Term
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Definition
| Written, Transferable, signed promise or order to pay a specified sum of money- a negotiable instrument |
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Term
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Definition
drafts, promissory notes, checks, and certificates of deposit that in proper form, give special rights as "negotiable commercial paper"
-is treated like a contract type
-governed by article three of the uniform commercial code
-title/ownership is tranferred by negotiation |
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Term
| negotiable instrument qualities |
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Definition
payable to the bearer of order
payable on demand or at a specific time
no other purpose than the payment of money |
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Term
| types of negotiable instruments |
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Definition
1. Check
2. CD
3. Promissory Note
4. Drafts (bills of exchange) |
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Term
| CD (Certificate of deposit) |
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Definition
| a promise-to-pay instrument issued and backed by a bank |
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Term
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Definition
| unconditional promise in wirting made by one person to another, signed by the maker engaging to pay on demand, or at a definite time, a sum certain in money or to the bearer |
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Term
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Definition
| an unconditional order in writing by one person upon another, signed by the person giving it, and ordering the person to whom it is directed to pay upon demand or at a definite time a sum certain in money to order or to bearer |
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Term
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Definition
| order by a depositor on a bank to pay a sum of money to a payee; a bill of exchange drawn on a bank and payable on demand |
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Term
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Definition
| draft drawn by a bank on itself |
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Term
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Definition
| person who signs an instrument to lend credit to another part to the paper |
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Term
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Definition
| quality of an instrument that affords special rights and standing |
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Term
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Definition
| a authorization may be made by the drawer or the maker or by his or her own authorized ______ |
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Term
| requirements of negotiability |
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Definition
1. Record (writng), no form required
2. Signed/authenticated |
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Term
| Promissory note requirents |
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Definition
1) promise/order to pay
2. unconditional
3. payment in money form
4. exact amount of money
5. payable on demand or at a specified time
6. magic wors- pay to the order of the bearer |
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Term
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Definition
| "pay to the bearer" transferred and negotiated by delivery |
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Term
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Definition
| "pay to the order" requires endorsement and tranfer of possession |
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Term
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Definition
| someone in possession of an instrument that runs to that person (I.E. is made payable to that person, is endorsed by that person, or is bearer paper. |
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Term
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Definition
| a holder who has given value, taken in good faith without notice or dishonor, defenses, or that instrument is overdue, and who is afforded special rights or status |
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Term
| requirements to be a holder in due course |
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Definition
1) must be a holder
2) must give value
3) Must act in good faith- act honestly, and act reasonably in regards to commercial dealings |
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Term
| close connection doctrine |
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Definition
| circumstantial evidence, such as an ongoing or close relationship, that can serve as notice of a problem with an instrument- guilt by association |
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Term
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Definition
| protects a HDC as a middle man. Exception is fraud that affects the instrument |
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Term
| Things HDCs are protected against/not subject to |
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Definition
ordinary contract defenses
incapacity of maker or drawer
fraud in the inducement- persuasion
non-delivery
breach of warranty
etc |
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Term
| Things all holders can be liable for, including HDCs (universal defense against them) |
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Definition
Fraud as the the nature of essential terms of the instrument
forgery or lack of authority
duress depriving control
incapacity
illegality
alteration |
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Term
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Definition
| formal request for payment on an instrument by a holder/HDC (in writing or by electronic means) |
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Term
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Definition
primary part refuses to pay
-only once this occurs can you go to the secondary party for paryment
-banks give notice of dishonor at midnight next day, non banks have 30 days. |
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Term
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Definition
| a check whose date is longer than 6 months ago |
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Term
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Definition
| primarily liable for the debt or obligation of the principal debtor |
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Term
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Definition
| signature of the payee on an instrument |
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Term
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Definition
| does not designate anyone to be paid and how |
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Term
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Definition
| an endorsement that specifies the person to whom the instrument is endorsed. |
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Term
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Definition
| an endorsement that includes works such as "without recourse" that disclaims certain liability of the endorser to maker or a drawee |
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Term
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Definition
| an endorsement that restricts further transfer, such as in trust for the use of some other person, is conditional, or for collection or deposit |
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Term
| Exceptions to the Imposter Rule |
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Definition
1. Impersonating a payee
2. Dummy payee
3. Dummy payee supplied by dummy employer |
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Term
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Definition
| a contract by someone in exchange for consideration so that you will pay another person in the event that they may experience a loss (ex-insurance) |
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Term
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Definition
| the party who is secondarily liable to stand in place of the creditor after making payment to the creditor and to enforce the creditor's right against the party primarily liable in order to obtain indemnity from such primary party |
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Term
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Definition
aim to protect the rights of consumers
50 states have these laws in place |
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Term
| FTC (Federal Trade Commission) |
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Definition
prohibits unfair or deceptive trade practices
-can go after anyone who has a transaction with the with the customer
-deems them for failing to act as well
-consumer does not have to be damaged to go after someone
-do not protect consumer from their own negligence
-do not protect consumers from their own negligence |
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Term
| CFPB (Consumer Financial Protection Bureau) |
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Definition
| consumer protection bureau located within the Federal Reserve that now has jurisdiction over all consumer credit issues and statutes |
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Term
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Definition
| sum of money that will compensate an injured plaintiff for actual loss |
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Term
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Definition
| damages, in excess of those required to compensate the plaintiff for the wrongdoing that are imposed to punish the defendant because of the particular want or willfull character of wrongdoing; also called exemplary damages |
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Term
| The Areas of Consumer Protection |
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Definition
1. deceptive ads (deception)
2. labeling (especially warnings)
3. selling methods (3 days to recind contract)
4. telemarketing fraud (8AM to 9PM) (no healthcare service)
5. form
6. subprime mortgages (limits on int rates)
7. unconscionability
8. TILA (over 4 installments)
9. Unsolicited credit card sales |
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Term
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Definition
unauthorized use up to $50
1. accepted card
2. notice
3. how to report lost or stolen
4. method to ID authorized user
5. lost/stolen |
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Term
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Definition
| not a defense that debtor owned money, not a defense debtor suffered no damages |
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Term
| FCRA- Fair Credit Reporting Act |
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Definition
| act which fed crime to obtain credit report for improper use |
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Term
| Equifax, Experian, Transunion |
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Definition
the three main credit reporting agencies
-they tell consumer anyone who pulled report in the last 6 months
-tell consumer employers who pulled reports in last 2 yrs |
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Term
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Definition
| bankruptcy remains on your credit report for ten years |
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Term
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Definition
| a loan or credit transaction in which the lender acquires a security interest in collateral owned by the borrower and the creditor is therefore entitled to special protection |
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Term
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Definition
typpe of bankruptcy where they use the means test. They have to fall below the State's median disposable income or it is dismissed for abuse
-this can be with all types of entitites |
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Term
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Definition
| bankruptcy in which there is a consumer repayment plan; debts partially repaid |
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Term
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Definition
| typical business bankruptcy |
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Term
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Definition
| farmers, insurance companies, savings and loan, cities, railroads, and other certain businesses can file for this type of bankruptcy. |
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Term
| Process steps of bankruptcy |
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Definition
1. voluntary or involuntary bankruptcy is filed
2. debtor files schedule of assets/ income and debts/ expenses
3. debtor provides list of creditors
4. trustee appointed
5. credit counseling within 180 days
6. proofs of claims filed by creditors- ranked by priority
7. order for relief; discharge, plan, or dismissal |
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Term
| discharging in bankruptcy |
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Definition
| order of the bankruptcy court relieving the debtor from obligation to pay the unpaid balance of most claims |
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Term
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Definition
| relationship that exists between a person identified as a principle and another by virtue of which the latter may make contracts with third persons on behalf of the principal. |
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Term
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Definition
| person or firm who is authorized by the principle or by opertation of law to make contracts with third persons on behalf of the principal. Employees are ____ of their employer |
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Term
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Definition
person or firm who employs an agent; person who, with respect to surety, is primarily liable to the third person or creditor; property held in trust.
-store owner employs manager |
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Term
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Definition
| contractor who undertakes to perform a specified task according to the terms of a contract but over whom the other contracting party has no control except as provided for by the contract. |
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Term
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Definition
| agent who is authorized to transact a specific transaction or to do a specific act |
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Term
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Definition
| agent authorized by the principal to do all acts that can lawfully be delegated to a representative |
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Term
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Definition
| agent authorized by the principal to transact all affairs in connection with a particular type of business or trade or to transact all business at a certain place |
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Term
| interest in the authority |
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Definition
| form of agency n which an agent has been given or paid for the right to exercise authority |
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Term
| interest in the subject matter |
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Definition
| form of agency in which an agent is given an interest in the property with which that agent is dealing |
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Term
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Definition
| authority of an agent that is reasonably necessary to execute express authority |
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Term
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Definition
| appearance of authority created by the principal's words or conduct |
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Term
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Definition
| authority of an agent to do any act that, according to the custom of the community, usually accompanies the transaction for which the agent is authorized to act. |
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Term
| How are agency relationships created? |
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Definition
1. expressly authorizing, like when buying or selling land, and it has to be in writing
2. Conduct/implied, store assistant asked to assist is implied
3. ratification
4. by law |
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Term
| cases when agent is not liable |
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Definition
disclosed principal
they are working within the proper authority
contract executed properly
federal employee involved in a tort |
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Term
| situations where agent is liable |
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Definition
partially undisclosed principal (no way to ID)
undisclosed principal (unknown)
fraud, negligence |
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Term
| Duties of Agent to Principal |
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Definition
loyalty
obedience and performance
reasonable care
accounting
information |
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Term
| Duties of principal to agent |
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Definition
contractual duties
compensation |
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Term
| Termination of agency relationships |
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Definition
contract has a specific time
termination by act of parties
termination by operation of law
-insanity of the principal or agent
-bankruptcy of "
-impossibility of performance
-when the countries are at war |
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Term
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Definition
| someone is being held responsible for the actions of another |
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Term
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Definition
| holding an employer liable for the action of their employee |
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Term
| collective bargaining agreements |
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Definition
| these govern the rights and obligations of employers and employees in many private and public areas of employment |
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Term
| terms found in collective bargaining agreements |
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Definition
1) ID of the work beelonging exclusively to designated classes of employees
2) Wage and benefits clause
3) Promotion and layoff clauses
4) a management's rights clause
5) a grievance procedure |
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Term
| Employment-at-will doctrine |
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Definition
| donctine i which the employer has historically been allowed to terminate the employment contract at any time for any reason or for no reason at all |
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Term
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Definition
| when a company pays a worker a claim because they were injured on the job |
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Term
| FLSA Fair Labor Standards Act |
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Definition
| act that establishes wage laws. Subminimum wage provisions, overtime pay, and cild labor provisions |
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Term
| FMLA Family Medical Leave Act |
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Definition
| 12 weeks off, unpaid; employer an force to take away from vacation days; has to be a medical condition the prevents employer from doing their job |
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Term
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Definition
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Term
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Definition
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Term
| OSHA Occupational Saftey and Health Act |
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Definition
| preserves the US workforce |
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