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BUL 3320 - Law and Business – Welker EXAM PREP WITH COMPLETE SOLUTION
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BUL 3320 - Law and Business – Welker EXAMPREP WITH COMPLETE SOLUTION
Specific Performance (3 q's) - =A remedy that orders the breaching party to perform the acts
promised in the contract. Specific performance is usually awarded in cases in which the subject
matter is unique, such as in contracts involving land, heirlooms, and paintings.
Specific Performance (3 q's) - =On September 1, Won-Suk enters into a contract to purchase a
house from Geraldine fro $1 million. The closing date is set for November 1. On November 1,
Won-Suk brings the money to the closing but Geraldine does not appear at the closing and
thereafter refuses to sell the house to Won-Suk. In this case, because each piece of real estate
is considered unique, Won-Suk can bring an action of specific performance against Gerldine and
obtain a court judgement ordering Geraldine to sell the house to Won-Suk.
Specific Performance (3 q's) - ="Specific performance" is a specialized remedy used by courts
when no other remedy (such as money) will adequately compensate the other party. If a legal
remedy will put the injured party in the position he or she would have enjoyed had the contract
been fully performed, then the court will use that option instead. The most common reason
courts grant specific performance is that the subject of the contract is unique. When a contract
is for the sale of a unique property, mere money damages will not remedy the purchaser's
situation.
Example: Rina offers to buy Beth's house and Beth accepts, but later decides to keep the
property. Real estate is considered to be unique. Since there is no other piece of property or
house exactly like Beth's, Rina may be entitled to specific performance on the contract. Beth
would be compelled to go through with the sale.
Mitigation of Damages - =A non-breaching party's legal duty to avoid or reduce damages caused
by a breach of contract.
Liquidates Damages ( 2 q's) - =Damages that parties to a contract agree in advance should be
paid if the contract is breached
Liquidates Damages ( 2 q's) - =Alaska Oil Company discovers a new rich oil field in the northern-
most part of Alaska. Alaska Oil contracts to purchase special oil drilling equipment from Tundra
Equipment corporation that is necessary to drill holes in the hard ground in the Alaska tundra.
The contracts states that the equipment is to be delivered by July 1, 2014. The parties know
that Alaska Oil cannot start digging the oil holes until it recieves this equipment. It is uncertain
how great the oil flow will be from the drilled oil holes... Thus, if Tundra equipment does not
delever the equipment until July 1, 2012, it owes Alaska oil $7,300,000 (365 days x $20,000 per
day)
,Liquidates Damages - =are damages whose amount the parties designate during the formation
of a contract for the injured party to collect as compensation upon a specific breach (e.g., late
performance).
Nominal Damages ( 2q's) - =Damages awarded when the non-breaching party sues the
breaching party even though no financial loss has resulted from the breach. Nominal damges
are usually $1 or some other small amount
Nominal Damages ( 2q's) - =refers to a damage award issued by a court when a legal wrong has
occurred, but where there was no actual financial loss as a result of that legal wrong. Typically,
when a nominal damage award is used, the plaintiff will be awarded $1 or $2.
Injunction - =A court order that prohibits a person from doing a certain act
Automatic Stay - =The suspension of certain legal actions by creditors against a debtor or the
debtor's property
Fraudulent Transfer - =The trustee may avoid any transfer (including any transfer to or for the
benefit of an insider under an employment contract) of an interest of the debtor in property, or
any obligation (including any obligation to or for the benefit of an insider under an employment
contract) incurred by the debtor, that was made or incurred on or within 2 years before the
date of the filing of the petition, if the debtor voluntarily or involuntarily
Trustee (Chap. 11) - =A federal government official who is responsible for handling and
supervising many of the adminstrative tasks of a bankruptcy case
Purpose of Chapter 11 Bankruptcy - =The goal of bankruptcy laws is to balance the rights of
debtors and creditors and provide methods for debtors to be relieved of some of the debt in
order to obtain fresh start.
Debtor Exemption - =Homestead Exception: Equity in a debtors home that debtor is permitted
to retain.
Domestic Support Obligations - =a Domestic Support Obligation is a debt owed to a child,
parent, spouse or former spouse, now or later. This debt can be for alimony, maintenance or
support pursuant to a court order such as a divorce decree, or an agreement such as separation
or property agreement
Bankruptcy Trustee when appointed - =Must be appointed in liquidation, family farmer or
family fishermen, and the adjustment of debts bankruptcy cases. A trustee may be appointed in
a reorganization case upon showing of fraud, dishonesty, incompetence, or gross
mismanagement of the affairs of the debtors by current management.
Involuntary Petition - =A petition filed by creditors of a debtor that alleges that the debtor is
not paying his or her debts as they become due.
, Involuntary Petition - =Can be filed in liquidation, reorganization cases, an involuntary petition
can NOT be filed in family farmer. fisherman family or adjustment of debts cases
Payment to unsecured creditors - =Priority of Unsecured creditors claims:
1. Unsecured claims for domestic support obligations to a spouse, former spouse, or child of
the debtor.
2.
US Bankruptcy Courts - =Special Federal courts that hear and decide bankruptcy cases
Bankruptcy attorney certification - =Whereby an attorney who represents a client in bankruptcy
must certify the accuracy of the information contained in the bankruptcy petition and the
schedules under penalty of the perjury.
Pre-petition Counseling - =Must receive counseling within 180 days prior to filing his or her
petition for bankruptcy.
Post-petition Counseling - =Post-petition debt is all debt that you incur after your bankruptcy
case is filed. These debts will not be a part of your bankruptcy case and cannot be discharged.
You are still liable on this debt and must pay for it. The bankruptcy cannot help you with post-
petition debt.
Domestic Support Obligations - =a Domestic Support Obligation is a debt owed to a child,
parent, spouse or former spouse, now or later. This debt can be for alimony, maintenance or
support pursuant to a court order such as a divorce decree, or an agreement such as separation
or property agreement
Bankruptcy Exemptions - =1. Interest up to $21, 625 in equity in property used as residence and
burial plots (called the homestead exemption)
2. Interest up to $3,450 in value in one motor vehicle
3. Interest up to $550 per item in household goods and furnishings, wearing apparel,
appliances, books
Homestead Exemptions - =A legal regime designed to protect the value of the homes of
residents from property taxes, creditors, and circumstances arising from the death of the
homeowner spouse.
Means Test - =determination of whether an individual or family is eligible for government
assistance, based upon whether the individual or family possesses the means to do without
that help.
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