Csu Business Law Final Exam

Front 1

Reasons for the UCC

Back 1

Keeps business deals together and commercializes transactions. Standardizes commercial litigation, facilitates commercial transactions

Front 2

What are "goods" under the UCC? (Article 2)

Back 2

Things that are moveable other than money and investments

Front 3

What is defined as a "merchant" under the UCC?

Back 3

Someone who has expertise regarding a particular good in the transaction

Front 4

What is a "mixed sale"?

Back 4

A sale that involves both a service and a good in the same transaction

Front 5

What is the UCC Merchant exception? (Statute of Frauds)

Back 5

Under the statute of frauds, a transaction is not enforceable if the amount to be exchanged is over $500 and not written in a contract.

When 2 merchants mute an oral contract and:

one sends memo confirming w/ reasonable time

memo sufficiently definite that it could be enforced against the sender

Memo also valid against merchant who receives it, unless objects within 10 days

Front 6

What terms are left open by the UCC? *

Back 6

Price, payment, delivery, and time.

Front 7

What term is required under the UCC? *

Back 7

Quantity

Front 8

Express Warranty

Back 8

Warrant that the seller creates with his words or actions. Can be an affirmation of fact or any promise.

Front 9

Implied Warranty of Merchantability

Back 9

A warranty that the goods shall be merchantable is implied in a contract for their sale, if the seller is a merchant of goods of that kind.

Front 10

Implied Warranty of Fitness for a Particular Purpose

Back 10

When the seller at the time of contracting knows about a particular purpose for which the buyer wants the goods, and knows that the buyer is relying on the sellers skills and judgement, there is an implied warranty that goods shall be fit for such a purpose

Front 11

Warranty Disclaimers

Back 11

A statement that a particular warranty does not apply

Front 12

Product Liability Negligence and Defenses

Back 12

In negligence cases, plaintiffs most often raise claims of negligent design, negligent manufacturing, and failure to warn.

Front 13

How can you create an agency relationship?

Back 13

There must be a principal, an agent, and mutual consent that the agent will act on behalf of principal. Also must be subject to principals control. Creation of a fiduciary relationship.

Front 14

Equal Dignities Rule

Back 14

Legal doctrine requiring an agent to perform all acts authorized by the principal.

Subject matter of an agency can't be performed in one year, needs to be in writing

Front 15

What duty does the agent have to the principal?

Back 15

A principal is bound by the acts of an agent if the agent has authority

Front 16

Fully Disclosed Principal

Back 16

When the third party knows the agent is acting for a principle and they know the identity of the principal. Agent is not liable for these contracts

Front 17

Partially Disclosed Principal *

Back 17

When agent discloses agency status but does not reveal identity of principal. Both agent and principal are liable

Front 18

Undisclosed Principal

Back 18

When the agency occurs but the third party is unaware of agent and principle. Both principle and agent are liable for the contract

Front 19

Express Authority *

Back 19

Principal asks agent to do something and the agent agrees

- Granted by words or conduct

Front 20

Implied Authority *

Back 20

Principal asks agent to do something but agent must act in ways not stated to accomplish it.

- Must have expressed to have implied

Front 21

Apparent Authority *

Back 21

Principal is liable for acts of an agent who isn't acting with authority.

-Exists in mind of 3rd party if principal makes them believe agent is authorized to them

Front 22

Gratuitous Agent

Back 22

Person not paid by the principal for the work they do

Front 23

Liability for Agents Torts

Back 23

An agent is subject to liability to a 3rd party harmed by the agents tortious conduct

Front 24

Partnership formation

Back 24

General partnerships can be expressly or constructively created.

Front 25

Liability of Partners

Back 25

Creditor may sue partners jointly as a group or separately as individuals

Front 26

Limited Liability

Back 26

Partners not personally liable for debts of the partnership. Not taxable.

Front 27

Franchises

Back 27

Compromise between employment and starting your own business. Some freedoms and restrictions.

Front 28

Limited Liability Companies

Back 28

Limited liability of a corporation and tax status of a partnership without disadvantages of an S corporation.

Front 29

C Corporations *

Back 29

Reference to a corporation whose stock is not publicly traded on a stock exchange

Front 30

S Corporations *

Back 30

Shareholders: limited liability of a corporation and tax status of a partnership.

Disadvantages: only one class of stocks, no more than 75 shareholders, shareholders cannot be partnerships in other corporations, must be US citizens or residents

Front 31

Buy out agreement *

Back 31

Whoever breaches the contract must pay money out of pocket to terminate the contract

Front 32

Start Up Money (Capital)

Back 32

Money needed to start up a business. Must liberally predict expenses and conservatively predict revenue

Front 33

Parole Evidence *

Back 33

Refers to anything that was said, done, or written before the parties signed the agreement or as they signed it.

Front 34

Contract Performance

Back 34

Strict: Performance that is exactly what was promise. Usually not expected and failure to do so does not cause for discharge

Substantial: If substantial, party will receive full contract price minus value of defects. Failure to perform substantially results in no payout (Inferior).

Front 35

Remedies

Back 35

"Identifying the interest"- legal right in something

4 main contract interests a court may seek to protect.

1. Expectation Interest

2. Reliance Interest

3. Restitution Interest

4. Equitable Interest

Front 36

Difference between compensatory damages and restitution interest

Back 36

Compensatory- most common monetary awards. Generally flow directly from contract, like an order to pay what was promised or pay for expenses caused by breach. Must prove breach caused damages that can be quantified with reasonable certainty.

Restitution Interest- Designed to return to injured party a benefit that he has conferred on the other party, which it would be unjust to leave with that person

Front 37

Mitigation of damages *

Back 37

A party may not recover for damages that could be avoided with reasonable efforts

Front 38

Consequential damages

Back 38

Result from unique circumstances of injured party.

Front 39

Liquidated damges *

Back 39

Provision stating in advance how much a party must pay it if it breaches.

Will be enforced if:

1. At the time of creating the contract it was very difficult to estimate actual damages

2. The liquidated amount is reasonable.

Front 40

Specific Performance

Back 40

A court orders seller to sell you land (or anything thats unique) because its unique

Front 41

Additional terms

Back 41

Those that raise issues not covered in the offer.

Front 42

Different terms

Back 42

Contradict terms in the offer. If no clear oral agreement, the UCC will supply its own terms to fill the gap.

Front 43

Right to cure

Back 43

The seller will replace goods with what buyer originally wanted

Front 44

Right to cover

Back 44

The buyer purchases substitute good and can recover the different between the original goods and the price to cover.

Front 45

Doctrine of Respondent Superior *

Back 45

A doctrine that holds the principal liable for an act within the scope of employment, even if expressly forbidden. Employee is only liable if he abandons the principals business.

Front 46

Reformation*

Back 46

Process which court will probably rewrite contract

Front 47

Oral disclaimers *

Back 47

May be disclaimed by "sold as is" or "any oral promises are disclaimed" statements

Front 48

Proof in strict liability *

Back 48

That you bought a product and it caused an injury

Front 49

Duty of loyalty *

Back 49

Can't represent 2 repeating principals, can't misuse confidential info, and may not engage in appropriate behavior

Front 50

Principals Liability for torts *

Back 50

Liable for your own torts

Liable for independent cont. for physical torts only if principal was negligent when hiring/ supervising

Front 51

Corporations *

Back 51

Offer limited- liability: Usually managers and investors personal property is not at risk.

- Stock can be bought and sold

- Have perpetual existence: can exist without founders

- Profits can be taxed

Front 52

What contribution did John Smolts have to law? *

Back 52

Ironed shirt while on body. Now there is a Smolts warning on shirts.

Example of failure to warn (negligence)

Front 53

Greenman v Yuba-Power Products *

Back 53

Won on strict liability, just have to prove purchase product caused harm

Front 54

Nina and Seth *

Back 54

Nine sends fax to reassure oral agreement to purchase cars at wholesale and Seth throws away paper. Nina wins b/c Seth didn't deny.

Merchant Exception to Statute of Frauds

Front 55

Estoppel Case *

Back 55

Jack is applying for job as a car salesman and during interview he sells car while boss is away even though he doesn't work there yet. Boss cannot turn down offer b/c he is estoppel (since Jack appeared as worker to customer)