Module 8: Debtor and Creditor Law Flashcards Preview

MOS 2275: Business Law > Module 8: Debtor and Creditor Law > Flashcards

Flashcards in Module 8: Debtor and Creditor Law Deck (55)
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1

money laundering

the false reporting of income from criminal activity as income from legitimate business

2

account agreement

a contract that specifies the rights and obligations of a bank and its customer

3

overdraft

when money is withdrawn from a bank account with the result that the balance in the account goes below zero

4

negotiable instrument

a signed doc containing an unconditional promise or order to pay a specific sum on demand or on a specified date to a specific person

5

promissory note

a written promise to pay another person a specific amount on demand or on a specific date

6

bill of exchange

a written order by one person (the drawer) to a 3rd person (the drawee) to pay money to another person (The payee)

7

holder

a person who has possession of a negotiable instrument i.e. cheque

8

holder in due course

a holder in good faith without notice of defects, who acquires greater rights than the parties who dealt directly w each other as the drawer and payee

9

consumer note

a negotiable instrument signed by a consumer to buy goods or services on credit

10

bank draft

a cheque written by a bannk on the request (and payment) of its customers

11

certified cheque

a cheque on which the drawee bank has guaranteed payment

12

stop payment

when the drawer of a cheque orders its bank not to pay the holder who presents the cheque for payment

13

endorsement in blank

signing a cheque without any special instructions

14

restrictive endorsement

signing a cheque for deposit only to a bank account

15

special endorsement

signing a cheque and making it payable to a specific person

16

personal defence

a defence that affects the parties themselves rather than the instrument

17

real defence

a defence based no the instrument being fundamentally flawed

18

secured credit

a debt where the creditor has an interest in the debtor's property to secure payment

19

unsecured credit

a debt where the creditor has only a contractual right to be repaid i.e. usually trade credit

20

letter of credit

a written promise by a buyer's bank to a seller's bank to pay the seller when specified conditions are met

21

events of default

failure by the debtor to make required payments on a loan or to fulfill its other obligations under the credit agreement

22

collateral

property in which a creditor takes an interest as security for a borrower's promise to repay a loan

23

covenants

provisions found in credit agreements which require debtors to carry on business in accordance w specific requirements (basically, conditions)

24

letter of commitment

a document that is provided by a lender to a borrower and sets out the terms of a loan

25

general security agreement

a security agreement that includes all of the debtor's personal property assets as collateral

26

After-acquired property

collateral that includes personal property acquired by the debtor during the term of the loan

27

security interest

an interest in personal property that is intended to secure payment or performance of an obligation (usually a debt)

28

registration

the registration of a financing statement to record a security interest

29

financing statement

the doc registered as evidence of a security interest

30

purchase-money security interest (PMSI)

a security interest that enables the debtor to acquire assets and gives the secured party priority over existing perfected security interests