Commercial Law Pre-Week

8/3/2019 Commercial Law Pre-Week

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COMMERC IAL LAW UP COLLEGE OF LAW PRE-WEEK NOTES

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COMMERCIAL LAW PRE-WEEK

LETTERS OF CREDIT

Q: What is the doctrine of independence?

A: This doctrine states that the three composite contracts involved in an L/C transaction are

distinct and independent contracts. Thus, the seller/beneficiary of the L/C is assured of promptpayment independent of any breach of the main contract.

Exception: Fraud

Q: What is the liability of a confirming bank to the seller/beneficiary in an L/C transaction?

A: A confirming bank has a direct and primary obligation to the seller/beneficiary as if it werethe issuing bank. Thus, it is liable to pay the seller/beneficiary upon receipt of the draft andproper documents.

Q: When does an advising/notifying bank become liable to the seller/beneficiary in an L/Ctransaction?

A: An advising/notifying bank becomes liable to the seller beneficiary when it discounts the L/C

or when it lends credence to the L/C. In the first case, it becomes a negotiating bank; in thesecond, a confirming bank.

WAREHOUS RECEIPTS LAW

Q: Distinguish Negotiable Instrument from Negotiable Warehouse Receipt?

A:NEGOTIABLE INSTRUMENT NEGOTIABLE WAREHOUSE RECEIPT

(a) may be issued by anyone withcapacity to contract

(b) must contain all the requisites under

Sec. 1 of the NIL

(c) subject is sum certain in money

(d) holder has the right to demandpayment

(e) the issuer has no lien on the amountrepresented by the instrument

(a) may be issued only by a warehouseman

(b) must contain all the essential terms under Sec.

2 of the WRL

(c) subject is goods

(d) holder has the right to demand the delivery ofthe goods

(e) the issuer retains a lien on the goods

Q: What is the effect of a provision in a negotiable warehouse receipt indicating that it is non-

negotiable?The negotiable warehouse receipt remains negotiable. The provision indicating non-negotiabilityis void.

Q: When can a non-negotiable warehouse receipt be considered negotiable?

A: When the non-negotiable warehouse receipt does not contain a statement on its face that itis non-negotiable, it may be considered as negotiable by a holder who purchased it for valueand who supposed it to be a negotiable warehouse receipt.


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Q: What is a Warehousemans Lien?

A: A warehouseman shall have a lien on goods deposited or on the proceeds thereof in hishands:

(a) for all lawful charges for storage and preservation of the goods;(b) for all lawful claims for money advanced, interest, insurance, transportation, labor,

weighing, coopering and other charges and expenses in relation to such goods;

(c) for all reasonable charges and expenses for notice, and advertisements of sale; and(d) for sale of the goods where default had been made in satisfying the warehouseman's

lien (Sec. 27)

TRUST RECEIPTS LAW

Q: Who owns the goods/documents/instruments under a T/R transaction?

A: The ENTRUSTER is the real owner of the goods/documents/instruments under a T/R transaction.The ENTRUSTEE is a mere factual owner.

Q: What are the remedies available to the entruster?

A:

1. In case of default or failure of the Entrusteeto comply with the trust receiptagreement

Entruster may:(1) cancel the trust receipt agreement;(2) take possession of the goods,

documents, instruments; and(3) sell the same at any private or public

sale at least five days from notice ofintention to sell to the entrustee.

2. In case of loss of the goods, documents,instruments

Entruster may claim damages fromthe entrustee (Sec.10)

3. In case of failure to turn over proceeds ofthe sale of the goods, documents orinstruments or to return the same in case ofnon-sale

Entruster may file a criminal complaintfor estafa (Art. 315 (b) of the RevisedPenal Code) against the entrustee,

NEGOTIABLE INSTRUMENTS LAW

Q: When is an instrument negotiable?

A: An instrument is negotiable when it conforms to the following requirements:(SUDOC)

(a) It must be in writing andSigned by the maker or drawer;(b)Must contain an Unconditional promise or order to pay a sum certain in money;(c)Must be payable on Demand or at a fixed or determinable future time;(d)Must be payable to Order or bearer; and

(e)Where the instrument is addressed to a drawee, he must be named or otherwiseindicated therein with reasonable Certainty.

Q: A check which has not been encashed cannot discharge an obligation. True or False.

A: False. A check which has not been encashed but has been cleared and credited to theaccount of the creditor shall discharge the obligation. It is equivalent to the delivery of cash tothe creditor.Q: What is a signature per procuration?


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A: This is a notice that the agent has limited authority to sign, and the principal is bound only incase the agent in so signing acted within the actual limits of his authority.

Q: Distinguish between Incomplete and Undelivered Instrument and Complete but Undelivered

Instrument?A:

INCOMPLETE and UNDELIVERED COMPLETE but UNDELIVEREDIf the same is completed and

negotiated without authority, it will notbe a valid contract as against theperson whose signature appears

thereon before delivery in the hands ofany holder.

In the hands of an HDC, valid deliveryof the instruments of all parties prior to

the HDC is conclusively presumed.

Q: Does the forgery of a signature in a negotiable instrument render the instrument void?

A: No. Only the forged signature is inoperative. The instrument and other genuine signaturesremain to be valid. (Sec. 23, NIL)

Q: Who are precluded from setting up the defense of forgery?A: 1. Those who warrant or admit the genuineness of the signature in question. This includes

indorsers, persons negotiating by delivery and acceptors.2. Those who, by their acts, silence, or negligence, are estopped from setting up the defense

of forgery.

Q: In a bearer instrument, all those whose signatures appear prior to the forged signature are not

liable. True or False.A: False. The Maker/Drawer of an instrument is still liable when the signature of the payee or anyindorser is forged. Indorsement is not necessary for title to pass to the holder. The Maker/Draweris not liable only when his signature is forged.

Q: Does the insertion of a wrong date avoid the instrument?

A: It depends. As a rule, yes. But in the hands of an HDC, no. In the hands of the HDC, the wrongdate shall be considered the true date of issue.

Q: Is absence or failure of consideration a real defense?

A: No. Absence or failure of consideration is a personal defense which may be raised as againsta non-HDC. (Sec. 28, NIL)

Q: An accommodation party is liable to any holder. True or False.

A: False. An accommodation party is liable only to a holder for value. (Sec. 29, NIL)

Q: Is the accommodation party released from his obligation when the accommodated party

receives an extension of period of payment?

A: No. The liability of the accommodation party to the HFV is unconditional. To the HFV, he is asolidary co-debtor of the accommodated party. (Prudencio v. CA, 1986)

Q: Can a corporation be an accommodation party?

A: No. The corporation cannot be an accommodation party because accommodation is anultra viresact.

Exception: An officer or agent of a corporation shall have the power to execute orindorse a negotiable paper in the name of the corporation for the


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accommodation of a third party only if specifically authorized to do so.(Crisologo Jose v. CA, 1989)

Q: What is the distinction between negotiation and assignment?

A:

NEGOTIATION ASSIGNMENT

The transfer of the instrument from oneperson to another so as to constitute thetransferee as holder thereof (Sec.30).

The transferee does NOT become a holder andhe merely steps into the shoes of the transferor.Any defense available against the transferor isavailable against the transferee.

Q: The special indorsement of a bearer instrument converts it to an order instrument. T or F.

A: False. An bearer instrument cannot be converted into an order instrument by indorsement.

Note: However, an order instrument may be converted to a bearer instrument by a blankindorsement. This converted instrument may again be converted to an order instrumentby special indorsement.

Q: Who is a Holder in Due Course?A: A holder in due course is a holder who has taken the instrument under the followingconditions:

(COGI)(a) That it is Complete and regular upon its face;(b) That he became the holder of it before it was Overdue, and without notice that it

has been previously dishonored, if such was the fact;(c) That he took it in Good faith and for value;(d) That at the time it was negotiated to him, he had no notice of any Infirmity in the

instrument or defect in the title of the person negotiating it.

Q: What are the defenses against an HDC?

A: The following real defenses may be raised against an HDC:1. Material Alteration;2. Want of delivery of incomplete instrument;3. Duress amounting to forgery;4. Fraud in factum or fraud in esse contractus;5. Minority (available to the minor only);6. Marriage in the case of a wife;7. Insanity where the insane person has a guardian appointed by the court;8. Ultra viresacts of a corporation9. Want of authority of agent;10. Execution of instrument between public enemies;11. Illegality if declared void for any purpose12. Forgery.

Q:Can the holder of an instrument sue any of the genuine indorsers?A: Yes. The holder may sue any of the genuine indorsers. The order of liability under Sec. 68 onlyapplies among the indorsers themselves.

Q: What are the liabilities and warranties of parties to a negotiable instrument?

A:1. Maker, Drawer and Acceptor


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MAKER DRAWER ACCEPTOREngages to

pay accordingto the tenor ofthe instrument

Engages that theinstrument will be

accepted or paid by theparty primarily liable; and

Engages that if theinstrument is dishonoredand proper proceedingsare brought, he will pay

to the party entitled to bepaid.

Engages to pay the billaccording to tenor of

acceptance

Existence of payee

Capacity to indorse at the time of issuance/acceptance of instrument

Existence of the drawerGenuineness of drawers

signatureDrawers capacity andauthority to draw the

instrument

2. Indorsers and Persons Negotiating by Delivery

GENERAL/UNQUALIFIED INDORSER QUALIFIED INDORSER and PERSONNEGOTIATING BY DELIVERY*

Engages that the instrument will beaccepted or paid, or both, as the

case may be, according to its

tenor; and

If the instrument is dishonored andnecessary proceedings on dishonor

be duly taken, he will pay to theparty entitled to be paid.

Genuineness of the instrument in all respects that it purports to beHis good title to the instrument

All prior parties capacity to contract**

The instrument is valid and subsistingat the time of his indorsement.

No knowledge of any fact which wouldimpair the validity of the instrument or

render it valueless.

* For Persons negotiating by delivery, warranties apply only to immediate transferee** This warranty does not apply to a qualified indorser negotiating public or corporation

securities other than bills and notes.

Q: Does a qualified indorser assume the liability to pay the instrument?

A: No . A qualified Indorser does not assume the liability to pay the instrument since he is merelyan assignor of the title to the instrument. His liability arises when he breaches his warranties.


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Q: When is presentment for payment necessary?

A: Presentment for payment is necessary to charge parties secondarily liable, ie. drawer andindorsers.

Exceptions: 1. Where the drawer has no right to expect or require that the drawee or acceptor

will pay the instrument;2. Where the instrument was made or accepted for the indorsers accommodation

and he has no reason to expect that the instrument will be paid if presented.3. When the instrument was previously dishonored by non-acceptance and no

subsequent acceptance has been made.

Q: When is an instrument dishonored by non-payment?

A: An instrument is dishonored by non-payment when:(a) It is duly presented for payment and payment is refused or cannot be obtained; or

(b) presentment is excused and the instrument is overdue and unpaid.

Q: What is a notice of dishonor?

A: Notice given by holder or his agent to party or parties secondarily liable that the instrumentwas dishonored by:(1) non-acceptance by the drawee of a bill;or(2) non-payment by the acceptor of a bill; or(3) non-payment by the maker of a note.

Q: What is the effect of notice of dishonor?

A: A notice of dishonor charges the parties secondarily liable, ie. drawer and indorsers.

Q: What is the effect of failure to give notice of dishonor?

A: Failure to give notice to parties secondarily liable discharges such parties.

Exceptions: 1. Notice of dishonor is not required to be given to the drawer in any of the ff.

cases: Drawer and drawee are the same; Drawee is a fictitious person or not having the capacity to contract; Drawer is the person to whom the instrument is presented for payment; The drawer has no right to expect or require that the drawee or acceptor

swill honor the instrument; Where the drawer has countermanded payment. (Sec. 114, NIL)

2. Notice of dishonor is notrequired to be given to an indorser in the ff. cases: Drawee is a fictitious person or does not have the capacity to contract,

and indorser was aware of that fact at the time he indorsed theinstrument;

Indorser is the person to whom the instrument is presented for payment; Instrument was made or accepted for his accommodation. (Sec. 115,

NIL)

3. Where the instrument is in the hands of a holder in due course who became soafter the omission to give notice of dishonor by non-acceptance.

Q: How is a negotiable instrument discharged?

A: An instrument is discharged by:


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(a) By payment in due course by or on behalf of the principal debtor;(b) By payment in due course by the party accommodated, where the instrument is

made or accepted for his accommodation;(c) By the intentional cancellation thereof by the holder;(d) By any other act which will discharge a simple contract for the payment ofmoney;

(e) When the principal debtor becomes the holder of the instrument at or aftermaturity in his own right.

Q: When does a renunciation by the holder discharge an instrument?

A: Renunciation by the holder discharges the instrument when it is made against the principaldebtpr made at or after maturity of the instrument. If renunciation is made against other parties,the instrument itself is not discharged. Only the liabilities of the parties against whom suchrenunciation is made are discharged.

Q: What is the effect of material alteration?

A: Material alteration avoids the instrument except as against the party who made, authorized,or assented to the alteration and subsequent indorsers. Such parties against whom the altered

instrument may be enforced may be held liable on the instrument as altered.

Exception: In the hands of an HDC, a materially altered instrument may be enforced accordingto the original tenor of the instrument.

Q: Non-acceptance of the instrument within 24 hours after presentment amounts to an implied

acceptance. True or False.

A: False. Non-acceptance of the instrument within 24 hours after presentment renders theinstrument dishonored by non-acceptance. Thus, the holder must notify the parties secondarilyliable on the instrument; otherwise, they will be discharged.

Note: There is implied acceptance only when there is failure to return the instrument.

Q: Can a drawee pay the liability on the instrument even without accepting the same?A: Yes. The actual payment of the amount implies not only the drawees assent to the order ofthe drawer and a recognition of his corresponding obligation to pay the aforementioned sum,but also, his clear compliance with that obligation. (FEBTC vs. Gold Palace Jewellery Co, 2008)

Q: What is the effect of failure to make presentment for acceptance?

A: Failure to make presentment discharges the drawer and all indorsers (Sec. 144).

Q: When is there dishonor by non-acceptance?

A: A bill is dishonored by non-acceptance:(a) When it is duly presented for acceptance and such an acceptance as is prescribed

by this Act is refused or cannot be obtained; or

(b) When presentment for acceptance is excused and the bill is not accepted. (Sec.149)

Q: What is a crossed check?

A: A crossed check is one which has two parallel lines diagonally on the left top portion . (StateInvestment House vs. IAC, 1989)

Q: What are the effects of a crossed-check?

A: A crossed-check has the following effects:


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a. That the check may not be encashed; it may only be deposited with the bank;b. That the check may be negotiated only once to a person who has an account with the

bank; andc. That it serves as a warning to a holder that the check has been issued for a definite

purpose. (Bataan Cigar v. CA, 1994)

Q: What is the effect of delay in the presentment of a check?A: The drawer will be discharged from liability thereon to the extent of the loss caused by thedelay.

INSURANCE CODE

Q: What are the elements of an Insurance Contract?

A: (PARIS)(a)Payment of Premium(b)Assumption of Risk(c)Risk of Loss(d) Insurable Interest

(e)Scheme to Distribute the Losses

Q: Does the designated beneficiary in a life insurance policy need to have insurable interest in

the life of the insured?

A: It depends. If the owner of the policy and the insured is one and the same, the designatedbeneficiary need not have an insurable interest in the life of such insured. BUT, if the owner of thepolicy took out an insurance on the life of another, the beneficiary needs to have insurableinterest in the life of such insured.

Q: What are the distinctions between insurable interest in life and in property insurance?

A:INSURABLE INTEREST IN

PROPERTYINSURABLE INTEREST IN LIFE

ExtentLimited to actualvalue of the interestthereon

Unlimited (save in life insurance effected by acreditor on the life of the debtor)

Time whenInsurable InterestMust Exist

Must exist when theinsurance takeseffect and when theloss occurs, BUT neednot exist in themeantime

Must exist at the time the insurance takes effect

Expectation ofBenefit to BeDerived

Must have legal basis Need NOT have legal basis

BeneficiarysInterest

Must have insurableinterest over the thinginsured

Need not have insurable interest in the life of theinsured if the insured himself secured the policy.

But if the insurance was obtained by thebeneficiary, the latter must have insurableinterest over the life of the insured. (SUNDIANG)

Q: What are the distinctions between double insurance and over insurance?

A:


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INSURABLE INTEREST INPROPERTY

INSURABLE INTEREST IN LIFE

ExtentLimited to actualvalue of the interestthereon

Unlimited (save in life insurance effected by acreditor on the life of the debtor)

Time whenInsurable InterestMust Exist

Must exist when the

insurance takeseffect and when theloss occurs, BUT neednot exist in themeantime

Must exist at the time the insurance takes effect

Expectation ofBenefit to BeDerived

Must have legal basis Need NOT have legal basis

BeneficiarysInterest

Must have insurableinterest over the thinginsured

Need not have insurable interest over the life ofthe insured if the insured himself secured thepolicy. But if the insurance was obtained by thebeneficiary, the latter must have insurable

interest over the life of the insured. (SUNDIANG)

Q: When is the contract of insurance perfected?

A: The contract of insurance is perfected when the offeror/applicant is notified notice of theacceptance by the insurer. (cognition theory)

Q: Does the delay in accepting the offer/application amount to implied acceptance?

A: In the case of Perez v. Court of Appeals, 2000, it was held that Delay in acting on theapplication does not constitute acceptance even though the insured has forwarded his firstpremium with his application.

Q: Is delivery of policy essential to the validity of the insurance contract?

A: No. Delivery of policy is important because it is: a) an evidence of the execution of theinsurance contract; b) a communication of the insurers acceptance of insureds offer.

Q: Is a policy issued at a time where no premium payment has yet been made valid and

binding?

A: No. Sec. 77, states that No insurance policy issued or renewal is valid and binding until actualpayment of the premium. Any agreement to the contrary is void. However, there areexceptions.

Exceptions: 1. In case of life and industrial life whenever the grace period provision applies (Sec.77).

2. Where there is an acknowledgment in the contract or policy of insurance thatthe premium has already been paid (Sec. 78)

3. Where there is an agreement to grant the insured credit term for the payment ofthe premium despite full awareness of Sec. 77.

4. Where there is an agreement allowing the insured to pay premium in installmentand partial payment has been made at the time of the loss (See Makati Tuscanyvs. CA)

5. Where the parties are barred by estoppel (See UCPB vs, Masagana)

Q: When is reinstatement of a lapsed life insurance available?


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A: Reinstatement is available at anytime within 3 years from date of default, unless the cashsurrender value is already paid or the extension has already expired.

Q: When is the insured entitled to full refund of premium payment?

A: 1. If the thing insured was never exposed to the risks insured against (Sec. 79)2. Contract is voidable due to the fraud or misrepresentation of insurer or his agent

3. Insurer never incurred liability under the policy because of the default of the insured otherthan actual fraud (Sec. 81)

4. Contract is voidable because of the existence of facts of which the insured was ignorantwithout his fault

Q: What are the requisites of concealment?

A: 1. A party knows a fact which he neglects to communicate or disclose to the other.2. Such party concealing is duty bound to disclose such fact to the other.3. Such party concealing makes no warranty of the fact concealed.4. The other party has not the means of ascertaining the fact concealed.5. The fact concealed is material.

Q: Is the insurer entitled to rescind the contract even if the death or loss is due to a cause notrelated to the concealed matter?

A: Yes. Concealment vitiates the consent of the insurer.

Q: What are the defenses barred by the incontestability clause?

A:

BARRED DEFENSESOF THE INSURER

DEFENSES NOT BARRED

1. Policy is void ab initio2. Policy is rescindable by reason of the

fraudulent concealment ormisrepresentation of the insured orhis agent

1. That the person taking the insurance lackedinsurable interest as required by law;

2. That the cause of the death of the insured is anexcepted risk;

3. That the premiums have not been paid (Secs. 77,227[b], 228[b], 230[b]);

4. That the conditions of the policy relating tomilitary or naval service have been violated(Secs. 227[b], 228[b]);

5. That the fraud is of a particularly vicious type;6. That the beneficiary failed to furnish proof of

death or to comply with any condition imposedby the policy after the loss has happened; or

7. That the action was not brought within the timespecified.

Q: In a fire insurance, a notice of loss is always required to enable the insured to recover. True or

False.A: False. When the insurer has actual knowledge of the loss, the requirement of notice of loss isdone away with.

Q: When the stipulation on the period to file action is less than one year an therefor void, what

period is applicable?

A: 10 years. The period to file action under contract.

Q: Is subrogation applicable in all kinds of insurance?


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A: No. There can be no subrogation in life insurance.

TRANSPORTATION LAW

Q: When does extraordinary diligence for goods commence?A: Extraordinary diligence starts from the time the goods are loaded into the vessels.

Q: When does extraordinary diligence for goods cease?A: Extraordinary diligence ends when the goods are discharged and delivered to the consignee.

Q: When is a stipulation/agreement limiting liability valid?

A: A stipulation between the common carrier and the shipper or owner limiting the liability of theformer for the loss, destruction, or deterioration of the goods to a degree less than extraordinarydiligence shall be valid, provided it be:

1. In writing, signed by the shipper or owner;2. Supported by a valuable consideration other than the service rendered by the common

carrier; and3. Reasonable, just and not contrary to public policy. (Art. 1744, Civil Code)

Q: What are the kinds of passenger baggage and the laws applicable to them?A: 1. Passenger baggage in the custody of the passenger (e.g. carry-on luggage). These areconsidered as necessary deposits. Articles 1998, 2000-2003 apply.

2. Passenger baggage not in the custody of the passenger (e.g. checked-in luggage). Arts.1733-1753 on extraordinary diligence apply. The liability is greater for baggage that is in thecustody of the carrier in contrast if such is in the possession of the passenger.

Q: What is the common carriers responsibility with respect to acts of co-passengers or strangers? A: A common carrier is responsible for injuries suffered by a passenger on account of the willfulacts or negligence of other passengers or of strangers, if the common carrier's employeesthrough the exercise of the diligence of a good father of a family could have prevented orstopped the act or omission. (Art. 1763, Civil Code)

Q: What is the three-fold character of a bill of lading?A: 1. receipt as to the quantity and description of the goods shipped;

2. contracttotransport the goods to the consignee or other person therein designated, onthe terms specified in such instrument;

3. document of title

Q: What is the period for filing claims under a bill of lading?

A:DAMAGE WHEN TO CLAIM

Ascertainable from package Claim for damages must be made upon receiptOnly upon opening the package Claim for damages may be made within 24 hours

upon receipt

Q: In what kind of charter is the charterer deemed the owner pro hac viceof the vessel?

A: Demise/Bareboat charter. Under the demise or bareboat charter, the charterer will generallybe regarded as the owner for the voyage or service stipulated. The charterer mans the vesselwith his own people and becomes the owner pro hac vice, subject to liability to others fordamages caused by negligence. To create a demise, the owner of a vessel must completelyand exclusively relinquish possession, command and navigation thereof to the charterer.(Puromines v. CA)

Q: What is the concept of inscrutable fault?


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A: It arises when it cannot be decided which one of the two vessels was the cause of thecollision. As such, each one shall be liable for its own damages, and both shall be jointlyresponsible for the losses and damages suffered by their cargoes. (Article 828, Code ofCommerce).

Q: When does COGSA apply?

A: Application of laws:a. If the common carrier is coming to the Philippines:

First: Civil CodeSecond: COGSA (in foreign trade)

Third: Code of Commerce

b. If the private carrier is coming to the Philippines:First: COGSA

Second: Code of CommerceThird: Civil Code (excluding rules on common carriers)

c. If the private or common carrier is from the Philippines to a foreign country:

Apply the law of the foreign country (per Art. 1753, CC) UNLESS the parties make COGSAapplicable.

Q: What is the rule on prescription of claims under the COGSA?

A: The carrier and the ship shall be discharged from all liability in respect of loss or damageunless suit is brought within one year after delivery of the goods or the date when the goodsshould have been delivered. (Sec. 3 (6), COGSA)

Q: What is the effect of absence of notice of loss or damage on the right of the shipper sue?

A: The absence of a notice shall not affect or prejudice the right of the shipper to bring suitwithin one year after the delivery of the goods or the date when the goods should have beendelivered. (Sec. 3 (6), COGSA)

Q: What is the prior operator rule?A: The prior operator rule works to protect the prior operator if it maintains an adequate serviceand is able to meet the demands of the public. His or her investment is protected by notallowing a subsequent operator to be granted a license for the same route.

Q: Does the possibility of reduction in profit sufficient to prove ruinous competition?

A: No. The mere possibility of reduction in the earnings of the business or the deterioration in theincome of his business is not sufficient to prove ruinous competition. It must be shown that thebusiness would not have sufficient gains to pay a fair rate of interest on his capital investments(Manila Electric Co. vs. Pasay Transportation Co; Ice & Cold Storage Industries v. Valero)

Q: What is the difference between boundary system and kabitsystem?

A:BOUNDARY SYSTEM KABITSYSTEM

A scheme by an owner/operatorengaged in transporting passengers asa common carrier to primarily governthe compensation of the driver, that is,the latters daily earnings are remittedto the owner/operator less the excessof the boundary which represents the

A system whereby a person who hasbeen granted a certificate of publicconvenience allows other persons whoown motor vehicles to operate undersuch license, for a fee or percentage ofsuch earnings.


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drivers compensation.

Under this system, the owner/operatorexercises control and supervision overthe driver. (Villamaria v. CA, 2006)

Q: Is the owner-lessor of the vehicle under a boundary system liable for damages in case ofinjuries to persons?

A: Yes. To exempt from liability the owner of a public vehicle who operates it under the"boundary system" on the ground that he is a mere lessor would be not only to abet flagrantviolations of the Public Service Law, but also to place the riding public at the mercy of recklessand irresponsible drivers. (Sps. Hernandez v. CA, 2004)

Q: Can the Warsaw Convention apply if the place of departure and place of destination is within

the territory of a single High Contracting Party?

A. Yes. If there is an agreed stopping place which is under the sovereignty or authority ofanother power, even though the power is not a party to the Warsaw Convention.

Q: What are the different limitations of liability under the Warsaw Convention?A:

LIMITATIONS1. Passengers GR: $100,000

E: Agreement on a higher limit

2. Checked-in baggage GR: $20/kgE: Special declaration of value, the declaredvalue/sumE to E: carrier proves that value/sum is greaterthan the actual value

3. Hand-carried baggage GR: $1000/passenger

The foregoing limits are not applicable where the damage is caused by willful misconduct.

CORPORATION LAW

Q: What is the Control Test?

A: It is a method of determining the nationality of a corporation. A corporation shall beconsidered a Filipino corporation if the Filipino ownership of its capital stock is at least 60%, andwhere the 60-40 Filipino-alien equity ownership is NOT in doubt (SEC Opinion dated 6 November1989; DOJ Opinion No. 18, s. 1989).

Q: What is the Grandfather rule?

A: It involves the computation of Filipino ownership of a corporation in which another

corporation of partly Filipino and partly foreign equity owns capital stock. The percentage ofshares held by the second corporation in the first is multiplied by the latters own Filipino equity,and the product of these percentages is determined to be the ultimate Filipino ownership of thesubsidiary corporation (SEC Opinion re; Silahis International Hotel, 4 May 1987).

Q: What are the tequirements for valid transfer of stocks

A: For a valid transfer of stocks, the requirements are as follows:a) There must be delivery of the stock certificate;


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b) The certificate must be endorsed by the owner or his attorney-in-fact or other personslegally authorized to make the transfer; and

c) To be valid against third parties, the transfer must be recorded in the books of thecorporation.(Bitong v. Court of Appeals, G.R. No. 123553, July 13, 1998)

Q: What is an ultra vires act? How is it different from an illegal act?A: Ultra vires acts are those which a corporation is not empowered to do or perform becausethey are not conferred by its AOI or by the Corporation Code, or not necessary or incidental tothe exercise of the powers so conferred. It is distinguished from an illegal act, the former beingvoidable which may be enforced by performance, ratification, or estoppel, while the latter isvoid and cannot be validated (Seaoil vs Autocorp Group, 2008).

Q: What is the doctrine of Equality of Shares?

A: States that each share shall be equal in all respects to every other share, except as otherwiseprovided in the AOI and stated in the certificate of stock (Sec. 6)

Q: What corporate acts require majority vote? 2/3 vote?

A: MAJORITY VOTE 2/3 VOTE1. Power to enter into managementcontracts (Sec. 44).

a. In generalb. For the managing corporation, where amajority of the members of the managingcorporations BOD also constitute amajority of the the managed corporationsBOD

2. Amendments to by-laws (Sec. 48)

3. Revocation of delegation to the BODof the power to amend or repeal oradopt by-laws (Sec. 48)

4. Calling a meeting to removedirectors (Sec. 28)

5. Granting compensation other thanperdiemsto directors (Sec. 30)

6. Consideration no-par shares (Sec. 62)

1. Amendment of AOI (Sec. 16)including Amendment of AOI of closecorporations (Sec 103)

2. Delegating the power to amend orrepeal by-laws or adopt new by-laws(Sec. 48)

4. Extending/shortening corporate term(Sec. 37)

5. Increasing/decreasing capital stock(Sec. 38)

6. Incurring, creating, increasingbonded indebtedness (Sec. 38)

7. Issuance of shares not subject to pre-emptive right (Sec. 39)

8. Sale/disposition of all or substantiallyall of corporate assets (Sec. 40)

9. Investment of funds in anotherbusiness (Sec. 42)

10. Dividend declaration (Sec. 43)

11. For the managed corporation.Power to enter into managementcontracts (Sec. 44) where a majority ofthe members of the managing


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corporations BOD also constitute amajority of the the managedcorporations BOD

12. Removal of directors or trustees(Sec. 28)

13. Ratifying contracts with respect todealings with directors/trustees (Sec.32)

14. Ratifying acts of disloyalty of adirector (Sec. 34)

15. Stockholders approval of the planof merger or consolidation (Sec. 77)

16. Distribution of assets in non-stock

corporations (Sec. 96)

17. Incorporation of a religious society(Sec. 116)

18. Voluntary dissolution of acorporation (Sec. 118-119)

Q: What is an appraisal right? When is it available?

A: It is the right to withdraw from the corporation and demand payment of the fair value of theshares after dissenting from certain corporate acts involving fundamental changes in corporatestructure (Sec. 81). The instances it may be availed of are:

1. Extension or reduction or corporate term (Sec. 11);

2. Change in the rights of stockholders, authorize preferences superior to thosestockholders, or restrict the right of any stockholder (Sec. 81);

3. Investment of corporate funds in another business or purpose (Sec. 42);4. Sale or disposal of all or substantially all assets of the corporation (Sec. 81);and5. Merger or consolidation (Sec. 81).

Q: What is the business judgment rule?

A: The rule asserts that as a general proposition, directors cannot be held liable for mistakes orerrors in the exercise of their business judgment if they acted in good faith, with due care &prudence. Contracts intra vires entered into by the board of directors are binding upon thecorp. & courts will not interfere. As a matter of exception, if the contracts are so unconscionable& oppressive as to amount to a wanton destruction of the rights of the minority or if they violate

their duties under Sections 31 & 34, then the directors committing or responsible for suchcontracts may be held liable.

Q: Distinguish pre-emptive right from right of first refusal.

A: Pre-emptive right is an option privilege of an existing stockholder to subscribe to aproportionate part of shares subsequently issued by the corporation before the same can bedisposed of in favor of others. Stockholders shall enjoy pre-emptive right to subscribe to ALLISSUES OR DISPOSITIONS of shares of any class, in proportion to their respective shareholdings. It isa common law right and may be exercised by stockholders even without legal provision. On the


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other hand, a right of first refusal arises only by virtue of contract stipulations, by which the right isstrictly construed against the right of person to dispose or deal with their property.

Q: What is the trust fund doctrine?

A: It means that the capital stock, properties and other assets of a corporation are regarded asequity in trust for the payment of corporate creditors. Stated simply, the trust fund doctrine states

that all funds received by the corporation in payment of the shares of stock shall be held in trustfor the corporate creditors and other stockholders of the corporation. Under such doctrine, nofund shall be used to buy back the issued shares of stock except only in instances specificallyallowed by the Corporation Code (Boman Environmental Development Corporation vs. CA,1988).

Q: Distinguish liquidation from rehabilitation.

A: Liquidation is the winding up of a corporation so that assets are distributed to those entitled toreceive them. It is the process of reducing assets to cash, discharging liabilities and dividingsurplus or loss. On the other hand, rehabilitation contemplates a continuance of corporate lifeand activities in an effort to restore and reinstate the corporation to its former position ofsuccessful operation and solvency. Both cannot be undertaken at the same time (Phil. Veterans

Bank v. Employees Union, 2001).

Q: Can there be a sale of a portion of partially paid shares? Of all partially paid shares?

A: There can be NO sale of a portion of partially paid shares but there can be a sale of allpartially paid shares. The SEC has opined on several occasions that a stockholder who has notpaid the full amount of his subscription cannot transfer part of his subscription in view of theindivisible nature of a subscription contract. The reason behind the principle of disallowingtransfer of not fully paid subscription to several transferee is that it would be difficult to determinewhether or not the partial payments made should be applied as full payment for thecorresponding number of shares which can only be covered by such payment or asproportional payment to each and all of the entire number of subscribed shares, and it wouldbe difficult to determine the unpaid balance to be assumed by each transferee. (Villanueva,2001)

On the other hand, the SEC has opined that the entire subscription, although not yet fully paid,may be transferred to a single transferee, who as a result of the transfer must assume the unpaidbalance. It is necessary, however, to secure the consent of the corporation since the transfer ofsubscription rights and obligations contemplates a novation of contract which under Article 1293of the Civil code cannot be made without the consent if the creditor. (Villanueva, 2001)

Q: Can Congress dissolve a corporation?

A: Yes. The inherent power of Congress to make laws carries with it the power to amend orrepeal them. Involuntary corporate dissolution may be effected through the amendment orrepeal of the Corporation Code. However, this is subject to the following limitations:

a) Under the Constitution, the amendment, alteration, or repeal of the corporate franchiseof a public utility shall be made only when the common good so requires;b) Under Section 145 of the Code, it is provided that: No right or remedy in favor of or

against any corporation, its stockholders, members, directors, trustees, or officers, nor anyliability incurred by any such corporation, stockholders, members, directors, trustees, orofficers, shall be removed or impaired either by the subsequent dissolution of saidcorporation or by any subsequent amendment or repeal of this Code or of any partthereof;


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c) While Congress may provide for the dissolution of a corporation, it cannot impair theobligation of existing contracts between the corporation and third persons, or take awaythe vested rights of its creditors. (De Leon, 2010)

SECURITIES REGULATION CODE

Q: What is tender offer?

A: It is a publicly announced intention of a person acting alone or in concert with other personsto acquire equity securities of a public company. It is required to be made when:1. Any person or group of persons acting in concert intends to acquire 35% or more of equity

shares in a public company;2. Any person or group of persons acting in concert intends to acquire 35% or more of equity

shares in a public company in one or more transactions within a period of 12 months; or3. Any acquisition of even less than 35% results in ownership of over 51% of the total outstanding

equity securities of a public company.

BANKING LAWS

Q: What are the deposits covered by the Law on Secrecy of Bank Deposits?

A: All deposits of whatever nature with banks or banking institutions in the Philippines are herebyconsidered as of an absolutely confidential nature and may not be examined. These includeinvestments in bonds issued by the Philippine Government, its political subdivisions and itsinstrumentalities.

Q: What are the rules on garnishment of deposits?

A: The prohibition against examination of or inquiry into a bank deposit under Republic Act 1405does not preclude its being garnished to insure satisfaction of a judgment (PhilippineCommercial and Industrial Bank v. Court of Appeals, 1991)

INTELLECTUAL PROPERTY LAW

Q: When do Intellectual Property Rights vest?

A:1. Copyright From the very moment of creation2. Trademark Upon registration3. Patent Upon issuance of letters patent

PATENTS

Q: What is the first-to-file rule?

A: The first-to-file rule states that: If two (2) or more persons have made the invention separatelyand independently of each other the right to the patent shall belong to the person who filed anapplication for such invention; Where two or more applications are filed for the same inventionpatent will issue to the applicant who has the earliest filing date or, the earliest priority date; Iftwo or more applications for the same invention have the same filing date or priority date, the

patent will be issued jointly to all applicants (Sec. 29)

Q: Who owns the patent to an invention created pursuant to a commission?

A: The one who commissioned the work shall own the patent UNLESS there is a contrarystipulation.

Note: The rule is opposite to that in copyright. In copyright, the one who commissioned the workowns the work but the copyright remains with the author or creator.


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Q: What are the requirements before a right of priority may be claimed?

A: 1. The local application expressly claims priority;2. It is filed within twelve (12) months from the date the earliest foreign application was filed;

and3. Certified copy of the foreign application together with an English translation is filed within

six (6) months from the date of filing in the Philippines (Sec. 31).

Q: What are the two tests in patent infringement?

A:LITERAL INFRINGEMENT DOCTRINE OF EQUIVALENTS

Resort must be had in the first instanceto the words of the claim. To determinewhether the particular item falls withinthe literal meaning of the patentclaims, the court must juxtapose theclaims of the patent and the accusedproduct within the overall context ofthe claims and specifications, to

determine whether there is exactidentity of all material elements.

An infringement occurs when a deviceappropriates a prior invention byincorporating its innovative conceptand, albeit with some modification andchange, performs substantially thesame function in substantially the sameway to achieve substantially the sameresult.

Q: What is the prescriptive period for civil and criminal actions?

A: Civil Action. Recoverable damages are limited to acts of infringement committed within 4years before the institution of the action (Sec. 79)

Criminal Action. The criminal action herein provided shall prescribe in three (3) years fromdate of the commission of the crime.

Q; What are the remedies of the True and Actual Inventor?

A: The TAI may file an action before the courts within one year from publication of theapplication or grant of patent, as the case may be. If declared by final court order or decisionas the TAI, the court shall order his substitution as patentee; or at the option of the true inventor,cancel the patent, and award actual and other damages in his favor if warranted by thecircumstances

Q: Can a patent applicant file an action against an infringer after publication of his application?

A: No. The applicant can only file an action after the grant of patent. (Sec. 46)

Q: Is a first-time infringer criminally liable?

A: No. Only repetition of infringement criminalized. (Sec. 84)

Note: This is not the same with copyright and trademark. For these other two, a single act ofinfringement is punishable as a crime.

Trademarks

Q: Distinguish trademarks/service marls from tradenames.

A:TRADEMARK/SERVICE MARK TRADENAME

Definition Any visible sign capable ofdistinguishing the goods(trademark) or services (servicemark) of an enterprise and shall

It is the name or designationidentifying or distinguishing anenterprise (Sec. 121.3). It is anyindividual name or surname,


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include a stamped or markedcontainer of goods (Sec. 121.1).

firm name, device or word usedby manufacturers, industrialists,merchants, and others toidentify their businesses,vocations or occupations.

How ownership is acquired By registration By adoption and use

Transfer May be transferred withouttransferring the enterprise whichuses the trademark/servicemark

May only be transferredwith the transfer of theenterprise or part thereofidentified by that name.

Q: What are the two tests in determining confusing similarity between marks?

A:DOMINANCY TEST HOLISTIC TEST

The dominancy test focuses on the similarity of

the prevalent features of the competingtrademarks that might cause confusion.

The holistic test requires the court to consider

the entirety of the marks as applied to theproducts, including the labels and packaging,in determiningconfusing similarity

Q: What is a well-known mark?

A: It is a mark which a competent authority of the Philippines has designated to be well-knowninternationally and in the Philippines. In determining whether a mark is well-known, account shallbe taken of the knowledge of the relevant sector of the public, rather than the public at large,including knowledge in the Philippines which has been obtained as a result of the promotion ofthe mark.

Q: Is a third party who makes use of his name which forms part of the registered trademark of

another liable for infringement?

A: No. Registration of the mark shall not confer on the registered owner the right to precludethird parties from using bona fide their names, addresses, pseudonyms, a geographical name, orexact indications concerning the kind, quality, quantity, destination, value, place of origin, ortime of production or of supply, of their goods or services: Provided, That such use is confined tothe purposes of mere identification or information and cannot mislead the public as to thesource of the goods or services.

Q: Can a non-registrant file an action for infringement?

A: No. Only the registered owner of a mark has a cause of action for infringement. (Sec. 156)

Note: However, a non-registrant may file an action for unfair competition.

Q: What is the effect of failure to give notice on a civil action for damages?A: Failure to give notice shall not entitle the registered owner to recover profits or damages.

Q: Distinguish trademark infringement from unfair competition

A:TRADEMARK INFRINGEMENT UNFAIR COMPETITION

Unauthorized use of a trademark Passing off of ones goods as those of anotherFraudulent intent is unnecessary Fraudulent intent is essential

Prior registration of the trademark is a Registration is not necessary


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prerequisite to the action

Q: Can the registration of/application for collective mark be subject of a license contract?

A: No. The registration of a collective mark, or an application therefor shall not be the subject ofa license contract.

CopyrightQ: What are the basic principles in Copyright?

A: 1. Works are protected by the sole fact of their creation. (Sec.172.2)2. Protection extends only to the expression of an idea, not the idea itself. (Sec 175)3. The copyright is distinct from the property in the material object subject to it. (Sec 181

Q: When is a work considered original?

A: 1. the work is an independent creation of the author; and2. it must not be copied from the work of another

Q: What are derivative works?

A: 1. Dramatizations, translations, adaptations, abridgments, arrangements, and other

alterations of literary or artistic works;2. Collections of literary, scholarly or artistic works, and compilations of data and othermaterials which are original by reason of the selection or coordination or arrangement oftheir contents.

Q: What are the rules on ownership of copyright?

A:Single Creator of an Original Work (Sec.

178.1)Belongs to the author of the work

Works of Joint Authorship (178.2)

Belongs of the co-authors; in the absence ofagreement, their rights shall be governed by therules on co-ownership. However, if the work consistsof parts that can be used separately and identified,the author of each part owns the copyright of thepart he has created.

Work created during the course of

employment (178.3)

Belongs to the employee if the creation is not a partof his regular duties, even if he used the time,facilities and materials of the employer.

However, belongs to the employer if the work is inthe performance of the employees regular dutiesunless there is an agreement to the contrary.

Work commissioned by a person other

than the employer (178.4)

The person who commissioned the work holdsownership of the work per se, but copyright remainswith the creator unless there was a stipulation to the

contrary.

Audio visual works (178.5)

Belongs to the producer, author of the scenario,composer of the music, film director, and author ofthe adapted work. However, subject to stipulations,the producers shall exercise the copyright as maybe required for the exhibition of the work, except forthe right to collect license fees for the performanceof musical compositions in the work.


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Letters (178.6)

Belongs to the writer, but the court may authorizetheir publication or dissemination of the public goodor interest of justice requires, pursuant to Art. 723,New Civil Code

Anonymous and pseudonymous works

(179)

Publishers are deemed to represent the authors,unless the contrary appears, the pseudonyms or

adopted names leave no doubt as to the authorsidentity or if the author discloses his identity.

Collective works (196)A contributor is deemed to have waived his rightunless he expressly reserves it.

Q: What is the doctrine of fair use?

A: The doctrine provides that the fair use of copyrighted work for criticism, news reporting,teaching (including multiple copies for classroom use), research and similar purposes anddecompilation of computer program is not an infringement of copyright. (Sec. 185)

Q: What are the remedies for copyright infringement?

A:

Civil

(Sec. 216)

Injunction,; Actual, Moral and Exemplary Damages;Impounding of documents evidencing sales, articlesand packaging that infringe copyright and implementsfor making them; Destruction without compensation ofinfringing copies and devices and the means of makinginfringing copies.

Criminal (Sec. 217)

Imprisonment and fine- depending on the value of theinfringing materials produced and the damage thecopyright owner has suffered by reason of theinfringement

Administrative

Administrative action; Cease and Desist Orders;Forfeiture of the paraphernalia used in committing theoffense; Administrative fines

SPECIAL LAW: Chattel Mortgage Law

Q: What are the rights of junior mortgagee?

A: 1. Right to redeem the property from the prior mortgagee2. Right to the residual proceeds of the foreclosure sale

Q: When may the right of redemption be exercised?

A: The right of redemption may be exercised when the condition of a chattel mortgage isbroken (Sec. 13)/ However, there can be no redemption after the foreclosure sale of thegood/chattel (Lee v. Trocino, 2008).

Q: What are the exceptions to the rule allowing claim for deficiency?

A: 1. Sale of things pledged (Art. 2115, Civil Code)2. Foreclosure of chattel mortgage on personal property sold on installment basis (see Art.

1484, Civil Code)

SPECIAL LAW: Real Estate Mortgage Law

Q:What are the remedies available to the mortgagee upon default of the mortgagor?

A: The mortgagee has a choice of one (1) of two (2) remedies, but he cannot have both. Themortgagee may:

(1) foreclose the mortgage; or


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(2) file an ordinary action to collect the debt

Q: What is the effect of lack of proof of petitioner's special authority to foreclose on the petition

for extrajudicial foreclosure?

A: The Clerk of Court as Ex-Officio Sheriff is precluded from acting on the application forextrajudicial foreclosure (First Marbella Condominium Assoc. Inc. v. Gatmaytan, 2008; See A.M.

No. 99-10-05-0, supra)

Q: When is personal notice of foreclosure sale to the mortgagor required?

A: Personal notice is required when the parties so stipulate (Global Holiday Ownership Corp. v.Metropolitan Bank and Trust Co., 2010).

Q: What is the remedy of the debtor if the foreclosure is not proper?

A: Action for annulment of sale. (Sec. 8). In the proceedings in which possession was requested,but not later than thirty days after the purchaser was given possession, the debtor may petitionthat the sale be set aside and the writ of possession cancelled specifying the damages sufferedby him on the ground that:

(1) the mortgage was not violated; or(2) the sale was not made in accordance with the provisions of the Act.

Q: What is the period for redemption?

A: Redemption may be made anytime within one year from the registration of the sale with theRegistry of Deeds.

Q: Does the pendency of an action for annulment of sale suspend the running of the redemption

period?

A: No. The institution of an action for annulment of sale does not suspend the running of theredemption period (China Banking Corp. v. Sps. Martir, 2009)

Q: Does the pendency of an action for annulment of sale stay the issuance of a writ or render

ineffective one already issued?A: No. The pendency of an action for annulment does not stay the issuance of the writ norrender ineffective a writ already issued (Sec. 8, as amended)

Q: The issuance of writ of possession becomes a ministerial duty after the lapse of the

redemption period. True or False.

A: False. It is ministerial duty to issue writ of possession to purchaser even during redemptionperiod (Villanueva v. Cherdan Lending Investors Corp., 2010). However, a bond has to beposted.Exceptions: 1. If it appears that there is a third party in possession of the property who is claiming

a right adverse to that of the debtor/mortgagor. (Villanueva v. Cherdan LendingInvestors Corp., 2010)

2. If it would work as an injustice. (Cometa v. CA, 1987; Barican v. IAC, 1988; Sulit v.CA, 1998)

SPECIAL LAW: Truth in Lending Act

Q: What are the consequences of non-compliance with the obligation?

A: Failure to disclose the required information will not prevent the creditor from collecting theundisclosed charges (Development Bank of the Philippines vs. Arcilla, Jr, 2005). The creditor mayalso be held civilly and criminally liable under the TILA (UCPB v. Sps. Beluso, 2007)


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SPECIAL LAW: Anti-Money Laundering Law

Q: When is money laundering committed?

A: Money Laundering is a crime whereby the proceeds of an unlawful activity are transacted,thereby making them appear to have originated from legitimate sources. (Sec. 4, AMLA)

Q: Can the Anti-Money Laundering Council issue a Freeze Order?

A: No. The AMLA as amended vested in the Court of Appeals the sole jurisdiction to issue FreezeOrders. (Republic v. Cabrini Green &Ross Inc., 2006)

Q: Are deposits in Foreign Currency Deposit Unit Accounts exempt from the examination of

deposits?

A: No. Examination of accounts under Sec. 11, AMLA is mandated notwithstanding theprovisions of the Secrecy of Bank Deposits Act, the Foreign Currency Deposits Act, the GBL andother laws

Q: When is a court order not required for an examination of deposits?

A: In cases of kidnapping; drug trafficking; hijacking, destructive arson and murder, includingthose perpetrated by terrorists against non-combatant persons and similar targets

SPECIAL LAW: Foreign Investments Act

Q: What is Foreign Investment?

A: Shall mean equity investment:(1) made by a non- Philippine national(2) in the form of foreign exchange and/or other assets actually transferred to the Philippines

and duly registered with the Central Bank which shall assess and appraise the value ofsuch assets other than foreign exchange (Sec. 3c)

Q: Distinguish Export Enterprise from Domestic Market Enterprises?

A:EXPORT ENTERPRISE DOMESTIC MARKET ENTERPRISE

(1) a manufacturer, processor or

service (including tourism) enterprisewhich exports sixty percent (60%) ormore of its output; or

(2) a trader which purchases productsdomestically and exports sixty percent(60%) or more of such purchases.

(1) producer of goods for sale, or

renderer of services to the domesticmarket entirely; or

(2) if exporting a portion of its outputfails to consistently export at least sixtypercent (60%) thereof

Q: Foreign investment in domestic enterprises is allowed only up to the extent of 40%. T or F.

A: False. Foreign Investment in domestic market enterprises is allowed up to 100% ownership. Thesame is true for export oriented enterprises.

Exception: When foreign ownership in domestic market enterprises is prohibited or limited underthe Constitution, existing law or the Foreign Negative Investment List (Sec. 7)

Q: What is the Foreign Investment Negative List?

A: Foreign Investments Negative List or Negative List shall mean a list of areas of economicactivity whose foreign ownership is limited to a maximum of forty percent (40%) of the equitycapital of the enterprises engaged therein (Sec. 3g)

---end of Commercial Law Pre-Week---

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Commercial Law Pre-Week