question

acceleration clause

answer

a clause in an instrument that allows the payee/holder to accelerate the payment of the principle amount of an instrument plus accrued interest upon the occurence of an event

question

accomodation

answer

a shipment of goods thats offered to a buyer as a replacement for the original shipment when the original shipment cant be filled

question

agent

answer

a party who agrees to act on behalf of another

question

allonge

answer

a separate piece of paper attached to an instrument on which an endorsement is written

question

anti-deficiency statute

answer

statute that prohibits deficiency judgements regarding certain types of mortgages, such as those on residential property

question

assignment of rights

answer

the transfer of rights under a contract

question

automatic stay

answer

the suspension of certain legal actions by creditors against a debtor or the debtors property

question

bank check

answer

a certified check or a cashiers check, the payment for which a bank is solely or primarily liable.

question

bearer paper

answer

an instrument that is payable is to anyone in physical possession of the instrument who presents it for payment when it is due. the person in possession of the instrument is the bearer: bearer paper results when the drawer or maker doesn't make the instrument payable to a specific payee

question

breach of contract

answer

a contracting party's failure to perform an absolute duty owed under a contract

question

cashiers check

answer

a check issued by a bank for which the customer has paid the bank the amount of the check and a fee. the bank guarantees payment of the check.

question

certification

answer

a process in which the accepting bank writes or stamps the word certified on an ordinary check of an account holder and sets aside funds from that account to pay the check.

question

certified check

answer

a type of check for which a bank agrees in advance (certifies) to accept the check when it is presented for payment.

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check

answer

a distinct form of draft that is an order by a drawer( ie checking acct. holder) to the drawers financial institution (the drawee) to pay a specified sum of money from the drawers checking acct. to named payee

question

compensatory damages

answer

an award of money intended to compensate a nonbreaching party for the loss of a bargain. compensatory damages place the nonbreaching party in the same position as if the contract had been fully preformed by restoring the "benefit of the bargain".

question

consignment

answer

an arrangement in which a seller ( the cosigner) delivers goods to a buyer (the consignee) to sell

question

conspicuous

answer

description of a notice that is given by a seller of goods, principal of a principal agent relationship, and others that is noticeable to a reasonable person.

question

deed of trust

answer

an instrument that gives a creditor a security interest in the debtors property that is pledged as collateral

question

default

answer

a situation that occurs when a debtor that does not make the required payments on a debt

question

deficiency judgement

answer

a judgement of a court that permits a secured lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan

question

demand note

answer

a note payable of demand

question

discharge

answer

discharge from liability on negotiable instruments

question

draft

answer

a three party instrument that is an unconditional written order by one party(drawer) that orders a second party(drawee) to pay money to a third party.

question

express warranty

answer

a warranty that is created when a seller or lessor makes an affirmation that the goods he or she is selling or leasing meet certain standards of quality, description, performance or condition.

question

force majeure clause

answer

a clause in a contract which the parties specify certain events that will excuse nonperformance

question

gap-filling rule

answer

a rule that says an open term can be "read into" a sales or lease contract.

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good faith

answer

honesty in the conduct or transaction concerned

question

guaranty arrangement

answer

an arrangement in which a third party promises to be secondary liable for the payment of another debt.

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indorsement

answer

the signature of a signer ( other than as a maker, a drawer, or an acceptor) that is placed on an instrument to negotiatate it to anothe rperson. The signer (and other directions) written by or on behalf of the holder somewhere on an instrument.

question

injunction

answer

a court order that prohibits a person from doing a certain act

question

liquidated damages

answer

damages that parties to a contract agree in advance should be paid if the contract is breached

question

material breach

answer

a breach that occurs when a party renders inferior performance of his or her contractual duties

question

mechanics lien

answer

a contractors, laborers and material persons statutory lien that makes the real property to which services or materials have been provided security for the payment of the services and materials

question

mitigation of damages

answer

a non breaching partys legal duty to avoid or reduce damages caused by a breach of contract

question

mortgage

answer

an interest in a real property given to a lender as security for the repayment of a loan

question

nominal damages

answer

Damages awarded when the non-breaching party sues the breaching party even though no financial loss has resulted from the breach. nominal damages are usually $1 or some other small amount

question

notice of dishonor

answer

The formal act of letting the party with secondary liability to pay a negotiable instrument know that the instrument has been dishonored.

question

obligation

answer

an action a party to a sales or lease contract is required by law to carry out

question

overdrafts

answer

the amount of money a drawer owes a bank after it has paid a check dispite the drawer's account having insufficient funds

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permanency requirement

answer

a requirement that a negotiable instruments that says they must be in a permanent state, such as written on ordinary paper

question

personal defense

answer

a defense that can be raised against enforcement of a negotiable instrument by an ordinary holder but not not against a holder in due course.

question

petition

answer

a document filed with a bankruptcy court that starts a bankruptcy proceeding

question

power of sale

answer

A power stated in a mortgage or deed that permits foreclosure without court proceedings and sale of the property through an auction

question

presentment

answer

a demand for acceptance or payment of an instrument made upon the maker, acceptor, drawee, or other payer by or on behalf of the holder.

question

principal

answer

a party who employs another person to act on his or her behalf

question

promissory note

answer

A two-party negotiable instrument that is an unconditional written promise by one party (maker) to pay money to another party(payee); also known as a note

question

provisional credit

answer

a situation in which a collecting bank gives credit to a check in the collection process prior to it final settlement. Provisional credits may be reversed if the check does not clear.

question

reasonableness

answer

a term used throughout the UCC to establish the duties of performance by the parties to sales and lease contracts

question

recording statute

answer

a state that requires a mortgage or deed of trust to be recorded in the county recorders office of the county in which the real property is located.

question

reformation

answer

an equitable doctrine that permits the court to rewrite a contract to express the parties true intentions

question

release of lien

answer

a written document signed by a contractor, subcontractor, laborer, or material person, waiving his or her statutory lien against real property.

question

replevin

answer

the right of a buyer or lessee to recover goods from a seller or lessor who is wrongfully withholding the goods

question

repossession

answer

the right granted to a secured creditor to take possession of the collateral upon default by the debtor

question

rescission

answer

an action to rescind (undo) a contract. rescission is available if there has been a material breach of contract, fraud, duress, undue influence or mistake.

question

restitution

answer

the return of goods or property received from the other party to rescind a contract. if the actual goods or property is not available, a cash equivalent must be made

question

right of redemption

answer

(1)the right a mortgagor to recover real property after the the mortgagors default and before foreclosure by paying the mortgagee the full amount of costs (2) the right of a debtor to recover persoanl property that is collateral for a secured transaction after the debtors default and before the creditor has disposed of the property by paying the debt in full amount of debt plus costs

question

right to cure

answer

the legal right of a seller or lessor who has delivered defective or nonconforming goods to repair or replace the defective or nonconforming goods if the time for performance has not expired and the seller or lessor notifies the buyer or lessee of his o her intention to make a conforming delivery within contract time

question

security agreement

answer

a written document signed by a debtor that creates a security interest in personal property

question

stale check

answer

a check that has been outstanding for more than six months

question

statement of opinion

answer

a commendation of goods, made by a seller or lessor, that does not create an express warranty; also know as puffing.

question

statute of limitations

answer

a statute that establishes the period during which a plaintiff must bring a lawsuit against a defendant.

question

surety arrangement

answer

An arrangement in which a third party promises to be primarily liable with the borrower for the payment of the borrowers debt.

question

title

answer

legal, tangible evidence of ownership of goods, real property or other property

question

transfer

answer

any passage of an instrument other than its issuance and presentment for payment

question

unconditional

answer

a requirement that a negotiable instrument must contain either an unconditional promise to pay(not or CD) an unconditional order to pay(draft or check)

question

universal defense

answer

(real defense) a defense against a payment of an instrument that can be raised against both holders and holders in due course (HDC's)

question

void title

answer

a title to goods that a purchaser acquires if he acquires the goods through fraud, a check that is later dishonored, or impersonation of another person. A person with voidable title to goods can transfer good title to a good faith purchaser for value.

question

warranty

answer

a sellers or lessors express or implied assurance to a buyer or lessee that that the goods sold or leases meet certain quality standards

question

warranty disclaimer

answer

a statement that negates implied warranties and sometimes express warranties if certain requirement are met.

Business Law henry cheeseman – Flashcards

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