MGT 2106 - Final Exam Rubinoff

Breach of contract

When a party fails to fulfill their obligations under a contract

repossession of the collateral through self-help remedy

on the debtor's default, a secured party can take peaceful possession of the collateral without the use of judicial process

Age Discrimination Act of 1967

one cannot discriminate solely based on age, in addition to forcing retirement on non-managerial workers (especially over 40 years old)

agency

one party is the agent that represents the other party (the principal) and interacts with third parties on their behalf

Entrepreneur

one who initiates and assumes the financial risk of a new business enterprise and undertakes to provide or control its management

independent contractor

one who works for and receives payment from an employer but whose working conditions and methods are not controlled by the employer

garnishment

orders third party to turn over property

hostile work environment

pattern of sexual offensive behavior/conduct that permeates the workplace such as people having jokes about women, about individuals of a given race or religion

Good faith purchaser

A person who buys goods in good faith and without knowledge of any defects or liens

Merchant Status

A person who deals in goods of the kind involved in the sales contract or who holds themselves out as having skill or knowledge peculiar to the practices or goods being purchased or sold

Warranties

Assurances by one party of the existence of a fact on which the other party can rely

Right of assurance

Buyer can request assurance from the seller that they can complete the contract and if they can't, the contract can be terminated

Right of inspection

Buyer has the absolute right to inspect goods before making payment

Installment contract

Contract that requires delivery in separate lots to be accepted and paid for separately

Assumption of risk

Defense to product liability; the plaintiff failed to heed a product recall

Risk of loss

Does not necessarily pass with title; can be determined by contract terms

Substantial impairment

Failure to deliver one shipment affects the buyer's ability to sell future shipments, the buyer is not obligated to accept future shipments

Implied warranty of fitness for a particular purpose

Goods are fit for the buyer's specific intended use

Implied warranty of merchantability

Goods are reasonably fit for their ordinary purpose and of at least average quality

Perfect Tender Rule

Goods must conform to the contract in every respect, if the goods fail to conform to the contract, the buyer may accept the goods, reject the goods, or accept part and reject part of the goods tendered

D&O Liability Insurance

Insurance coverage for corporate directors and officers, and their spouses, in the event of the lawsuit. Know how much the coverage maximum is and what the deductible is (higher payment, lower deductible)

Incoterms

International shipping terms defined by the International Chamber of Commerce

Statute of Frauds

Law that requires certain contracts to be in writing to be enforceable

Product liability

Legal responsibility of manufacturers and sellers for injuries caused by their products

Strict liability

Liability without fault for defective products

Sale

Passage of title from seller to buyer for a price

Passage of title

Occurs when the goods are identified and ownership rights are transferred

Exclusive type remedies

Remedies that limit liability to replacing goods

Tender of delivery

Seller makes conforming goods available to the buyer and provides whatever notification is necessary to enable the buyer to take delivery

Performance of a Sales or Lease Contract

Seller must transfer and deliver conforming goods on time; buyer must accept and pay for conforming goods in accordance with the contract

Express warranties

Seller's promise as to the quality, condition, or performance of the goods being sold

Right to cure

Seller's right to fix nonconforming goods within the contract time for performance

Uniform Commercial Code (UCC)

Statutory law that covers sales, leases, and secured transactions

Identification

The express designation of the goods provided for in the contract

Cure

The right of a party to fix nonconforming performance within the contract period

Title

The right of ownership, was the central concept in sales law and controlled all issues of rights and remedies of the parties to a sales contract

Destination contract

Title does not pass until the goods arrive at the specified destination, the seller assumes liability for any losses or damage to the goods until they are tendered at the destination specified in the contract

Void title

Title obtained from a person who does not have the right to sell the goods

Lease

Transfer of the right to possess and use goods for a period of time in exchange for payment

Article 2a

UCC article that covers the lease of goods

Article 2

UCC article that covers the sale of goods

Implied warranties

Warranties that arise by law due to the circumstances of the sale and not from the seller's express promise

Anticipatory repudiation

When one party communicates their intention not to perform the contract

limited partnerships

a partnership consisting of one or more general partners and one or more limited partners

quid pro quo harassment

a Latin term which means "this for that", sexual favors are demanded in return for job opportunities, promotions, salary increases or threats of adverse action if a person does not submit

prima facie case

a case in which the plaintiff has produced sufficient evidence of a claim that the case will be decided for the plaintiff unless the defendant produces evidence to rebut the claim

S-Corporation

a close business corporation that has most corporate attributes, including limited liability, but qualifies under the Internal Revenue Code to be taxed as a partnership

Doctrine of Employment at Will

a common law doctrine under which either party may terminate an employment relationship at any time for any reason, unless it would violate a contract or statute

Business Necessity

a defense to an allegation of employment discrimination in which the employer demonstrates that an employment practice that discriminates against members of a protected class is related to job performance

dividend

a distribution of corporate profits to the corporation's shareholders in proportion to the number of shares held

disparate-treatment discrimination

a form of employment discrimination that results when an employer intentionally discriminates against employees who are members of protected classes

limited liability company

a hybrid form of business enterprise that offers the limited liability of a corporation and the tax advantages of a partnership

limited liability partnerships

a hybrid form of business organizations that is used mainly by professionals who normally do business as partners in a partnership

homestead exemption

a law permitting a debtor to retain the family home, either in its entirety or up to a specified dollar amount, free from the claims of unsecured creditors or trustees in bankruptcy

Corporation

a legal entity formed in compliance with statutory requirements that is distinct from its shareholder-owners

mechanic's lien

a nonpossessory filed lien on an owner's real estate for labor, services, or materials furnished for making improvements on the realty

agency by ratification

a person who is not the agent or an agent acting outside of his or her scope of authority may make a contract on behalf of the principal; if the principal affirms the contracts by words or actions, then the contract is ratified

fiduciary

a person who, having undertaken a certain enterprise on behalf of another person, has a duty to act for the other person's benefit in all matters related to that enterprise

artisan's lien

a possessory lien by a party who has made improvements and added value to personal property of another party as security for payment for services performed

surety

a promise made by a third party to be responsible for a debtor's obligation

Rule 10B-5

a rule of the Securities and Exchange Commission that prohibits the commission of fraud in connection with the purchase or sale of any security

Business Judgement Rule

a rule under which courts will not hold corporate officers and directors liable for honest mistakes of judgement and bad business decisions that were made in good faith

judicial remedies

a secured party can relinquish the security interest and use any judicial remedy available, such as obtaining a judgment on the underlying debt, followed by execution and levy

scope of security interest

a security interest can cover property in which the debtor has either present or future ownership or possessory rights

purchase money security interest (PMSI)

a security interest that arises when a seller or lender extends credit for part or all the price of goods purchased by a buyer

corporate governance

a set of policies specifying the rights and responsibilities of the various participants in a corporation and spelling out the rules and procedures for making corporate decisions

constructive discharge

a termination of employment brought about by making the employee's working conditions so intolerable that the employee reasonably feels compelled to leave

guaranty

a third party who agrees to be secondarily liable for the debt of another (the debtor) only after the principal debtor defaults

corporate acquisition

acquiring a company by buying up all of the shares

apparent authority

actual authority that arises when words or actions of principal leads agent to assume how to act

shareholders agreement

agreement between shareholders on how to address ownership of the shares (ex. What if I die? What if I want to sell my stock?); addresses ownership

Statute of Limitations

an action for breach of contract under the UCC must be commenced within four years after the cause of action accrues. that is a buyer must file a lawsuit within four years after the breach occurs

partnership

an agreement by two or more persons to carry on, as co-owners, a business for profit

Lease Agreement

an agreement in which one party (the lessor) agrees to transfer the right to the possession and use of property to another party (the lessee) in exchange for rental payments

wrongful discharge

an employer's termination of an employee's employment in violation of the law or an employment contract

Bona Fide Occupational Qualifications - BFOQ

an identifiable characteristic reasonably necessary to the normal operation of a particular business, such characteristics can include gender, national origin, and religion, but not race

partial performance

an unforeseen event only partially affects the capacity of the seller to perform, the seller can partially fulfill the contract but cannot tender total performance

franchise

any arrangement in which the owner of a trademark, trade name, or copyright licenses another to use that trademark, trade name, or copyright in the selling of goods or services

secured party

any creditor who has a security interest in the debtor's collateral, can be a seller, lender, a cosigner, or even a buyer of accounts or chattel paper

Secured Transactions

any transaction in which the payment of a debt is guaranteed, or secured, by personal property owned by the debtor or in which the debtor has a legal interest

creditors committee

as soon as practicable after the entry of the order for relief, a committee of unsecured creditors is appointed, the committee can consult with the trustee or the debtor concerning the administration of the case or the formulation of the plan

expressed agreement

formed by written or oral agreement

Securities Act of 1933

based on disclosure, which means the issuer of the security should disclose all the materials which would be pertinent to the investor in order to make a decision about investing

Secured lending

borrowing money from the bank with collateral

Class B Non-voting Stock

common stock, but you cannot vote

Security Agreement

contract in which a debtor agrees to give a creditor the right to take the debtor's property in the event of default

officers

control day to day decisions in a company

FOB (free on board)

designate address for buyer, title passes wherever you designate that location to be; means seller absorbs transport and insurance costs, and buyer would pay for the rest of the transport costs

Bill of Lading

document provided for shipped goods outlining what is shipped, provides up to $100 in shipping insurance, serves as a contract and receipt

agents

employees/person who deals with third parties on behalf of the principal (sales person)

liens

encumbrance on (claim against) property to satisfy a debt or protect a claim for the payment of debt

UCC Good Faith provision

every contract/duty within this act imposes an obligation of good faith in its performance or enforcement

Financing Statement (UCC Form 1)

file to give public notice to third parties of the secured party's security interest, expires after 5 years but you can renew it

venture capital

financing provided by professional, outside investors to new business ventures

discharge of debts

from the debtors point of view, the primary purpose of liquidation is to obtain a fresh start through the discharge of debts, a discharge voids or sets aside any judgment on a discharged debt and prevents any action to collect it

private equity capital

funds invested in an existing corporation by a private equity firm, usually to purchase and reorganize it

securities

generally, stocks, bonds, or other items that represent an ownership interest in a corporation or a promise of repayment of debt by a corporation

Antifraud Provisions of the 1934 Act

giving untrue information; captures all kinds of fraud , once stock is out upper management cannot disclose untruthful info to the public

CISG (Contracts for the International Sale of Goods)

governs international sales contracts between CISG countries; has defaults for international contracts (62 countries)

protected class

group of persons protected by specific laws because of the group's defining characteristics, including race, color, religion, national origin, gender sexual orientation, age, disability, and military status

existing goods

if the contract calls for the sale or lease of specific goods that are already in existence, identification takes place at the time of contracting are known as this

Family Medical Leave Act (FMLA)

if you are an employee of a company, you are entitled to 12 weeks of unpaid leave within a 12 month lookback period beyond giving birth, assisting parents, adopt a child, non-birthing spouse versus being fired

implied agreement

implied by conduct/custom often inferred/confirmed by customs or by position in a company

fiduciary duty

highest form of obligation/trust, putting principal's interest in front of agent

agency by estoppel

if a principal causes a third party to believe that another person is his or her agent, the principal cannot deny their relationship with the agent

Usage of trade

if both parties are merchants, and the contract is silent on something, one party could argue it should have been included because it's industry standard

Americans with Disability Act of 1990

if someone has a disability that makes it hard for them to work, a company must make reasonable attempts/accommodations so that the employee can work

doctrine of respondeat superior

imposes various (indirect) liability on the employer without regard to the personal fault of the employer for torts committed by an employee in the course or scope of employment

automatic stay

in bankruptcy proceedings, the suspension of almost all litigation and other actions by creditors against the debtor or the debtor's property, the stay is effective the moment the debtor files a petition in bankruptcy

joint liability

in partnership law, the partners' shared liability for partnership obligations and debts, a third party must sue all of the partners as a group, but each partner can be held liable for the full amount

Equal Employment Opportunity Commission (EEOC)

investigates priority cases which involve retaliator, discharge, and discrimination

Goods

item of property must be tangible and moveable

Securities Exchange Act of 1934

law governs the secondary trading securities (while dealing with insider trading); establishes the SEC (the act was made to create absolute transparency to make legitimate decisions in buying stock)

merger

merging companies together, liable for company, even before the merging begins

commingled

mixed to such a degree that the individual parts (such as funds or goods) no longer have separate identities

debtor

person who owes payment or other performance of secured obligation

debtor

person who owes the money

perfection by possession

pledge certain collateral as security for the debt and transfer the collateral into the creditors possession

Uniformed Services Employment and Reemployment Rights Act (USERRA)

prohibits discrimination against persons who have served in the military

Title VII of the Civil Rights Act of 1964

prohibits job discrimination against employees, applicants, and union members on the basis of race, color, religion, sex or national origin

after acquired property

property that is acquired by the debtor after the execution of a security agreement

collateral

subject of the security interest

disparate-impact treatment

results from certain employer practices which may not be directly discriminatory but have discriminatory impacts

right of subrogation

right to step in and sue for someone else, the right of a party to stand in the place of another, giving the substituted party the same legal rights that the original party had

Sales on Approval

risks of damage of goods fall onto the seller, if there is a fine print that says you have a responsibility to reimburse the seller so make sure to have insurance when assuming a risk

bonds

securities that evidence a corporate (or government) debt

stocks

securities that evidence an ownership (equity) interest in a corporation, measured in units of shares

CIF or C&F (cost, insurance, and freight)

seller pays for the purchase, insurance, and freight, then ownership passes to the buyer

good title

seller warrants they have good and valid title and transfer of title is rightful

common stock

shares of ownership in a corporation that give the owner a proportionate interest in the corporation with regard to control, earnings, and net assets; lowest in priority with respect to payment of dividends and distribution of the corporation's assets on dissolution

preferred stock

stock that has priority over common stock as to payment of dividends and distribution of assets on the corporation's dissolution

Piercing the Corporate Veil

the action of a court to disregard the corporate entity and hold the shareholders personally liable for corporate debts and obligations

Articles of Organization

the document filed with a designated state official by which a limited liability company is formed

execution

the implementation of a court's decree or judgment

security interest

the interest in the collateral that secures payment of the obligation

perfecting security interest

the legal process by which secured parties protect themselves against the claims who may wish to have their debts satisfied out of the same collateral (must file)

levy

the legal process of obtaining funds through the seizure and sale if nonexempt property, usually done after a writ of execution has been issued

perfection by filing

the most common means of perfection is by filing financial statement with the office of the appropriate government officials

quorum

the number of members of a decision-making body that must be present before business may be transacted

creditor

the person who is owed money by the company that has taken a loan

retained earnings

the portion of a corporation's profits that has not been paid out as dividends to shareholders

insider trading

the purchase or sale of securities on the basis of information that has not been made available to the public

right of contribution

the right of a co-surety who pays more than a proportionate share on a debtor's default to recover the excess paid from other co-sureties

Shipment contract

the seller is required only to deliver goods to a carrier, and title passes to the buyer at the time and place of the handoff (buyer is responsible for insuring and tracking)

sole proprietorships

the simplest form of business organization, in which the owner is the business and the owner reports business' income as personal income and is legally responsible for all debts and obligations incurred by the business

undisclosed authority

third party is unaware that the agent is acting on behalf of the principal

disclosed authority

third party knows that the agent is acting on behalf of the principal

insolvent

unable to pay debts as they become due

buyers in the ordinary course of business

under the UCC, a person who buys "in the ordinary course of business" takes the goods free from any security interest created by the seller even of the security interest is perfect and the buyer knows of its existence

sexual harassment

unwelcomed sexual advances, requests for sexual favors and other conduct of a sexual nature which is pervasive and/or severe can constitute harassment, including, but not limited to, verbal misconduct without accompanying physical contact

Board of Directors

vote on things critical to the company and oversee the company, its dividends, and has fiduciary duties (highest) to shareholders

Magnuson-Moss Act of 1975

was designed to prevent deception in warranties by making them easier to understand; requires warranties to be labeled as 'full' or 'limited' and explained in simple language

- written statement - the secured party must give something of value to the debtor - the debtor must have rights to the collateral

what are the requirements to create a security interest?

- protect a debtor by providing a fresh start without creditors claims - to ensure equitable treatment of creditors who are competing for a debtor's asset

what are the two main goals of bankruptcy?

judicial lien

when a debt is past due, a creditor can bring a legal action against the debtor to collect the debt, if the debtor is successful, the courts awards the creditor a judgment against the debtor

open delivery terms

when no delivery terms are specified, the buyer normally takes delivery at the seller's place of business

open payment terms

when parties do not specify payment terms, payment is due at the time and place at which the buyer is to receive the goods

COD (cash on delivery)

when the buyer is having financial challenges, a seller can request this to only give goods after payment

collateralized loans

you have collateral, and if you don't pay back your loan, the bank can foreclose on it (like a house)