Right to grant permission to conduct business within a business's model.

An arrangement where the owner of a trademark, trade name, or copyright licenses others to use it

Governed by contract law; Article 2 of UCC applies (usually)

A franchiser must disclose certain information to the franchisee.

Directed at perceived misrepresentations of the profits of a franchise to the franchisee.

Protect from unreasonable demands/bad faith

Mac's Shell Services, Inc. v. Shell Oil Products Co.

(Constructive Termination Case)

The parties are each others' agents and each others' principals.

They have fiduciary duties to each other, must act in the best interest of both parties.

Partnerships are a nexus of agency relationship!

Salmon and Meinhard enter into agreement for a 20 year lease for the Hotel Briston in NYC to convert it into shops n' offices and share the costs and profits 50/50.  Agreement gave Salmon sole power to manage the building. Before lease end, Salmon was approached about a project w/ the building to expand it and he agreed and signed a new contract in the name of his own business w/o telling Meinhard.

Since their agreement is still together (still in joint venture together), they owe each other fiduciary duties. Salmon put his interests above Meinhard's and therefore breached their fiduciary duties.

The General Partner in this case was a corporation and the other 2 partners are also the only 2 shareholders in that corporation, so they're almost limited and general partners at the same time.

-Can the fiduciary duty be waived through a provision in the partnership agreement?

General partner owes fiduciary duty to all other partners, both general and limited.  A partnership cannot "contract away" the fiduciary duty that a general partner owes to limited partners! A partnership agreement may not eliminate or reduce a partner's fiduciary duties.

Involves 2+ people but doesn't require any formalities to form. The only people that need to be involved are the partners. No legal action required. 

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UPA (Uniform Partnership Act):

Defines a general partnership as 1) A sharing of profits/losses, 2) a joint ownership of the business, and 3) an equal right to be involved in the management of the business.

All partners share profits/losses evenly unless agreement specifies otherwise. No partner is entitled to special treatment/compensation for more work unless agreement specifies otherwise. Very flexible!

The document that is normally filed to give public notice to thrid parties of the securied party's security interest. 

Referred to as the UCC-1 form

Requirements for a creditor to have an enforceable security interest 

(steps for becoming a secured party)

1. Unless the creditor has possession of the collateral, there must be a written or authenticated security agreement that clearly describes the collateral subject to the security interest and is signed/authenticated by the debtor. 

2. The secured party must give the debtor something of value. (value can include a binding commitment to extend credit and, in general, any consideration sufficient to support a simple contract.

3. The debtor must have rights in the collateral

Once these requirements are met, the creditor's rights are said to attach to the collateral.

Attachment

An agreement that creates or provides for a security interest.

Must contain a description of the collateral that reasonably identifies it.

If the security agreement is in writing or authenticated, only the debtor's signature or authentication is required to create a security interest.

the legal process by which secured parties protect themselves against claims of third parties who may wish to have their debts satisfied out of the same collateral.  Whether a secured party's security interest is perfected or unperfected can have serious consequences for the secured party.

Priority to the collateral goes to the first in time to perfect! (NOT ATTACH)

Most common means of perfection - filing a financing statement (a document that gives public notice to third parties of the secured party's security interest) with the office of the apropriate government official.

Must provide the names of the debtor and the secured party (must be filed under the name of the debtor), and must indicate the collateral covered by the financial statement.

Communication of the statement to the filing office, with payment of the correct fee, or acceptance of the statement by the filing officer constitutes a filing

Perfection by Attachment

-the purchase-money security interest in consumer goods-

Under the UCC, 14 types of security interests are perfected automatically at the time they're created. Most common of these is purchase-money security interest (PMSI).  This is created when a person buys goods primarily for personal, family, or household purposes, and the seller/lender agrees to extend credit for part or all of the purchase prices of the goods.

A PMSI in consumer goods is perfected automatically at the time of a credit sales - that is, at the time the PMSI is created.  The seller in this situation doesn't need to do anything more to perfect his/her interest.

1)Certain types of security interests that are subject to other federal/state laws may require additional steps to be perfected.

2)Nonconsumer goods, such as a business's inventory or live-stock, are not automatically perfected

the cash or property received when collateral is sold/disposed of in some other way.  A security interest in the collateral gives the secured party a security interest in the proceeds aquired from the sale of that collateral.  

A security interest in proceeds perfects automatically on the perfection of the secured party's security interest in the original collateral and remains perfected for 20 days after the debtor receives the proceeds.

property that the debtor acquired after the execution of the security agreement.  The security agreement may provide for a security interest in after-acquired property, such as a debtor's inventory.

Generally, the debtor will purchase new inventory to replace the inventory sold.  The secured party wants this newly acquired inventory to be subject to the original security interest. After-acquired property clause continues the secured party's claim to any inventory acquired thereafter.

1) A perfected security interest has priority over unsecured creditors and unperfected security interests

2) Conflicting perfected security interests - the first in time to perfect (by filing or taking possession of the collateral) has priority.

3)Conflicting unperfected security interests - the first to attach (be created) has priority. Also called the "first-in-time" rule.

Repossession of the Collateral--The self-help remedy: On debtor's default, a secured party can take possession of collateral covered by the security agreement. Since it can be done without use of judicial process, it's often caled the 'self-help' provision of Article 9.

Judicial Remedies:A secured party can relinquish the security interest and use any judicial remedy available, such as obtaining a judgement on the underlying debt, followed by execution and levy.

(Execution and Levy are rarely undertaken unless the collateral is no longer in existence or has decline so much in value that it's super shitty now)

Execution

The obtaining of funds by legal process through the seizure and sale of nonexempt property, usually done after a writ of execution has been issued.