A bank may file a voluntary petition with the bankruptcy court.
If a debtor specifies the debt to which a payment is to be applied and the creditor
accepts the money, the creditor is bound to apply the money as specified; therefore, if a
debtor specifies that a payment is to be made for a current purchase, the creditor may
not apply the payment to an older balance.
Morris made two purchases. He purchased his neighbor Cordelia’s typewriter and a
computer from Crazy Computers. Regarding the typewriter, Cordelia had bought it on
credit from Jack’s Typewriters. Cordelia had financed the purchase with Jack’s and
signed a promissory note and a security agreement covering the purchase. The creditor,
Jack’s, did not file a financing statement, relying on the concept of automatic perfection
for purchase money security interests in consumer goods. Morris was unaware of the
history of the typewriter. The computer was subject to a security interest in favor of
Country Bank, which had perfected its security interest by filing. Morris, by
coincidence, knew of this security interest when Morris purchased the computer.
Unfortunately, neither Cordelia nor Crazy Computers paid the secured creditors who
now seek to repossess the collateral from Morris. What will be the likely outcome of
this case?
The Market Reform Act of 1990 empowers the SEC to suspend all trading when
markets are excessively volatile.
Vacarro gave her son Mark a car on the day Mark left for college. Vacarro told Mark
that she expected him to use the car for school purposes and to earn good grades. Mark
flunked out of college in his second semester. Vacarro sued to regain title to the car on
the ground that the gift was conditional on Mark’s earning good grades and remaining
in college. Will Vacarro win the case?
If a check has not been certified, a holder has no claim against the bank for the dishonor
of a check.
Unless otherwise agreed, every merchant seller warrants that goods are sold free of any
rightful claim by any third party.
Where a depositor receives a bank statement and the checks the bank has paid, the
failure to notify the bank within a reasonable time of forgeries of the depositor’s
signature may preclude recovery for other forged checks thereafter paid by the bank.
Each of the states and the federal government have statutes and regulations that prohibit
unfair methods of competition.
An instrument is order paper when by its terms it is payable to the order of any person
described in it, or to a person or order.
An output contract is too vague to be a legally-enforceable agreement.
Generally, only the parties to a contract may sue on it.
Mortgages, security interests, and surety relationships are legal mechanisms created
primarily to promote stability and flexibility in trade.
A special endorsement consists of the signature of the indorser and the words
identifying the person to whom the indorser makes the instrument payable.
Jones and Clark entered into a written contract for the purchase of an apartment
building by Clark. The contract was carefully drafted to set forth the agreement of the
parties. It was signed by both parties. Clark subsequently claimed that the contract did
not cover all the terms included in the written and oral agreements that the parties had
made during their prior negotiations.
Jones claimed that the parol evidence rule barred proof of all of their prior agreements.
Which claim would be upheld in court?
You are forced to sign a check over to an individual who subsequently transfers the
instrument to another. You have only a limited defense regarding payment and therefore
would have to pay a holder in due course.
If an agent commits a crime, the agent’s liability will depend on the agency relationship.
Under the Equal Credit Opportunity Act, it is unlawful to discriminate against an
applicant because all or part of the applicant’s income is obtained from a public
assistance program.
In a sale on approval, the buyer’s approval must be demonstrated by express words.
A bill of lading will be negotiable if its terms are that the goods are to be delivered to
“bearer” or to “the order of” a named person.