NCA Commercial Law cheat sheet

Goods are merchantable if they pass without objection in the trade, are fit for ordinary purposes, and conform to label promises (UCC 2-314).

Perfect tender rule: buyer may reject goods if they fail in any respect; seller may cure within the contract time if it seasonably notifies and replaces conforming goods.

Under CISG Art. 35, goods conform if fit for ordinary use, fit for particular purpose made known to seller, and packaged in the usual manner; conformity is judged at the time risk passes.

Risk of loss: shipment contracts shift risk on delivery to carrier; destination contracts shift on tender at destination; breach by seller shifts risk to seller.

Buyer's remedies: cover damages = cost of cover minus contract price plus incidental and consequential losses; market damages = contract price minus market price at time of breach.

Seller's remedies: resale damages = resale price minus contract price; expectation damages = contract price minus market price at time and place of tender.

Statute of Frauds: contracts for goods of $500 or more are unenforceable absent a writing, unless goods are specially manufactured, admitted in pleadings, or payment/accepted goods occurred.

Anticipatory repudiation allows the aggrieved party to await performance for a commercially reasonable time or resort to a remedy immediately.

Warranty disclaimer: implied merchantability can be waived only by conspicuous mention; implied fitness requires a writing; all implied warranties can be excluded by 'as is' language.

Attachment requires value given, debtor rights in the collateral, and a security agreement authenticated by the debtor describing the collateral.

Perfection methods: filing a financing statement, possession or control of collateral, automatic perfection (PMSI in consumer goods), or compliance with certificate-of-title statutes.

PMSI in inventory or livestock has priority if perfected before the debtor receives possession and the seller gives authenticated notification to prior conflicting secured parties.

PMSI in non-inventory collateral perfected within 20 days after debtor receives possession has priority over earlier-perfected security interests.

First-to-file-or-perfect rule governs priority among conflicting perfected security interests in the same collateral.

Ordinary-course buyer takes free of a security interest created by the seller, even if perfected, unless the buyer knows the sale violates the security agreement.

A buyer of consumer goods takes free of a security interest even if perfected if the buyer buys without knowledge, for value, and for personal, family, or household purposes.

UCC Article 9 filing is effective for five years; continuation statement filed within six months before lapse extends effectiveness for another five years.

Bankruptcy trustee's strong-arm power under 11 U.S.C. 544(a) allows avoidance of unperfected security interests and liens; perfection before petition defeats it.

Negotiability requires a writing, signed by the maker or drawer, unconditional promise or order to pay a fixed sum, payable on demand or at a definite time, and payable to order or bearer.

Holder in due course must take the instrument for value, in good faith, and without notice of dishonor, default, claims, or defenses; HDIC takes free of personal defenses but not real defenses.

Real defenses include infancy, duress, fraud in the factum, discharge in insolvency, and material alteration; personal defenses include failure of consideration and fraud in the inducement.

Under UCC 3-406, a person whose negligence substantially contributes to a forged signature or alteration is precluded from asserting the forgery against a good-faith taker.

Under UCC 3-405, an employer is liable for an indorsement by an employee entrusted with responsibility for instruments; the loss falls on the employer, not the depositary bank.

Bills of exchange: drawer orders drawee to pay payee; acceptance by drawee creates liability; presentment and notice of dishonor are required to hold secondary parties liable.

UCC 3-118: if an instrument is undated, date is the date of issue; if interest rate is unspecified, judgment rate applies; if no time for payment, it is payable on demand.

Conversion of an instrument under UCC 3-420: the payee or holder may recover from a depositary bank that took the instrument for collection.

Automatic stay under 11 U.S.C. 362 arises on petition filing and enjoins all collection actions, lien enforcement, and setoffs against the debtor.

Chapter 7 liquidation: trustee sells nonexempt assets and distributes under 11 U.S.C. 726: administrative expenses, priority claims, then general unsecured claims.

Chapter 11 reorganization: debtor in possession retains avoidance powers; plan confirmed if it is feasible, proposed in good faith, and satisfies the absolute priority rule.

Chapter 13 adjustment of debts: individual with regular income and unsecured debts under the statutory cap may propose a three- to five-year plan.

Preference under 11 U.S.C. 547: transfer to a creditor within 90 days (one year for insiders) while insolvent, enabling the creditor to receive more than in Chapter 7, is avoidable.

Fraudulent transfer under 11 U.S.C. 548: transfer within two years with actual intent to hinder creditors or for less than reasonably equivalent value while insolvent is avoidable.

Priorities under 11 U.S.C. 507: domestic support, administrative expenses, employee wages up to the statutory cap, and tax claims rank ahead of general unsecured claims.

Discharge under 11 U.S.C. 523 is denied for debts obtained by fraud, willful injury, or breach of fiduciary duty; student loans are excepted absent undue hardship.

Secured creditor's claim is secured to the extent of collateral value; the unsecured deficiency is a general claim, and the creditor may seek relief from stay.

Truth in Lending Act requires disclosure of the annual percentage rate, finance charge, amount financed, and total of payments before consummation.

TILA rescission right: borrower may rescind within three days of consummation or of receiving required disclosures, whichever is later, for loans secured by principal dwelling.

Holder in due course rule under FTC Holder Rule: a consumer may assert against the assignee of a consumer credit contract any claim or defense arising from the sale.

Fair Debt Collection Practices Act restricts third-party collectors: no calls before 8 a.m. or after 9 p.m., no contact at work if prohibited, and no harassment or false representations.

Fair Credit Reporting Act: consumer may obtain a free report annually; nationwide agencies must investigate disputed items within 30 days and correct inaccuracies.

Equal Credit Opportunity Act prohibits discrimination on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.

Usury limits cap interest; state consumer protection statutes (UDAP) prohibit unfair or deceptive acts or practices and often allow private rights of action.

Cooling-off rule: door-to-door sales over the statutory threshold give the buyer three business days to cancel, with the seller required to give notice of the right.

Agency is created by express appointment, implication from conduct, estoppel, or ratification; the agent owes fiduciary duties of loyalty, obedience, and disclosure.

Actual authority arises from the principal's manifestations to the agent; apparent authority arises from the principal's manifestations to third parties.

Undisclosed principal: the third party may sue either the agent or the principal but not both; the principal may intervene subject to the third party's defenses.

Termination of agency: by revocation, renunciation, expiration, death, or incapacity; termination does not affect apparent authority until third parties receive notice.

Distribution agreements are governed by contract law; exclusive distributorship may raise antitrust issues if it forecloses a substantial share of a relevant market.

Franchise disclosure requirements: franchisor must provide a disclosure document (FDD) at least 14 days before signing or payment.

Duty of good faith and fair dealing applies to distribution and franchise relationships; some statutes require good cause for nonrenewal or termination.

Commission agent is entitled to commission on transactions procured during the agency, even if consummated after termination, where the cause arose during the agency.

Section 1 Sherman Act prohibits contracts, combinations, or conspiracies in restraint of trade; per se illegal: price fixing, bid rigging, market allocation, group boycott.

Rule of reason analysis weighs procompetitive benefits against anticompetitive harm, market power, and less restrictive alternatives.

Section 2 Sherman Act prohibits monopolization, attempted monopolization, and conspiracy to monopolize; elements are possession of monopoly power plus willful maintenance.

Clayton Act Section 7 prohibits mergers where the effect may be substantially to lessen competition; Hart-Scott-Rodino premerger notification applies above statutory thresholds.

Robinson-Patman Act prohibits price discrimination that injures competition; defenses include cost justification and meeting competition in good faith.

FTC Act Section 5 prohibits unfair or deceptive acts or practices; deception requires a material representation likely to mislead a reasonable consumer.

Vertical restraints: resale price maintenance is judged under the rule of reason; territorial and customer restrictions are also rule-of-reason analyzed.

State action doctrine exempts anticompetitive conduct compelled by a clearly articulated state policy actively supervised by the state.

CISG applies to contracts for sale of goods between parties in different contracting states unless excluded; it does not cover consumer sales, services, or liability for death or injury.

CISG Art. 38: buyer must examine goods within as short a period as practicable; Art. 39: notice of nonconformity within reasonable time or lose remedy, subject to two-year outer limit.

Incoterms 2020: EXW places minimum obligation on seller; FOB and CIF transfer risk on loading; DAP and DDP place delivery obligations on seller at destination.

CIF requires seller to procure insurance and pay freight; risk passes on shipment, and buyer bears risk of loss during carriage.

Letter of credit: issuing bank pays against complying documents; UCP 600 requires presentation within 21 days of shipment and within the credit's validity.

Force majeure under CISG Art. 79 excuses nonperformance for impediments beyond control that could not reasonably be avoided or overcome.

New York Convention requires recognition and enforcement of foreign arbitral awards; grounds for refusal are limited and include public policy and lack of notice.

Bill of lading is a document of title; a clean bill indicates goods received in apparent good order; a claused bill notes defects and may be rejected by the bank.

UCC 2-207: definite and seasonable expression of acceptance operates as acceptance even with additional terms; between merchants, additional terms become part of the contract unless materially altering or objected to.

Course of performance, course of dealing, and usage of trade are admissible to explain or supplement a written sales contract.

CISG Art. 25: a breach is fundamental if it causes such detriment as substantially to deprive the other party of what it is entitled to expect, permitting avoidance.

Under CISG Art. 39(2), the buyer loses the right to rely on nonconformity if notice is not given within two years of delivery, unless the contract establishes a different period.

UCC 2-608: revocation of acceptance requires nonconformity substantially impairing value and acceptance made on reasonable assumption that it would be cured or without discovery.

UCC 2-718: liquidated damages are enforceable if reasonable in light of anticipated or actual harm; a term fixing unreasonably large damages is a penalty.

UCC 2-302: unconscionable contract or clause may be refused enforcement or limited; the court may consider commercial setting, purpose, and effect.

UCC 2-202 parol evidence: final written terms may not be contradicted by prior or contemporaneous agreements but may be explained by course of dealing or usage of trade.

A security interest in after-acquired property attaches only when the debtor acquires rights in the collateral; a financing statement may cover after-acquired property.

A financing statement must provide debtor name, secured party name, and an indication of the collateral; minor errors are not seriously misleading unless the search would fail.

Control of a deposit account gives priority over a non-control secured party; control arises from the secured party being the bank, or by authenticated agreement.

A security interest in a payment intangible or promissory note can be perfected by control; control of an uncertificated security arises from an authenticated agreement.

Accessions: a security interest in goods that become accessions is subordinate to a security interest in the whole if the whole interest was perfected before the goods became accessions.

Commingled goods: a perfected security interest in goods that become part of a product or mass has priority if perfected before commingling; proceeds rules apply.

Fixtures: a security interest in fixtures may be perfected by fixture filing; a PMSI in fixtures has priority over a conflicting real property interest if perfected before the goods become fixtures.

A secured party may dispose of collateral after default only if it gives reasonable notification of the time and place of sale to the debtor and secondary obligors.

Shelter rule under UCC 3-203: a transferee acquires the rights of the transferor, including holder-in-due-course status, even if the transferee is not an HDIC.

Indorsement types: blank indorsement makes the instrument bearer paper; special indorsement identifies the person to whom it is payable.

Restrictive indorsement (e.g., 'for deposit only') limits further negotiation and puts subsequent takers on notice.

UCC 3-311: accord and satisfaction by use of a check marked 'full payment' is effective if the claim is disputed in good faith and the claimant obtains payment.

UCC 3-419: a person who makes or accepts an instrument with a forged signature is liable to a holder in due course who took in good faith.

UCC 3-503: presentment must be made at a reasonable hour, and notice of dishonor must be given by midnight of the next banking day after dishonor.

UCC 3-604: a party may discharge an instrument by cancellation, renunciation, or surrender to the obligor; renunciation must be in writing and signed.

UCC 3-305(b): HDIC takes free of claims to the instrument and personal defenses but is subject to real defenses such as infancy, duress, and fraud in the factum.

Means test under 11 U.S.C. 707(b): Chapter 7 petition is presumed abusive if current monthly income exceeds the state median and disposable income exceeds statutory thresholds.

Secured claims are not dischargeable to the extent of the lien; a Chapter 7 debtor may reaffirm a debt only with court approval and adequate disclosure.

Avoidance of liens under 11 U.S.C. 522(f): debtor may avoid judicial liens on exempt property and nonpossessory, nonpurchase-money security interests in household goods.

Executory contracts: trustee may assume or reject; assumption requires cure of defaults and adequate assurance of future performance.

Chapter 11 cramdown: a plan may be confirmed over a dissenting class if the class receives at least the liquidation value and no junior class receives more than full value.

Chapter 13 discharge is broader than Chapter 7: student loans may be discharged on undue hardship, and debts from willful injury remain excepted.

Automatic stay exceptions under 11 U.S.C. 362(b) include criminal proceedings, domestic support enforcement, and certain tax assessments.

Setoff under 11 U.S.C. 553: creditor may offset mutual prepetition debts unless the claim was transferred within 90 days or the debt was incurred for the purpose of setoff.

TILA finance charge includes interest, points, service charges, and certain insurance premiums; the APR expresses the finance charge as an annualized rate on the amount financed.

RESPA requires a good-faith estimate of settlement costs within three business days of the loan application and a HUD-1 settlement statement at closing.

Fair Credit Billing Act: creditor must acknowledge a billing dispute within 30 days and resolve it within two billing cycles or 90 days.

Fair Debt Collection Practices Act: collector must send written validation notice within five days of initial contact; debtor has 30 days to dispute.

Consumer Leasing Act requires disclosure of capitalized cost, residual value, monthly payment, and total of payments for leases over four months.

Magnuson-Moss Warranty Act: written warranties on consumer products must be labeled full or limited and must disclose terms in simple language.

Fair Credit Reporting Act: adverse action notice must identify the agency that supplied the report and state that the consumer may obtain a free copy and dispute accuracy.

Predatory lending statutes restrict prepayment penalties, balloon payments, and negative amortization for high-cost mortgage loans.

Agent's duty of loyalty prohibits self-dealing, usurping business opportunities, and competing with the principal during the agency.

Principal's duties to agent include compensation, reimbursement of expenses, and indemnification for authorized acts.

Ratification: a principal may ratify an unauthorized act if it has full knowledge of the material facts; ratification relates back to the original act.

Third party liability: an agent is liable on a contract if the principal is undisclosed or partially disclosed, unless the agent disclaims personal liability.

Tort liability: a principal is liable for an agent's torts if the agent was an employee acting within the scope of employment; independent contractors generally do not create vicarious liability.

Apparent authority cannot be created by the agent's own statements; it requires a manifestation by the principal to the third party.

Franchise relationship: franchisor may be liable for the franchisee's acts if it exercises substantial control over the franchisee's day-to-day operations.

Termination of distribution agreement: reasonable notice is required; statutory compensation may be owed to the distributor for goodwill and unamortized investments.

Market definition: relevant product market includes products reasonably interchangeable by consumers; relevant geographic market is the area where consumers can practically turn for alternatives.

Herfindahl-Hirschman Index: sum of squares of market shares; a merger raising the HHI by more than 200 points in a concentrated market is presumed anticompetitive.

Predatory pricing: below-cost pricing plus a dangerous probability of recoupment; courts apply the Areeda-Turner average variable cost test.

Tying arrangement is per se illegal if the seller has market power in the tying product and the tie affects a substantial volume of interstate commerce.

Exclusive dealing: legality judged under the rule of reason; substantial foreclosure of the relevant market is required.

Noerr-Pennington doctrine immunizes petitioning the government, including litigation, unless the conduct is a sham.

International antitrust: extraterritorial application requires a direct, substantial, and reasonably foreseeable effect on U.S. commerce.

Merger remedies: divestiture of assets, behavioral commitments, or consent decrees; the remedy must restore competition lost by the merger.

CISG Art. 1: applies when parties have places of business in different contracting states or when conflict rules lead to the law of a contracting state.

CISG Art. 6: parties may exclude application of the Convention or derogate from its provisions, subject to Art. 12 reservations.

CISG Art. 14: a proposal is an offer if it is sufficiently definite and indicates intention to be bound; a proposal to a specific person is an offer unless the offeror indicates otherwise.

CISG Art. 16: an offer may be revoked before it reaches the offeree or before the offeree dispatches acceptance, unless the offer is irrevocable.

Incoterms 2020: CIF and FOB are for sea and inland waterway transport; FCA, CPT, and CIP apply to any mode of transport.

UCP 600: banks deal with documents, not goods; a bank must examine documents within five banking days and may refuse noncomplying documents.

New York Convention Art. V: enforcement may be refused if the award exceeds the scope of the arbitration agreement, the tribunal was improperly composed, or the award is not yet binding.

Force majeure: CISG Art. 79 requires notice of the impediment within a reasonable time; failure to notify renders the party liable for damages resulting from non-receipt.

UCC 2-313 express warranty: any affirmation of fact or promise, description, or sample creates a warranty that goods will conform.

UCC 2-315 implied fitness for a particular purpose arises where the seller has reason to know the buyer's particular purpose and the buyer relies on the seller's skill.

UCC 2-601: buyer may reject the whole, accept the whole, or accept any commercial unit and reject the rest.

UCC 2-607: buyer must pay at the contract rate for goods accepted and must notify seller of breach within a reasonable time.

UCC 2-706: seller's resale must be made in a commercially reasonable manner; resale may be public or private, and seller must give buyer reasonable notice.

UCC 2-708: lost profits measure applies where the market price measure is inadequate to put the seller in as good a position as performance would have.

UCC 2-509: risk of loss passes to buyer on receipt of goods if seller is a merchant; otherwise on tender of delivery.

UCC 2-615: seller's excuse by failure of presupposed conditions requires that nonoccurrence was a basic assumption; seller must notify buyer seasonably.

A security interest continues in identifiable proceeds; commingled proceeds are identifiable to the extent the secured party can trace them by a reasonable method.

A secured party may require the debtor to account for and turn over proceeds; failure to do so may constitute default.

A secured party's disposition of collateral may be by public or private sale; the secured party may purchase at a public sale but not at a private sale unless customary.

A secured party must apply proceeds in order: reasonable expenses, satisfaction of the obligation, then surplus to the debtor.

A debtor may redeem collateral by paying the full obligation plus expenses before the secured party disposes of it or enters a contract to dispose.

A secured party must send a notification of disposition to the debtor and any secondary obligor; the notification must state the method, time, and place of sale.

A secured party's failure to comply with Article 9 may result in liability for actual damages and statutory minimum damages.

A secured party may accept collateral in full or partial satisfaction of the obligation only with the debtor's authenticated consent, subject to notice to other secured parties.

UCC 3-104: a negotiable instrument must be payable to bearer or to order at the time it is issued or first comes into possession of a holder.

UCC 3-106: a promise or order is unconditional unless it states an express condition to payment or is subject to another writing.

UCC 3-108: an instrument is payable on demand if it states it is payable on demand or at sight, or if no time for payment is stated.

UCC 3-109: an instrument is payable at a definite time if it is payable on elapse of a definite period or at a fixed date.

UCC 3-201: negotiation transfers possession of the instrument to a holder; if payable to order, negotiation requires indorsement by the holder.

UCC 3-205: special indorsement identifies the person to whom it is payable; blank indorsement makes the instrument payable to bearer.

UCC 3-302: a holder in due course must take the instrument for value, in good faith, and without notice that it is overdue or has been dishonored.

UCC 3-306: a person not a holder in due course takes the instrument subject to all claims and defenses of prior parties.

Chapter 7 eligibility: individuals, partnerships, and corporations may file; individuals must satisfy the means test unless their debts are primarily consumer debts and their income is below the state median.

Chapter 11 eligibility: any entity may file; small business debtors may elect simplified procedures under Subchapter V.

Chapter 13 eligibility: individual with regular income and unsecured debts below the statutory cap and secured debts below the statutory cap.

Proof of claim: creditor must file a proof of claim within 90 days after the first meeting of creditors; governmental units have 180 days.

Claim objection: trustee or party in interest may object to a claim on grounds of insufficient documentation or improper priority.

Discharge injunction: after discharge, creditors may not attempt to collect discharged debts; violation may result in contempt.

Reaffirmation agreement: debtor may reaffirm a debt if it is in the debtor's best interest and does not impose undue hardship; court approval required if debtor is represented.

Lien avoidance: debtor may avoid a judicial lien on exempt property to the extent the lien impairs the exemption.

TILA right of rescission: borrower must receive notice of the right; if not, the right extends for three years from consummation.

TILA damages: actual damages plus statutory damages up to twice the finance charge for certain violations, plus attorney's fees.

FCRA: consumer reporting agency must provide a free report annually; consumer may dispute inaccurate information, and the agency must investigate within 30 days.

FCRA: furnisher of information must investigate a dispute and correct or delete inaccurate information within 30 days.

FDCPA: collector may not use false or misleading representations, threaten arrest, or use abusive language.

ECOA: creditor must notify applicant of adverse action within 30 days and provide reasons for the denial.

UDAP: state statutes prohibit unfair or deceptive acts; remedies include actual damages, statutory damages, and attorney's fees.

Consumer credit disclosure: credit card solicitations must disclose the APR, annual fee, grace period, and balance calculation method.

Agency creation: express appointment by written or oral agreement, implication from conduct, estoppel, or ratification of an unauthorized act.

Agent's fiduciary duties: loyalty, obedience, reasonable care, and accounting for funds and property.

Principal's liability for agent's contracts: disclosed principal is liable; undisclosed principal is liable; agent may be liable if the principal is undisclosed or partially disclosed.

Termination by operation of law: death, incapacity, bankruptcy, or expiration of the agency term.

Exclusive distribution: distributor may have a claim for wrongful termination if the principal terminates without good cause or reasonable notice.

Franchise disclosure: franchisor must provide an FDD with audited financial statements and a copy of the franchise agreement at least 14 days before signing.

Franchise relationship laws: some states require good cause for termination or nonrenewal and provide a right to cure.

Commission: agent is entitled to commission on transactions procured during the agency, even if the transaction closes after termination.

Horizontal price fixing: per se illegal; includes agreements to set minimum or maximum prices, stabilize prices, or eliminate discounts.

Horizontal market allocation: per se illegal; includes agreements to divide territories or customers among competitors.

Group boycott: per se illegal if it is a horizontal agreement among competitors to exclude a rival.

Vertical price fixing: judged under the rule of reason after Leegin; minimum resale price maintenance is not per se illegal.

Monopoly power: the ability to control prices or exclude competition; market share above 70 percent may support an inference.

Attempted monopolization: specific intent to monopolize plus a dangerous probability of success plus anticompetitive conduct.

Merger review: HSR filing required if the transaction exceeds the size-of-transaction threshold and the parties meet the size-of-person test.

State antitrust: state laws parallel federal antitrust; state attorneys general may enforce federal law under parens patriae.

CISG Art. 2: does not apply to consumer sales, auctions, execution sales, stocks, securities, negotiable instruments, money, ships, aircraft, or electricity.

CISG Art. 3: does not apply to contracts where the preponderant part of the obligation is labor or services.

CISG Art. 18: acceptance may be made by statement or conduct; silence does not constitute acceptance unless the parties agree.

CISG Art. 19: a reply purporting to be acceptance but containing additional or different terms is a counter-offer.

CISG Art. 21: a late acceptance is effective if the offeror promptly informs the offeree or if the offeror's silence indicates acceptance.

CISG Art. 49: buyer may declare avoidance if the seller's breach is fundamental or if the seller fails to deliver within the additional period of time.

CISG Art. 74: damages are limited to loss suffered, including lost profit, and must be foreseeable at the time of contracting.

Incoterms 2020: DDP requires seller to clear goods for import and pay duties; DAP requires seller to deliver at the named place, with buyer clearing import.

UCC 2-314 implied merchantability applies if the seller is a merchant with respect to goods of that kind; the warranty arises unless excluded or modified.

UCC 2-316: exclusion of implied warranty of merchantability must mention merchantability and be conspicuous; exclusion of fitness must be in writing and conspicuous.

UCC 2-317: express and implied warranties are cumulative; if they conflict, the intention of the parties determines which warranty is dominant.

UCC 2-719: consequential damages may be excluded unless the exclusion is unconscionable; limitation of remedy to repair or replacement is valid unless it fails of its essential purpose.

UCC 2-725: statute of limitations for sale of goods is four years from tender of delivery, regardless of the aggrieved party's lack of knowledge.

UCC 2-210: delegation of performance is permitted unless the other party has a substantial interest in having the original promisor perform.

UCC 2-306: output and requirement contracts are enforceable if they are in good faith and within the stated estimates.

UCC 2-305: open price term is enforceable if the parties so intend; price is a reasonable price at the time of delivery if not otherwise fixed.

Attachment of a security interest in a deposit account requires control; a security interest in a deposit account as original collateral may be perfected only by control.

A security interest in a letter-of-credit right may be perfected by control; the issuer's consent is required for control.

A security interest in chattel paper may be perfected by filing or possession; a purchaser of chattel paper has priority if it takes possession in the ordinary course.

A security interest in instruments may be perfected by filing; a purchaser who takes possession has priority over a filed security interest.

A security interest in investment property may be perfected by control or filing; control has priority over filing.

A security interest in commercial tort claims may be perfected by filing; the claim must be described with specificity.

A security interest in a health-care-insurance receivable may be perfected by filing; the description must identify the receivable.

A security interest in a payment intangible may be perfected by filing; control of a payment intangible is not possible.

UCC 3-401: a signature may be made by any means, including a device or symbol, with present intention to authenticate.

UCC 3-402: a person who signs an instrument as an authorized representative is not personally liable if the instrument identifies the principal.

UCC 3-403: an unauthorized signature is ineffective except as the signature of the unauthorized signer; the signer is liable to a holder in due course.

UCC 3-404: a fictitious payee indorsement is effective in favor of a person who pays the instrument in good faith.

UCC 3-405: an indorsement by an employee entrusted with responsibility for instruments is effective against the employer.

UCC 3-406: a person whose negligence substantially contributes to a forged signature is precluded from asserting the forgery against a good-faith taker.

UCC 3-407: a material alteration discharges a party whose obligation is affected unless the party assents; a holder in due course may enforce the original terms.

UCC 3-408: value is any consideration sufficient to support a simple contract; an antecedent debt constitutes value.

Automatic stay: applies to all entities, including governmental units, and prohibits enforcement of liens, setoff, and collection actions.

Relief from stay: a party in interest may seek relief for cause, including lack of adequate protection of the creditor's interest in property.

Adequate protection: creditor may be entitled to periodic payments, additional liens, or replacement liens to protect its interest during the stay.

Cash collateral: debtor may not use cash collateral without the secured party's consent or court authorization after notice and hearing.

DIP financing: debtor in possession may obtain credit or incur debt with priority over existing liens if the debtor cannot obtain credit otherwise.

Avoidance of preferences: trustee may avoid a transfer to a creditor within 90 days of the petition if the creditor received more than in a Chapter 7 distribution.

Avoidance of fraudulent transfers: trustee may avoid a transfer made with actual intent to hinder creditors or for less than reasonably equivalent value while insolvent.

Discharge: individual debtor receives a discharge unless the debtor has received a discharge in a prior Chapter 7 case within eight years.

TILA: creditor must disclose the APR, finance charge, amount financed, total of payments, and payment schedule before consummation.

TILA: right of rescission applies to loans secured by the consumer's principal dwelling; the consumer may rescind within three business days.

TILA: if the creditor fails to provide required disclosures, the rescission period extends to three years.

FCRA: consumer reporting agency must provide a free report annually; the consumer may dispute inaccurate information.

FCRA: adverse action notice must include the name and address of the agency that furnished the report.

FDCPA: collector must send a validation notice within five days of the initial communication; the consumer has 30 days to dispute.

ECOA: creditor may not discriminate on the basis of race, color, religion, national origin, sex, marital status, or age.

UDAP: state statutes prohibit unfair or deceptive acts or practices; remedies include actual damages and attorney's fees.

Agency: a fiduciary relationship in which the agent acts on behalf of the principal and is subject to the principal's control.

Actual authority: authority the principal intentionally confers on the agent, including incidental authority reasonably necessary to carry out the express authority.

Apparent authority: authority a third party reasonably believes the agent has based on the principal's manifestations.

Ratification: principal's approval of an unauthorized act, with full knowledge of the material facts, relates back to the original act.

Undisclosed principal: the third party may sue the agent or the principal, but not both; the principal may intervene subject to the third party's defenses.

Termination: agency may be terminated by revocation, renunciation, expiration, death, or incapacity; notice to third parties ends apparent authority.

Franchise: franchisor must provide an FDD at least 14 days before the franchisee signs the agreement or pays any fee.

Distribution: exclusive distributorship may raise antitrust concerns if it forecloses a substantial share of the relevant market.

Sherman Act Section 1: prohibits contracts, combinations, or conspiracies in restraint of trade; requires concerted action.

Sherman Act Section 2: prohibits monopolization, attempted monopolization, and conspiracy to monopolize; requires unilateral conduct plus monopoly power.

Per se violations: price fixing, bid rigging, market allocation, and group boycotts.

Rule of reason: plaintiff must show anticompetitive effect in the relevant market; defendant may show procompetitive benefits.

Clayton Act Section 7: prohibits mergers that may substantially lessen competition or tend to create a monopoly.

HSR Act: premerger notification required for transactions above the size-of-transaction threshold; waiting period is 30 days.

Robinson-Patman Act: prohibits price discrimination that injures competition; defenses include cost justification and meeting competition.

State action doctrine: antitrust laws do not apply to state-regulated conduct if the state clearly articulates a policy and actively supervises it.

CISG: applies to international sales of goods between parties in different contracting states; excludes consumer sales and services.

CISG: parties may exclude application of the Convention by agreement.

CISG: buyer must examine goods and give notice of nonconformity within a reasonable time; otherwise, the buyer loses the right to rely on nonconformity.

CISG: fundamental breach allows avoidance; nonfundamental breach allows damages but not avoidance.

Incoterms 2020: EXW places minimum obligations on the seller; DDP places maximum obligations on the seller.

Incoterms 2020: FOB and CIF transfer risk on loading; DAP and DDP transfer risk at destination.

UCP 600: banks deal with documents, not goods; documents must comply strictly with the credit terms.

New York Convention: requires enforcement of foreign arbitral awards; grounds for refusal are limited and include public policy.

UCC 2-201: statute of frauds requires a writing sufficient to indicate a contract for sale, signed by the party against whom enforcement is sought.

UCC 2-201(3): exceptions include specially manufactured goods, admission in pleadings, and payment or acceptance of goods.

UCC 2-204: a contract for sale of goods may be made in any manner sufficient to show agreement, including conduct.

UCC 2-206: an offer to buy goods for prompt or current shipment invites acceptance by prompt promise to ship or by prompt shipment.

UCC 2-209: modification of a sales contract needs no consideration to be binding; a no-oral-modification clause requires a signed writing.

UCC 2-302: unconscionability may be raised by the court on its own motion; the court may refuse to enforce the contract or limit the clause.

UCC 2-313: express warranty may be created by description, sample, or model; the warranty is that the goods will conform.

UCC 2-314: implied warranty of merchantability arises if the seller is a merchant with respect to goods of that kind.

Attachment: security interest is enforceable against the debtor when value is given, debtor has rights in the collateral, and a security agreement is authenticated.

Perfection: security interest is effective against third parties when it attaches and is perfected by filing, possession, control, or automatic perfection.

Priority: first to file or perfect has priority; a PMSI in inventory has priority if perfected before the debtor receives possession and notice is given.

PMSI in non-inventory: priority if perfected within 20 days after the debtor receives possession.

Ordinary-course buyer: takes free of a security interest created by the seller, even if perfected, unless the buyer knows the sale violates the security agreement.

Consumer goods buyer: takes free of a security interest if the buyer buys without knowledge, for value, and for personal, family, or household purposes.

Filing: financing statement must include debtor name, secured party name, and collateral description; minor errors are not seriously misleading.

Default: secured party may repossess collateral without breach of peace; may dispose of collateral after reasonable notification.

Negotiability: writing, signed by maker or drawer, unconditional promise or order, fixed sum, payable on demand or at a definite time, payable to order or bearer.

Holder in due course: takes for value, in good faith, without notice of dishonor, default, claims, or defenses.

HDIC: takes free of personal defenses but subject to real defenses such as infancy, duress, fraud in the factum, and discharge in insolvency.

Shelter rule: transferee acquires the rights of the transferor, including HDIC status, even if the transferee is not an HDIC.

Indorsement: blank indorsement makes the instrument bearer paper; special indorsement identifies the person to whom it is payable.

Presentment: required to hold secondary parties liable; notice of dishonor must be given by midnight of the next banking day.

Forgery: unauthorized signature is ineffective except as the signature of the unauthorized signer; the signer is liable to an HDIC.

Conversion: payee or holder may recover from a depositary bank that took the instrument for collection.

Automatic stay: arises on petition filing and enjoins all collection actions, lien enforcement, and setoffs against the debtor.

Chapter 7: trustee sells nonexempt assets and distributes under 11 U.S.C. 726: administrative expenses, priority claims, then general unsecured claims.

Chapter 11: debtor in possession retains avoidance powers; plan confirmed if feasible, proposed in good faith, and satisfies absolute priority rule.

Chapter 13: individual with regular income and unsecured debts under the statutory cap may propose a three- to five-year plan.

Preference: transfer to a creditor within 90 days (one year for insiders) while insolvent, enabling the creditor to receive more than in Chapter 7, is avoidable.

Fraudulent transfer: transfer within two years with actual intent to hinder creditors or for less than reasonably equivalent value while insolvent is avoidable.

Priority: domestic support, administrative expenses, employee wages up to the statutory cap, and tax claims rank ahead of general unsecured claims.

Discharge: denied for debts obtained by fraud, willful injury, or breach of fiduciary duty; student loans excepted absent undue hardship.

TILA: requires disclosure of APR, finance charge, amount financed, and total of payments before consummation.

TILA: rescission right for loans secured by principal dwelling; borrower may rescind within three days of consummation or receiving disclosures.

FTC Holder Rule: consumer may assert against the assignee of a consumer credit contract any claim or defense arising from the sale.

FDCPA: restricts third-party collectors; no calls before 8 a.m. or after 9 p.m., no contact at work if prohibited, no harassment or false representations.

FCRA: consumer may obtain a free report annually; nationwide agencies must investigate disputed items within 30 days and correct inaccuracies.

ECOA: prohibits discrimination on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.

Usury: state limits cap interest; UDAP statutes prohibit unfair or deceptive acts and often allow private rights of action.

Cooling-off rule: door-to-door sales over the statutory threshold give the buyer three business days to cancel, with notice required.

Agency: created by express appointment, implication from conduct, estoppel, or ratification; agent owes fiduciary duties of loyalty, obedience, and disclosure.

Actual authority: arises from the principal's manifestations to the agent; apparent authority arises from the principal's manifestations to third parties.

Undisclosed principal: the third party may sue either the agent or the principal but not both; the principal may intervene subject to the third party's defenses.

Termination: by revocation, renunciation, expiration, death, or incapacity; termination does not affect apparent authority until third parties receive notice.

Distribution agreements: governed by contract law; exclusive distributorship may raise antitrust issues if it forecloses a substantial share of a relevant market.

Franchise disclosure: franchisor must provide an FDD at least 14 days before signing or payment.

Good faith: duty of good faith and fair dealing applies to distribution and franchise relationships; some statutes require good cause for nonrenewal or termination.

Commission: agent is entitled to commission on transactions procured during the agency, even if consummated after termination, where the cause arose during the agency.

Sherman Act Section 1: prohibits contracts, combinations, or conspiracies in restraint of trade; per se illegal: price fixing, bid rigging, market allocation, group boycott.

Rule of reason: weighs procompetitive benefits against anticompetitive harm, market power, and less restrictive alternatives.

Sherman Act Section 2: prohibits monopolization, attempted monopolization, and conspiracy to monopolize; elements are possession of monopoly power plus willful maintenance.

Clayton Act Section 7: prohibits mergers where the effect may be substantially to lessen competition; HSR premerger notification applies above statutory thresholds.

Robinson-Patman Act: prohibits price discrimination that injures competition; defenses include cost justification and meeting competition in good faith.

FTC Act Section 5: prohibits unfair or deceptive acts or practices; deception requires a material representation likely to mislead a reasonable consumer.

Vertical restraints: resale price maintenance is judged under the rule of reason; territorial and customer restrictions are also rule-of-reason analyzed.

State action doctrine: exempts anticompetitive conduct compelled by a clearly articulated state policy actively supervised by the state.

CISG: applies to contracts for sale of goods between parties in different contracting states unless excluded; does not cover consumer sales, services, or liability for death or injury.

CISG Art. 38: buyer must examine goods within as short a period as practicable; Art. 39: notice of nonconformity within reasonable time or lose remedy, subject to two-year outer limit.

Incoterms 2020: EXW places minimum obligation on seller; FOB and CIF transfer risk on loading; DAP and DDP place delivery obligations on seller at destination.

CIF: requires seller to procure insurance and pay freight; risk passes on shipment, and buyer bears risk of loss during carriage.

Letter of credit: issuing bank pays against complying documents; UCP 600 requires presentation within 21 days of shipment and within the credit's validity.

Force majeure: CISG Art. 79 excuses nonperformance for impediments beyond control that could not reasonably be avoided or overcome.

New York Convention: requires recognition and enforcement of foreign arbitral awards; grounds for refusal are limited and include public policy and lack of notice.

Bill of lading: document of title; a clean bill indicates goods received in apparent good order; a claused bill notes defects and may be rejected by the bank.