REG 7 Flashcards
REG 7 (49 cards)
REG 7-1 Agency - What are the requirements to create an agency?
Consent of both parties; and Capacity of the principal. Note: Consideration is not required and a writing is necessary only if the agent is to purchase land on behalf of the principal or if the agency cannot be performed within one year. Note also that the agent need not have contractual capcaity (a minor can serve as an agent).
REG 7-2 Agency - What are the duties of the agent to the principal?
Loyalty, Obedience, Reasonable care, Duty to account
REG 7-3 Agency - What are the duties of principal to the agent?
Compensation, Reimbursement
REG 7-4 Agency - What types of agency relations cannot be unilaterally terminated by the principal?
A principal may not unilaterally terminate an agency coupled with an interest.
REG 7-5 Agency - Define actual (real) authority?
Actual authority is that which an agent reasonably thinks he possesses based on communications from the principal.
REG 7-6 Agency - What are the two types of actual authority?
The two types of actual authority are implied authority (e.g. from position, past acts, circumstances) and express authority (authority specifically granted by the principal).
REG 7-7 Agency - Define apparent authority.
Apparent authority is that which a third party believes an agent possesses as a result of the principal’s communications with the third party.
REG 7-8 Agency - If a principal tells a purchasing agent not to spend more than $500 on each purchase, but tells the agent not to disclose this ceiling amount to third parties, has the principal effectively limited the agent’s apparent authority?
No. Secret limiting instructions are sufficient to limit actual authority, but do not limit apparent authority because apparent authority is based on the third party’s reasonable belief in the agent’s authority. An instruction of which the third party is unaware can have no effect on the third party’s beliefs.
REG 7-9 Agency - Would the manager of a retail business generally have implied authority to: hire employees? Purchase merchandise? Sell the store’s trade fixtures?
A manager generally has implied authority to hire and fire employees, Whether the manager would have implied authority to buy merchandise depends on the nature of the business and the customs of the industry, A manager generally has no implied authority to sell his store’s trade fixtures because the manager’s apparent authority is limited to running the business, not dissolving it.
REG 7-10 Agency - What is the difference between a general agent and a special agent?
A general agent is one who is authorized to engage in a series of transactions involving a continuity of service.; A special agent is one who is authorized only to engage in a single transaction or a single type of transaction.
REG 7-11 Agency - Under what conditions may a principal ratify an unauthorized transaction?
The agent must have indicated that he was acting on behalf of the principal. The principal also must: Know all the material facts surrounding the transaction, and Accept the entire transaction. In addition, the third party must not have already revoked.
REG 7-12 Agency - Describe the differences between a disclosed, partially disclosed, and undisclosed principal.
A disclosed principal is one whose existence and identity are disclosed to the third party with whom an agent deals.; A partially disclosed principal is one whose existence is disclosed, but whose identity is not disclosed.; An undisclosed principal is one whose existence and identity are not disclosed to the third party with whom the agent deals.
REG 7-13 Agency - Who is liable to third parties in the case of an undisclosed or partially disclosed principal?
Both the agent and the principal are liable. Only the principal is liable if the principal is fully disclosed.
REG 7-14 Agency - What elements are necessary to establish a principal’s liability under respondeat superior?
An employer-employee relationship; Act committed within the scope of employment
REG 7-15 Agency - What is an employer’s liability for independent contractors?
The general rule is that an employer is not liable for torts committed by independent contractors, but there are certain situations in which the employer can be held liable for torts of independent contractors: Ultrahazardous activities; Authorized misrepresentation.
REG 7-16 Bankruptcy - Under the federal Bankruptcy Code, is a trustee required for Chapter 7, Chapter 11, and Chapter 13?
A trustee is required for Chapter 7 and Chapter 13; A trustee is not required for Chapter 11
REG 7-17 Bankruptcy - What two groups may file voluntary bankruptcy, but may not be the subject of involuntary bankruptcy?
Farmers; Nonprofit charitable organizations
REG 7-18 Bankruptcy - How many creditors must join in filing a petition to commence an involuntary bankruptcy case: if the debtor has 12 or more creditors? -if the debtor has fewer than 12 creditors?
If the debtor has 12 or more creditors, at least three creditors with aggregate unsecured claims of at least $14,425 must join in the petition.; If the debtor has fewer than 12 creditors, any one creditor with an unsecured claim of at least $14,425 may file the petition alone.
REG 7-19 Bankruptcy - What is the automatic stay?
Automatic stay: When bankruptcy proceedings commence, a creditor may not pursue remedies against the debtor or his assets.; The automatic stay goes into effect the moment a bankruptcy petition is filed.
REG 7-20 Bankruptcy - Under the federal Bankruptcy Code, what elements are necessary to establish a preferential payment?
A preferential payment is: A transfer made to or for the benefit of a creditor; On account of an antecedent debt of the debtor; Made within 90 days prior to the filing (one year if the creditor is an insider, such as an officer of the debtor organization or a close relative of the debtor); Made while the debtor was insolvent; and Results in the ccreditor receiving more than the creditor would have received under the Bankruptcy Code.
REG 7-21 Bankruptcy - List at least six grounds for denial of discharge.
Debtor not individual; Fraudulent transfers or concealment of property; Failure to keep books and records; Commission of bankruptcy crime; Failure to explain loss of assets; Refusal to obey orders or answer questions Improper conduct in an insider’s case; Prior discharge within eight years; Individual debtor’s failure to complete financial management course; Waiver
REG 7-22 Bankruptcy - List at least six exceptions to discharge.
- Taxes due within three years of filing 2. Debts incurred by fraud 3. Debts related to luxury goods 4. Open-ended credit debts of consumers 5. Debts undisclosed in bankruptcy petition 6. Debts from embezzlement, larceny, and fiduciary’s fraud 7. Alimony, maintenance, support 8. Debts from willful and malicious injury 9. Debt from DWI 10. Debts that are government fines and penalties 11. Debts from education loans 12. Debts denied discharge in a prior bankruptcy 13 Debts incurred to pay taxes 14 Debts incurred due to violations of securites laws 15. Condo, co-op, and homeowners’association fees 16. Restitution for federal crimes 17. Prisoner’s court fees 18. Fines for federal election law violations 19. Debt owed to pension or profit-sharing plan.
REG 7-23 Bankruptcy - What is the hierarchy for paying unsecured priority claims in a bankruptcy proceeding?
Secured creditors then SAG WEG CTI: S = Support obligations to spouse and children, A = Administration expenses from Bankruptcy, G = Gap creditors; W = Wages up to $11,725 if earned within 180 days, E = Employee benefit plan payments up to $11,725 (reduced by wage claims) if earned within 180 days, G = Grain farmers’and fishermen’s claims against storage/processing facilities up to %5,775; C = Consumer deposits, T = Taxes, I = Injuries cuased by intoxicated driving.
REG 7-24 Bankruptcy - In a Chapter 11 reorganization, is a trustee usually appointed?
A trustee usually is not appointed in a Chapter 11 case; the debtor usually remains in possession of the estate’s assets.
