Mgmt 643 Exam 3

Front 1

3 types of remedies under k law

Back 1

damages, specific performance, unilateral recission

Front 2

remedy: damages

Back 2

money paid to IP by GP

Front 3

remedy: specific performance

Back 3

require GP to perform k

Front 4

remedy: unilateral recission

Back 4

allows IP to cancel k and (try to) return to pre-k position

Front 5

general rule for remedies

Back 5

IP should be placed, if possible, in exactly the same position as if GP had performed the k. IP should get "benefit of the bargain"

Front 6

Hairy Hand case

Back 6

sets general rule for remedies that IP should be placed in the same position as if GP performed k

Front 7

4 types of damages

Back 7

compensatory, expectancy, consequential, liquidated

Front 8

compensatory damages

Back 8

amount of money to compensate IP for the money IP spent to perform k (costs)

Front 9

expectancy damages

Back 9

amount of money IP expected to receive and keep if k was performed (profits)

Front 10

consequential damages

Back 10

money paid to IP for reasonably forseeable future damages to IP resulting from GP's breach ----> reasonably forseeable by GP at time of k, future damages to IP directly related to GP's breach of this k, involves 3rd party (usually person dealing with IP, but not always)

Front 11

Baden v Curtis Breeding Service

Back 11

case over consequential damages. missed a calving season due to bad bull semen

Front 12

liquidated damages

Back 12

previously Agreed upon damage amount. --> in lieu of consequential and maybe compensatory and/or expectancy damages, too. why? people are risk-averse

Front 13

positive specific performance

Back 13

require GP to perform k because no other remedy can put IP in same position

Front 14

negative specific performance

Back 14

require GP not to do what GP agreed not to do in k - usually called an injunction or temporary restraining order

Front 15

when to use specific performance remedy

Back 15

dolar damages are inadequate because subject matter is unique

Front 16

when to use unilateral recission

Back 16

when it's not possible to give IP benefit of the bargain (least preferable of remedies since it doesn't give IP benefit of the bargain)

Front 17

what does unilateral recission do

Back 17

permits only IP to cancel k, returns IP to pre-k position or as closely as possible

Front 18

S's remedies under sales law

Back 18

when B doesn't accept or pay for cold goods. 1) cancellation of unmade order - unilateral recission. 2) withholding of undelivered order. 3) re-sell goods either at public or private sale in a commercially reasonable manner and sue for damages. 4) keep goods and sue for lost profits

Front 19

Can S keep goods AND sue for lost profits and then re-sell again at a profit?

Back 19

depends on uniqueness of goods. if not unique, you can. if unique, you can't. (why? if B1 bought it, there wouldn't be another to sell to B2)

Front 20

B's remedies under sales law

Back 20

when S doesn't tender conforming goods. 1) cancellation of k or reject goods. 2) specific performance if goods are unique. 3) cover - replace goods. 4) sue for cost profits only. 5) sue for breach of warranty.

Front 21

mitigation of damages general rule

Back 21

IP must make a reasonable effort to lessen (mitigate) GP's damages after GP's breach

Front 22

negotiable instruments definition

Back 22

written promises or orders to pay sums of money

Front 23

negotiability definition

Back 23

k which is freely transferable from 1 person to another taking with it certain legal rights and duties

Front 24

purposes of negotiable instruments

Back 24

substitution for money, creates credit

Front 25

five requirements of negotiability

Back 25

1) signed and in writing 2) contains an unconditional promise or order to pay 3) sum certain in money only 4) payable on demand or at a fixed future date 5) contains "pay to the order of"/"pay to bearer"

Front 26

what if a date is omitted on a negotiable instrument?

Back 26

doesn't destroy negotiability - assumption is that the date is the date the instrument is given to other person

Front 27

three classifications of negotiable instruments

Back 27

promissory note, draft/check, CD

Front 28

promissory note distinguishable characteristics

Back 28

1) two party instrument 2) contains at least "promise to pay" and maybe "to the order of"

Front 29

promissory note maker

Back 29

makes the promise, signs it

Front 30

promissory note payee

Back 30

person to be paid

Front 31

types of promissory notes (payments)

Back 31

lump sum, installment, balloon/bullet note

Front 32

lump sum promissory note

Back 32

single pay; entire amount at one fixed future date

Front 33

installment promissory note

Back 33

ALL equal periodic payments so that after last "equal" payment, balance is "0" --> "straight amortized" note

Front 34

balloon/bullet promissory note

Back 34

equal periodic payments UNTIL last payment when entire remaining balance is due

Front 35

types of promissory notes (security)

Back 35

unsecured, secured

Front 36

unsecured promissory note

Back 36

"signature" - no collateral, there's only a promise to pay and if they don't, payee sues in court

Front 37

secured promissory note

Back 37

"collateral" - in addition to a promise, you put up collateral which can be taken away for non-payment

Front 38

distinguishing characteristics of check/draft

Back 38

1) three party instrument 2) contains only an order to pay - "pay to the order of" - no promise

Front 39

drawer of check/draft

Back 39

person who orders withdrawal, signs check

Front 40

payee of check/draft

Back 40

person who gets paid

Front 41

drawee of check/draft

Back 41

receives order for withdrawal and follows order

Front 42

CD definition

Back 42

acknowledgement by bank of receipt of your money with return promise to repay money plus interest at a future date

Front 43

two types of CD

Back 43

negotiable and non-negotiable

Front 44

negotiable CD

Back 44

commercial CD's, larger amounts, you can "sell" CD

Front 45

non-negotiable CD

Back 45

most common for consumers, you can't sell your CD to another person

Front 46

Order of analysis of negotiable instruments

Back 46

1) is it a k?

2) is it negotiable?

3) if negotiable - note, check/draft, or CD?

4) if promissory note - lump sum, installment, or balloon? secured or unsecured?

5) if check/draft - payable in future (draft) or on demand (check)?

6) if CD - negotiable or non-negotiable?

Front 47

assignment

Back 47

assign non-negotiable k's. assignee has exactly the same k rights and the other original party is owed the same duties by assignee

Front 48

negotiation

Back 48

negotiate negotiable k's - possible for transferee to have same k as transferor but the other original party is owed fewer k duties by transferee

Front 49

holder in negotiation

Back 49

legally posesses a negotiable instrument (ex: payee, transferree)

Front 50

holder in due care in negotiation

Back 50

holder who pays value, acquires the negotiable k in good faith, without knowledge of any collection problem

Front 51

endorses in negotiation

Back 51

person who signs back of negotiable instrument and transfers it

Front 52

endorsee in negotiation

Back 52

person to whom an endorsed instrument is transferred

Front 53

bearer in negotiation

Back 53

person who has physical posession of a negotiable instrument - does not have to have legal posession

Front 54

types of papers in negotiation

Back 54

bearer paper, order paper

Front 55

bearer paper & negotiation method

Back 55

non-specific person to be paid (ex: no name on a check)

negotiation method - delivery only

Front 56

order paper & negotiation method

Back 56

specific person to be paid

negotiation method - 1) endorsement and 2) delivery

Front 57

4 kinds of endorsement

Back 57

blank, special, restrictive, qualified

Front 58

blank endorsement

Back 58

contains only endorser's signature - makes it a bearer paper

Front 59

special endorsement

Back 59

specifies person to be paid - contains endorser's name and endorser's signature. magic words - "pay to" or "to" is okay. is order paper

Front 60

restrictive endorsement

Back 60

doesn't destroy negotiability, only restricts future negotiation by holder to bank. "for deposit only". doesn't necessarily require signature, if it's surrendered with a deposit slip, the bank can assume deposit and add restrictive endorsement

Front 61

"pay to Donella OR Ed Elmore"

Back 61

either person's endorsement

Front 62

"pay yo Donella AND Ed Elmore"

Back 62

both endorsements

Front 63

misspelled names?

Back 63

can correct, unless government check or insurance settlement draft

Front 64

rescission

Back 64

unilateral rescission is okay, you can revoke what you wrote. (mark out "for deposit only" and initial)

Front 65

who has liability for negotiable instruments

Back 65

all persons who sign, endorse, or transfer instrument have some liability

Front 66

primary liability

Back 66

makers or promissory notes and drawers of checks/drafts. absolute liability, like co-signature. (agents? may have it if they don't disclose they are just an agent)

Front 67

secondary liability

Back 67

almost all endorsers. like a guaranty. conditional liability, only if persons with primary liability don't pay

Front 68

"Rule No. 1" of negotiable instrument liability

Back 68

Never sign negotiable instrument unless you have to - avoid k'al liability (problem - you have to endorse order papers)

Front 69

conditions before secondary liability

Back 69

1) due presentment

2) dishonor

3) notice of dishonor to secondary party

Front 70

due presentment condition

Back 70

demand for payment. order - first to person with primary liability then to person with secondary liability. time - for endorsers, 30 days from endorsement.

Front 71

dishonor condition

Back 71

refusal by person with primary liability to pay

Front 72

notice of dishonor condition

Back 72

before person with secondary liability must pay, s/he must be given notice of primary's dishonor.

Front 73

"Rule No. 2" of negotiable instrument liability

Back 73

DATE endorsements but don't put down address if you are endorser. if you are endorsee, get address and phone number of endorsers. why? because you might collect from them if you can find them

Front 74

"Rule No. 3" of negotiable instrument liability

Back 74

if you have to endorse, then use a qualified endorsement - "without recourse" endorser is not secondarily liable

Front 75

qualified endorsement

Back 75

contains words" without recourse" above endorser's signature. can be added to blank, special, or restrictive endorsements. eliminates endorser's secondary k liability.

Front 76

warranty liability

Back 76

not k liability. it's certain guarantees about negotiable instruments that everone who handles the negotiable instrument makes to the person they transfer it to

Front 77

warranties of warranty liability

Back 77

1) not stolen

2) no forgeries

3) no material alterations

Front 78

order of endorser warranty liability

Back 78

presumption - order of endorsement with payee first

Front 79

accomodation endorser

Back 79

co-endorser has the same liability as "real" endorser who you helped or "accomodated by co-endorsing

Front 80

discharge of parties from negotiable instruments

Back 80

1) payment/performance 2) holder who altered can't collect 3) cancellation

Front 81

drawing without recourse

Back 81

relieves drawer's primary k'al liability to pay that negotiable instrument. used when paying other people's debt(s) if you're not otherwise obligated to pay the total amount to payee

Front 82

rule on theft/forgery/alteration

Back 82

most negligent suffers loss

Front 83

Holders in Due Course (HDC)

Back 83

same k rights as transferor but other OP owed fewer k duties

Front 84

Holder through holder in due course

Back 84

person who legally possesses a negotiable instrument and was transferred it by a HDC, gets benefits of HDC even if mere holder

Front 85

personal (limited) defenses do what

Back 85

releives drawers and makers from payments ONLY if due to HOLDERS but don't work if HDC is transferee

Front 86

real (universal) defenses do what

Back 86

releives drawers and makers from payment due to EVERYBODY - holders and HDCs, so drawers and makers don't have to pay

Front 87

types of peresonal defenses

Back 87

breach of k, breach of warranty, fraud in the inducement, unauthorized completion

Front 88

breach of k personal defense

Back 88

seller doesn't deliver conforming goods or provide services or building contractor doesn't complete job - most common

Front 89

breach of warranty personal defense

Back 89

seller delivers goods but they are non-conforming or building contractor improperly completes job - very common

Front 90

types of real defenses

Back 90

forgery, fraud in the execution, material alteration, illegality, minor

Front 91

HDC limitation - FTC rule 433

Back 91

consumer goods, promissory note is used (not applicable to business transactions or check/draft). must contain language that destroys HDC's protection