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Exam Review

by: Javier Villa

Exam Review BUL

Javier Villa
GPA 3.75
Manuel Dieguez

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About this Document

Manuel Dieguez
Study Guide
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Popular in 4320

Popular in Accounting

This 21 page Study Guide was uploaded by Javier Villa on Monday December 8, 2014. The Study Guide belongs to BUL at Florida International University taught by Manuel Dieguez in Summer2014. Since its upload, it has received 84 views. For similar materials see 4320 in Accounting at Florida International University.


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Date Created: 12/08/14
Expressly permits Congress quotto regulate Commerce with foreign Nations and among the several States and with the Indian Tribes This clause referred to as the COMMERCE CLAUSE has had a greater impact on business than any other provision in the Constitution Supremacy Clause The requirement in Article VI of the US Constitution that provides that the Constitution laws and treaties of the United States are quotthe supreme Law of the Land Under this clause state and local laws that directly con ict with federal law will be rendered invalid Procedural vs substantive due process Procedural due process Requires that any government decision to take life liberty or property must be made fairly that is the government must give a person proper notice and an opportunity to be heard Substantive due process Protects an individual s life liberty or property against certain government action regardless of the fairness of the procedures used to implement them Application of the First Amendment to Commercial Speech The protection given to commercial speech under the First Amendment is not as extensive as that afforded to noncommercial speech however A state may restrict certain kinds of advertising for instance in the interest of protecting consumers from being misled by the advertising practices Chapter 4 Torts Tortsintentional business and negligence Torts A civil wrong not arising from a breach of contract a breach of a legal duty that proximately causes hard or injury to another Business tort Wrongful interference with another s business rights Intentional tort A wrongful act knowingly committed Negligence The failure to exercise the standard care that a reasonable person would exercise in similar circumstance Defamation of Characterslander libel and slander per se Defamation Anything published or publicly spoken that causes injury to anothers good name reputation or character Slander Defamation in oral form Libel Defamation in writing or other form having the quality of permanence Such as a digital recording Slander per se Almost anything is patentable except the laws of nature natural phenomena and abstract ideas including algorithms Trademarkswhat may be trademarked what may not be trademarked Trademark A distinctive mark motto device or emblem that a manufacturer stamps prints or otherwise af xes to the goods it produces so that they may be identi ed on the market and their origins made known Once a trademark is established under the common law or through registration the owner is entitled to its exclusive use Service markshow they differ from trademarks Service Mark A mark used in the sale or advertising of services distinguish services of one person from those of others Titles character names and other distinctive features of radio and television programs may be registered as service marks Copyrightswhat may be copyrighted what may not be copy righted Copyright The exclusive right of an author or originator of a literary or artistic production to publish prints or sell that production for a statutory period of time A copyright has the same monopolistic nature as a patent or trademark but it differs in that it applies exclusively to works of art literature and other works of authorship including computer programs Protects Literary words Musical works Dramatic works Pantomimes and choreographic works Pictorial and graphic works Motions pictures works Sound recordings works Architectural works Uquot39gtW39 quot Fair Use Doctrine An exception to liability for copyright infringement is made under the fair use doctrine In certain circumstance a person or organization can reproduce copyrighted material without paying royalties fees paid to the copyright holder for the privilege of reproducing the copyrighted material if it use for purposes of criticism comment news reporting scholarship or research Trade Secrets for proprietary information Trade Secrets Information or process that gives a business an advantage over competitors that do not know the information or process 0 Effect of Intoxication A contract entered into by an intoxicated person can be either voidable or valid and thus enforceable If the person was sufficiently intoxicated to lack mental capacity then the transaction may be voidable at the option of the intoxicated person even if the intoxication was purely voluntary If despite intoxication the person understood the legal consequences of the agreement the contract is enforceable 0 Rati cation The act of accepting and giving legal force to an obligation that previously was not enforceable Legality Unconscionability A contract or clause that is void on the basis of public policy because one party as a result of disproportionate bargaining power is forced to accept terms that are unfairly burdensome and that unfairly bene t the dominating party 0 Contracts that Require a License All states require members of certain professions including physicians lawyers real estate brokers accountants architects electricians and stock brokers to have licenses Some licenses are obtained only after extensive schooling and examinations which indicate to the public that a special skill has been acquired Formality 0 Requirements of a novation Substitutes a third party for one of the original parties 1 The existence of a previous valid obligation 2 Agreement by all of the parties to a new contract 3 The extinguishing of the old obligation discharge of the prior party 4 A new valid contract 0 0 Express v Implied Contracts 1 Express Contract A contract in which the terms of the agreement are stated in words oral or written 2 Implied Contract A contract formed in whole or in part from the conduct of the parties as opposed to an express contract Conditions 0 Conditions precedent In a contractual agreement a condition that must be met before a party39s promise becomes absolute 0 Conditions subsequent A condition in a contract that if it occurs operates to terminate a party39s absolute promise performs 0 Concurrent Conditions Conditions that must occur or be performed at the same time they are mutually dependent No obligations arise until these conditions are simultaneously performed Remedies Defenses Impossibility A doctrine under which a party to a contract is relieved of his or her duty to perform when performance becomes objectively impossible or totally impracticable though no fault of either party mpracticability A doctrine under which a seller may be excused from performing a contract when 1 a contingency occurs 2 the contingency s occurrence makes performance impracticable and 3 the nonoccurrence of the contingency was basic assumption on which the contract was made Although UCC section 2615 expressly frees only distinguished between buyers and sellers in applying it Mutual Mistake and Unilateral Mistake 1 Unilateral Mistake A mistake that occurs when one party to a contract is mistaken a to a material fact the contract normally is enforceable 2 Bilateral Mistake A mistake that occurs when both parties to a contract are mistaken about the same material fact and the mistake is one that a reasonable person would make either party can rescind the contract Duress is both a defense to the enforcement of a contract and a ground for rescission of a contract Therefore a party who signs a contract under duress can choose to carry out the contract or to avoid the entire transaction The wronged party usually has this choice in cases in which consent is not voluntary Undue In uence Undue arises from relationships in which one party can greatly in uence another party thus overcoming that party39s free will A contract entered into under excessive or undue in uence lacks voluntary consent and is therefore voidable Third Parties Intended Bene ciaries A third party for whose bene t a contract is formed An intended bene ciary can sue the promisor if such a contract is breached Unintended Bene ciaries third party who incidentally bene ts from a contract but whose bene t was not the reason the contract was formed An incidental bene ciary has no rights in a contract and cannot sue to have the contract enforced Promissory Estoppel Quasi Contract Avoid unjust enrichment To recover on a quasi contract theory the party seeking recovery must show the following 1 The party conferred a bene t on the other party 2 The party conferred the bene t with the reasonable expectation of being paid 3 The party did not act as a volunteer in conferring the bene t 4 The party receiving the bene t would be unjustly enriched if allowed to retain the bene t without paying for it 4 Sue to recover the purchase price or lease payments due 5 Sue to recover damages for the buyer s non acceptance If the seller has delivered the goods to a carrier or a bailee but the buyer or lessee has not yet received them the goods are said to be in transit If while the goods are in transit the seller or lessor learns that the buyer or lessee is insolvent the seller or lessor can stop the carrier or bailee from delivering the goods regardless the quantity of goods shipped When the buyer or lessee breaches a sales or lease contract and the goods are in the buyer s or lessee s possession the seller or lessor can sue to recover the purchase price of the goods or the lease payments due plus incidental damages 2 0 Remedies of the Buyer or Lessee When the seller or lessor breaches the contract the buyer or lessee has numerous remedies available under the UCC If the seller or lessor refuses to deliver the goods or the buyer or lessee has rejected the goods the remedies available to the buyer or lessee include the right to 1 Cancel rescind the contract 2 Obtain goods that have been paid for if the seller or lessor is insolvent 3 Sue to obtain specific performance if the goods are unique or if damages are in adequate remedy 4 Buy other goods obtain cover and obtain damages from the seller 5 Sue to obtain identified goods held by a third party replevy goods 6 Sue to obtain damages If either the goods or the tender of the goods by the seller or lessor fails to conform to the contract in any respect the buyer or lessee rejects can reject the goods in Whole or in part A buyer or lessee is permitted to revoke her or his acceptance of the goods Acceptance of a lot or a commercial unit can be revoked if the nonconformity substantially impairs the value of the lot or unit Revocation of acceptance is not effective until the seller or lessor is notified A buyer or lessee who has accepted nonconforming goods may also keep the goods and recover damages cause by the breach To do so the buyer must notify the seller or lessor of the breach Within a reasonable time after the defect was or should have been discovered 2 Sale on approval contracts In a sale on approval a seller offers to sell goods to a buyer Who usually is not a merchant and sends the gods to that buyer on a trial basis The goods are delivered primarily so that the prospective buyer can use the goods and be convinced of their appearance or performance In a sale on approval title and risk of loss remain with the seller until the buyer accepts approves the offer by any act inconsistent with the trial purpose or the seller s ownership such as retaining the goods beyond the trial period If the buyer does not wish to accept the buyer may notify the seller of that fact Within the trial period and the return is made at the seller s expense and risk 2 Know when Title passes from buyer to seller Without an explicit agreement to the contrary title passes to the buyer at the time and the place the seller performs by delivering goods For instance if a person buys cattle at a livestock auction title will pass to the buyer when the cattle are physically delivered to him or her 2 0 Shipment Contract Under a shipment contract the seller is required only to deliver conforming goods into the hands of a carrier and title passes to the buyer at the time and place of shipment 2 0 Destination Contract The seller is required to deliver the goods to a particular destination usually directly to the buyer but sometimes to another party designated by the buyer Title passes to the buyer when the goods are tendered at that destination Tender of delivery occurs when the seller places or holds conforming goods at the buyer s disposal enabling the buyer to take possession 0 Delivery Without Movement of the Goods When the sales contract does not call for the seller to ship or deliver the goods When the buyer is to pick up the goods the passage of title depends on Whether the seller must deliver a document of title such as a bill of lading or a Warehouse receipt to the buyer When a document of title is required title passes to the buyer when and Where the document is delivered When n documents of title are required and delivery is made Without moving the goods title passes at the time and place the sales contract is made if the goods have already been identified If the goods have not been identified title does not pass until identification occurs 2 Know when Risk of Loss passes from buyer to seller Under the UCC risk of loss does not necessarily pass with title When risk of loss passes from a seller or lessor to a buyer or lessee generally is determined by the contract between the parties Sometimes the contract states expressly when the risk of loss passes At other times it does not and a court must interpret the performance and delivery terms of the contract to determine Whether the risk has passed When the contract involves movement of the goods through a common carries but does not specify when risk of loss passes the courts first look for specific delivery terms in the contract 0 Shipment Contracts In a shipment contract the seller or lessor is required or authorized to ship goods by carrier but is not required to deliver them to a particular final destination The risk of loss in a shipment contract passes to the buyer or lessee when the goods are delivered to the carrier 0 Destination Contracts In a destination contract the risk of loss passes to the buyer or lessee when the goods are tendered to the buyer or lessee at the specified destination words a merchant promises that the goods delivered are free from any copyright trademark or patent claims of a third person 2 Warranty of Merchantability Every sales or lease of goods made by a merchant who deals in goods of the kind sold or leased automatically gives rise to an implied warranty of merchantability Goods that are merchantable are reasonably fit for the ordinary purpose for which such goods are used They must be of at least average fair or mediumgrade quality The quality must be comparable to a level that will pass without objection in the trade or market for goods of the same description To be merchantable the goods must also be adequately packaged and labeled and the must conform to the promises or affirmations of fact made on the container or label if any 2 Warranty of Fitness for a Particular Purpose The implied warranty of fitness for a particular purpose arises when any seller or lessor merchant or nonmerchant knows the particular purpose for which a buyer or lessee will use the goods and knows that the buyer or lessee is relying on the skill and judgment of the seller or lessor to select suitable goods A particular purpose of the buyer or lessee differs from the ordinary purposes for which goods are used merchantability Goods can be merchantable but unfit for a particular purpose Knowledge and Reliance requirements A seller or lessor is not required to have actual knowledge of the buyer s or lessee s particular purpose so long as the seller or lessor has reason to know the purpose For an implied warranty to be created however the buyer or lessee must have relied on the skill or judgment of the seller or lessor in selecting or fumishing suitable goods 2 Puffery and whether puffery creates a warranty Puffery is the expression of opinion by a seller or lessor that is not made as a representation of fact The seller s opinion that the a vehicle is the best used car to come along in years however is known as puffery and creates no warranty 2 Whether samples create a Warranty Goods conform to any sample or model of the goods shown to the buyer or lessee creates an express warranty 2 Disclaimer of Warrantiesexpress and implied The UCC generally permits warranties to be disclaimed or limited to specific and unambiguous language provided that the buyer or lessee is protected from surprise 0 Express Warranties A seller or lessor can disclaim all oral express warranties by including in the contract a written or an electronically recorded disclaimer in language that is clear and conspicuous and called to a buyer s or lessee attention This allows the seller or lessor to avoid false allegations that oral warranties were made and it ensure that only representations made by properly authorized individuals are included in the bargain 0 Implied Warranties Generally unless circumstances indicate otherwise the implied warranties of merchantability and fitness are disclaimed by expressions Requirements for negotiability 2 1 Be in writing Be signed by the maker or the drawer Be an unconditional promise or order to pay State a fixed amount of money Be payable on demand or at a definite time Be payable to order or to bearer unless it is a check U 39gt Holder in Due Course defined Is a holder who by meeting certain acquisition requirements takes an instrument free of most of the defenses and claims that could be asserted against the transferor 2 When and how holder becomes holder in due course 0 Taking for value An Holder in Due Course must have given value for the instrument A person who receives an instrument as a gift or inherits it has not met the requirement of value 0 Taking in good faith To qualify as an HDC a holder must take the instrument in good faith This means that the holder must have acted honestly in the process of acquiring the instrument 0 Taking without notice A person will not qualify for HDC protection if he or she is on notice knows or has reason to know that the instrument being acquired is defective in any one of the following ways overdue dishonored unauthorized irregular and incomplete Holder VS Holder in Due Course An ordinary holder obtains only those rights that the transferor had in the instrument In this respect a holder has the same status as an assignee Like an assignee a holder normally is subject to the same defenses that could be asserted against the transferor In contrast a holder in due course is a holder who by meeting certain acquisitions requirements takes an instrument free of most of the defenses and claims that could be asserted against the transferor 2 Shelter Principle The shelter principle extends the benefits of HDC status and is designed to aid the HDC in readily disposing of the instrument Under this rule anyone no matter how far removed from an HDC who can ultimately trace his or her title back to an HDC status the shelter principle promotes the marketability and free transferability of negotiable instrument There are some limitations on the shelter principle though Certain person who formerly held instruments cannot improve their positions by later reacquiring the instruments from HDC If a holder participated in fraud or illegality affecting the instrument or had notice of a claim or defense against an instrument that holder is now allowed to improve her or his status nu repurchasing the instrument from a later HDC


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