Business Law Final Exam Notes PDF

Final Exam Notes of Business Law Chapter 2 The Agency What is Agency? Agency is a contract where an Agent undertakes a legal act on behalf of a Principal. What are The Key Elements of an Agency? The Principal authorizes the Agent through an agency contract. The Agent acts based on the Principal...

Final Exam Notes of Business Law Chapter 2 The Agency What is Agency? Agency is a contract where an Agent undertakes a legal act on behalf of a Principal. What are The Key Elements of an Agency? The Principal authorizes the Agent through an agency contract. The Agent acts based on the Principal’s instructions and is compensated. What is an Agent and a Principle? The Agent and Principal create an agency relationship. Person Description Agent A person authorized to act on behalf of The Principal to perform legal actions Principal The person who delegates authority to an Agent to act on their behalf. Why is Agency Important? Allows negotiation by a skilled agent. Addresses the principal’s lack of time or expertise. Facilitates actions when the principal is abroad. Sometimes mandated by law for legal accountability. What is the Capacity Required for an Agency? Both principal and agent must Be above Legal Age (21+) & Have sound minds What is Delegated Authority in an Agency? Case Description A new contract is established between the principal and a third party. Successful Task Completion The agent is excluded from the new contract but remains bound by the agency contract. The principal may be held vicariously liable for the agent's wrongful acts that caused harms & damages to the others, during implementing his TORT agency duties How is an Agency Created? What Are the Implied Rights of an Agent Against Their Principal? Exceptions Right Description Agent Entitled to a Commission (The agent cannot claim if): The agent must successfully complete the task While executing the for which they were hired to earn a They disobeyed the principal’s instructions. principal's instructions, an commission. Agent's Right They acted negligently or exceeded their agent may pay a third party & to Indemnity authority. has the right to recover that If the principal's actions prevent the task from They failed to exercise reasonable care & skill. amount from the principal. being fulfilled, the agent is still entitled to the commission. Right Description Legal Effects Agent's Right The agent has a legal right to retain possession of the principal’s property until debts are The agent has the right to sell the car & he will the to Lien are settled. first to his money What are Types of Agency? Principal’s Description How To Express I’m an Agent Legal Effect Existence Oral: To write/sign my name in the The principal is disclosed if contract as agent The agent drops out of the seen as soon as the contract is his agent revealed that he is Disclosed made and he generally incurs neither rights nor liabilities acting for and on behalf of Written: To write my name and must under the contract affected by him. the principal. write for & on behalf of the principal The third party has the right to sue the agent because he appears to be the principal & in return the agent has the right to sue the third party. If the third party discovers the existence of agency A principal is undisclosed before going to the court, then he has the right to when agent does not reveal Undisclosed N/A choose either to sue the agent or the principal that he is acting for a (Alternative liability) principal. The undisclosed principal can sue the third party based on the contract and in this case the third party can sue the principal if he did not implement his commitments according to the contract What Are The Types of an Agency Termination? By Act of Parties Agency can be brought to an end (as any contract) by the mutual consent of the parties. Legal Effect If the principal notifies both the agent and the third party of an agency's termination, the agent is accountable for subsequent actions. However, if only the agent is informed, they still seem to represent the principal to the unaware third party, leaving the principal liable for the agent's actions. Irrevocable Authority The principal cannot terminate the agency if the agent seeks compensation before the agency is established, as the agent has an interest. Termination requires the agent's agreement. Operation (Force) of law Agency can be brought to an end by force of law & without the interference of any of the parties. The Following Ways This May Occur: End of Fixed Period or Performance of Task Death, Mental Incapacity or Bankruptcy of one of the parties. Illegality of the Subject Chapter 3 The Contract of Sale Of Goods What is a Contract of Sale? It is an agreement transferring ownership of goods from the seller to the buyer in exchange for monetary payment. What are Considered Goods in a Contract of Sale? Personal chattels: Movable items such as cars, clothes, and furniture. Things in action: Intangible assets like intellectual property, shares, and trademarks. Emblements: Crops cultivated by human effort, such as rice and wheat. Attached items to land: Trees, crude oil, and minerals if severed before sale. Deposit What is the Role of the Deposit in a Contract of Sale? The deposit demonstrates the buyer’s intent to purchase. What happens if the buyer cancels the transaction? The buyer forfeits the deposit as compensation to the seller. What happens if the seller cancels the transaction? The seller must return double the deposit to the buyer as compensation. Delivery by Sea Carrier What are the methods of delivering goods by sea? Methods Description The seller ships the goods to a designated port and loads them onto the buyer’s freight carrier. FOB (Free on Board) The buyer assumes responsibility once the goods are loaded. CIF (Cost, Insurance, and Freight) The seller is responsible for the goods and insurance until they reach the buyer’s destination port. Hire-Purchase Contract What is a hire-purchase contract? It is an agreement where the hirer rents goods and has the option to purchase them later. How does a hire-purchase differ from a sale contract? The hirer is not obligated to purchase the goods, whereas the buyer in a sale contract is obligated. A hire-purchase involves three parties (hirer, bank, owner), while a sale involves only two (buyer and seller). Chapter 4 Negotiable Instruments What is a Negotiable Instrument? It is a document guaranteeing the payment of a specific amount of money, either on demand or at a set date. What are the 3 types of negotiable instruments under Egyptian commercial law? Bill of Exchange Cheque Promissory Note Bill of Exchange It is a written order to a person (drawee) requiring them to make a specified payment to another person (payee). What are the key specifications of a bill of exchange? Contains two dates: the issue date and the due date (unless payable on demand). Requires at least three persons: the drawer, the drawee, and the payee. Who are the parties involved in a bill of exchange? Parties Description Creates the bill and orders the drawee to pay the specified amount to the payee. Drawer Acts as a guarantor, responsible for payment if the drawee refuses or delays payment. Ensures reimbursement to the payee if the drawee defaults. The party responsible for paying the fixed monetary value. Drawee Ends the validity of the bill by making the payment to the payee. The person to whom the payment is made, named on the bill of exchange. Payee Holds possession of the bill until the drawee makes the payment. Can transfer their rights via endorsement to another payee. What is endorsement in the context of a bill of exchange? It is a method by which the payee transfers their right to the fixed financial value to a second payee by: Writing the second payee’s name on the back of the bill. Including the endorsement date and the first payee’s signature. Are the drawer and payee liable if the drawee defaults? Yes, both are considered sureties and are responsible for payment if the drawee refuses or delays payment. Cheque A cheque is a negotiable instrument where one party orders a bank to transfer money to the account of another party. Who are the parties involved in a cheque transaction? Parties Description Writes all the details on the cheque. Drawer Is liable to pay the monetary value if the bank refuses payment. Bank (Drawee) Pays the fixed monetary value of the cheque. Holds the cheque and is entitled to the monetary value. Payee Can transfer their rights to another payee using endorsement. What is a crossed cheque? It is a cheque marked with two parallel lines, indicating that its cash value must be deposited into the payee’s bank account and cannot be cashed directly. What happens if a cheque is issued without sufficient balance? Issuing a cheque without sufficient balance is considered a crime under criminal law, and the drawer may face legal charges. Promissory Note It is a legal instrument where one party (writer) promises in writing to pay a specific amount to another party (payee), either at a fixed date or on demand. What are the key specifications of a promissory note? Requires at least two parties: the writer and the payee. Can be payable on demand or at a fixed date. The payee can be a specified person (name written on the note) or the bearer. How can the right to a promissory note be transferred? Method Description Endorsement By writing the new payee’s name, the endorsement date, and signing the back of the note. All prior payees remain liable if the writer defaults. Hand delivery If the note is payable to the bearer.