...The Prescriptions for debt. Debts prescribe (expire) after a certain period of time if they are not yet asked for by the owner.The debtor then after this period of time has much leverage to deny paying back the debt he or she owes without any lawsuit being brought against him or her. For every sort of debt, the law fixes a definite period after the lapse of which the debt can no longer be legally enforced and when this period has expired the debt is said to be no longer legally enforceable. The period of prescription is calculated from the day on which the debt becomes due. The following are the prescription periods for various kinds of debts Debt Period of prescription Judgement debt/mortgage bond 30 years Debt owed to the state 15 years Bills of exchange 6 years Debts arising from contracts (ordinary debts) 3 years. The Remedies for breach of contract. Breach occurs when a party fails to observe one or more sections of the agreed contract. An agreement is meant to be adhered to, so a breach or failer to observe the terms and conditions as well as the instructions thereof calls for certain measure to counter such unethical moves in the world of contracts and agreements. The innocent party will therefore be entitled to remedies for breach of contract. A breach by one party of his contractual...
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...LAW * any rule of action (state law, divine law, natural law, moral law) or any system of uniformity (physical law) * determines not only activities as rational beings but also the movements of all objects of creation, animate or inanimate GENERAL DIVISIONS 1.) Law which is promulgated and enforced by the state * State Law—also called positive law, municipal law, civil law, imperative law ; enforced by the state with the aid of its physical force ; does not concern itself w/ violations of the other rules of action unless they also constitute violations of its commands. 2.) Law which is not promulgated and enforced by the state * Divine Law—law of religion and faith ; concerns itself with the concept of sin and salvation ; promulgated by means of direct revelation ; sanction is through reward and punishment * Natural Law—the divine inspiration of sense of justice, fairness and righteousness by internal dictates of reason alone ; basic understanding of right and wrong dictated his moral nature ; reasonable basis of state law * Moral Law— is the totality of the norms of good and right conduct from the collective sense of every community ; no definite legal sanction but induces social reaction, either positive or negative ; not absolute, but varies from time to time ; influences or shapes state law * Physical Law—nothing more than an order or regularity in nature by which certain results follow certain causes CONCEPTS General— the mass of...
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...Obligations – General Provisions 1. Meaning of “Law on Obligations and Contracts”? The law on obligations and contracts is the body of rules which deals with the nature and resources of obligations and rights and duties arising from agreements and contracts. 2. Source of the Law on Obligations and Contracts is the Civil Code of the Philippines (Republic Act No. 388) which took effect August 30, 1950. The Civil Code is derived from the Civil Code of Spain of 1889. 3. Meaning of obligation: Code basis Article 1158 – obligation is juridical necessity to give to do or not to do. 4. Criticism as to the definition of the Civil Code by Justice J.B.L. Reyes. It views obligation from the debit side. There is no debt with credit and the credit is an asset in the patrimony of the creditor just as the debt is the liability of the obligor. Better definition: the one given by Arias Ramos, one of the commentators of the Civil Code: An obligation is a juridical relation whereby a person (called creditor) may demand from another (called debtor) the observance of a determinative conduct (the giving, doing or not doing) and in case of breach, may demand satisfaction from assets of the latter. 5. Kinds of obligations based on its definition: Real obligation – obligation to give Personal obligation – obligation to do or not to do Two kinds of personal obligation a) Positive personal obligation – to do b) Negative personal obligation – not to do 6. Essential Requisites of obligation 1. Active Subject – the...
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...Craig’s Crocodiles, Inc. CASE #1 June 16, 2011 [Group Names] DATE: January 8, 2009 TO: Nikita La Femme, V.P. of Operations and Harry Dim, Staff Accountant, Craig’s Crocodiles Inc. FROM: Team 1: Tri Duong, Andrew Gamble, Belona Gvargezzobalan, Khanh Nguyen, Craig Stevens, Dean Scott, Grace Shirvani, RE: Evaluation of the accounting and legal issues for Craig’s Crocodiles Inc. We have evaluated the accounting and legal issues arising from the expansion of your business. Feel free to contact us for any other questions or information. Executive Committee: Head of Contacts: Dean Scott: 18111 Nordhoff Street, Northridge, CA-91330 Office: 818-521-2354 Fax: 818-867-5309 dean.scott.5@my.csun.edu Assistant: Tri Duong 18111 Nordhoff Street, Northridge, CA-91330 Office: 818-324-5282 Fax: 818-233-2284 tri.duong.497@my.csun.edu Executive Summary Purpose: To explore and analyze Craig's Crocodiles’ different accounting options for how and when they should treat their revenue. In addition, this report will also analyze the potential legal liability Craig’s Crocodiles is accountable for after breaking their lease agreement with Pauly Property Management Services. Background: Craig’s Crocodiles was established on January 1st, 2008 as a company that catches crocodiles and sells them as pets. After their first year of business, Craig’s Crocodiles is looking to expand. This means that the company will need to prepare income statements to...
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...years ago. Of those thirty students that signed up for credit cards, no one knows how many of those students are managing the cards they received or the resultant debt that comes along with that. Ryan has done 13,000 dollars worth of damage to his credit and was and maybe still is having a difficult time paying off the debt. He would not be the only one in that situation. Students across the country are filling out applications for credit cards on their campuses, and after the damage is done to their credit, just exactly what the cards are for, and what credit debt means. Students are not being told of the dangers of credit cards consequently, young adults are being caught unawares and thrown head first into the credit trap. Credit cards are damaging to uninitiated students and should not be pedaled anywhere on college campuses. High card payments are one of the first things an unsuspecting student has to contend with. The uninitiated spend with reckless abandon, driving up the monthly payment. When this payment can’t be met, damage to the credit score results. Poor credit scores also raise card payments to levels difficult to pay. Not understanding debt and all the intricacies associated, a student may take out a loan to pay off their credit cards. What they do not realize is that all this does is transfer debt from the credit card it does not get rid of it. Lack of knowledge is a student’s...
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...the contract and refuses to render it, not because he is entitled to do so. The repudiation can either be accepted or refused by the innocent party. Take note that if the innocent party does so ignore the repudiation, the legal position of both parties will remain unchanged. The innocent party must abide by his choice once it has been made. He will also lose the right to rescind if he refused to accept the repudiation or if the repudiation hasn’t been accepted within a reasonable time. To constitute an actual breach of contract the repudiation must be accepted and notice should be issued to the debtor, by the innocent party and will then amount to a rescission of the contract. The creditor may sue for the contracts rescission and damages if the contracts performance isn’t due yet. (2) Default of the debtor (mora debitoris) Mora debitoris – this is a form of breach of contract that takes place when the debtor fails to perform on time. A debtor is in mora when performance hasn’t been rendered on the specific date and this date has passed. There is then no need for the creditor to issue a demand to the debtor for the debtor to be...
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...12-7 An implied warranty is one that derives by implication or inference because of the circumstances of a sale. In an action based on breach of implied warranty it is necessary to show that an implied warranty existed and that the breach of the warranty proximately caused the damage sustained. An implied warranty of merchantability, is a warranty that goods being sold or leased are reasonably fit for the general purpose for which they are sold or leased, are properly packaged and labeled, and are of proper quality. Merchantable goods warranty- Goods that are merchantable are “reasonably fit for the ordinary purposes for which such goods are used.” They just be of at least average, fair, or medium grade quality. The quality must be comparable to a level that will pass without objection in the trade or market for goods in the same description. The warranty of merchantability may be breached even though the merchant did not know or could not have discovered that a product was defective. Merchantable foods warranty- The UCC recognizes the serving of food or drink to be consumed on or off the premises as a sale of goods subject to the implied warranty of merchantability. Warranties implied from prior dealings or trade custom- Implied warranties can also arise as a result of course of dealing or usage of trade. In the absence of evidence to the contrary, when both parties to a sales or lease contract have knowledge of a well-recognized trade custom, the courts will infer...
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...OBLIGATIONS AND CONTRACTS REVIEWER TITLE I – OBLIGATIONS CHAPTER 1 GENERAL PROVISIONS 1156. An obligation is a juridical necessity to give, to do, or not to do. JURIDICAL NECESSITY – juridical tie; connotes that in case of noncompliance, there will be legal sanctions. • • An obligation is nothing more than the duty of a person (obligor) to satisfy a specific demandable claim of another person (obligee) which, if breached, is enforceable in court. A contract necessarily gives rise to an obligation but an obligation does not always need to have a contract. KINDS OF OBLIGATION A. From the viewpoint of “sanction” - (a) CIVIL OBLIGATION – that defined in Article 1156; an obligation, if not fulfilled when it becomes due and demandable, may be enforced in court through action; based on law; the sanction is judicial due process (b) NATURAL OBLIGATION – defined in Article 1423; a special kind of obligation which cannot be enforced in court but which authorizes the retention of the voluntary payment or performance made by the debtor; based on equity and natural law. (i.e. when there is prescription of duty to pay, still, the obligor paid his dues to the obligee – the obligor cannot recover his payment even there is prescription) the sanction is the law, but only conscience had originally motivated the payment. (c) MORAL OBLIGATION – the sanction is conscience or morality, or the law of the church. (Note: If a Catholic promises to hear mass for 10 consecutive...
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...Creditors & Debtors: Rights & Remedies Creditor and debtor fulfill very different roles, and both have their own respective risks and obligations, along with their own personal rights, protections, and remedies. Unfair, deceptive, or abusive debt collection tactics are fairly common, so the federal government has enacted laws specifically for consumer protection. Although these protections are in place for the debtor, the creditor is not exactly at a disadvantage. Just as the debtor has the right to have his payment accepted, the creditor also has the right to receive the payment that was agreed upon. When the contract is broken, the creditor has specific tools at his disposal that can be utilized in a court of law. For example, if the debtor has defaulted, the creditor has the ability to acquire ownership of any collateral on a secured debt (Goel 2014). Or a claim can be filed to move for an order of attachment or garnishment of wages up to 25%, or to file a lien on the debtor’s property (Goel 2014). Additionally, the creditor can also file to initiate foreclosure or even involuntary bankruptcy of the debtor (FindLaw 2015). The creditor is fully within his rights to move against the debtor legally to recoup the debt. He has an arsenal of valid legal tactics to exercise against the debtor in order to do so. Accordingly, both parties are provided with ample protections and insurances, and are pretty evenly matched when following a proper legal process. However...
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...ATENEO CENTRAL BAR OPERATIONS 2007 Civil Law SUMMER REVIEWER OBLIGATIONS AND CONTRACTS • TITLE 1 - OBLIGATION • Art. 1156. An obligation is a juridical necessity to give, to do or not to do. (n) CHAPTER 1. – GENERAL PROVISIONS See Arts. 1156 - 1162 ELEMENTS OF AN OBLIGATION: 1. Active subject (obligee/creditor): one in whose favor the obligation is constituted 2. Passive subject (obligor/debtor): one who has the duty of giving, doing or not doing 3. Object: prestation; the conduct which has to be observed by the debtor/obligor REQUISITES 1. it must be licit (otherwise it is void) 2. it must be possible, physically and juridically (otherwise it is void) 3. it must be determinate or determinable (otherwise it is void) 4. it must have pecuniary value a. Vinculum Juris: juridical/legal tie; binds the parties to the obligation b. Causa (causa debendi/causa obligationes): why obligation exists SOURCES OF OBLIGATION Art. 1157. Obligations arise from: (1) Law; (2) Contracts; (3) Quasi-contracts; (4) Acts or omissions punished by law; and (5) Quasi-delicts. (1089a) forth CONTRACT (OBLIGATION EX CONTRACTU) • Must be complied with in good faith • it is the “law” between parties; —Adviser: Dean Cynthia del Castillo QUASI-CONTRACT (OBLIGATION EX QUASICONTRACTU) • Juridical relation resulting from lawful, voluntary and unilateral acts, which has for its purpose, the payment of indemnity to the end that no one shall be unjustly enriched or benefited at the expense of another. • Distinguished...
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...documentation 7 2. Financial statements and their elements 12 3. Double entry bookkeeping: the debits and credits 18 4. Cash and bank 21 5. Sales and credit transactions 24 6. Purchases and credit transactions 29 7. Payroll 32 8. Page | 2 3 Control accounts and initial trial balance 34 © 2011 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes will be accepted by the ExP Group. ExPress Notes FIA FA1 Recording Financial Transactions START About ExPress Notes We are very pleased that you have downloaded a copy of our ExPress notes for this paper. We expect that you are keen to get on with the job in hand, so we will keep the introduction brief. First, we would like to draw your attention to the terms and conditions of usage. It’s a condition of printing these notes that you agree to the terms and conditions of usage. These are available to view at www.theexpgroup.com. Essentially, we want to help people get through their exams. If you are a student for the ACCA exams and you are using these notes for yourself only, you will have...
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...stockholders accept personal and unlimited liability for its debts and obligations in return for avoiding double taxation of a limited company. Unlimited liability firms are exempt from filing their annual accounts with a public authority (such as Registrar Of Companies) unless they are subsidiaries of limited liability holding companies. Also called unlimited company. Definition of 'Unlimited Liability' A type of business where owners share joint and several responsibility for the entire amount of debt and other liabilities amassed by the business. Unlimited liability is not capped at a maximum amount and exists regardless of the amount of investment each owner has personally made. If the business is unable to meet any financial obligations or settle any outstanding liabilities, the owner's personal assets can be seized to satisfy the debts. This is in contrast to a limited liability structure where owners' losses cannot exceed the total amount invested in the business. Unlimited liability is found in general partnerships and sole proprietorships. Investopedia explains 'Unlimited Liability' Unlimited liability means that owners can be held personally accountable for a business's debt. For example, three partners each invest $20,000 in a business. The business accrues $150,000 in liabilities. If the business is unable to repay the debts or defaults on its debt, each of the three partners is equally liable for the debt. In other words, each would have to come up with $50,000...
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...COOMPENSATION, CONFUSION, REMISSION NOVATION- modification of an obligation. – changing the principal object of the obligation. = substitution of the person of the debtor. Compensation- takes place when 2 people on their own right are creditor and debtor of each other. Confusion- takes place when the character of the creditor or debtor are merge on the same person. PENAL CLAUSE- Is an accessory undertaking to assume greater liability on the part of the obligor in case of breach. PRINCIPAL PURPOSE 1. To ensure the performance of an obligation 2. To substitute for damages and the payment of interest in case of non-compliance. 3. To punish the debtor 4. Provide for liquidated damages. CLASSIFICATION OF PENAL CLAUSE 1. SUBSIDIARY( ACCESSORY) only penalty is demandable on case on non-compliance 2. JOINT- both the principal contract and the penal clause can be enforced. WHEN DAMAGES AND ONTEREST ALSO DEMANDABLE 1. WHEN STIPULATED in the obligation 2. When the debtor refuses to pay the penalty 3. When the debtor is guilty of fraud in the fulfillment of the obligation. PAYMENT ON PERFORMANCE – PAYMENT means not only the delivery of money but also the performance, in any other manner of the obligation. PAYMENT- means to deliver of money or thing ( in obligation to give), the doing of a thing (in obligation to do) or the desistance from doing something( in obligation not to do). PERFORMANCE- means that the parties to the contract have done...
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...Kinds of Obligations ..98 I. Pure and Conditional Obligations .......98 II. Reciprocal Obligations ......................100 III. Obligations with a Period ..................100 IV. Alternative and Facultative Obligations 101 V. Joint and Solidary Obligations ..........103 Effects of Prejudicial and Beneficial Acts (Art.1212) ...................................................105 VI. Divisible and Indivisible Obligations..106 VII. Oblligations with a Penal Clause ..106 Chapter IV. Extinguishment of Obligations .......................................................................107 I. Payment or Performance ..................107 II. Loss or Impossibility..........................109 III. Condonation or Remission of the Debt 109 IV. Confusion or Merger of Rights ..........110 V. Compensation ...................................110 VI. Novation ............................................111 Charts: Payment & Performance ................114 90 OBLIGATIONS Chapter I. General Provisions.......................91 I. Obligations ..........................................91 II. Sources of Obligations ........................91 Prof. Solomon Lumba Faculty Editor Leo Ledesma Lead Writer Krizel Malabanan Ivy Velasco Tin Reyes Frances Domingo Hazel Abenoja Writers CIVIL LAW Kristine Bongcaron Patricia Tobias Subject Editors ACADEMICS COMMITTEE Kristine...
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...CHAPTER 7 DEDUCTIONS AND LOSSES: CERTAIN BUSINESS EXPENSES AND LOSSES SOLUTIONS TO PROBLEM MATERIALS 1. An account receivable can give rise to a bad debt deduction if income arising from the creation of the account receivable was previously included in gross income. 7. Jack should be concerned with the following issues: • Should this be treated as a worthless security? • Should this be treated as a theft loss? • Does the theft loss create an NOL? • Can the NOL be carried back three years? 10. Some courts have held that termite damage over periods of up to 15 months after infestation constituted a sudden event and was, therefore, deductible as a casualty loss. However, the current position of the IRS is that termite damage is not deductible (it is not considered a sudden event). 11. Casualty losses are not allowed for a decline in the value of the property. Losses are allowed only for actual damage. 13. Mary should include the recovery as gross income in her 2014 tax return, but only to the extent of the tax benefit in the prior year. Mary’s deduction in the prior year would have been $3,900 computed as follows: Amount of loss $ 8,000 Less: $100 floor (100) 10% * 40,000 (4,000) Deduction $ 3,900 Therefore, Mary must include $3,900 in gross income in 2014. 15. If no insurance claim is filed for a loss on business use property, the taxpayer is still permitted a loss deduction. 16. The cost of repairs can be used as a method for measuring...
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