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Business Law > Part 2: Commercial Law and Securities > Flashcards

Part 2: Commercial Law and Securities Flashcards

Guarantee of Obligations, commercial liabilities, securities, specific obligations of the traders (Part 1 Chapter 5, Part 2 Chapter 1 and Chapter 2, Part 2)),

1
Q

General guarantee of obligations

A

the debtor’s assets that can be seized (bank account, estate, capital)

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2
Q

A personal guarantee is as good as a guarantee from an owned asset in what situations…

A

if the guarantor is also well off/financially capable.

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3
Q

The Civic procedural code states that some things/assets are… (in regards to seized assets)

A

unsuitable (they cannot be seized no matter what)
partially unseizable (only partially seized)
relatively unseizable (only seized under certain circumstances)

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4
Q

Example of things that cannot be seized

A

things in public domain
things that cannot be assigned
objects that if seized can offend common decency or lack economic justification

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5
Q

Example of things that can be partially seized

A

2/3 of liquid salaries, wages, other social benefits (insurance)

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6
Q

Personal securities

A

A person’s guarantor, with their assets to the fulfilment of the debtor’s obligations

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7
Q

in rem securities

A

a fixed charge attached to a particular asset and gives the creditor preference in payment for the value of the sale of the assets

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8
Q

What is the difference between personal security and in rem securities?

A

in rem securities are registered and are more secure and guaranteed to be seized, while personal security can be faked.

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9
Q

what does the provision of personal security mean?

A

a third party guarantees with their own assets to comply for someone else’s obligations and becomes liable to the creditor.

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10
Q

The guarantor has the benefit of prior excussio, what does this mean?

A

The guarantor can refuse payment to the creditor until all the assets of the debtor are seized first.

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11
Q

What two situations can a guarantor not use the benefit of prior excussio?

A
  1. if they have renounced the benefit
  2. if they assumed the role of primary payer
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12
Q

Pledge

A

grants the creditor right to have his credit paid with preference over other creditors in relation to certain movable things.

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13
Q

Pledge of things

A

when someone offers a physical item, like a piece of property or valuable possession, as security for a debt or obligation

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14
Q

Example of pledge of things…

A

if you borrow money from a friend to start a small business. To ensure that your friend gets their money back, you offer your expensive watch as collateral.

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15
Q

Pledge of rights

A

when someone gives up certain rights as security for a debt or obligation

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16
Q

An example of pledge of rights…

A

if you owe someone money, you might pledge your right to receive future payments from a customer as security until the debt is repaid

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17
Q

Difference between a mortgage and a pledge when it comes to it guarantee?

A

Mortgage is registered, immovable things and a pledge cant be registered (unless its a pledge of shares)

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18
Q

Mortgage

A

A legal document offering a building or land (or things deemed immovable) as security (for a loan).

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19
Q

For the purposes of a mortgage, what movable things can be equivalent to immovable things and why?

A

Cars, ships, aircrafts. The reason why is because they can be registered in a registry.

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20
Q

What are the three types of mortgages?

A

Legal
Voluntary
Judicial

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21
Q

Voluntary mortgage

A

result from an agreement or an unilateral statement (art. 712 to 717 of the Civil Code)

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22
Q

Judicial mortgage

A

Granted by the court, more accurate safer to the law.

23
Q

Prior ranking

A

Allows creditors to be paid over anyone else regardless of registration.

24
Q

Right of retention

A

When you incur expenses because of a thing, then you hold the right of holding the thing until expenses are paid.

25
Q

Bank guarantee

A

A personal guarantee provided by the bank, undertaking the payment of a certain amount.

26
Q

Acts of Commerce

A

All acts that are regulated in the commercial code

27
Q

Objective acts of commence

A

classified as such by the law (included in the code or any other legislative act)

28
Q

Examples of objective acts of commerce

A

Mergers (of companies)

29
Q

Subjective acts of commerce

A

All contracts that are not exclusively civil in nature

30
Q

Example of subjective acts of commerce

A

When someone prefers one brand of a product over another based on personal taste or perception

31
Q

Who can carry out acts of commerce?

A

Traders
Individuals with capacity to exercise, even if they are not traders

32
Q

Special rules applicable to acts of commerce and traders

A
  • Simplification of formalities and means of proof
  • Joint and several liability
  • Time-barring
33
Q

Simplification of formalities and means of proof

A

legal provisions or practices aimed at streamlining (making it faster) the documentation and evidence requirements in commercial transactions.

34
Q

Joint and several liability

A

It provides a mechanism for ensuring that obligations are fulfilled and harms are compensated, even if one or more parties are unable to meet their responsibilities. It also offers greater flexibility for creditors to receive compensation

35
Q

Time-Barring

A

Time-barring is a rule in commerce that sets a limit on how long someone can take legal action against a trader for certain issues.
Be aware that it’s 2 years in the Portugal

36
Q

Example of time barring

A

buying a product from a store, and later you realise there’s a problem with it.
If the time limit is two years, you must file a complaint or lawsuit within two years of discovering the issue.

37
Q

Fundamental principles applicable to business names

A

Principle of truth
novelty or exclusivity principle
capacity to distinguish (different from other companies)
Unity principle
Principle of Lawfulness

38
Q

How long are traders under obligation to keep proper records of their commercial
activity?

A

10 years

39
Q

upon first demand bank guarantee

A

A personal guarantee provided by the bank, in which the bank pays the creditor if the debtor’s obligations are breached, without discussing wether it happened or not. The debtor must then pay the bank instead.

40
Q

What happens when debts are incurred by both spouses, or one spouse with the consent of the other?

A

both spouses are liable for the payment of the debt

41
Q

What happens when debts are incurred by one of the spouses?

A

Except when provided by the law, only the spouse that incurred the debt is liable for the payment of the debt

42
Q

in certain cases, both spouses are responsible for the debts incurred by one of them. One of those cases, inter alia, are when…

A

the debts incurred by a trader spouse in the exercise of his/her commerce

43
Q

Pursuant to article 1691(1) (d) of the Civil Code, regarding debts incurred by the trader spouse in the
exercise of his commerce:

A

Both spouses are liable for the debts incurred by the trader spouse in the
exercise of his commerce, unless it is proven that it was not incurred in the
common interest of the couple or if the couple is married in a separate
property regime.

44
Q

What are individuals that do not classify as traders?

A

incompatibilities (the law doesn’t allow people in positions of trading activities.
Culpable insolvency and bankruptcy fraud (disqualifying incompetent people who led things to bankruptcy)

45
Q

What does culpable insolvency and bankruptcy fraud mean?

A

means that someone is responsible for becoming bankrupt due to their own actions. If a judge determines that insolvency was culpable, they must identify who is at fault. The judge can disqualify these individuals from participating in business activities.

46
Q

What are traders?

A

Individuals who have the capacity to carry out acts of commerce

47
Q

The quality of trader is acquired when:

A

The person executes acts that reveal the intent of pursuing a commercial gain as its profession.

48
Q

Commercial companies take the legal form of:

A
  • general partnership
  • private limited company
  • public limited company
  • limited partnership
  • partnership with shares
49
Q

What are the specific obligations of the traders?

A
  • Adopt a business name
  • keep proper records of their commercial activity
  • comply with registration obligations at the commercial register
  • prepare annual report and accounts
  • other
50
Q

A business name is mandatory for…

A

Individuals and commercial companies, composed entirely of words.

51
Q

Three types of business names:

A
  • Composed of the name of one or more people (Silva & Tamang, Lda)
  • Composed by an expression that indicates activity (Fruit & Vegetables)
  • Composed by a mixture of two types
52
Q

Protection of business name is guaranteed through…

A

preventive (certificate of admissibility RRNPC) and repressive means (RRNPC declare loss of right to name if it infringes principle of truth and novelty).

53
Q

Company names can’t contain words, expressions, abbreviations that are…

A

misleading.

54
Q

Company names can’t include elements that suggest activities different from…

A

what’s actually being carried out by the trader.

Business Law (5 decks)

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