Term
| Stating: "These drill bits will penetrate stainless still" to a lessor would be an example of? |
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Definition
| An express warranty as goods must conform to any affirmation or declaration that is made between the seller and lessor. |
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Term
| A label that reads "Crate contains one 150-horsepower diesel engine" would be an example of what? |
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Definition
| An express contract as goods must conform to any description or call of description of them. |
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Term
| What would a lessor purchasing a car based on a model of another car be? |
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Definition
| An express contract as any sample or model of a good must conform to the actual good. |
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Term
| If a lessor wishes to recover damages of an express warany what must be proven? |
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Definition
| That the product was misrepresented either in the nature, care or quality of the good. The misrepresentation must have been the basis of the purchase and there must be damage. |
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Term
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Definition
| Salesman talk that does not make any real guaranty that holds water. It is merely opinion. |
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Term
| If a good is over $10, and there is a written warranty on it, how must it be written? |
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Definition
Either as a full warranty with free repair and replacement of defected parts or as a limited warranty.
This is under the Magnuson-Moss Waranty Act. |
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Term
| What is the term for the guarantee of a product? |
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Definition
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Term
| Bob's tv is stolen by Larry and sold to Jill. Bob then sues Jill for the tv, it is awarded back to him and Jill sues Bob under what? |
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Definition
| Breach of warranty of Good Title because when Larry sells Jill the tv the sell itself was enough for Jill to assume Larry was transfering to Jill a valid title. |
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Term
| John sells a car to Larry and after the transaction Larry learns there is an outstanding lien on the car, Larry is entitled to do what? |
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Definition
| Collect damages from John for breach of warranty under the No Liens Warranty of Title. |
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Term
| If Albert the inventory sells you a new portable heater that you later find has a patent on it you are entitled to do what? |
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Definition
| Collect damages under the No Infringements Warranties of Title. |
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Term
| If you buy a car from a car salesman and the vehicle breaks down as you exit the lot, you are entitled to what? |
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Definition
| Compensation under the Implied Warranty of Merchantability. A seller that deals with the product being sold daily than the seller ensure the goods are good and proper. |
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Term
| If I bought a new cpu to run a specific type of software and the CPU that I bought was not suffice for the software I could collect under what? |
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Definition
| Implied Warrany of Fitness for a Particular Purpose. When a buyee makes a purchase for a specific reason and a saler guarantees the product doesn't, then they are in breach of warranty. |
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Term
| If a buyee makes a purchase because the saler promised it would do something it does not the buyee may do what? |
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Definition
| Recover under Other Implied Warranties. |
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Term
| What does negotiable instruments and there transfer from person to person fall under? |
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Definition
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Term
| Explain the 4 types of negotiable instruments? |
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Definition
| Drafts (3rd party: I tell credit card a to send $ I owe to credit card b) and checks (types of drafts), orders to pay; promissory notes (2 party) and CDs, orders to pay. |
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Term
| What must be meet for an instrument to be negotiable? |
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Definition
1. Be in writing.
2. Be signed by the maker or the drawer.
3. Be an unconditional promise or order to pay.
4. State a fixed amount of $.
5. Be payable on demand or at a definite time.
6. Be payable to order or to bearer, unless it is a check. |
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Term
| An example of order paper would be what? |
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Definition
| It must state "Pay to the order of Jack Mehoff" and be signed and delivered by Jack. |
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Term
| An example of bearer paper would be what? |
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Definition
| It must state "Pay to the order of cash" and be delivered. |
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Term
| If a check is full of endorsements from one person to another may the check still be endorsed to another person? |
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Definition
| Yes through an allonge may be attatched to the check if the bank the $ will be coming from allows it. |
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Term
| If I receive a check from someone and I do not want it what must questions must be answered before I can renig on the check? |
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Definition
1. Is what I have a negotiable instrument? Did I take it for value?
2. Has it been properly negotiated? This is making sure it is legaly delivered as order or bearer paper, and that it fits with any rules of the financial institute it came from or that you are using. And
3. Is the holder in due course? Is it something someone took for a value in good faith. |
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Term
| If I indorse a check what kind of paper did it just become? |
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Definition
| Bearer paper because I made a blank indorsement. |
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Term
| If I owed Sam $20 and just received a check of $20 from Joe I can do what to get Sam his $? |
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Definition
| Special indorse the check to same by writing "Payable to Sam" above my signature. This makes it an order instrument for Sam that he needs to indorse and cash. |
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Term
| What does Netbank do to protect itself from customers that may default on a loan it is selling? |
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Definition
| Make a qualified indorsement that is indorsing a doc and printing the words "Without Recourse" on the indorsement. This protects Netbank from liability in the event a borrower defaults on their payments. |
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Term
| If I right the words "For deposit only" above my indorsement of a check what have I done? |
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Definition
| Given it a conditional indorsement. This is when an indorsement is given with instructions attatched to it by the indorser. |
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Term
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Definition
A person that is in possession of an instrument drawn, issued, or indorsed to that person, to their order, to blank, or to bearer.
A holder has only those rights that the transferer had. |
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Term
| Would a person that receives a check as a gift be a holder in due course? |
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Definition
| No. An HDC must have given something in value for the instrument. This person would be an oridinary holder. |
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Term
| What is special about a holder in due course (HDC)? |
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Definition
| They are immune of most defenses nd claims to which the transferor was subject. |
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Term
| Is the concept of value when dealing with negotiable instruments the same as consideration when dealing with contracts? Why? |
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Definition
| No. The concept of value when dealing with a negotiable instrument comes with present value. A promise to give value in the future would not be value that would make the holder an HDC. |
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Term
| If someone met the conditions of a HDC, what could cause them to have that immunity thrown out? |
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Definition
| If common sense dictates one of the rules as being void. Ex: Person buys a $30,000 note from a man on a street corner for $300 that turns out to be fake. The person would not be able to collect the $30,000. |
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Term
| If a sells clerk asks me to sign a paper that they explain is a reciept when in fact it is a promissory note that has been altered to look like a reciept and is then sold to an HDC do I have to pay the HDC? |
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Definition
| No under the Universal or Real defense as fraud was used in the execution of the note. |
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Term
| Under what circumstances can Universal or Real Defenses be used? |
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Definition
Forgery
Material Alteration-adding things to a check that did not exist at time of execution.
Discharge in Bankruptcy
Minority-can be universal or personal
Illegality-can be universal or personal
Mental Incapacity-can be both
Extreme Duress-can be both |
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Term
| What is the difference between universal and personal defenses? |
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Definition
| Personal can be used to avoid payment to an ordinary holder but not to an HDC, universal can be used to avoid payment to both. |
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Term
| If Rhodes agrees to purchase some China from Livingston and gives him a note for the China only later to find out the China is damaged Rhodes can do what? |
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Definition
| Refuse to pay under breach of contract and warranty as a personal defense unless Livingston sold the China to an HDC then Rhodes would have to honour the note with the third party but could sue Rhodes for the amount of the note. |
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Term
| If there is lack of consideration can a court enforce a note that one party gives to another? |
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Definition
| No. Under personal defenses. |
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Term
| If someone conned you into signing a note for the purchase of something under false pretenses you could do what? |
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Definition
| Refuse to pay the note under the personal defenses act for fraud in the inducement? But that is not the case if the note has been negotiated to someone that is an HDC. |
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