rights
offerer can assign
assigner assigns to assignee
121
minor in adult activity
122
quasi contract
implied contract
if don't make contract, an unjust enrichment
123
to modify common law contract
is consideration needed
yes
124
to modify a UCC contract
is consideration needed
no
125
parole evidence rule
can't give evidence outside the document
only supplemental to support
126
Damages
money most of the time
or
specific performance
127
Damages
injunctive
punitives
nominal
liquidated
128
UCC
What can be omitted
Price
Delivery
Quantity
129
Statute of Frauds
MYLEGS-IS
M - mary for money
Y - year - not fully performed within a year
L - land - transfer land interest
E - executor - pay descendants death from personal funds
G - goods \> $500 - movable personal property
S - surety - promise to pay debts if other doesn't
I - insurance
S - securities
130
8 ways to terminate offer
1. lapse of time
2. acceptance
3. revoke - prior to acceptance
4. reject
5. counter-offer (reject + new offer)
6. death/insanity (exception in an option contract)
7. subject destroyed
8. subsequent illegality
131
Mutual Assent
Offer + Acceptance
132
3 elements
of offer
communicated to offeree (received)
intent (not solicitation, will you buy car?)
definite (terms)
133
newspaper ad
solicitation, not offer
134
auction
solicitation for bids
135
when offer accepted
i.e. terminated
mailed/sent
stamped/addressed, even if never receive
136
what offer types are effective on receipt
revocation
rejection
counter offer
137
mirror image rule
for
offers
offer A, accept A
not accept A+1
138
5 types of conduct that invalidate offer or acceptance
duress
undue influence
fraud
innocent representation
mistake
139
physical duress
for
offer or acceptance
void contract
140
mental duress
for
offer or acceptance
voidable
141
Undue Influence
for
offer or acceptance
voidable
relationship that has trust or dominance
142
Fraud in execution
for
offer or acceptance
void
143
fraud in inducement
voidable
material mispresentation that was justifiable relied on
144
Innocent misrepresentation
for
offer or acceptance
voidable
145
mutual mistake
for
offer or acceptance
void
146
unilateral mistake
for
offer or acceptance
void
147
negligent misrepresentation
for
offer or acceptance
voidable
made without knowledge of falsity
without due care to determine truthfulness
148
Consideration
inducement for a promise
something of value
bargain for exchange
149
gratitutios promise
not enforceable
150
past consideration
is no consideration
151
value
legal sufficiency
legal detriment to promisee
legal benefit to promiser
adequacy means nothing
pre-existing duty - not consideration
152
bargained for exchange
parties negotiated
and
mutually agreed upon terms
153
3 big mouth consideration exceptions
1. statute of limitations
if promise to pay anyhow, have to pay, even if no consideration
2. debt dischanged in bankruptcy
if promise to pay after dischange, have to pay with no consideration
3. promissory estoppel
charity pledge, if relied upon, have to pay
154
promise under seal
binding,, not used
155
enforceable promised by statute
contract mods - UCC
renunciation
term offers
156
unenforceable
if bargain illegal, not enforceable
statute violation - gambling, licensing
public policy - tort, corruption, unconsionable
157
3 types of incapacitated people
for
contract capacity
kids, crazies, drunks
158
minor contract capacity
voidable at option of minor
exception, life necessities
no luxury items
159
when can minor ratify a contract
at majority (18), reasonable time
upon ratification, liable from beginning
160
when can minor disaffirm K
while minor or at majority (reasonable time)
exception
land cannot be disaffirmed until age of majority
161
incompetent contract capacity
voidable
liable for life necessities
exception
K when court appointed guardian - void
during lucid interval may ratify or disaffirm
162
incapacitated contract capacity
lack capacity, not slightly drunk
liable for life necessities, no luxury items
163
3rd party in contracts
contract rights assignment
assignor assigns to assignee
assignee stands in for assignor
voluntary
don't have to give notice to obligators
164
privity
contractual relationship
165
3rd party in contracts
contract duty delegation
closely scrutinized
can't be too personal
166
3rd party beneficiaries
gift, creditor, son
167
novation
new contract performed when original duties are delegated
delegatee bound by contract
168
4 ways to legally terminate contract
1. performance (tender) done
2. act/agreement (mutual rescission - contract to end contract)
3. operation of law - subsequent illegality
4. breach (materiality) - anticipatory - before end
169
conditions may excuse performance
not a breach
1. express - spoken
2. implied in fact - parties understand
3. implied in law - fairness
4. concurrent promises
5. condition precedent - present before - not raining before paint
6. condition subsequent - terminates existing duty
170
remedies
compensate injured party for loss from breach
171
remedy types
monetary damages - most common
specific performance - very rare - order someone to do something, land
injunction - command to do or not to do - rare
restitution - return consideration to good guy
172
monetary damages
compensatory - reliance
amount lost +/-
offset damages - mitigation
recoverable if foreseeable
nominal - win but get $1 + attorney fees
punitives - penalties never against government, wanton, willful, malicious conduct, breach of conduct, tort
liquidated - decide in advance, reasonable amount
173
natural person
living human with certain rights
174
legal or artificial person
group considered by law to be acting as a single individual
capable of rights and duties
175
executory contract
not completed
176
executed contract
completed
177
contract
set of promises
gives one party a remedy if breached
oral, written, implied
178
express vs implied
contract
express - in words
implied - by action
179
formal vs informal
contract
formal - depends on form, a check, under seal, other countries use
informal - everything else
180
unilateral vs bilateral
contract
unilateral - 1 promise
bilateral - 2 promises
181
void contract
no legal effect - pay to kill someone, nope
182
voidable contract
1 party (good guy) can avoid (bad guy)
183
unenforceable contract
all elements but statute of limitations ran out
184
Quasi contract
does not have all the elements
law creates so one party not unjustly enriched
- reasonable value of benefit conferred
185
4 contract elements
LACC
L - legality - subject matter
A - mutual assent (offer + acceptance)
C - capacity
C - consideration
all 4 must be present for contract
186
promissory estoppel
187
sale
transfer of goods for a price (some services)
do not need possession
parties perform in good faith
188
non-sale transactions
bailments, gifts, security agreements
189
lease
personal not real property
190
merchant to merchant sale
stricter rules
higher conduct standard
191
merchant
deals in goods
skilled or
employs agent with skills
192
UCC Mutual Assent
elements that can be left out
price - figure out from market
delivery - sellers place of business or residence if none, unless specified
quantity - output + requirement
193
UCC Acceptance vs common law
UCC more reasonable
194
irrevocable offers
option
firm offer
195
option
irrevocable offer
open for specified period
requires consideration
196
firm offer
irrevocable offers
keep open 3 months
signed
in writing
offeror has to be a merchant
197
merchant to merchant sales
receive written order - affirmative duty to respond in 10 days to object
if oral, admit in court, code will enforce
special manufactured goods, code will enforce
198
perfect tender rule
exact conformity to contract specifications
if not buyer may
1) reject
2) accept anyway
3) accept/reject
199
contract performance complete
1) fully perform your part
2) tender performance
3) excused
200
tender performance
seller puts and holds
conforming goods
at buyer's disposal
gives reasonable notification
at reasonable hour
if not agreed, single delivery
201
3 modifications on buyers right to reject
1) limit rejection to nonconforming goods
2) seller can cure (fix) promptly, in time allowed
3) agree to modify in installments or not at all
202
buyers right of inspection
can inspect before accept and pay
conditional acceptance until inspection in timely manner
203
Excuses for Performance
1) Casualty of goods - no fault - avoided
2) nonhappening of event - strike
3) substituted performance
204
do future goods constitute a future sale
NO
205
Under UCC does title = possession
NO
206
Shipment Contract
Seller delivers to carrier where title passes
207
Destination Contract
Title Transfer
Title passes at destination
208
No Goods Movement
Title Transfer
Upon identification of goods
209
bonafide purchaser
for value
in good faith
without notice
BFP wins over minor
210
BFP and void title
BFP loses
211
BFP and voidable title
BFP wins
212
Sale on Approval
Risk of Loss
seller bears risk until buyer accepts
213
Sale or return
Risk of Loss
Buyer maintains risk until goods returned
214
Consignment
sale or return
buyer maintains risk
215
COD
Shipping contract
seller get to carrier
title to buyer
216
Seller breach
Risk of loss
risk stays with seller
until
buyer accepts or
seller cures
217
Buyer breach
Risk of Loss
Risk of Loss on buyer
for commerciably reasonable time
(fresh fish vs widgets)
218
Bulk Sale
Law deals with fraud
not ordinary in course of business
liquidates and runs
219
caveat emptur
let the buyer beware
220
warranty
seller obligations to buyer
title
quality
condition
performance
if breach - breach of contract
221
3 types of seller warranties
express != opinion
warranty of title - UCC title, goods, not encumbered
implied by law - (not necessarily agreed)
222
implied warranty of merchantability
obligation that goods
reasonably fit
for general purpose
manufactured and sold
used, how old, cost, condition
223
implied warranty of fitness for particular purpose
same as first except reliance on seller to furnish suitable goods
224
disclaim or modify warranty
positive
explicit
conscicous
unequivocable
225
disclaim or modify
express warranty of title
specific language
specific circumstances
seller refrain from making promises
clear, unambigous language
226
implied warranty of merchantability
disclaim or modify
must mention merchantability
conspicuous writing
**does not have to be in writing**
227
implied warranty of fitness for a particular purpose
disclaim or modify
in writing
conspicuous
228
buyer must examine
if examine and should have caught defect, no remedy
229
can there be both
implied and expressed warranty
yes
has to be consistent
230
Warranty Hieararchy
exact or technical specs override sample or model
sample overrides consistent language
express has precedent over implied
231
Magnuson-Moss Act
protection for buyers of consumer goods
FTC enforces
1) cannot disclaim implied with written warranty
2)
232
privity
contractual relationship
233
horizontal privity
between noncontracting parties
determines who sues
234
vertical privity
determine who is liable in supply chain
235
buyer responsibility on warranty breach detection
notify seller in reasonable time
236
strict warranty liability
don't have to be negligent
not a breach of contract
look at product defectiveness
if defective, sue
imposes liability on party in business
dealer, merchant
occassional seller
237
Fictious Payee Rule
gets money by creating fake names
ghost payroll
principal bears risk
238
burden of proof
product defectiveness
prove is defective
not how or why
239
Sellers duty for warranty
provide adequate warnings of danger
safe instructions for use
240
elements of
strict liability warranty
product sold in defective condition
in business of selling product
defect made unreasonably dangerous
existed when left hands of seller
injured (physical or property)
defect is proximate cause
- reliance not needed
- notice of defect given
- not governed by UCC
241
defenses of strict liability warranty
contributory negligence - not material (defective)
comparative - maybe
assumption of risk - yes
misuse, abuse - yes
242
statute of depose
from date of manufacture and sale where action cause filed
reasonable time, not liable forever
243
Seller Remedies
- if delivers on credit, sue for unpaid price
- reclaim only if buyer insolvent at time of delivery
244
Buyer remedies
Specific performance is rare
recover for breach of warranty
245
Every indorser promises to pay an instrument unless?
if 3 conditions met
add without recourse
with signature
1. demand for payment (presentment)
2. dishonor
3. notice of dishonor
246
protest
certificate of dishonor
under the hand and seal of US Counsel or Vice Counsel
drawn or payable outside US
247
delay execused in notice or presentment
1) holder hasn't noticed it is due (acceleration clause)
2) beyond holders control (dates of ordinary deligence)
248
holder execused entirely if
already discharged
account closed / stop payment
249
only present execused when
maker dead or bankrupt
primary party refuses payment
250
Imposter Rule
Indorsement effective even if induced drawer or maker to amke check
be more careful
A impersonates B
C thinks A is B
251
instrument liability based on warranty (2)
transferor
presentment
252
transferor instrument warranty
goot title
genuine signature
no material alterations
no defenses
no knowledge of insolvency of maker or drawer
253
presentment transfer warranty
good title
good signatures
no material alterations
254
terminate liability of negotiable instrument (3)
payment or satisfaction
tender of payment
cancellation, renunciation, rip it up
255
contracting bank
agent of paper owner
contractual relationship
duty of care (ordinary/timely)
seasonable respect endorsements
same warranties
final payment
256
bank and drawer that dies
10 days after notice to pay or certify death
unless instructed by executor to stop
257
depositary banks
deposit check
receive provisional credit
until final credit (check clears)
258
clearing house
association of banks
259
must check bank statement for errors
and notify bank
260
Contract Termination
• Lapse of Time - after a reasonable period of time
• Offeree’s Rejection - Once the offeree rejects the offer, cannot come back later and accept the offer.
• Counter Offer - A counter offer or counter proposal in response to an offer, the original offer terminates. Offer ancillary or non-material terms may not terminate the offer.
• Revocation by Offeror - offeror may revoke an offer at any time before the offeree accepts it.
• Destroy Subject Matter of Contract - Before the offer is accepted, the subject of the offer is destroyed. - If the offer has already been accepted, this could serve to void the contract.
• Death or Mental Incapacity - offeror dies or loses mental capacity at any time before an offer is accepted, the offer is revoked.
Note: The offer does not become effective again if the offeror regains mental capacity.
• Illegality - if the subject of the offer (the activity or product) becomes illegal. If the offer has been accepted, the subject matter becoming illegal will void the contract.
261
debts as consideration
legal duty
3 exceptions
1 special problem
Under the legal duty rule,
payment lesser amount not consideration for full discharge doing only what he has a pre-existing legal duty to do. creditor can sue for the rest
first exception different performance. debtor does different than obligated, the creditor’s promise enforceable.
second exception honest dispute actually owes. payment lesser consideration
third exceptionan honest dispute as to how much. payment less discharge of the debt in full
special problem arises disputed amount writes check amount less supposed to be in full payment
262
oral contract exception for land
and
Statute of Frauds
Under the Statute of Frauds, contracts for the sale of an interest in land must be written down.
The exception here is where an oral contract for the sale of land has been partially performed. If a seller performs his side of the contract by conveying good title to the buyer, the seller can recover the purchase price from the buyer even though the contract is oral. For example:
263
Land
Partial Performance
Statute of Frauds
Under the Statute of Frauds, sale land interest written.
Exception where oral partially performed. If seller conveying good title recover the purchase price contract is oral.
Buyer’s part performance valuable improvement or takes possession and pays contract enforceable.
264
Sale of Goods and Services under UCC
According to U.C.C. Section 2-201, any contract for the sale of goods \> $500 in writing.
statute not governing for primarily sale of services.
oral contract for the sale of goods of $500 or more will be enforced
(1) buyer receives/accepts goods, oral contract enforceable. buyer receives/accepts part of the goods, contract enforceable as goods accepted/received.
(2) buyer partial payment contract enforceable goods for paymentmade
(3) seller specially manufacture goods not suitable for others and the seller substantial beginning in the manufacturing enforceable
If a contract involves the sale of goods and services together, the Statute of Frauds will govern if the contract is primarily for the sale of goods and will not govern if the contract is primarily for the sale of services.
265
contracts in a year
contracts cannot be performed within one year of the contract being made must be in writing.
one-year time period measured date contract made
any theoretical possibility performed in year contract outside statute no matter how remote the chance
If Roy dies within a year of making the contract theoretically possible
The exception contract fully performed. If an oral contract that cannot be fulfilled within one year has been fully performed, the contract is fully enforceable (regardless of how long performance actually took).
266
Contracts of Suretyship
promise to third person to creditor to pay for another writing
3 exceptions:
1. third person promise to the debtor instead of creditor, not in writing
2. third person promises to be primarily responsible outside the statute,
3. Main Purpose rule promises only to be responsible for the debt if the debtor defaults. main purpose for his own benefit, not in writing
