23, 26, 27 & 31-36

Front 1

(Liability for Payment of Instrument)
Unqualified Endorser

Back 1

Subject to presentment, dishonor and notice of dishonor,
unqualified indorsers have secondary liability to pay an instrument.

Front 2

(Liability for Payment of Instrument)
Qualified Endorser

Back 2

No liability to pay amount of paper even if primary party fails to pay.

Front 3

(Warranties)
Unqualified Endorser

Back 3

Warrants certain matters to all holders

Front 4

(Warranties)
Qualified Endorser

Back 4

an indorser “ without recourse” makes the
same warranties that an unqualified indorser makes.

Front 5

Extent of Authority

Back 5

express, implied, customary, apparent.

Front 6

Appointment

Back 6

Contracts are oral or written, formal or informal.

Front 7

Agency by Estoppel

Back 7

when a person’s word or acts mislead another
person into believing that a third party is that person’s agent and it is
necessary to recognize an agency in order to avoid injustice.

Front 8

Neccesity

Back 8

If a parent fails to provide necessaries for a child (minor), the
child may purchase the necessaries and charge them to the parent.

Front 9

Loyalty and Good Faith

Back 9

the relationship b/t a principal and agent is
one called fiduciary, which means trust.

Front 10

Obedience

Back 10

The agent must carry out the principal’s requests to the
letter unless they have been given some degree of latitude or discretion
for the betterment of the transaction.

Front 11

Reasonable skill and diligence

Back 11

The agent must possess the skill
required to perform the duties and must the diligent in performing the
skill.

Front 12

Accounting

Back 12

The agent must keep good financial records and must
justify expenditures.

Front 13

Information

Back 13

Privacy is a key element of this relationship.

Front 14

Compensation

Back 14

The agent should be compensated for all work
performed for the principal.

Front 15

Reimbursement

Back 15

The principal must reimburse the agent for any
expenses related to principal that the agent incurred

Front 16

Indemnification

Back 16

The principal should cover (loss and damages) you if
during the normal course of business you incur a lawsuit, etc.

Front 17

Abidance by the Terms of the Contract

Back 17

The principal must abide by
the terms of the contract including implied compliance. In other words,
the principal must do what they promised to do.

Front 18

An agent is not liable to a third party if:

Back 18

1. The agent makes a contract for a principal.
2. The agent had any type of authority
3. The name and existence of the principal was disclosed.

Front 19

An agent is liable to a third party if the agent:

Back 19

1. Contracts in their own names and do not disclose that they are
legally representing a principal will be liable for the transaction if the
principal does not “ratify” the transaction.
2. Agent by express agreement may make themselves liable to third
parties. In other words: They agree to be personally bound.

Front 20

An agent is liable to a third party if the agent:

Back 20

3. People who assume to act for the principal but have no legal right to
do so. This usually happens when an agent oversteps his/her
bounds.
4. Fraud and other wrongful acts

Front 21

Original Agreement

Back 21

Time of the contract lapses

Front 22

Subsequent Agreement

Back 22

Mutual agreement to quit/cease

Front 23

Revocation

Back 23

The principal can revoke the agency at anytime (unless
stated otherwise in the agency agreement). The principal may be liable
for business conducted prior to notification to the agent.

Front 24

Renunciation by the Agent

Back 24

Unless stated otherwise in the agency
agreement, the agent simply resigns/quits upon notice.

Front 25

Termination of an Agency by an Operation of Law

Back 25

Subsequent Illegality – The subject matter of the agency becomes illegal
by nature
• Death or Incapacity - Of either parties
• Destruction - The subject matter of agency is destroyed. i.e. – house
burns down that Conner was going to sell.

Front 26

Termination of an Agency by an Operation of Law

Back 26

Bankruptcy – The bankruptcy of the principal terminates the agency
• Dissolution – Similar to death of an individual. However, this relates to a
business entity such as a corporation.
• War – Agency ends if parties are citizens of different countries that go to
war against one another. Also, when war makes the subject matter
impossible to perform.

Front 27

Silent Partner

Back 27

partner who take no part in the business.

Front 28

Secret partners

Back 28

an active partners unknown to the public.

Front 29

Dormant Partners

Back 29

an active partner unknown to the public, who is not
active in the business. (silent/secret)

Front 30

Corporation

Back 30

is an association of individuals created by law into an entity
which is able to change its members without dissolution of the
association.

Front 31

Duties of Partners

Back 31

Exercise loyalty and good faith
Work for the Partnership
Abide by Majority Vote
Keep Records
Inform

Front 32

Rights of Partners

Back 32

1. Participate in the management of the business unless they have
relinquished this right by contract
Inspect the Books
Contribution
Withdraw Advances
Withdraw Profits

Front 33

Partners have Three Types of Liabilities:

Back 33

1. Contractual Liabilities
2. Liability for Torts –
3. Liability for Crimes

Front 34

Dissolution

Back 34

is a change in the purpose of a partnership from that of
pursuing an ongoing business to concluding its business.

Front 35

Permitted Withdrawal

Back 35

if the partnership is formed for an indefinite term, a
partner can withdraw anytime and for any reason without liability and the
withdrawal dissolves the partnership.

Front 36

Expulsion

Back 36

The partnership agreement should contain a clause
providing for the expulsion of a member.

Front 37

Insanity of a Partner

Back 37

Another partner is judicially declared insane.

Front 38

Incapacity of a Partner

Back 38

Another partner suffers a permanent disability
rendering the partner incapable of performing their duties.

Front 39

Misconduct

Back 39

Another partner engages in serious misconduct that
endangers the partnership

Front 40

Futility

Back 40

It becomes reasonably impossible to accomplish objectives of a
partnership and the business can be operated only at a loss.

Front 41

Dissolution by Operation of Law

Back 41

Death
Bankruptcy
Illegality

Front 42

Private Corporations

Back 42

Those formed by private individuals to perform
some non-governmental functions.

Front 43

Porfit Corporation

Back 43

organized to earn money.

Front 44

Closed (Closely held) corporation

Back 44

one person or a few people own all
shares of stock

Front 45

Domestic Corporation

Back 45

Does business in the state where incorporated.

Front 46

Foriegn Coporation

Back 46

All other states but home state

Front 47

Alien Corporation

Back 47

If doing business in another country besides home
country.

Front 48

Articles of Incorporation

Back 48

a written document stating the facts about the
corporation. This is required by law.

Front 49

Watered Stock

Back 49

is stock that has been issued as fully paid when it has
been paid for by services or property at an inflated value.

Front 50

The stockholders of a corporation enjoy several important rights and
privileges:

Back 50

1. To receive a properly executed certificate of stock ownership
2. To attend corporate meetings and to vote unless the right to vote has
been given up by agreement
3. To receive a proportionate share of the profits when profits are
distributed as dividends.

Front 51

A state may request a dissolution for several reasons:

Back 51

– Violation of State Law
– Fraud in obtaining the charter
– Failure to pay certain taxes

Front 52

Real Property

Back 52

consists of land, water on the land, minerals under the soil,
and all permanent attachments to the land such as fences, walls, and
other man-made property.