Business Law: Defenses Quiz

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Questions and Answers

What is the definition of 'real' in relation to infancy?

Lack of consideration

Fraud in the execution

Breach of contract

Infancy (correct)

What does 'real' mean in the context of incapacity, duress, or illegality?

Any other incapacity, duress, or illegality of the transaction that renders the obligation void

What is the meaning of 'real' in relation to fraud in the execution?

Fraud in the execution

What does 'real' describe regarding discharge in insolvency proceedings?

Discharge in insolvency proceeding Signup and view all the answers

What is meant by 'real' in terms of any other discharge?

Any other discharge Signup and view all the answers

What is the definition of 'real' as it pertains to unauthorized signature?

Unauthorized signature Signup and view all the answers

What does 'real' encompass concerning fraudulent alteration?

Fraudulent alteration Signup and view all the answers

What does 'personal' indicate in legal terms regarding lack of consideration?

Lack of consideration Signup and view all the answers

What does 'personal' describe concerning failure of consideration?

Failure of consideration Signup and view all the answers

What is meant by 'personal' in relation to breach of contract?

Breach of contract Signup and view all the answers

What does 'personal' signify when discussing fraud in the inducement?

Fraud in the inducement Signup and view all the answers

What does 'personal' refer to regarding illegality that does not render the transaction void?

Illegality that does not render the transaction void Signup and view all the answers

What does 'personal' entail concerning duress or undue influence?

Duress, undue influence, mistake, misrepresentation, or incapacity that does not render the transaction void Signup and view all the answers

What is the definition of 'personal' as it relates to setoff or counterclaim?

Setoff or counterclaim Signup and view all the answers

What does 'personal' mean in terms of discharge of which the holder in due course does not have notice?

Discharge of which the holder in due course does not have notice Signup and view all the answers

What does 'personal' indicate regarding non-delivery of an instrument?

Non-delivery of any instrument, whether complete or incomplete Signup and view all the answers

What does 'personal' refer to in relation to unauthorized completion of an incomplete instrument?

Unauthorized completion of an incomplete instrument Signup and view all the answers

What is the definition of 'personal' regarding payment without obtaining surrender of the instrument?

Payment without obtaining surrender of the instrument Signup and view all the answers

What does 'personal' encompass concerning theft of a bearer instrument?

Theft of a bearer instrument or of an instrument payable to him Signup and view all the answers

What does 'personal' mean in regards to lack of authority of a corporate officer?

Lack of authority of a corporate officer, agent, or partner as to the particular instrument, where such officer, agent, or partner had general authority to issue negotiable paper for his principal or firm Signup and view all the answers

Study Notes

Real Defenses

Infancy: Protects minors from legal obligations, making contracts voidable.
Other incapacity: Refers to various forms of incapacity, duress, or illegality that nullify contract obligations.
Fraud in the execution: Occurs when a party is misled about the nature of the transaction, rendering the contract invalid.
Discharge in insolvency: Debts extinguished during bankruptcy proceedings may not be enforced.
Any other discharge: Covers various discharges that can arise, leaving obligations unenforceable.
Unauthorized signature: A signature made without proper authorization renders the contract void.
Fraudulent alteration: Modification of a signed document through deceit makes the contract void.

Personal Defenses

Lack of consideration: A contract may be defensible if there is no value exchanged.
Failure of consideration: Occurs when the promised performance is not delivered, impacting enforceability.
Breach of contract: A party's failure to fulfill contractual terms can serve as a defense.
Fraud in the inducement: Misleading statements before the contract was signed can invalidate consent but not the contract itself.
Illegality: Transactions might still be enforceable despite illegal aspects if they do not render the agreement completely void.
Duress and undue influence: Coerced or overly influenced agreements may be defensible, provided the transaction remains valid.
Mistake or misrepresentation: Genuine errors or dishonest representations may affect enforceability without voiding the contract outright.
Setoff or counterclaim: Defenses based on claims arising from the same transaction can limit obligation.
Discharge without notice: A defense exists if the holder wasn't aware of a discharge affecting the contract.
Non-delivery of instruments: Failure to deliver negotiable instruments impacts contractual obligations.
Unauthorized completion: If an incomplete instrument is filled out without authority, it may be challenged.
Payment without surrender: Payments made without obtaining the actual instrument can lead to defenses against obligations.
Theft of instruments: A defense can be invoked when an instrument is stolen, affecting its validity.
Lack of authority: Defenses may arise when a corporate officer or agent exceeds their authority with instruments, despite having general authority.

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Test your knowledge on real and personal defenses in business law with these flashcards. From infancy to fraud, explore the various defenses that can impact obligations in transactions. Perfect for law students and professionals looking to sharpen their understanding.