Business Law Q2
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| sale of tangible moveable property | Article 2 of Uniform Commercial Code
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| origin of Uniform Commercial Code | law merchant of English common law
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| indicates monetary consideration in a contract | price
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| a document that evidences ownership of personal property | bill of sale
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| a sale concerning existing goods | contract of sale
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| a sale concerning future goods | contract to sell
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| if amount of sale of tangible moveable property is $500 or more, contract must be in writing by time of suit in order to be enforceable | statute of frauds
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| exception to statute of frauds | 1. if buyer has received & accepted the goods
2. if buyer pays for the goods
3. judicial admission in court
4. specifically manufactured goods
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| auctioneer signs memorandum indicating goods, price & buyer | auction sales
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| can't refuse highest bid | auction without reserve
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| can refuse highest bid if it doesn't meet reserve | auction with reserve
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| title doesn't pass until buyer receives & approves the goods | sale on approval
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| title will pass once buyer receives goods; buyer can return goods by time specified in contract | sale with right to return
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| manufacturer appoints someone as their agent to sell their goods; title does not pass from manufacturer to seller | consignment
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| cash on delivery | does not affect passage of title or risk of loss
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| field in bill of lading; the point to which title transfers from seller to buyer | free on board
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| contract between common carrier & seller (shipper) for shipment of goods; the point to which the seller owns the goods & bears the risk of loss | bill of lading
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| a writing which is drawn in a special form that can be transferred from person to person as a substitute for money | negotiable instrument
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| the transfer of the instrument from one person to another | negotiating
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| the first delivery of the instrument to the original payee | issuing
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| negotiable instrument made payable to a named payee & negotiated by endorsement/delivery | order paper
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| negotiable instrument made payable to bearer or cash & negotiated by delivery alone | bearer paper
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| an order by one person to another person to pay sum certain in money to a third person on demand or a fixed future date | draft
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| person who draws up & executes a draft | drawer
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| party that is ordered to pay on a draft | drawee
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| person who an instrument is made payable | payee
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| a promise to pay specific amount of money over a period of time; 2 parties | promissory note
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| person who executes a promissory note | maker
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| person who promises to pay | maker
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| person to who a promissory note is made payable | payee
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| person to who an instrument is made payable | payee
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| person who endorses an instrument/anyone that endorses that endorses or signs an instrument on the reverse side | endorser
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| anyone to whom any negotiable instrument is made payable through an endorsement | endorsee
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| anyone in possession of an instrument that has been negotiated to them | holder
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| the drawee, once they accept the instrument for payment | acceptor
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| anyone in possession of an instrument that is bearer paper | bearer
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| T or F: there is no such thing as an oral negotiable instrument | true
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| requirements of negotiability | 1. signed writing
2. order to pay/promise to pay
3. unconditional
4. sum certain in money
5. payable on demand of on a fixed future date
6. payable to the order of a named payee
7. payee & drawer must be identified
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| T or F: an IOU is not a negotiable instrument | true
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| a written contract obligation, usually executed by a corporation or governmental body under seal of the body & usually secured by property of that association | bond
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| bond with detachable interest-paying stub & a payment date | coupon bond
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| a promissory note payable to a named payee & the payee's name is registered on the books & record of the corporation | registered bond
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| Is a registered bond negotiable or non-negotiable? | non-negotiable
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| promissory note which is sealed by personal property | collateral note
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| promissory note secured by real property | real estate mortgage note
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| maker of real estate mortgage note | mortgagor
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| lender (real estate mortgage note) | mortgagee
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| promissory note with due date, not secured by property, and issued by business under corporate seal | debenture
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| acknowledgement by a bank that they have received money & promised to pay it back with interest by some future date | certificate of deposit (CD)
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| a draft that is both drawn & payable within U.S. | domestic/inland draft
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| either drawn up in a foreign country or payable in a foreign country or both | foreign draft
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| When does title pass for existing goods? | at the time of the transaction
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| goods already owned & produced | existing goods
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| When does the risk of loss pass for existing goods? | at the time of the transaction
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| When does title & risk of loss pass in a contract to sell? | at a future point, such as time of receipt
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| Regarding free on board, who bears the risk of loss? | seller
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| origin of Article 3 of UCC | law merchant
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| How many requirements of negotiability? | 7
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| T/F There is no such thing as an oral negotiable instrument | true
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| Negotiable instrument: Handwriting controls over _____ | numeral
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| Negotiable instrument: Typewriting controls over _____ | printing
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| Negotiable instrument: ______ controls over typewriting | handwriting
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| T/F A coupon bond is negotiable | true
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| T/F A registered bond is non-negotiable | true
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| a draft that is payable immediately | sight draft
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| a draft that is payable on a future date (post-dated) | time draft
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| an order by the seller of goods to the buyer of goods ordering them to pay for the goods on a fixed future date | trade acceptance
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| The drawer of a trade acceptance is the... | seller
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| The payee of a trade acceptance is the... | payee
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| The drawee of a trade acceptance is the... | buyer
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| A trade acceptance is a type of... | draft
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| a draft drawn on a bank | check
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| drawer on a check | person with funds on deposit (depositor)
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| drawee on a check | bank
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| the bank takes funds out of the bank account and puts the funds into a separate account | certified check
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| What is the best type of check to receive? | certified check
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| T/F You cannot stop payment on a certified check | true
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| T/F A certified check cannot be staledated | true
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| a check wherein the same bank is both the drawer and the drawee | cashier's check
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| a type of check that must be signed twice | traveler's check
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| a check wherein one bank is drawer and another bank is drawee | bank draft
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| a check with stubs or a carbon copy used as a record of who it is for, the amount, and date | voucher check
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| an oral stop payment order on a check is good for ___ ___ | 14 days
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| a written & signed stop payment order on a check is good for ___ ___ | 6 months
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| transferring from one person to another as a substitution for payment | negotiation
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| the place of endorsement, located on left reverse side | trailing edge
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| a piece of paper permanently affixed to the back side under the trailing edge | allonge
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| T/F Misspelling a payee's name is not fatal to negotiation | true
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| T/F If there is more than one payee, all must endorse | true
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| an endorsement with the signature of the payee only with no added words | blank endorsement
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| an endorsement made payable to another payee | special endorsement
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| A blank endorsement will convert ____ paper to ____ paper | order to bearer
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| an endorsement "for deposit only" | restrictive endorsement
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| an endorsement that restricts the use of an instrument for a particular purpose | restrictive endorsement
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| an endorsement that excludes endorsee from liability | qualified endorsement
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| In order to make a qualified endorsement, you must include the words... | "without recourse"
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| T/F All endorsers are liable for warranties | true
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| Which endorsers are liable for payment ? | blank, special & restrictive
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| Primary liability for payment on a draft lies with the... | drawee/acceptor
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| Primary liability for payment on a note lies with the... | maker
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| Secondary liability for payment on a draft lies with the... | endorser (except qualified) & drawers
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| The words "_____ _____" before a signature makes the endorser primarily liable | payment guaranteed
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Created by:
leahmurphy
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