quiz 1 notes - NegotiableInstruments

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Negotiable Instruments Assignment : a transfer of a right or multiple rights Delegation of duty: transfer of duty EX.) <---------------->  B   I A : paint house for B Assign  I B : $300 for service for A   I C : weak legal position  C General Rule    Obligor cannot prevent assignment Exceptions : 1. Contract prevents assignment 2. Personal contract 3. Substantial change in performance **Can’t always transfer the right to receive a service (i.e. doctor services) $ Seller  <---------------   Buyer           ----------------->   I      goods    I    I    I   v
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   X (obligee)      v. (obligor) weak legal strong legal   position      position  Contract Defenses 1. Breach of Contract 2. Discharge (D) 3. Bankruptcy (U , D) 4. Minority ( V , V , U ) 5. Insanity ( V , V , U ) 6. Intoxication ( V ) 7. Duress ( V , V , U ) 8. Illegality ( V , V , U ) 9. Unconscionability ( V , V , U )
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10.  Fraud in the inducement ( V ) 11.  Unilateral mistake of fact ( V ) 12.  Bilateral (mutual) mistake of fact ( V ) - Fact does not equal opinion or value 13.  Undue Influence ( V ) 14. Statute of Frauds (have to be written) (U ) 15. Concealment ( V ) 16. Statute of Limitations (U ) 17. Lack Agreement (NoK) 18. Failure of Consideration (NoK)  19. Misrepresentation ( V ) 20. Fraud in the execution (V , U ) **Voidable : you can get out of it    Void : never existed **   Commercial Law Privities Contract  The person who gets assigned a contract   weak legal position <---------------->  B
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 I A : paint house for B assign I B : $300 for service for A  I C : weak legal position  C o Subject to all contracts A was a part of o Subject to negligence claims o If you do not notify B Negotiable Instruments  (i.e. check) Article III Uniform Commercial Code (UCC) Negotiable     : easily transferred  Mere Contract Rights = Non-Negotiable (not easily transferred) o Puts C into a weak legal position  Negotiability     : if this piece of paper meets certain form requirements then it will be  easily transferred  o 6 Requirements: 1. Written 2. Signed by maker 3. Sum certain in money 4. Payable at a definite time - Demand Instrument o Payable on demand o No time/date stated - Time Instrument  o i.e. payable 10/12/11 5. Words of negotiability - “Order” or “bearer” 6. Unconditional promise to pay Types of Negotiable Instruments:
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1. Promissory Notes (easiest to do)- 2 parties on face Maker issues the check to the payee  Issue     : 1. Executed 2. Delivery  Order Instrument     : pay to the order of: Megan o In order to negotiate order paper: 1. Indorse it (indorse the back of a note- blank 
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quiz 1 notes - NegotiableInstruments

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