Blaw Review for Final
Blaw Review for Final ECON 2301
Popular in Principles of Macroeconomics
verified elite notetaker
Ms. Jerrell Lind
verified elite notetaker
Ms. Jerrell Lind
verified elite notetaker
Ms. Jerrell Lind
verified elite notetaker
verified elite notetaker
verified elite notetaker
Popular in Economcs
This 7 page Study Guide was uploaded by Darling on Thursday September 17, 2015. The Study Guide belongs to ECON 2301 at University of Texas at Austin taught by Luba Ketsler in Summer 2015. Since its upload, it has received 15 views. For similar materials see Principles of Macroeconomics in Economcs at University of Texas at Austin.
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Date Created: 09/17/15
General K Law Past consideration is no consideration If a minor goes buys something that is necessary the minor is only liable for the reasonable price of the product which is not to exceed market value Seller and buyer contracted for the sale of goods in a sellers plant contract The goods were delivered by the carrier to the buyers warehouse where the buyer subjected the goods to an initial reasonable inspection Upon such inspection the buyer discovered the goods to be nonconforming The buyer noti ed the seller that the goods were rejected Shortly after such noti cation of rejection and without the buyers fault there was a re in the buyers warehouse And the goods were destroyed The contract price of the goods was 4500 and the buyer did not have the goods insured Punitive damages are recoverable for a breach of a contract for the sale of goods FALSE Breach of warrant is a contract theory of recovery A sellers plant contract is the same as a shipment contract A buyer can get both the differences between the cover price and the contract price and the ordinary measure of damages for breach of contract for the sale of foods false This offer will stay open for 180 days from the date of this letter Mort would require to leave the offer open for 90 days Cannot exceed 90 days The sales provision of Article 2 of the UCC applies to both merchants and nonmerchants True A seller can get both the difference between the resale price and the contract price and the ordinary measure of damages for breach of a contract for the sale of goods False Negotiable interests 21 Assignment 2 Common law contracts p 1 K of sale of goods 12 rm offer rule and 90 day rule Mixed 1 Product liability 2 Secure transaction 1 1 What is an allonge Paper attached to negotiable instrument on which transferees can make indorsements Blank piece of paper to continue indorsements 2 What are the differences among the following draft check promissory note and certi cate of deposit Draft An order by one person to another person or to bearer It is an unconditional written order that involves three parties Drawerwriter of check creates the draft who orders the draweebank on which the check is drawn to pay the money usually to the payee 3rd party of whom the check is made payable to Check A draft drawn on a bank and payable on demand This is the most common type of draft Checks demand instruments because they are payable on demand Drafts and Checks are ORDERS TO PAY Promissory Note a promise by one party to pay money to another party or to bearer It is a written promise made by one person maker to pay a xed sum of money to another payee It can be payable at a de nite time or on demand Certi cate of Deposit a note made by a bank acknowledging a deposit of funds made payable to holder of the note It is also a type of note A CD is usually issued when a party deposits funds with a bank and the bank promises to repay the funds with interest on a certain date Here the bank is the maker of the note and the depositor is the payee PN and CD are PROMISES TO PAY 3 What are the requirements for negotiability In order for law of instruments to be negotiable Instrument has to be negotiable and has to be holder of due course Signed and Writing must be both written and signed 0 Signature under UCC may be in rubber stamp or electronic but could be any code of signature that quali es as a signature works Has to contain an unconditional promise or order to pay 0 Drafts and Checks are order to pay 0 CDs and PN are promises to pay 0 lOU is not a negotiable instrument Acknowledgement of a debt is neither a promise nor order to pay so by default you apply contract law 0 The promise or order to pay must be unconditional in order for instruments to be negotiable Has to be payable in a sum certain in money 0 Cannot give the maker of the payment an option to pay in other ways but money This would destroy negotiability o In a PN there is interest which means that as long as you can look at the face of the instrument and it is current then the sum is certain PN will have interest provision and maybe a different rate but face can be seen at any given time This wouldnt destroy negotiability Certain as long as one can determine whats stated in instrument Be payable on demand or de nite time o Is due whenever the holder demands payment Example A check payable on demand if not payable on demand then must be paid at speci c time 0 Demand Note states that one promises to pay money on demand common on closely owned or help corporation experiencing money crunch Be payable to order or to bearer unless it is a check o If not payable to order must be payable to bearer instrument payable to bearer check 4 What is a holder in due course and how does a holder qualify as such under UCC Sections 3302a and 3203b A PNgtB gtCHDC Holder in Due Course HDC is a holder who by meeting certain acquisition requirements takes an instrument free of money of the defenses and claims to which the transferor was subject 0 Example Debby Morrison signs a 10k note payable to Alex in payment for goods Jerrod negotiates the note to Beverly who promises to pay Jerrod for it in 30 days During the next month Beverly learns thatJerrod breached his contract with Debby by delivering defective goods and that for this reason Debby will not honor the 10k note Whether Beverly can hold Debby liable on the note depends on whether Beverly has met the requirements for HDC status If Beverly has met these requirements and thus has HDC status she is entitled to payment on the note Under UCC 302a o HDC must rst be a holder of a negotiable instrument and must have taken instrument For Value In good Faith Without notice that it is overdue that it has been dishonored and any person has a defense against it or a claim to it or that the instrument contacts unauthorized signatures or alterations or is so irregular or incomplete as to call into questions its authenticity C has no notice may qualify as holder of due course ebidence of person defenses are not admissible A may have one or more person defenses B wants to transfer I to C I recites it is due April 20th C is noti ed that I is overdue This is a form of notice Promissory note due July 15th negotiation between B amp C takes place today on its face it recites its due July 15th it may be accelerated Its overdue but if C has no notice it is overdue then holder of due course but if C knows it is overdue he is NOT a holder of due course Under UCC 3 203b transfers of instruments transfers all rights of I to transferee from transferor Shelter provision C negotiates and transfers I to D after due date Is D going to be able to meet requirement of 3302 On its face value 0 Lets say this transaction is a gift D has knowledge so under these circumstances D does NOT qualify as holder of due course UCC 3302a Holder in Due course UCC 3203b Shelter Provisionperson who does not qualify as an HDC but who derives his or her title through an HDC can acquire the rights and privileges of an HDC 5 What is the signi cance of a negotiable instrument being held by a holder in due course Holder has immunity from personal not real defense Neogtiating Order Instruments requires DELIVERY AND INDORSEMENT Neogtiating Bearer Instruments requires only DELIVERY 6 Bess received a check from Tom for a lawnmower Tom purchased from Bess who is not a merchant Bess knew the mower was defective and unusable Guilty of Fraud in the inducement Personal defense However by the time Tom discovered this fact Bess had negotiated Toms check to Bob for a retaining wall Bob was building for Bess Bob was acting in good faith and was unaware that the lawnmower Tom purchased was defective and unusable Makes a Bob a holder in due course ls Bob a holder in due course Yes Can Bob enforce the check or does Tom have a defense based on fraud in the inducement Yes he can and there in no defense 3302A 7 What is a real aka universal defense defense What is a personal defense Examples Real Defense valid against all holders of a negotiable instrument 0 Defense against forgery fraud in the execution material alteration discharges in bankruptcy minority illegality mental incapacity extreme duress Basically anything that is illegal Personal Defense defenses used to avoid payment to an ordinary holder of negotiable instrument but not to an HDC or a holder through an HDC 0 Defense against breach of contractwarranty lackfailure of consideration fraud in the inducement illegality mental incapacity personal defenses 8 Is a check always a draft Is a draft always a check Check is a type of draft Draft is not always a check 9 The person who writes the order for a draft is the A Drawer of a draft 10 The party who receives money from a draft C Payee of a draft 11 Who is primarily liable on a draft or check The drawee upon acceptance of the draft Who is primarily liable on a promissory note The maker of the note What is the nature of a drawers liability primary or secondary Secondary Who else is secondarily liable on a negotiable instrument The Indorser with an unquali ed indorsement What are the differences among the following types of indorsements blank special restrictive quali ed and unquali ed What is the signi cance of the difference between a quali ed and unquali ed indorsement Unquali ed lndorsements Secondary liability indorser promises to pay the holder the amount of the instrument in the event that the drawer or maker defaults on the payment Quali ed lndorsements an indorsement on a negotiable instrument in which the indorser disclaims any contract liability on the instrument the notation without recourse is commonly used to create a quali ed indorsement Blank lndorsement the holder the instrument signs his name when he transfer an indorsement that speci es no particular and indorsee can consist of a mere signature An order instrument that is indorsed in blank becomes a bearer instrument Special lndorsement designates a speci c endorsement An indorsement on an instrument that indicates the speci c person to whom the indorser intends to make the instrument payable that is it names the indorsee Restrictive lndorsement for deposit only prohibit or limit further negotiation of the instrument does not prohibit the further negotiation of the instrument 12 What is a three party instrument that consists of an unconditional written order by one party that orders a second party to pay money to a third party C Check or draft 13 The nancial institution where the drawer of a check has hisher account B Drawee 14 The party to whom a check is written C Payee of a check 15 The person who writes a check A Drawer of a check 16 The party who makes a promise to pay B Maker of a note 17 The party to whom the promise to pay is made C Payee of a note 18 A note payable on demand A Demand note 19 Orville writes a check payable to cash for 100 Is an indorsement a requirement for negotiation No because its bearer paper at the inception How about a check payable to Ben Baker who indorses it by signing his name only If he endorses it with blank indorsement it becomes bearer paper 20 What are the differences among the following theories of recovery is a defective products case breach of warranty express and implied and the tort theories of negligence and strict liability What are the elements of a cause of action based on strict liability Restatement Law of Torts Sec 402A In what kinds of cases is there common law authority for a cause of action based on strict liability Extra hazardous activity and product liability cases Defense to a breach of warranty Disclaimer contract defense Tort theories of negligence and strict liability Disclaimer would not apply Remedies at Law A Nominal damages Remember the United States Football League Donald Trump owned Nj devils They held up their own draft Move from the summer to the Fall because the USFL thinks theyre big shots Have to have TV contracts to make money If you got a television contract then you would have to get a contract with one of the big 3 CBS ABC NBC Problem was NFL had all 3 major networks tied up so USFL couldnt get it USFL lawyers said that since the NFL has all 3 it has a monopoly Head to Head with the NFL Prove damages and multiplied by 3 bc on antitrust USFL won the lawsuit and proved 2 antitrust violations but in order for damages to be paid the lawyer has to prove that the damages has to cause the nominal loss The jury could not connect the dots so the jury said it was only 1 in damages 1 x 3 3 damages Nominal damages you dont le a lawsuit You have to be able to prove damages due to the violations to get paid Nominal damages is led and plantiff is able to prove the damages then it is called Compensatory damages B Compensatory damages lf buyers breach costs the seller damages then it is compensatory damages lf contract price is greater than free market value then buyers breach will be paid in compensatory damages lf seller breaches contract and contract price is less than free market value then the buyer will pay compensatory damages They cant prove their damages because we kept lousy records So the plaintiff went to the experts and see what the damages would be because the defendant was saying they kept lousy records So the plaintiff said to apply the market share to the receipts of the defendant and the court agreed The plaintiff were able to need only establish a stable foundation C Consequential damages aka special damages Lost pro t due to late delivery Court said it was not recoverable Lost pro t was a consequential damage so there had to be some proof that when the contract was made that the defendant would have to know that if the freight was not on there on time then pro t damage would not be applied Freight contract would not apply to that sort of damage D Duty to mitigate Actress sues Fox for breach of contract because they did not make movie which she signed contract for She sued for breach of contract but Fox said they offered her another role Court ruled this contract is not allowed to mitigate like that because she would have to relocate and other troubles E Liquidated damages Liquidated damages provision For each day delay that the damages will be removed from each day of delay as liquidated damages Highway job has to be done by a certain date What type of damages can be expected by the nonbreaching party Interest on nancing fact that you have other subcontractors sitting around until you nish extra duty police of cers to redirect the traf c ow As long as the criteria is reasonable then court will allow it California and Hawaiian sugar company vs Sunshine Inc Shipping contract It considered a liquidated damages of 35m Defense was this amount is unreasonable bc actual damages was only 900k Court disagreed because the liquidated damages clause will be enforced because injustice will not be done due to the fact that the 35m liquidated damage gure was agreed upon by both parties The price were gured by all possible damages even though all damages were not done but since they were agreed on the defendant has to pay that amount Although the actual damages were only 900k why did the plaintiff recover 35m What if the plaintiff in that case can actually show that they showed 6m in damages and can show it It wouldnt matter because they agreed on 35m F Punitive or exemplary damages including contractrelated torts Punitive damages are not contract damages They are TORT damages Punitive damages cannot be recovered for breach of contract just for any tort but contract related torts Punitive damages are punishment damages like paid in the Simpson case 28m a Contract related torts i Fraud revisitedBoth actual and constructive Bought car that said it had 165miles but really it had 6900 miles Clark wrote 2 checks for 2500 Clark stopped payment on the two checks Dodge sued him and Clarks lawyer led a counter claim and said Dodge engaged in this breach of contract Defense breach of contract and Offense Punitive damages 2 element of damage compensatory damages for breach of contract amount paid vs actual value 375 damage in compensatory damages and Punitive damage amount of 12500 Punitive damage in this case is not for breach of contract but for fraud ii Intentional interference with contractual relations Elements contract 3rd party knowledge of K 3rd party induces party to breach Girly was injured in an automobile accident by an uninsured driver Girly led a claim by State Farm and asked for the maximum amount offered State Farm said that she wasnt wearing a seatbelt so she is not entitled to more than 20k Girlys lawyer led for 80k and arbitrator awarded Girl 88k which State Farm paid Girlys lawyer then sued for bad faith of tort and breach of contract Girly was awarded 55k due to breach of contract So the difference between 100k and 80k plus interest Jury awared punitive damages of 15m over tort damages Jury said State Farm was acting in bad faith Remedies In equity presupposes inadequacy of remedy at law A B C D Injunction Speci c performance Accounting reformation rescission Quasi contract General concepts 1 Express and implied in fact contracts a No fundamental difference Same elements b Contract may be entirely expressed either orally or in writing or a combination of both or c Contract may be based on conduct of parties or a combination of conduct and expressed agreement Void voidable and unenforceable contracts a Void contract is no contract because essential element is missing The only one of the four elements which can be missing without the contract being void is contractual capacity in which case the contract is voidable b Voidable contract is a good contract but one of the parties is able to avoid liability on it Generally all of the elements are present but a party is able to show grounds for avoiding liability eg duress fraud in the inducement etc Exception If the rst three elements are present assent consideration legality but the fourth element capacity is missing the contract is voidable at the option of the party lacking capacity c Unenforceable contract is a good contract but for some reason the party seeking enforcement is unable to do so eg expiration of statute of limitations noncompliance with the Statute of Frauds etc Unilateral and bilateral contracts a UnilateralExchange of promise for an act b BilateralExchange of a promise for a promise Executed and executory contracts a ExecutedFully performed b ExecutoryUnperformed in whole or in part on either or both sides 2 3 4 5 Quasi contracts aka constructive contracts and implied in law contracts a Not really a contract because no manifestation of mutual assent b Obligation based on some form of unjust enrichment Overview of the two major bodies of contract law a Common law b Uniform Commercial Code Art 2 and Art 2A Ecommerce and the law of contracts Interpretation of contracts a b The Plain Meaning Rule Interpretation of ambiguous terms 6 7 8 C Essentials of a valid contract D Assignments 2 Negotiable Instruments 21 Kfor the sale of goods 12 Exam 3 review tort and rm offer rule Product Liability 2 Chapter 22 Exam 3 review K by minors 1 Review Exam 1 Common Law remedies 5 Chapt 18 Remedies at law consists predominantly different types of nominal damages Equitable Remedies Remedy of law is inadequate General K Law 6 Chapt 10
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