BLAW 2

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Author:
maxkelly
ID:
148598
Filename:
BLAW 2
Updated:
2012-04-23 23:55:28
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BLAW
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BLAW 2
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  1. Criteria for negotiable instruments
    • In writing
    • Unconditional promise to pay to order or bearer
    • Pay on demand or specific time
    • Sum certain in money
    • Signed
  2. Real defenses
    • Bankruptcy
    • Forgery
    • Material alteration
    • Fraud in the execution
    • No capacity (insane)
  3. Personal defenses
    • Breach of contract
    • Failed consideration
    • Wrongful completion
    • Duplicate payment
    • Fraud in the inducement
  4. Endorsements
    • Blank: just sign the back
    • Restrictive: "For deposit only"
    • Special: "Pay only to John" signed Steve
    • Qualified: "Without recourse"
    • Combo
  5. Ranking instruments
    Cash > NI HIDC > NI not HIDC > Non NI > Verbal promise
  6. HIDC requirements
    • Hold the NI
    • Good faith
    • No knowledge
    • Value
  7. Draft vs Note, parties involved in each
    • Draft - go to the bank for money - Drawee, Drawer, Payee
    • Note - come to me for money - Maker, Payee
  8. Warranties, term "Qualifying"
    • No material alterations
    • Not aware of Insolvencies
    • No forgeries
    • No claims or defenses
    • Transferer is entitled

    Qualifying - "without recourse" I'm not making these warranties
  9. Forgery on note, back vs front, who is responsible for each
    Ex. John writes check to Steve, John banks with Chase, Steve Banks with Capital One

    • Forgery is on Back - Depository, Capital One should verify John's signature
    • Forgery is on Front - Drawee, Chase Bank should verify John's signature
  10. How long do you have to inform bank of forgery?
    30 days
  11. Are theft and embezzlement real or personal defenses
    • theft - real
    • embezzlement - personal
  12. 9 ways to collect accounts receivable
    • Sue in small claims court - reactive
    • Attachment of assets to debt while suing - issue with other creditors in front - reactive
    • Granish wages or any revenue stream - reactive
    • Lien - attachment with statutory priority - reactive
    • Surety - comaker - promise to pay no matter what
    • Guarantee - second payer, guarantor, must first sue primary payer
    • Mortgage - debt attached to real property
    • UCC-9 - debt attached to moveables - written
    • Combo
  13. Four strata of securities
    • Secured and Perfected: Security Interest (Security agreement, debtor ownership, creditor value), public notice - first to file FSI wins
    • Secured and Unperfected: SI and no FSI - first SI wins
    • Unsecured and Unperfected: no SI, share pro rata
    • N/A: loan paid off
  14. What is a purchase money security agreement?
    if making loan for a new asset, ranked first on that asset over other creditors
  15. 5 benefits of bankruptcy
    • Exempt assets
    • Discharge debts
    • Uniform procedure
    • Centralized proceedings
    • Stay order (injunction)
  16. Chapters of bankruptcy
    • 7: Liquidation
    • 9: Municipalities
    • 11: Reorganization
    • 12: Farmers
    • 13: Reorganization
  17. Bankruptcy - 9 exempt assets
    • tools of trade
    • homestead ($21,600)
    • auto equity ($3,450)
    • personal items ($550)
    • jewelry ($1,450)
    • life insurance (100%)
    • retirement accounts (100%)
    • health aids (100%)
    • support payments (100%)
  18. Bankruptcy - 8 non-dischargeable debts
    • unscheduled creditor
    • student loans
    • cash advances > $875
    • loans against retirement accounts
    • intentional torts
    • back taxes
    • fines/penalties
    • support payments
  19. Future and past payments applicable during bankruptcy
    • Fraudulent transfer: Assets given away 2 years prior
    • Preferential transfer: Assets given with consideration 90 days prior
    • Future payments due (no time frame given)
  20. Requirements to pierce the corporate veil
    • Any of the following:
    • thinly capitalized
    • assets used for personal use
    • poor record keeping
    • comingle assets - personal and business assets in same account
    • corporation created for criminal purposes
  21. Fiduciary duty
    Duty to act in the interest of the company as CEO or employee
  22. Primarily and secondarily liable parties
    • Primarily: maker, comaker, drawee
    • Secondarily: guarantor, drawer
  23. Vicarious liability
    • liable for someone else's actions
    • ex. pets, children, employees within scope
  24. Equal dignity doctrine
    if contract subject to statute of frauds, prinicpal-agency relationship must also be in writing

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