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21 Cards in this Set

  • Front
  • Back
What is an Agency Coupled with an interest?

Is it revocable?
one in which the agent has specific, present, beneficial interest in a property which is subject matter to the agency.
This is irrevocable.
Statue of limitations under Section 11 must be commenced..
before the earlier of
1. 3 yrs after security was offered.
2. one yr after misstatement was or should have been discovered.
Defenses under section 11 of the Securities act of 1933
1. no misstatement or omission.
2. no material facts
3. plantiff knew of the misstatements
4. accountant exercised due dilligence.
5. plantiffs loss not caused by misstatement
6. statue of limitation expired.
Client suing for negligence must establish..
1. accountant owed a duty
2. he breached this duty
3. breach caused injury
4. client suffered damages
Elements of a contract
competent parties
legal purpose
Defenses to fraud
Creditable evidence that accountant can introduce to disprove on of the elements of fraud that the plantiff must prove.
Contracts that must be in writing
Noted by using the words "MYLEGS" to trigger memory.
Y=Year (can't be preformed in 1 year or less)
E=contracts made by an executor.
G=Goods over $500
S=Surety contracrs
Defenses to negliegence
1. alleged duty not owed
2. no breach (you exercised due care)
3. no loss
4. loss caused by parties own negliegence.
5. loss was not reasonably foreseeable.
6. effective disclaimer
Client suing for fraud must prove
1. accountant made misrepresentation.
2. scienter (knowingly)
3. material fact
4. misrepresentation induced reliance.
5. justified reliance.
6. loss
Priority claims in order of rank.
1. administrative exp.
2. tradespeople- who extend unsecured credit in ordinary course of business after the filing of involuntary petition but before trustee appointed.
3. wages owed to employees maximum $4300.
4. contributtions to employee benift plans.
5. claims for grain or fish up to $4300
6. deposits made by consumers up to $1950
8. fed, state, local taxes
Civil liability under the Securities Exchange Act of 1934.
Liability is limited to purchasers and sellers of securities.
Plantiff must prove misstatement of a material fact, reliance, and loss.
Civil liability under Securities act of 1933
For accountant to be civilly liable the Statements must include
1.a misstatement or ommission of a material fact.
2. loss after purchasing the securties.
Under section 10b of the antifraud provision of the 1934 act what does a plantiff need to prove?
1. misstatement/omission
2. its conncection with the securites sale or purchase.
3.scienter (accountant intent to decieve)
4. Reliance on the misstatement.
5. Loss caused by reliance.
General creditors rights
Last to be paid if money remains.
Secured creditors rights
These are paid first and in full if the collateral is sufficient.
If collateral not sufficient, then the secured creditor is a general creditor as to the deficency.
Priority creditors rights
They are next in line for payment and bankruptcy code gives them priority over general creditors.

see classes of priority flash card
Three types of involved for distribution of debtors estate under bankruptcy.
1 secured
2 priority creditors (unsecured creditors)
3 general creditors (other unsecured creditors)
Contractual defenses to breach of contract
1. no consideration
2. alleged obligation not within scope of contract.
3. full or substantial performance rendered.
4. illegal purpose.
5. client breached conract first.
6. failure of a condition precedent.
Under fraud liability you are liable to.....

Is privity required?
All foreseeable users of the work product. Privity is not required.
Statute of limitations under section 10 or 18
plantiff must bring suit one year after discovering the facts or 3 yrs after the time the cause of action rose.
Under Securities act of 1933 the plaintiff need not prove what?

Accountant is prima facie liable for misstatements.