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Fungible

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Being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.

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Bona Fide

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"In good faith".

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Warranty of Title

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Automatic and guarantees the title is legally owned by the seller, free of lien, and good in question is not an infringement on another's rights.

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Express Warranties

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Goods fulfill statement made by seller.

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Implied Warranties

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Goods are fit for standard use.

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Disclaimers

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Can negate warranties.

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"As Is" Disclaimer

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Voids warranties of merchantability.

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Specific Use Disclaimer

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Voids implied warranties of fitness for a specific purpose.

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Magnuson-Moss Warranty Act

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1975. Designed to prevent deception in warranties by making them easier to understand.

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Full Warranty

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Free repair of replacement for a defective part. May not cover every aspect

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Limited Warranty

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Has a time limit. Must be clearly stated that it is limited.

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Strict Product Liability

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Defective when sold. Actual harm must have occurred; defect must be the cause of damage.

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Manufacturing Defects

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When product doesn't conform to specs, even if care is exercised.

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Design Defects

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The design incurs unreasonable risk of harm.

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Warning Defects

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Sufficient warning of hazards incurred by use or reasonable misuse is not present.

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Defenses to Liability

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Consumer assumes risk. Product is misused. Comparative negligence.

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Click-On Agreement

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Agreement that arises when a buyer, engaging in a transaction on a computer, indicates his or her assent to be bound by the terms of an offer by clicking on a button that says, for example, "I agree".

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Browse-Wrap Agreement

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Terms and conditions of use that are presented to an internet user at the time certain products, such as software, are being downloaded but that need not be agreed to before being able to install or sue the product.

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Shrink-Wrap Agreement

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An agreement whose terms are expressed in a document located inside a box in which goods (usually software) are packaged.

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E-Contract

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A contract that is formed electronically

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Digital Signature

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A private cryptographic key that, when matched with a corresponding public key, recognizes the signature.

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Cybernotary

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Manages digital signatures.

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Signature Dynamics

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Records the signature with a pad and stylus.

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Uniform Electronic Transactions Act of 1999

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UETA. Defines e-signatures.

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Partnering Agreements

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Provide ground rules for all subsequent online transactions between two parties.

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Uniform Computer Information Transactions Act of 2000

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UCITA. Governs computer information sales and leases.

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Agent

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Any employee who deals with third parties.

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Principal

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Employer

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Performance, Notification, Loyalty, Obedience, Accounting

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Five duties of an agent.

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Actual Authority

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Should be in writing if agent will be doing written contracts.

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Apparent Authority

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Occurs when the principal causes the third party to think someone is an agent. Any actions the implied agent takes will be treated as if he were an agent by courts.

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Power of Attorney

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A written document, which is usually notarized, authorizing another to act as one's agent; can be special or general

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Special Power of Attorney

answer

Written document allowing the agent to do specified acts only.

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General Power of Attorney

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Written document allowing the agent to transact all business for the principal.

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Contract Liability

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Principle is liable if he is disclosed or partially disclosed to the third party.

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Disclosed Principal

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Principal's identity is known when contract is formed.

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Partially Disclosed Principal

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Principal's identity is unknown, but the third person knows that agent is or may be acting for a principal when contract is formed.

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Undisclosed Principal

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Principal's identity is unknown, and third person does not know the agent is acting for someone else. Agent is liable.

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Respondeat Superior

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Principal is liable for agents' actions if they were "in the scope of employment".

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Renunciation

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Giving up a right, such as a right of inheritance, a gift under a will or abandoning the right to collect a debt on a note.

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Revocation

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Mutual cancellation of a contract by the parties to it.

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Fair Labor Standards Act of 1938

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Established a federal minimum wage, mandated overtime pay, and banned child labor.

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Occupational Safety and Health Act of 1970

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OSHA. Charged with keeping workplaces safe.

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Consolidated Omnibus Budget Reconciliation Act of 1986

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COBRA. Allows employees to continue in a company's group insurance plan after termination if they pay the fees.

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Family Medical Leave Act of 1993

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FMLA. Allows employees to take up to 12 weeks per year of unpaid leave in a company with 50+ employees.

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Sole Proprietorship

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The simplest form of business. Owner pays personal income tax on all profits and is personally liable for all business debts.

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Partnership

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Created by agreement of the parties. Partners have unlimited liability for partnership debts.

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Uniform Partnership Act of 1997

answer

Governs partnerships. UPA.

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Limited Partnership

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Limited partner contributes capital but has no right to participate in management. A general partner is responsible for management and is liable for all partnership debts.

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Certificate of Partnership

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Filing of it forms a limited partnership.

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Corporation

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Owned by shareholders. Liability is limited to investment. Profits taxed twice.

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Limited Liability Company

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LLC. Limited liability of corporations and tax benefits of partnerships. Profits taxed once.

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Limited Liability Partnership

answer

Partnership for professionals who normally do business as partners in a partnership.

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Joint Venture

answer

An organization created by two or more people for one transaction or a limited activity. Usually a set time and for a specific project.

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Syndicate

answer

An investment group to finance a particular project. Could be a corporation, or general or limited partnership.

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Joint Sock Company

answer

A hybrid. Similar to a corporation but otherwise resembling a partnership.

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Business Trust

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Formed by a written trust agreement. Investors transfer cash or property to trustees in exchange for certificates of investment shares.

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Cooperative

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An association, which may or may not be incorporated, that is organized to provide an economic service to its members.

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Distributorship

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A manufacturer (franchisor) licenses a dealer (franchisee) to sell its product. Often has an exclusive territory.

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Chain-Style Business Operation

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When a franchise operates under a franchisor's trade name.

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Manufacturing or Processing Plan Arrangement

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Exists when a franchisor transmits to the franchisee the essential ingredient or formula to make the product.

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Business Premises

answer

Who buys equipment and furnishings.

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Draft, Check, Promissory Note, Certificate of Deposit

answer

4 types of negotiable instruments.

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Uniform Commercial Code Article 3

answer

UCC. Governs negotiable instruments.

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Drafts and Checks

answer

Orders to pay.

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Promissory Notes and CDs

answer

Promises to pay.

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Drawer

answer

The person creating the draft.

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Drawee

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The person ordered to pay by the drawer.

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Payee

answer

The recipient of the funds.

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Time Drafts

answer

Payable at a certain date.

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Sight Drafts

answer

Payable on presentation.

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Trade Acceptance

answer

A draft in which the drawer is also the payee. The drawee is the buyer of the goods.

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Promissory Note

answer

Written promise by the Maker to pay the Payee.

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Holder in Due Course

answer

HDC. This person acquires additional rights to the instrument than the assignor had, which means most defenses against payment are revoked. Gave something of value for the instrument; took it in good faith.

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Primary Liability

answer

Incurred by the maker and acceptor (a drawee who agrees to pay).

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Secondary Liability

answer

Falls on the drawer and unqualified endorsers if the drawee dishonors the instrument.

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Transfer Warranty

answer

Transferor guarantees that the transferor is entitled to enforce the instrument and everything is good to go.

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Presentment Warranty

answer

The presenter has no knowledge of unauthorized signatures, alteration, or other defect.

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Insufficient Funds

answer

Overdraft. The bank can either dishonor it or pay it and charge the customer's account, creating an overdraft.

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Stale Checks

answer

Non-certified checks over 6 months old. Bank has option of whether or not to pay.

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Stop-Payment Order

answer

Often used when checks are stolen or when a breach of contract has occurred.

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Forged or Altered Checks

answer

Bank is liable, unless customer was negligent or the holder knew the signature was forged.

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E-Money

answer

Governed by regulation E. Includes ATM cards, Smart Cards, Stored-Value Cards, Credit card machines, Direct deposits, etc.

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Depository Bank

answer

Where a check is deposited.

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Payor Bank

answer

The bank on which a check is drawn.

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Collecting Bank

answer

Any bank except the payor bank that handles a check during the collection process.

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Intermediary Bank

answer

Any bank except the payor bank and the depository bank to which an item is transferred in the collection process.

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Chattel Paper

answer

Any writing evidencing a debt secured by personal property.

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Secured Party

answer

Creditor who holds a security interest in a debtors capital.

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Debtor

answer

One who owes payment to a creditor.

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Security Interest

answer

The interest in collateral should the debtor default on the loan.

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Collateral

answer

Subject of security interest.

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Financing Statement

answer

Publicly filed document giving notice of the secured party's interest in collateral.

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Perfection

answer

Secured party protecting his rights to collateral.

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Deficiency

answer

Unless otherwise agreed, or if the collateral was intangible, the debtor may be held liable for any remaining debt after disposition.

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Lien

answer

Claim against property to satisfy debt.

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Mechanic's Lien

answer

For work done on real property.

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Artisan's Lien

answer

For value added to personal property (possessory).

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Judicial Lien

answer

Issued by a court to ensure payment, allows seizure.

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Garnishment

answer

Usually extracted from paycheck.

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Homestead Exemption

answer

Allows the debtor to retain a certain amount as a homestead exemption when going bankrupt.

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Bankruptcy Code Chapter 7

answer

Liquidation.

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Bankruptcy Code Chapter 11

answer

Reorganization.

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Workouts

answer

An alternative to Bankruptcy Code Chapter 11. An out-of-court agreement of how parties can work out a payment plan.

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Bankruptcy Code Chapter 13

answer

Individual repayment plan.

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