Social Ethical Aspects Of Business

Front 1

What is commercial paper

Back 1

a document used to facilitate the transfer of money or credit

Front 2

Two types of Commercial paper

Back 2

1. A promise to pay
2. An order to pay

Front 3

What is a negotiable instrument (type of commercial paper) (covered under Article 3 of the UCC

Back 3

written, signed, unconditional promise or order to pay a fixed amount of money to order or bearer either on demand or at a definite time

Front 4

Why do we have commercial paper

Back 4

1. Facilitate trade
2. impractical to always use cash (no paper trail, easily lost or stolen)

Front 5

When there are disputes as to the terms of an instrument, the following rules govern

Back 5

1. Handwriting prevails over typewriting and print
2. Typewriting prevails over print
3. Words prevail over numbers
4. Can be postdated, antedated, or undated

Front 6

List the 6 elements of negotiability

Back 6

1. Be written
2 Be singed by the make or drawer
3. Contain an unconditional promise or order to pay
4. Be for a fixed amount of money
5. Be payable on demand or at a definite time
6. Be payable to order or to bearer

Front 7

What are the advantages of negotiable instruments

Back 7

1. Consideration is presumed
2. Past consideration is sufficient
3. A HIDC usually need give no consideration is sufficient
4. A HIDC is generally not subject to personal defenses

Front 8

What does negotiation of negotiable instruments mean?

Back 8

requires delivery and paper indorsements Ex. checks made with specific instructions

Front 9

How is bearer paper negotiated

Back 9

checks made out for cash or left blank/ are transferred by delivery

Front 10

How is order paper negotiated?

Back 10

(Checks made with specific instructions) requires delivery and proper indorsements

Front 11

Drawer

Back 11

The person whose name is on the check

Front 12

Drawee

Back 12

Bank ( in case of check)

Front 13

Payee

Back 13

Who the check is made out to

Front 14

Cashiers Check

Back 14

Drawn by a bank against itself

Front 15

Traveler's Check

Back 15

Sign when you receive it sign it again when you use it

Front 16

Certified Check

Back 16

Bank certifies the funds are available

Front 17

What is the purpose of a shelter provision and when will it not apply?
Ex. worksheet back

Back 17

States that a holder who receives the instrument HIDC acquires the right of an HIDC even though he or she doesn't qualify as a HIDC
Purpose: designed to permit HIDC to transfer all rights they have to other parties

Front 18

When does shelter provision not apply

Back 18

When the transferee participated in fraud or illegality

Front 19

In terms of negotiable instruments what is a liability?

Back 19

a person has an obligation to pay on the negotiable intstrument

Front 20

What parties have liability

Back 20

1. Primary parties-drawers, makers, acceptors
2. Secondary parties-indorsers

Front 21

3 main types of liabilites

Back 21

1. Negligent persons
2. Imposters, Fictitious payees, and trusted employers
3. Signers without capacity or authority

Front 22

Discharge

Back 22

the removal of parties' liability on an instrument, usually by payment

Front 23

A bank and its customer may, by their contract, alter most of the Article 4 rules. However they cannot void

Back 23

1. The bank's responsibility for its own dishonesty or negligence, or the measure of damages for such dishonesty or negligence

Front 24

What is a certified check

Back 24

A check that the bank has accepted in advance. (the bank is guaranteeing that sufficient funds have been set aside to cover the check

Front 25

Are banks required to certify checks

Back 25

NO

Front 26

What are the effects of certifying a check

Back 26

Releases the drawer and all indorsers before certification from liability. The bank is responsible for payment

Front 27

What are the bank's responsibilities when a check has been altered

Back 27

1. The bank bears a loss to the exten of the raised amount
2. The bank may charge the drawer's account for the original amount of the check
3. the bank may recover from the person who presented the check for payment

Front 28

Four main protections for debtors

Back 28

1. Exemption Statutes- State laws may exempt certain types of property
2. Limits on Garnishment- Consumer credit proctection acts limits garnishment
3. Consumer Protection Statutes-State laws also. The laws exist to regulate creditor practices, prohibit abuses, and provide dispute resolution mechanisms
4. Lender Liability-Lenders may be used

Front 29

What is the role of the trustee in bankruptcy

Back 29

Trustee acquires title to all of the debtors, property and administers the estate by liquidating and distributing payments according to the priority of claims outlined in the Bankruptcy code

Front 30

3 examples of debts that cannot be discharged

Back 30

1. Child support, Alimony
2. Taxes and related fines owed for 3 years before bankruptcy
3.Student loans
4. Judgements based on drunk driving

Front 31

Upon default, what may a secured party do with the collateral?

Back 31

1.Keep it in exchange for full or partial satisfaction of the debtor's obligation
2. Sell it: to recoup reasonable expenses related to possessing, preserving and selling the collateral including attorney fees/ to recoup debt owed to the secured party/ to recoup claims of other secured parties/Any surplus goes to the debtor

Front 32

Describe Torts

Back 32

1.A private wrong
2.Usually arise from an intentional, wrongful action or from a negligent action
3.Many torts are also crimes
4.Any party who has been injured may bring suit

Front 33

Describe Crimes

Back 33

A public wrong (against public or against state)
-Classified as treason,felonies, or misdemeanors
-Crimes are prosecuted by the state

Front 34

Examples of crimes

Back 34

1. Bribery
2 Corporate crime
3. Embezzlement-unlawful use of money or property
4 Forgery-false signing a check

Front 35

Five torts that are most likely to occur in business

Back 35

1. Negligence of an employee, Driving an automobile
2. Invasion of privacy is interfence with a person's right to be left alone
3. Infringement of copyrights, patents, trademarks or trade names
4. Disparagement- to make falsehoods about a business
5. Unfair Competition-Deciteful advertising bribery of the employees
6. Fraud

Front 36

Express Warranties and Give example

Back 36

an oral or written statement, promise or other representation about the quality of a product
Examples
-This item will do X
-a description of the goods
-Reference to a sample or model

Front 37

Implied Warranties and Give examples

Back 37

Implied by law and arises out of the buyer-seller relationship
Examples
-Warrant of Merchantability-the products are good for the purpose for which they are used
-Warranty of Fitness-applies to any other seller of good and will be fit for the buyer's particular purpose, which may or may not be the general purpose for which the goods were intended

Front 38

Summarize the Magnuson-Moss Warranty Act

Back 38

-Includes items purchased for $10 or more
-Requires warranties/disclaimers to
-Be stated in simple, clear, conspicuous language
-Be available for sale
-Be designated as a full warranty or a limited warranty

Front 39

How does Res ipsa loquitur affect businesses

Back 39

Requires that
1.the product was under the exclusive control of the defendant at times of its manufacture
2. Injuries such as those suffered by plaintiff do not ordinarily happen in the absence of negligence

Front 40

How does Strict Liability affect businesses

Back 40

Requires that
1.The product was sold in a defective condition and as such was unreasonably dangerous to the user. 2. The seller is in the business of selling such a product 3.That the product reached the user without substantial change