Business law: Unit 1

What is the law?

The law is a system of principles and rules of human conduct
prescribed by the supreme power in a state. It is binding, it is
mandatory, it cannot be avoided. Law can be enforced: it means that
competent authorities may force people to obey the law.
We need them to establish order, to mantaine peace and to organize
society behavior.
Sources of law are a means of creation and formation of mandatory
norms of a state/country. Sources refer to the origin of the law.

Case law is the law that is stated in specific cases decided by

courts. They are competent bodies that decide disputes and make
judicial decisions. (Ruling or judgments). The prior decided cases
create precedent, this means that other courts must follow the rules
created by the judicial decision when deciding later cases that are
similar or identical to case that created the rule.

Statutory law: A law or statute is a written rule created by state

institutions (often a legislature). The law have sanctions which are
recognized by the state and enforced by state-authorized bodies
(the judiciary). A proposal for a new law is called a “bill”
Legal doctrine: analyses and interpretations of the law made by
scholars and legal experts.
Custom: Is a regular course of conduct observed uniformly and
voluntarily by the people. It is one of the oldest sources of law-
making.
The common law system: England. It is not created by means of
legislation but is based mainly on case law (judicial decisions). The
courts are given the main task in creating the law. For example,
United States.
The civil law system: Roman. Based mainly on statutes. Is
contained in civil codes, which are described as a “systematic,
authoritative, and guiding statue of broad coverage.” The courts
main task is to apply and interpret the law contained in a code. Also,
it is based on the theory of separation of powers. For example, in
Argentina it is divided into legislative, judicial and executive.
Morality vs law:
Law regulates external human conduct, whereas morality mainly
regulates internal. Laws are universal: morality is variable. Laws are
definite and precise. Laws are studied by the coercive power of the
state: morality simply enjoys the support of public opinion or
individual. Laws are studied under jurisprudence (study of law), but
morality is studied under brand of philosophy that studies the
concepts of right and wrong behavior.
Lawmaking and sovereignty: A state can generally control all
activities within its territory, prohibiting interference by other states.
How is law made? In a domestic setting, domestic law does not
only consist in rules dictating obligations/ rights to govern individual
behavior, but it also consists in rules for its own production and
application.
Branches of law: private law and public law.
Public law: is a set of rules that govern the relationship between
private individuals or private organizations and public bodies.
Criminal law: deals with actions considered harmful to society. It
defines this offense and sets the rules for the arrest, the trial and
punishment. Law that is not criminal law is defines as civil law.
Constitutional law: set of rules and principles that define the powers
of a government and the rights of the people.
Administrative law: Many departments to do the work of
government. Deals with matters as education, public health,
taxation. Other departments administer social provisions, such as
pensions and social security.
International law: Deals with the international relationships among
nations both in war and in peace. It concerns tarde,
communications, territorial limits, etc.
Private law: deals with the rights and obligations people have in
their relations with one another.
Commercial law: is the branch of law that regulates and governs
commercial transactions and business deals. It deals with the sale
and distribution of goods. Sometimes is called business law.
Contract law: (subdivision of commercial law) is the body of rules
that relates to making and enforcing agreements.
Tort: is a wrong or injury that a person suffers because of someone
else’s action.
Tort law: governs the remedies for civil wrongs. A person is liable
(responsible) for the wrongful act, wether done accidentally or
intentionally. This is compensated by the payment for damages.
Damages: May include compensation for loss of property, medical
expenses, mental or physical incapability, etc.
Property law: governs the ownership and use of property. It may be
real, such as land and buildings, or personal, such as a car and
clothing. The law ensures a person’s right to own a property.
Inheritance law or succession law: the transfer of property upon the
death of the owner.
Family law: the legal rights and obligations of husbands and wives
and of parents and children. It covers such as marriage, divorce,
adoption.
Company law: governs the formation and operation of business
corporations. Deals with the powers and obligations of management
and the right of shareholders.
Corporate law: Is related to commercial and contract law. Are
taxable enmities that are taxed at a lower rate from individuals.
Contracts: An agreement of a legal nature between two or more
parties that creates mutual rights and obligations. Main rule:
freedom of form —> Autonomy of parties.
Elements for a valid contract: consideration, legal subject matter,
legal competence of subjects and consent: offer and acceptance. If
these elements are missing is null and void contracts.
The agreement: offer, acceptance and consideration: Mutual
agreement between parties that reflects their respective intents. A
contract is formed when the acceptance of an offer is received by
the offer or.
Consent: offer and acceptance: An offer or is a manifestation
directed to a person with the intention to bind the offer. May have a
set of time.
Acceptance: fully agreeing to terms of the offer.
Consideration: Something of value given by both parties to a
contract to exchange mutual performances
Legal intent and subjects' matter: The subject matter of a contract
must be a property right. The contract must have the purpose to be
of a legal character.
Legal competence: Minors lack capacity to make most contracts,
persons with mental incapacity lack contract capacity and persons
affected by drugs or alcohol may sometimes lack capacity to form a
contract.
Breach of contract: When a party fails to fulfill its obligation under
the contract. A court of law can decide whether a breach has been
conducted and what consequences should follow.
Classification of contracts: Unilateral, bilateral and multilateral.
Onerous and gratuitous. Aleatory and commutative. Formal and
informal. Nominate/innominate.
A contract is unilateral when only one of the parties has an
obligation towards the other party.
A contract is bilateral when the parties have mutual obligations
towards each other.
A contract is onerous when the benefits that a party receives from a
contract are provided to it due to other benefits that this party agrees
to provide to the other party.
A contract is gratuitous when one of the parties receives a benefit
from the contract, without having to provide any benefit in return.
In a commutative contract, the benefits for all parties are certain
from the time of contract formation.
In a aleatory contract, the performance of one party is dependent on
the occurrence of a particular event beyond the control of either
party.
Formal contracts are those that require certain formalities in order to
be valid.
Informal contracts are those that do not require any special form in
order to be valid.
Nominates contracts are those that pertain to a special category
which is regulated by special contracts laws. In these contracts-
sales, insurance,etc- there are contractual rights that follow without
the need for the parties to have stipulated so in their contracts.
Innominate contracts are those that do not pertain to a legal
category. They are regulated by the will of the parties, analogous
contract law provisions, general principles of law, custom.
General contract law principles: freedom of contract: principle of
autonomy, protection of the weaker party: one reason for legislation
affecting the principle of autonomy, binding effect and good faith
when entering into, interpreting and executing a contract.

Examples: Employment contract, service contract, sales contracts.

Contracts for the sale of goods: A contract by which a party
(seller) agrees to transfer the ownership of goods and the other
party (buyer) agrees to pay a monetary price of them (only money).
Rules: This is an international agreement. Argentina is a party to the
UN Convention on contracts for the International Sale of Goods.
Contractual terms (cláusulas): The CCC conflict of law rules allow
the parties to an international contract to choose the applicable law.
Incoterms: specific rules that the party will use to regulate the rights
and obligations in the contract.
Example:
EXW: Ex works
 The seller/exporter: sell the goods in their own warehouse.
 The buyer/importer: bears all the cost and responsibilities from
the moment the goods cross the warehouse of the seller.
Elements:
 Parties: seller and buyer.
 Price: In money. Currency. It can be determined in the contract
or there is a method for its determination. Time: Parties can
choose, if not, payment must be made upon delivery of the
goods. Place: If the agreement is silent, it must be made at the
domicile of the buyer when the obligation was created.
 Property: delivery, physical, when the goods themselves are
delivered to the buyer. Symbolic:
Requirements to create a legally contract for the sale of goods:

Letters of intents are documents in high the parties agree to

negotiate an agreement on a certain basis.
Form: Requirements
The CCC recognizes informal contracts. The principle is freedom of
form. The parties can choose how they want to be the contract.
Exceptions: Real state, racehorses, ships. Aircraft’s, weapons, it
needs to be written.
Title of the goods passes to the buyer when the buyer acquires
possession of the goods.
Warranty of title is implied by law. The seller must guarantee good
title to the goods. This means that the seller must have the right to
transfer ownership and no one else may have rights to the property.
Warranty against hidden defects: The seller is liable for title defects
and hidden defects of the goods. The buyer must notify the seller of
any hidden defects within 60 days of their appearance.
Remedies for breach of a sales contract: A party to a sales
agreement can claim specific performance and indemnification of
the damages suffered as a result of a breach of contract.

In the case of non-delivery of the goods, the buyer can:

 Request specific performance and compensation for damages.
 Buy the goods from a third party at the expense of the seller.
 Late delivery, the buyer can request compensation for
damages.
Liability exclusion clause:
 Contractual provisions that limit or exclude liability are
generally enforceable, unless they are included in a consumer
contract.
 Exclusion clauses are only valid if they are individually
negotiated by the parties.

Lease agreement: A contract by which one party agrees to grant the

other party the use of property temporarily, and the other party
agrees to pay a prince in money.
Parties: lessor/landlord, the one that gran the property and the
lessee/tenant, the one that pays a price.
Leasing in Argentina: Grantor agrees to transfer property to the
grantee for a certain period of time in exchange of money, with the
option to purchase the property towards the ends of the agreed
period.
Lease agreement: Property: personal property or real property,
Price in money (rent), Grant of temporary use and formal contract:
written form.
Terms: a lease agreement must be made for 3 years at minimum,
and for a maximum term of 20 years for residential purpose. The
tenant cannot be required to pay more than one month in advance.
Obligations of the lessor:
 urgent repairs: leasee must notify lessor. After lessor’s silence
(minimum 24hs), lesse may carry out repair at the expense of
the lessor.
 Non-urgent repairs: Leslee must notify lessor. 10 days for
lessor to organize reparation.
Obligations of the lessee:
 Payment of rent
 Maintain the property in state of repair.
 Return the property back to owner at end of lease.
 Only usual expenses mist be paid by lessee.
Frustration of use: Lessee may request termination of contract if
she/he cannot use or enjoy the property.
Early termination: The notice to terminate shall be sent one month in
advance, if not statutory compensation shall be. If it sent with 3
months or more anticipation, no compensation is applicable.

Interpretation of contracts:
 Plain meaning rule: the text of contract is the primary source of
interpretation. The words in a contract must be interpreted
according to their usual and ordinary meaning.
 Parties common intent: the meaning of a contract is
determined by looking at the intentions of the parties at the
 time of the contract creation. The party may have opposite
interest, but they come together for a common business.
 Good faith: honesty in a person’s conduct during the
agreement. A duty to not do anything that will destroy or injure
the right of the other party to receive the benefits of the
contract.
 Economic purpose: a contract must be interpreted considering
the economic objective that the parties had in mind when they
entered into the contract.
 Contextual interpretation: a contract must be interpreted as a
whole, within the general context, not as isolated clauses.
 Preservation of the contract: principle “pacta sunt servanta”;
agreements must be kept.
How can a contract end?
Normal ways: by performance or by fulfillment.
Termination of contracts:
 Rescisión: unilateral or bilateral. A party may exercise the right
to rescind the contract at any time. Both parties may rescind
the contract by mutual agreement.
 Resolution: only unilateral. A party may be entitled to cancel
the contract, for cause (when the other party has committed
breach of contract, but other causes include frustration of the
purpose (unforeseen events change the party’s principal
purpose for entering into the contract)).
 Revocation: only unilateral (such as donations, deposits,etc) A
party unilaterally elects to terminate a unilateral legal act.
Mutual consent is not needed.

Other ways in which contracts may terminate:

 Impossibility of performance: the contractual obligations of one
or more parties cannot be fulfilled under normal
circumstances.
 - Force majeure: when an extraordinary event or circumstance
beyond the control of the parties prevents one or both parties
from fulfilling their obligations under the contract. \
- Frustration: something, the fault of none of the parties,
happens that has the following effect: it makes the contract
physically or commercially impossible to fulfil, or it transforms
the obligation to perform into a radically different obligation
from that undertaken at the start of the contract.
Void contracts: is a contract that isn’t legally enforceable, starting
from the time it was created.

Negotiable instruments: a document that guarantees payment of a

specific amount of money to a specified person (payee or assignee).
Is an unconditional promise. It is unilateral.
- Negotiable because money is traded or transferred.
Endorsement.
- Instruments means legal documents that define rights and
duties.
- The assignee obtains full legal title.
- Special endorsement: payee.
- Blank endorsement: anyone who is in possession of the
check, can receive the money. Not specified payee.
General features: transferable to different parties, new holder
obtains the full legal title to it, take the funds in cash or transfer to
another person, paid on demand or at specified date, signed by the
issuer of the document and exact amount to be paid is indicated on
the document.
Formal requirements:
- they must be in writing.
- Must be signed by the marker or drawer
- Must be a definite order or promise to pay.
- Must be unconditional
- Must be payable in money
- Musty be payable to order or bearer.
Types:
- Personal checks
- Traveler's checks
- Promissory notes
- Money order
- Bill of exchange
Bill of exchange: a document that is normally used in international
trade, that orders a person or organization to pay a particular
amount of money at a particular time for goods or services.
3 parties involved:
- Drawer: the maker of the bill of exchange, who gives the order
to pay money to the thirds party. Owns money to the payee.
The debtor.
- Drawee: the person who agrees to make the payment to the
payee.
- Payee: the person who receives the payment. The creditor.
Check:
- Is a written, dated and signed instrument that directs a bank to
pay a specific sum of money.
- A check is payable on demand.
- The person or entity writing the check is known as the pay or
or drawer, while the person to whom the check is written is the
payee. The drawee, on the other hand, it=s the bank on which
the check is drawn.
Promissory note:
- It contains a written unconditional promise, stamped and
signed by the drawer, to pay a specified sum of money to a
particular person or at the order of the particular person.
- It is made by the debtor to borrow money from the creditor.
- Signature of the promisor, is a prerequisite
- The date on which the note is payable should be fixed, as well
as the amount
Endorsement: Means signature of the holder ( the individual who
has lawfully received possession) made with the object of
transferring the instrument.
It is the signature and message on the back
Order instruments: to the order + specified payee
Bearer instruments: any holder of the instrument

Loan agreements: a contract between two parties under which the

lender gives or agrees to give funds to a borrower in consideration
for the borrower’s promise to repay the loaned funds at an agreed
time in the future, plus interest.
Parties:
 Lender (creditor)
 Borrower (debtor)
Under argentine law:
 Commodatum: loan for use.
- A person lends to another person a non fungible thing, for a
definite time, to be endowed and used under certain
conditions, without any pay or reward. Example: modem.
- It is a bilateral contract, but it is gratuitous.
- The object is non-fungible property.
 Mutuum: loan for consumption.
- The lender transfers the ownership of a fungible thing to the
borrower, by which it is agreed that the borrower shall
consume the thing and return, at the time agreed upon,
another thing, of the same quality, kind, and number, to the
lender, generally for consideration.
- It is a bilateral contact, and onerous (the lender charges
interest for the thing loaned).
- The object is fungible property.
- Example: préstamo de un banco.
Property is divided into:
Movable and immovable: immovable refers to real estate (such as
house, factory, etc). Movable property refers to personal property
(jewelry, vehicles, etc)
Fungible and non fungible: fungible goods are items that are
interchangeable/replaceable because they are identical to each for
practical purposes. For example, money, stock.
Non fungible: are not replaceable because they have unique
qualities that add or abstract value. A house or a used car.

Deposit contract:
- An agreement whereby a party undertakes to receive a thing
from another party with the obligation to safekeep it and the
return it.
- Depositary (natural or legal person) receives a thing belonging
to another (depositor)
- Purpose of contract: custody/safekeeping of the deposited
property.
- Consensual: formed by the agreement of the parties.
Characteristics:
- Presumed to be onerous
- Bilateral
- No formal requirement
Obligations:
- The depositary needs the express permission of the depositor
for using the deposited property. Otherwise, he/she shall be
liable for damages.
- Only permitted to use for that specific purpose.
Types:
1. Regular deposit (non-fungible property): main rule of the
depositor’s conserved ownership of the object applies:
ownership not transferred.
 2. Irregular deposit (fungible property, exchangeable): exception
to the main rule of conserved ownership, the ownership is
transferred to the depository.
3. Necessary deposit: force majeure or hotel deposits. It is not
freely agreed by the parties.
Force majeure: when it takes places because of an external,
unexpected event like a natural catastrophe.
Hotel deposit:
- the deposit of a traveler’s personal belongings in a hotel are
necessary deposits.
- The keeper of a hotel shall be responsible for these
belongings as a depositary provided.
- Also, the hotelkeeper is liable for vehicles, animals and articles
which have been introduced or placed in the annexes of the
hotel.
- The responsibility shall include the loss of, or injury to the
personal property of the guests causes by the employees, as
well as strangers
Liability:
- Any agreement between the hotel keeper and the guest
whereby the responsibility of the former is suppressed or
diminished shall be void.
Security interests:
Is a legal right granted by a debtor to a creditor over the debtor’s
property (usually referred to as the collateral) which enables the
creditor to have recourse to the property if the debtor defaults in
making payment or otherwise performing the secured obligations.
Purpose: it secures repayment of a debt, lowering the risk of the
creditor.
Common forms of society:
- Mortgages(hipoteca) may be created over real estate
(inmovable) and certain movable goods requiring registration
 such as aircraft’s and vessels. It must be registrate. Remains
with the debtor. Examples: aircraft and ships.
- Pledges(prenda) may be created over every other movable
good. It may or may not require registering. Applied to a wide
variety of assets.
Registered:
- the asset remains in the possession of the debtor and the
pledge is recorded in the relevant registry. There is no transfer
of the asset.
- For example, mutual contracts may be secured by a pledge
over an automobile.
- A registered pledge is useful if the asset is to remain in the
possession of the debtor.
- Can be a fixed pledge that affects only the relevant registered
asset itself or a floating pledge that affects the registered asset
plus any asset it is converted to or a replacement asset.
Unregistered:
- possession over the asset (but not ownership) is transferred to
the creditor. The creditor must physically receive and keep the
asset.
- For example, machinery that may be physically moved.
- It must be created by a deed.
- The pledged asset must be delivered to the creditor or to a
third party appointed by the parties involved.
- If the debtor defaults on the pledge, the creditor can either
acquire full ownership of the asset, subject to an independent
expert opinion confirming that the value of the debt equals or
exceeds the value of the asset or can sell the pledged asset
by public auction, in which case the creditor has a priority right
to the proceeds of sale.
The court:
- A pledge certificate grants the pledgee the right to initiate
summary enforcement proceedings.
- It will issue an attachment and execution order against the
asset.
 - It will notify the debtor of a proposed auction of the asset
- The debtor will have three days to oppose the sale based on
certain specified grounds
- Auction of the asset will proceed (if the debtor fails to oppose
the sale)
Banking contracts:
 A banking contract is a type of commercial or business
contract entered into between banks (financial entities) and
individuals or businesses.
 Is a legal act by which two or more parties express their
consent to create, adjust, modify, transfer or extinguish legal
relationships relating to banking operations.
 Parties: financial entities and legal or natural persons.
 There should be terms and conditions in place that are
agreeable to both the bank and the customer.
 Are set in place in order that the customer and the bank are
aware of each other’s requirements, expectations, and
obligations.
 Form: made be in writing and the customer has the right to
receive a copy.
 Rescisión: the customer is entitled to rescind banking
contracts at any time, without being subject to any penalty or
additional charge.
Types of banking contracts:
 Current account agreement
 Loan agreement
 Line of credit agreement
 Deposit contract
 Safe deposit box lease agreement
A bank loan agreement:
 Is a contract between a borrower and a lender (which is a
bank) that outlines the terms and conditions of a loan.
  The bank is obliged to deliver a sum of money, and the
borrower is obliged to return said sum of money and pay
interest.
A bank deposit contract: Two types:
 Demand deposits: are the placement of funds into an account
that allows the depositor to withdraw his or her funds from the
account without warning.
 A time deposit is an interest-bearing deposit held by a bank or
financial institution for a fixed term whereby the depositor can
withdraw the funds only after a certain period of time. The
bank issues a certificate which may be transferred by
endorsement.
Safe deposit box lease agreement:
 A safe deposit box is a secure container usually made of metal
that is used to store valuables at a bank or credit union. These
boxes are often kept in vaults and can be leased throughout
the lifetime of a customer for an annual fee.
 The provider of the safe deposit box is responsible for the
suitability of the custody over the safe deposit box, as well as
for its safety and its contents,e scepter in the case of
unforeseen circumstances or defects of the things deposited.
 Any clauses that limit or exclude the provider’s liability shall be
void.

Agency agreement:
 An agreement whereby a party (agent) agrees to carry out one
or more legal acts for the benefit of another party (principal). N
 Purpose: performance of legal acts
 Parties: principal and agent.
 Bilateral legal act.
 Consensual
 Non-formal
 Onerous
  With representation (will bind the principal, will act on behalf of
principal) or without representation (binding only if they are
gratified, agents will act in his own name.)
Power of attorney (with representation) POA.
 A legal document giving one person ( the agent) the power to
act on behalf of another person (the principal).
 It is a unilateral legal act that specifies the powers that may be
granted to the agent for the performance of legal acts.
 It is the instrument used to formalize the agent’s
representation
 It is not a contract.
 Formal
 Types:
- General POA: a general power of attorney gives the agent the
power to act on behalf of the principal in any and all maters.
- Limited POA: a limtied power of attorney gives the agent the
power to act on behalf of the principal in specific matters or
events.
Agent’s obligations:
 Performing the acts covered in the agreement, following the
instructions given by the principal and the nature of the
business.
 Notifying the principal of any unforeseen circumstance that
may make the agent unable to follow the instructions given,
requesting for new instructions.
 Notifying immediately any conflict of interest or any
circumstance that may require changing or terminating the
agreement.
 Ensuring the confidentiality of the information obtained under
the agreement that cannot be disclosed.
 Informing the principal of any sum of money received under
the agreement.
Termination of agency:
 Expiration of term
  Completion of the legal act or business for which it was
formed.
 Revocation(unilateral) of the agency by the principal.
Attorney-in- fact is not the same as attorney-at-law.
Exercise:
1- F, 6. Is general.
2- T. 1.
3- F. 4. It will not be liable except for negligence (not putting
enough care into the activities it must perform)
4- T. 5.
5- T. 7b.
6- F
7- T
8- T
9- T
10- F. Only a part will be affected, it will not be void.
Insurance agreements:
 An agreement whereby the insurer undertakes, for a premium
(money) or contribution, to indemnify (pay) a loss (siniestro).
Only in the specific events that are in the contract. Example:
Car accident.
 Parties: the insurer (the party who agrees to compensate
people) and the policy (owner of the policy). The insured is the
person who is covered against the risk. The beneficiary
receives the payment. For example in life insurance, if the
person dies, the family will receive money from the insurer.
 Aleatory contract
 It must be made in writing for evidentiary purposes.
Classification:
 Property insurance: including fierce, agriculture, animals, etc
 Life insurance: including life, personal accidents, and group life
insurance.
Insurance/reinsurance intermediaries:
  Insurance agents: insurers can appoint to sell insurance on the
insurers behalf.
 Insurance brokers: only individuals and companies that the
SSN has licensed as insurance brokers can carry on
insurance brokering activities.
Contract of reinsurance:
 Is an insurance for insurance companies.
 There is not legal definition.
 Reinsurance shares the essence and main features with
insurance, from which it directly derives.
Regulatory framework:
 Insurance law: regulates insurance contracts.
 Insurance undertakings law: Regulates the activity of insures.
 The general regulation of insurance activity, approve by the
argentine superintendence of insurance, which establishes the
main regulations for the insurance and reinsurance activity.
 Resolution: administrative decision made by an executive
body (SSN)
 The SSN is primarily responsible for regulating and
supervising the insurance industry.
 Brokering activity: an insurance broker is a professional who
represents consumers in their search for the best insurance
policy for their needs. They work closely with their clients to
research coverage, terms, conditions, and price and then
recommend the insurance policy that best fits the bill.
Other relevant regulation:
 Navigation law: governing marine insurance
 Labor risks law: governing the insurances possible for an
employer tot are with respect to different work-related
incidents.
Supervising and regulatory bodies:
  The superintendence of insurance is a regulatory entity which
oversees insurance activity and insurance companies in
argentina.
 Public registry of commerce
 Federal public income administration
 Consumer protection
 Superintendence of labor risks
 Financial information unit.

Vocabulary:
Accruing: generar
Instalments: cuotas

Mock exam:
1- Mutuum contract:
Purpose: loan for consumption.
Definition: The lender transfers the ownership of a fungible
thing to the borrower, by which it is agreed that the borrower
shall consume the thing and return, at the time agreed upon,
another thing, of the same quality, kind, and number, to the
lender, generally for consideration.
Consideration: It is a bilateral contact, and onerous (the lender
charges interest for the thing loaned).
The object is fungible property.
2- The negotiable instruments is a document that guarantees
payment of a specific amount of money to a specified person
(payee or assignee) or bearer. . Is an unconditional promise or
order. It is unilateral. Two purposes: promissory note and pay
something.
3- D.
4- B
5- Irregular deposit, fungible property. Yes.
6- B
 7- D

Mock exam:
NEGOTIABLE ISNTRUMENTS: is a document that guarantees
payment of a specific amount to a person (payee or assignee).
Negotiable because is money what is transferred.
Instruments because is a legal document that defines rights and
duties.
Is an unconditional promise. Is unilateral, it must be in written, it
must be signed by a maker or drawer. The assignee receives full
title of it. It must be payable in money. Must be payable to order or to
bearer.
Two purpose: unconditional promise or order to pay.
Special endorsement: specific payee
Blank endorsement: any person who is in possession of the check,
can receive the money.
Types: bill of exchange, promissory note and credit.
Bill of exchange: a binding document that is use generally on
international trade, it orders an organization or person to pay a
specific amount of money in a specific set of time.
Parties: drawer: the one who makes the bill of exchange. The
debtor.
Drawee: the one who agrees to make the payment.
Payee: the one who receives the payment. The creditor.
Check: the check is a written, signed and dated instruments that
directs a bank to pay a specified amount of money. In this case the
drawer is the person who is writing the check, the payee is the one
who receives the check and the drawee is the bank.
Promissory note: an unconditional promise to pay a specific amount
of money to a person. The debtor borrows money from the debtor.
The promise is a prerequisite for this agreement.
Loan agreement: a contract between two parties under which the
lender agrees to give funds to the borrower, in consideration that the
borrower will return it, plus interest.
Parties: the lender (the creditor)
The borrower: the debtor.
Under argentine law:
Commodatum: the purpose is loan for use.
The object is non fungible property.
A person lend to another person a non fungible property to use it
without any pay or reward. For example a modem.
It is bilateral but gratuitous.
Mutuum: the purpose is use for consumption.
The object is fungible property.
The lender transfer the ownership to the borrower to consume it but
then return it. For example loan for a bank.
It is bilateral and onerous because the lender agrees to lend
something but with interest.
Movable property: refers to personal property such as money or
jewelry. Immovable is real state, house or factory.
Fungible property: exchangeable, it can be replace like for example
money.
Non fungible: it is not replace, it has it unique value, for example a
use car.
Deposit contract: an agreement by which a party agrees to deposit a
belonging to the depository in order to custody and safe keep it.
Parties: depository, the one that receives a thing, and the depositor,
the one that gives a belonging.
It is consensual, it means that the agreement is formed by the
parties.
It is bilateral and onerous.
Depository obligations: needs specific permission to use the
property, if not is liable for damages.
Types:
Regular deposit: not transfer of ownership. ( non fungible property)
Irregular deposit (fungible property), transfer of owner ship.
Necessary deposit: force majeure or hotel deposit.
The hotel keeper is responsible for all the belongings that entered in
the hotel, for example animals, vehicles or personal things. It is
liable for injures, damages, or losses. It is not liable for unforeseen
events.
Security interest: is a legal right granted by the debtor to the creditor
to have a recourse of property if the debtor defaults on payment or
don’t performed the secured obligations.
Two types of security interest:
Mortgages: it is use for immobile property, or specific movable
goods such as aircraft or vassels. It must be registeredand it
remains with the debtor.
Pledges: it is use for every mobile good. It may or may not require
registration.
Registered: means that the asset remains In the possession of the
debtor. There is no transferred of the ownership.
Unregistered: possession over the asset (not ownership) is
transferred to the creditor. If the debtor defaults on the pledge, the
credito can acquire full ownership of the asset.
Banking contracts: is a type of commercial contract between
financial entities and natural persons.
Is a legal act between two or more parties that gives it consent to
create, modify or terminate legal relationships that are related to
business activity.
Parties are financial entities and natural customers. It must have
terms and conditions agreed by the two parties. It made be in written
and the customer has the right to receive a copy. The customer can
terminate the contract by rescisión, it means that can terminate it at
any time.
Types:
Bank loan agreement: Is a contract between the borrower and the
lender( in this case the bank). The bank is obliged to give a sum of
money and then the borrower is obliged to return it plus interest.
Deposit contract: demand deposit: you can put your funds into an
account in a bank or credit union and withdraw it whenever you
want.
Time deposit: you put your funds into an account but you can
withdraw in a certain period of time.
Safe deposit box: the safe deposit box is a secure box, usually
made by metal, where you store you value funds and the provider of
the deposit box is responsible for custody it and is liable for every
damage, except for an unforeseen event.
Agency agreement: an agreement whereby a party (the agent)
agrees to carry one or more legal acts for the benefit to another
party (the principal).
It is bilateral and onerous. It is non formal and consensual.
It can be with representation, act on behalf of the principal or without
represenation( acts on its own name).
If it is with representation, there exists a legal document, a legal
instruments that formalize it representation, the POA, Power of
attorney. It is unilateral and formal.
General POA: acts on behalf of the principal in any and all matters.
Limited POA: acts on behalf of the principal in specific cases.
Agents -obligations: to perform all acts covered in the agreement.
Notify the principal of any unforeseen event that makes the agent
unable to follow the instruction given.
Notify the principal if any conflict of interest that may need to change
or terminate the agreement.
Maintain confidentiality of the information given by the principal.
Termination of this contract:
Expiration of term, competition of the business for which it was form,
or revocation (unilateral), by the principal.

Insurance agreements:
  An agreement whereby the insurer undertakes, for a premium
(money) or contribution, to indemnify (pay) a loss (siniestro).
Only in the specific events that are in the contract. Example:
Car accident.
 Parties: the insurer (the party who agrees to compensate
people) and the policy (owner of the policy). The insured is the
person who is covered against the risk. The beneficiary
receives the payment. For example in life insurance, if the
person dies, the family will receive money from the insurer.
 Aleatory contract
 It must be made in writing for evidentiary purposes.
Classification:
 Property insurance: including fierce, agriculture, animals, etc
 Life insurance: including life, personal accidents, and group life
insurance.
Insurance/reinsurance intermediaries:
 Insurance agents: insurers can appoint to sell insurance on the
insurers behalf.
 Insurance brokers: only individuals and companies that the
SSN has licensed as insurance brokers can carry on
insurance brokering activities.
Contract of reinsurance:
 Is an insurance for insurance companies.
 There is not legal definition.
 Reinsurance shares the essence and main features with
insurance, from which it directly derives.
Regulatory framework:
 Insurance law: regulates insurance contracts.
 Insurance undertakings law: Regulates the activity of insures.
 The general regulation of insurance activity, approve by the
argentine superintendence of insurance, which establishes the
main regulations for the insurance and reinsurance activity.
  Resolution: administrative decision made by an executive
body (SSN)
 The SSN is primarily responsible for regulating and
supervising the insurance industry.
 Brokering activity: an insurance broker is a professional who
represents consumers in their search for the best insurance
policy for their needs. They work closely with their clients to
research coverage, terms, conditions, and price and then
recommend the insurance policy that best fits the bill.
Other relevant regulation:
 Navigation law: governing marine insurance
 Labor risks law: governing the insurances possible for an
employer tot are with respect to different work-related
incidents.
Supervising and regulatory bodies:
 The superintendence of insurance is a regulatory entity which
oversees insurance activity and insurance companies in
argentina.
 Public registry of commerce
 Federal public income administration
 Consumer protection
 Superintendence of labor risks
 Financial information unit.