1. Below are descriptions for five instruments used as a form of payment. For each instrument explain whether it is negotiable.
A. A check is made payable to the order of Mary Smith or bearer in the amount of $1000.00. Preprinted at the top of the check is the name John Jones, Ph. # 555-1234. The signature line on the check is blank.
Is the instrument negotiable? Explain your answer.
B. Dona and David got into an argument at the local bar over $100 owed by David to Dona. David finally took a bar napkin and wrote the following on the napkin: "I David promise to pay to the order of Dona $100 by her birthday." David signed the bar napkin and Dona left the bar with the napkin in her purse.
Is the instrument negotiable? Explain your answer.
C. ABC company prepared and signed a promissory note that promised to pay to the order of Widgets, Inc. $2000.00 on demand. Included within the promissory note was the following language: "This note is payable in accordance with a certain agreement between ABC company and Widgets, Inc. dated on the same date as this note."
Is the instrument negotiable? Explain your answer.
D. Uncle Ned prepared and signed a promissory note that promised to pay to the order of his nephew Stephen or bearer one nugget of gold on demand.
Is the instrument negotiable? Explain your answer.
E. ABC company signed a check made payable to the order of vendor in the amount of $500.00.
Is the instrument negotiable? Explain your answer.
2. Compare and contrast universal defenses and personal defenses and describe one example of a universal defense and one example of a personal defense.
3. Describe the check-collection process for a check drawn on a bank in Boston, Massachusetts and paid to a payee located in Los Angeles, California.
4. What is meant by the term "after-acquired property"? Give an example of after-acquired property, and explain how it would affect a business person who owes a debt to a secured creditor.
5. Explain how mechanic's liens, artisan's lien's and judicial liens are different.
6. If a business was to file for bankruptcy, it is likely to file a chapter 7 liquidation or a chapter 11 reorganization.Briefly explain the difference between a liquidation and a reorganization.
7. When dealing with sales contracts, it is important to understand specific terminology found under the UCC 2. Define the following terms that apply to sales contracts: sale, goods, merchant, merchant's firm offer, and perfect tender rule.
8. Compare and contrast shipment contracts with destination contracts. What does it mean to have an insurable interest in goods to cover risk of loss?
9. Describe and distinguish the following types of warranties that would apply in the sale of goods: warranty of title, express warranty, implied warranty of merchantability, and implied warranty of fitness for a particular purpose.
10. Read the below fact pattern. Answer the questions that follow the fact pattern.
Fact Pattern
Something Fishy, Inc. ("SFI") makes gourmet seafood chowder and sells it to upscale restaurants. The chowder is made fresh daily, and the chefs at SFI use fresh caught seafood to make the chowder. The chowder is delivered to local restaurants by 4:00 pm each day. The containers that the chowder is delivered in are labeled with the words "Seafood Chowder Made Fresh from the Sea Today." Last week, Monique, a customer at a fancy French restaurant known as "Poissons Restaurante," ate some of the SFI chowder. Unfortunately, a fish bone became lodged in her throat. Monique was rushed to the hospital where she underwent an esophagoscopy to remove the fish bone.
A. If Monique decides to sue, who should she sue? What is the basis of her lawsuit, based on product liability?
B. What defense or defenses might apply against Monique in her product liability lawsuit?
C. Name ONE of the consumer laws that might be employed in Monique's lawsuit by Monique or by the defendant or defendants, who she decides to sue. Explain why you believe this law might apply to these facts.