Chapter 28: Bankruptcy and Reorganization
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005: a federal act that substantially
amended federal bankruptcy law. This act makes it more difficult for debtors to file for bankruptcy and
Chapter 41: Investor Protection, E-securities, and Wall Street Reform
The federal and state governments have enacted statutes that regulate the issuance and
trading of securities.
The primary purpose of these acts is to promote full dis
Chapter 15: Third-Party Rights and Discharge
Third parties do not acquire any rights under other peoples contracts, but there are two exceptions: (1)
assignees to whom rights are subsequently transferred and (2) intended third-party beneficiaries to whom
Chapter 14: Statute of Frauds and Equitable Exceptions
Statute of Frauds: a state statute that requires certain types of contracts to be in writing.
Although the statute varies slightly from state to state, most states require the following types of
Chapter 13: Genuineness of Assent and Undue Influence
A contract can only be enforced when the assent of one or both parties to the contract is genuine or real.
Genuineness of assent: the requirement that a partys assent to a contract be genuine (real, i
Chapter 12: Capacity and Legality
The most prevalent (accepted, widespread, common) age of majority is 18 years of age for both
males and females.
A minor can expressly disaffirm (cancel) a contract orally, in writing, or through his or her cond
Chapter 11: Consideration and Promissory Estoppel
Defined as something of legal value.
Must be given before a contract can exist.
Most common types consist of either a tangible payment or the performance of an act.
Less usual forms of c
Chapter 10: Agreement
Agreement: a voluntary exchange of promises between two or more legally competent persons to do.
Three elements are required for an offer to be effective:
o The offeror must objectively intend to be bound by the offer (clear
Chapter 9: Nature of Traditional and E-Contracts
Contract: agreement (voluntary agreements b/t the parties), promise. (gifts are not contract)
Establishes rights and duties
It has 3 elements: mutual assent (both parties have to agree), consideration (bo
Chapter 49: Landlord Tenant Law and Land Use Regulation
The government may take private property for public use under its power of eminent domain, assuming
that certain requirements are met and just compensation is paid to the owner.
Chapter 48: Real Property
The concept of real property is concerned with the legal rights to the property rather than the physical
attributes (a quality or feature regarded as a characteristic or inherent part of someone or something) of
the tangible land
Chapter 47: Personal Property and Bailment
*Personal Property: tangible property such as automobiles, furniture, and equipment, and intangible
property such as securities, patents, and copyrights.
There are two kinds of property: real property and persona
Chapter 46: Antitrust Law and Unfair Trade Practices
*Federal Antitrust Law:
Antitrust laws: a series of laws enacted to limit anticompetitive behavior in almost all industries,
businesses, and professions operating in the US.
Sherman Act: a federal statu
Chapter 27: Secured Transactions and E-Filing
*Secured transaction: a transaction that is created when a creditor makes a loan to a debtor in
exchange for the debtors pledge of personal property as security.
Revised article 9 (secured transactions): an a
Chapter 26: Credit, Mortgages, and Debtors Rights
In a transaction involving the extension of credit (either secured or unsecured), there are two parties.
The party extending the credit, the lender, is called the creditor. The party borrowing the
Chapter 25: BANKS, E-MONEY, AND FINANCIAL REFORM
*The Bank-Customer relationship:
When a customer makes a deposit into a bank, a creditor-debtor relationship is formed.
o Creditor-debtor relationship: a relationship that is created when a customer deposi
Chapter 24: LIABILITY DEFENSES, AND DISCHARGE
*Signature liability for negotiable instruments:
Signature liability (contract liability): liability in which a person cannot be held contractually
liable on a negotiable instrument unless his or her signatur
Chapter 23: Holder in Due Course and Transferability
*Transfer of a nonnegotiable contract by assignment:
Assignment: the transfer of rights under a nonnegotiable contract. The transferor is the assignor,
and the transferee is the assignee.
Chapter 22: Creation of Negotiable Instruments
*Negotiable instrument (commercial paper): a special form of contract that satisfies the requirements
established by Article 3 of the UCC.
Important for the conduct of business and individual affairs.
Chapter 39: LLC and LLP
*Limited Liability Companies (LLC): an unincorporated business entity that combines the most
favorable attributes of general partnerships, limited partnerships, and corporations.
Can only be created pursuant to the laws
Chapter 38: Corporate Acquisitions and Multinational Corporations
*Proxy solicitation and proxy contest:
Voting by proxy is common in large corporations that have thousands of shareholders located
across the country and around the world.
Proxy: a writte
Chapter 37: Corporate Governance and the Sarbanes-Oxley Act
They are not agents of the corporation (i.e., they cannot bind the corporation to contracts).
The only management duty they have is the right to vote on matters such as the elect
Chapter 36: Corporate Formation and Financing
*Nature of the Corporation:
Corporations can be created only pursuant (proceeding after) to the laws of the state of
o Corporation codes: state statutes that regulate the formation, operation,
Chapter 35: Limited Partnerships and Special Partnerships
*Limited partnership (special partnership): a type of partnership that has two types of partners:
general partners and limited partners.
Limited partnerships are used for such business ventures as
Chapter 34: Small Business, Entrepreneurship, and General Partnerships
*Entrepreneur: a person who forms and operates a new business either by himself or herself or with
Entrepreneurs contemplating starting a business because there are many optio
Chapter 40: Franchises and Special Forms of Business
*Franchise: an arrangement that is established when one party (the franchisor/licensor) licenses another
party (the franchisee/licensee) to use the franchisors trade name, trademarks, commercial symbols
Chapter 30: Liability of Principals, Agents, and Independent Contractors
*Agents Duty of Loyalty:
Duty of loyalty: a fiduciary duty owed by an agent not to act adversely to the interests of the principal.
The most common types of breaches of loyalty by
Chapter 29: Agency Formation and Termination
Agency law: the large body of common law that governs agency; a mixture of contract law and tort
Agency: the principal-agent relationship; the fiduciary relationship which results from the
Chapter 20: Remedies for Breach of Sales and Lease
Obligation: an action a party to a sales or lease contract is required by law to carry out.
Breach: failure of a party to perform an obligation in a sale or lease contract.
*Seller and Lessor Performance:
Chapter 19: Title to Goods and Risk of Loss
*Identification of Goods and passage of Title:
Identification of Goods: distinguishing of the goods names in a contract from the sellers or
lessors other goods.
o Identification of goods can be made at any time