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10.1
Chapter 10
Writings and Records, Defenses, Remedies, and Creditors’ Rights
© 2003 by West Legal Studies in Business/A Division of Thomson Learning
10.2
Writings
Oral contracts are legal and enforceable, but are sometimes hard to prove.
Purposes for writing contracts include Authentication
Prevention of forgery
Demonstration of each party’s serious intent
10.3
Signatures
Any tangible sign used to authenticate writing
Cursive Stamp Corporate seal Initials Typing or printing Fingerprinting Electronic signature pads Digital signatures
10.4
Statute of Fraud Categories
These documents must be in writing:
Sale of land Guarantees to pay the debts of
others
Contracts incapable of performance within one year of their making
Sales of goods of $500 or more
10.5
Uniform Electronic Transactions Act
Most significant law for electronic commerce
Validates electronic contracts, electronic signatures, and use of electronic agents
UETA does not apply to wills or their revisions, testamentary trusts, or common negotiable instruments
10.6
Provisions of the UETA
Electronic records
Electronic signatures
Electronic records and contracts
Information in writing
Presentation of records
Change or error
10.7
Provisions of the UETA
Notarization and acknowledgement Retention of electronic records Admissibility in evidence Automated transaction Time and place of sending and
receiving Transferable records
10.8
Parol Evidence
Prohibits either party from proving any different terms than those stated in the written document
Integration
Merger clause
Confirmatory records
10.9
Contract Defenses: Capacity
These defenses can be brought up to void contracts:
Minority
Intoxication
Under the influence of drugs
Insanity
10.10
Contract Defenses: Fraud and Misrepresentation
UCC imposes good faith requirements
UCITA further provides for “observance of reasonable commercial standards of fair dealing” in every contract
10.11
Contract Defenses: Mistakes
Discuss the implications of each of the following mistakes and give examples of each:
Bilateral or mutual mistakes
Unilateral mistakes
Electronic errors
10.12
Contract Defenses: Duress
DuressDuress includes direct threat of force Economic duress
Unconscionability
Undue influenceUndue influence includes no direct threat of force, but subtle coercion
10.13
Types of illegalities:
Licensing
Gambling
Public policy
Restraints of trade
Contract Defenses: Illegality
10.14
Agency
Two-party relationship between a principal principal and agentagent.
Agents must not Exhibit conflicts of interest Simultaneously represent both parties Favor their own personal interests Take a profit made for the principal
without the principal’s consent Divulge principal’s trade secrets Break the law in the performance of
duties
10.15
Agent’s Authority
Express authority
Implied authority
Apparent (ostensible) authority
After-the-fact authority by ratification
Conduit theory
Electronic agents
10.16
Discharge of Obligations
Discharge by performance
Impossibility of performance
Damages (compensatory, punitive, liquidated)
Specific performance
Arbitration clauses
10.17
UCC Remedies
Consequential damages
Cancellation of the contract
Lapse of statute of limitations
Commercial impracticality
10.18
Seller’s Obligations and Buyer’s Remedies
Conforming goods
Inspection
Nonconforming goods
Acceptance
Revocation of acceptance
Cure
10.19
Buyer’s Obligations and Seller’s Remedies
Payment made on or before the time set
Collect difference between contract price and lower market price
Collect difference between contract price and lower resale price to another buyer
10.20
Buyer’s Obligations and Seller’s Remedies
Recover lost profits for sale of fewer units
Sue for total sale price if goods can not be resold
10.21
Creditor’s Rights: Secured Financing
Promissory notes
Insolvency
Pledge
Lien
Foreclosure
Security interests
Attachment and perfection
10.22
Creditor’s Rights: Bankruptcy
StraightStraight bankruptcy (Chapter 7) Complete liquidation of assets to
satisfy debt Voluntary or involuntary petitions Secured and unsecured creditors
involved
Debt adjustmentDebt adjustment (Chapter 13) Debts adjusted, not discharged Trustee arranges payment of all debts
10.23
Questions & Discussion