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)