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 Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss

10.12 Contract Defenses: Duress  Duress  Duress includes direct threat of force  Economic duress  Unconscionability  Undue influence  Undue 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 principal agent  Two-party relationship between a principal and agent.  Agents must not  Exhibit conflicts of interest  Simultaneously represent both parties  Favor their own personal interests  Take a profit make for the principal without the principal’s consent  Divulge principal’s trade secrets  Break the law in the performance of duties

10.15 Discharge of Obligations  Discharge by performance  Impossibility of performance  Damages (compensatory, punitive, liquidated)  Specific performance  Arbitration clauses

10.16 UCC Remedies  Consequential damages  Cancellation of the contract  Lapse of statute of limitations  Commercial impracticality

10.17 Creditor’s Rights: Secured Financing  Promissory notes  Insolvency  Pledge  Lien  Foreclosure  Security interests  Attachment and perfection

10.18 Creditor’s Rights: Bankruptcy  Straight  Straight bankruptcy (Chapter 7)  Complete liquidation of assets to satisfy debt  Voluntary or involuntary petitions  Secured and unsecured creditors involved  Debt adjustment  Debt adjustment (Chapter 13)  Debts adjusted, not discharged  Trustee arranges payment of all debts