MERCANTILE LAW

2013 BAR EXAMINATIONS

COVERAGE

I. Letters of Credit A. Definition and Nature of Letter of Credit B. Parties to a Letter of Credit 1. Rights and Obligations of Parties C. Basic Principles of Letter of Credit 1. Doctrine of Independence 2. Fraud Exception Principle 3. Doctrine of Strict Compliance

II. Trust Receipts Law A. Definition/Concept of a Trust Receipt Transaction 1. Loan/Security Feature 2. Ownership of the Goods, Documents and Instruments under a Trust Receipt B. Rights of the Entruster 1. Validity of the Security Interest as Against the Creditors of the Entrustee/Innocent Purchasers for Value C. Obligation and Liability of the Entrustee 1. Payment/Delivery of Proceeds of Sale or Disposition of Goods, Documents or Instruments 2. Return of Goods, Documents or Instruments in Case of Sale 3. Liability for Loss of Goods, Documents or Instruments 4. Penal Sanction if Offender is a Corporation D. Remedies Available C. Warehouseman’s Lien

III. Negotiable Instruments Law A. Forms and Interpretation 1. Requisites of Negotiability 2. Kinds of Negotiable Instruments

Indorser 5. Completion and Delivery 1. Acceptor 4. Drawer 3. Distinguished from Assignment 2. Dishonor by Non-Payment J. Completion of Blanks 3. Incomplete and Undelivered Instruments 4.2013 Bar Examination Coverage 2 Mercantile Law B. Holder in Due Course 2. Signature of Agent 3. Warranties I. Signing in Trade Name 2. Parties Who May Give Notice and Dishonor . Defenses Against the Holder H. Kinds of Indorsements G. Insertion of Date 2. Presentment for Payment 1. Parties to Be Notified 2. Indorsement by Minor or Corporation 4. Signature 1. Necessity of Presentment for Payment 2. Forgery D. Dispensation with Presentment for Payment 4. Notice of Dishonor 1. Maker 2. Accommodation Party F. Parties to Whom Presentment for Payment Should Be Made 3. Complete but Undelivered Instruments C. Liabilities of Parties 1. Consideration E. Negotiation 1. Modes of Negotiation 3. Rights of the Holder 1.

Dishonor by Non-Acceptance O. Manner 3. Time for Acceptance 4. Acceptance 1. Time b. Effect of Failure to Give Notice K. Time/Place/Manner of Presentment 2. Dispensation with Notice 7. Concept of Insurance B. Presentment for Acceptance 1. Effect of Delay IV. Effect of Notice 4. Kinds 3. Discharge of Negotiable Instrument 2. Insurance Code A. Rules Governing Acceptance N. Presentment for Payment a. Renunciation by Holder L. Concept 2. Checks 1. Promissory Notes P. Waiver 6. Material Alteration 1. Elements of an Insurance Contract . Discharge of Negotiable Instrument 1. Discharge of Parties Secondarily Liable 3. Definition 2. Right of Party Who Discharged Instrument 4. Effect of Failure to Make Presentment 3. Form of Notice 5. Effect of Material Alteration M. Definition 2.2013 Bar Examination Coverage 3 Mercantile Law 3.

Offer and Acceptance/Consensual a. Refund of Premiums G. Fire 3. Prescription of Action c. Misrepresentation/Omissions 3. Perfection of the Contract of Insurance 1. Casualty 4. Multiple or Several Interests on Same Property F. Rescission of Insurance Contracts 1. Guidelines on Claims Settlement a. Non-Default Options in Life Insurance 4. In Property 3. Characteristics/Nature of Insurance Contracts D. Premium Payment 3. Life 6. Classes 1. Claims Settlement and Subrogation 1.2013 Bar Examination Coverage 4 Mercantile Law C. Delay in Acceptance b. Double Insurance and Over Insurance 4. Subrogation . Suretyship 5. In Life/Health 2. Compulsory Motor Vehicle Liability Insurance E. Sanctions b. Insurable Interest 1. Unfair Claims Settlement. Marine 2. Notice and Proof of Loss 2. Delivery of Policy 2. Concealment 2. Reinstatement of a Lapsed Policy of Life Insurance 5. Breach of Warranties H.

Arrival at Destination 3. Absence of Delay c. Void Stipulations 2. Limitation of Liability to Fixed Amount c. Waiting for Carrier or Boarding of Carrier b. Checked-In Baggage b. Delivery of Goods . Requirement of Absence of Negligence b. Employees b. Actual or Constructive Delivery c. Bill of Lading 1. Delivery of Goods to Common Carrier b. Liability for Baggage of Passengers a. Transportation Laws A. Liabilities of Common Carriers B. Diligence Required of Common Carriers 2. Temporary Unloading or Storage 4. Vigilance over Goods 1. Contributory Negligence 3. Other Passengers and Strangers 4. Void Stipulations b. Baggage in Possession of Passengers C. Common Carriers 1. Liability for Acts of Others a. Duration of Liability a. Due Diligence to Prevent or Lessen the Loss 2. Stipulation for Limitation of Liability a. Three-Fold Character 2. Exempting Causes a. Extent of Liability for Damages D. Safety of Passengers 1.2013 Bar Examination Coverage 5 Mercantile Law V. Duration of Liability a. Limitation of Liability in Absence of Declaration of Greater Value 5.

Voyage/Trip Charter 2. Collisions 4. Applicability 2. Period of Prescription d. Delivery Without Surrender of Bill of Lading c. Exceptions to Limited Liability 3. Willful Misconduct VI. Application b. Refusal of Consignee to Take Delivery 3. The Warsaw Convention 1. Carriage of Goods by Sea Act a. Limitation of Liability a. Time Charter c. The Corporation Code A. Liability of Ship Owners and Shipping Agents a. Period for Filing Actions E.2013 Bar Examination Coverage 6 Mercantile Law a. Notice of Loss or Damage c. Bareboat/Demise Charter b. Definition 2. Liability for Checked Baggage c. Accidents and Damages in Maritime Commerce a. Period of Delivery b. Charter Parties a. General Average b. Attributes of the Corporation . Liability for Acts of Captain b. Limitation of Liability F. Corporation 1. Maritime Commerce 1. Liability to Passengers b. Period for Filing Claims 4. Liability for Hand-Carried Baggage 3.

Grandfather Rule D. Classes of Corporations C. Doctrine of Piercing the Corporate Veil a. Promoter a. General Powers. Test in Determining Applicability E. Recovery of Moral Damages 2. Control Test 2. Corporate Name—Limitations on Use of Corporate Name 4. Adoption of By-Laws a. Corporate Juridical Personality 1. Nationality of Corporations 1. Requisites of Valid By-Laws c. Incorporation and Organization 1.2013 Bar Examination Coverage 7 Mercantile Law B. Registration and Issuance of Certificate of Incorporation 8. Nature and Function of Articles b. Binding Effects d. Amendment d. Corporate Powers 1. Liability of Corporation for Promoter’s Contracts 2. Nature and Functions of By-Laws b. Number and Qualifications of Incorporators 3. Liability of Promoter b. Amendment or Revision F. Liability for Torts and Crimes b. Articles of Incorporation a. Contents c. Corporate Term 5. Minimum Capital Stock and Subscription Requirements 6. Place of Incorporation Test 2. Grounds for Application of Doctrine b. Non-Amenable Items 7. Theory of General Capacity . Doctrine of Separate Juridical Personality a.

Qualifications and Disqualifications of Directors or Trustees 4. Power to Declare Dividends h. Power to Acquire Own Shares f. Specific Powers. Ultra Vires Acts i. Increase Bonded Indebtedness c. Power to Increase or Decrease Capital Stock or Incur. By the Shareholders b. By the Officers 4. Board of Directors and Trustees 1. Power to Sell or Dispose of Corporate Assets e. Filling of Vacancies 7. Power to Deny Pre-Emptive Rights d. Power to Invest Corporate Funds in Another Corporation or Business g. Trust Fund Doctrine G. Doctrine of Centralized Management 2. Cumulative Voting/Straight Voting b. Power to Enter Into Management Contract i. Inside Information 12. Contracts a. Fiduciaries Duties and Liability Rules 9. Compensation 8. Tenure. Create. Theory of Specific Capacity a. By Self-Dealing Directors with the Corporation b. Between Corporations with Interlocking Directors . Applicability of Ultra Vires Doctrine ii. By the Board of Directors c. Quorum 5. Responsibility for Crimes 10. Consequences of Ultra Vires Acts 3. Removal 6. Business Judgment Rule 3. Elections a. Power to Extend or Shorten Corporate Term b.2013 Bar Examination Coverage 8 Mercantile Law 2. How Exercised a.

Notice b. Right to Vote f.2013 Bar Examination Coverage 9 Mercantile Law c. Voting Trust c. Right of Appraisal c. Pre-Emptive Right e. By a Majority Vote ii. Management Contracts 16. Derivative Suit 5. Stockholders and Members 1. Right to Dividends g. Rule on Abstention H. Doctrine of Equality of Shares 2. Obligation of a Stockholder . By Cumulative Voting 3. Right of First Refusal 4. Right to Dividends b. Cases When Stockholders’ Action is Required i. Who Presides c. Participation in Management a. Regular or Special i. Executive Committee 17. Right to Inspect d. Quorum d. When and Where ii. Meetings a. Individual Suit b. Remedial Rights a. Proxy b. By a Two-Thirds Vote iii. Proprietary Rights a. Rights of a Stockholder and Members a. Representative Suit c.

Meetings a. Effect of Delinquency ii.2013 Bar Examination Coverage 10 Mercantile Law 6. Certificate of Stock a. Capital Structure 1. Subscription Agreements c. Classes of Shares of Stock 4. Sale of Delinquent Shares i. Quorum d. Regular or Special i. Nature of the Certificate b. Definition ii. Consideration for Stocks 3. Who Calls the Meetings c. Shares of Stock a. Call by Board of Directors b. When and Where ii. Auction Sale and the Highest Bidder 5. Watered Stock i. Notice b. Notice of Sale iv. Minutes of the Meetings I. Situs of the Shares of Stock f. Nature of Stock b. Payment of Balance of Subscription a. Negotiability i. Call by Resolution of the Board of Directors iii. Requirements for Valid Transfer of Stocks . Uncertificated Shares c. Subscription Agreements 2. Notice Requirement c. Consideration for Shares of Stock d. Trust Fund Doctrine for Liability for Watered Stocks e. Liability of Directors for Watered Stocks iii.

Contents b. Conveyance to a Trustee within a 3-Year Period c. Who May Make Valid Entries 7. Methods of Liquidation a.2013 Bar Examination Coverage 11 Mercantile Law d. Disposition and Encumbrance of Shares a. Voluntary i. Involuntary i. Sale of Partially Paid Shares c. By the Corporation Itself b. Legislative Dissolution iv. Sale of All of Shares Not Fully Paid e. Full Payment ii. Lost or Destroyed Certificates 6. Payment Pro-Rata e. Stock and Transfer Book a. Dissolution by the SEC on Grounds under Existing Laws 2. Sale of Fully Paid Shares f. Sale of a Portion of Shares Not Fully Paid d. By Shortening of Corporate Term b. By Management Committee or Rehabilitation Receiver d. Liquidation after Three Years . Involuntary Dealings with Shares J. Where No Creditors Are Affected ii. Requisites of a Valid Transfer g. Modes of Dissolution a. Dissolution and Liquidation 1. Where Creditors Are Affected iii. Failure to Organize and Commence Business Within 2 Years from Incorporation iii. By Expiration of Corporate Term ii. Allowable Restrictions on the Sale of Shares b. Issuance i.

Procedure . No. Instances When Unlicensed Foreign Corporations May Be Allowed to Sue Isolated Transactions f. Necessity of a License to Do Business i. Characteristics of a Close Corporation b. Pre-Emptive Right f. Religious Corporations . When Board Meeting is Unnecessary or Improperly Held e. Definition and Concept 2. Constituent vs. Foreign Corporations a. Consolidated Corporation 3. Doctrine of “Doing Business” (relate to definition under the Foreign Investments Act. Personality to Sue d. Definition b. Purposes c. Consent ii. Articles of Merger or Consolidation 5.2013 Bar Examination Coverage 12 Mercantile Law K. Bases of Authority over Foreign Corporations i. Non-Stock Corporations a. Deadlocks 2. Other Corporations 1. Issuance or Transfer of Stock in Breach of Qualifying Conditions d. R.A. Resident Agent c. Treatment of Profits d. Suability of Foreign Corporations e.Exclude 4. Mergers and Consolidations 1. Amendment of Articles of Incorporation g. Requisites for Issuance of a License ii. Validity of Restrictions on Transfer of Shares c. Distribution of Assets upon Dissolution 3. Plan of Merger or Consolidation 4. 7042) b. Grounds for Revocation of License L. Close Corporations a.

Prohibitions on Fraud. Securities Required to Be Registered 1. Conservatorship b. 8799) A. Purpose B. State Policies 2. How the BSP Handles Exchange Crisis . Disclosure Rule F. Securities Regulation Code (R. Receivership d. Manipulation and Insider Trading 1. Exempt Transactions C. Effectivity 7.A. How the BSP Handles Banks in Distress a.A. Rules on Proxy Solicitation 3. Protection of Investors 1. Tender Offer Rule 2. State Policy. Insider Trading E. Manipulation of Security Prices 2. Liquidation 6. Banking Laws A. Exempt Securities 2. 7653) 1. Creation of the Bangko Sentral ng Pilipinas (BSP) 3. Civil Liability VIII. Procedure for Registration of Securities D. Responsibility and Primary Objective 4. Closure c. No. Limitations 8. Short Sales 3. Fraudulent Transactions 4. No. Monetary Board—Powers and Functions 5.2013 Bar Examination Coverage 13 Mercantile Law 6. Effects VII. The New Central Bank Act (R.

General Banking Law of 2000 (R. Rate of Exchange B. Trademarks and Patent 3. Definition and Classification of Banks 2. Deposits Covered 4. Ratio of Net Worth to Total Risk Assets b. Distinction of Banks from Quasi-Banks and Trust Entities 3. Stipulation on Interests 7. Stockholders and their Related Interests) IX. Diligence Required of Banks — Relevant Jurisprudence 5. Law on Secrecy of Bank Deposits (R. 1405. Including Foreign Deposits C. Intellectual Property Code (Exclude Implementing Rules & Regulations) A. No. Patents 1. Nature of Bank Funds and Bank Deposits 6. No. Differences between Copyrights. Purpose 2. Garnishment of Deposits. Grant of Loans and Security Requirements a. Legal Tender Power b. 8791) 1. Restrictions on Bank Exposure to DOSRI (Directors. Patentable Inventions 2. Ownership of a Patent a. Exceptions 5.A. Banking and Incidental Powers 4. Intellectual Property Rights 2. Bank Powers and Liabilities a.A. Technology Transfer Arrangements B. Prohibited Acts 3. as amended) 1. Right to a Patent . Non-Patentable Inventions 3. Officers. Corporate Powers b. Intellectual Property Rights in General 1.2013 Bar Examination Coverage 14 Mercantile Law a. Single Borrower’s Limit c.

Remedy of the True and Actual Inventor 6. Infringement and Remedies a. Use by Third Parties of Names. Collective Marks. Damages . Licensing a. Voluntary b. etc. Similar to Registered Mark 10. Tests in Patent Infringement i. Compulsory 10. Prior User b. Literal Infringement ii. Rights Conferred by a Patent 7. Holistic Test 7. Grounds for Cancellation of a Patent 5. Use by the Government 8. Well-Known Marks 8. Inventions Created Pursuant to a Commission d. Right of Priority 4. Non-Registrable Marks 5. Patent Infringement a. Doctrine of Equivalents b. Dominancy Test b. Trademark Infringement b. Definition of Marks. Defenses in Action for Infringement 9. Rights Conferred by Registration 9. Acquisition of Ownership of Trade Name 4. Assignment and Transmission of Rights C.2013 Bar Examination Coverage 15 Mercantile Law b. Prior Use of Mark as a Requirement 6. Trademarks 1. Trade Names 2. Limitations of Patent Rights a. Tests to Determine Confusing Similarity between Marks a. Acquisition of Ownership of Mark 3. First-to-File Rule c.

2. Rights of Copyright Owner 5. Policy of the Law 2. Anti-Money Laundering Council 9. Special Laws A. as amended by R. Basic Principles. Obligations of Covered Institutions 4. Unfair Competition 12. Covered Institutions 3. Covered Transactions 5. Suspicious Transactions 6.A. When Is Money Laundering Committed 7. Rules on Ownership of Copyright 6. Copyrights 1. Authority to Inquire Into Bank Deposits . No. Derivative Works 3. Collective Marks D. Freezing of Monetary Instrument or Property 11. Anti-Money Laundering Act (R. Doctrine of Fair Use b. No. Copyright Infringement X. Limitations on Copyright a. Functions 10. Unlawful Activities or Predicate Crimes 8. Copyrightable Works a. Trade Names or Business Names 13.A. Sections 172. 9160. 9194) 1. 175 and 181 2. The Chattel Mortgage Law and Real Estate Mortgage Law (Excluded and made a part of Civil Law coverage) B. Original Works b. Requirement of Notice 11.2013 Bar Examination Coverage 16 Mercantile Law c. Non-Copyrightable Works 4.

For example. Definition of Terms a. All Supreme Court decisions . some questions in every Bar Subject may require the consideration of underlying ethical rules and values. Foreign Investments in Export Enterprise 5. This was drawn up for the limited purpose of ensuring that Bar candidates are guided on the coverage of the 2013 Bar Examinations. and promulgated up to January 31. otherwise covered by the different examinable Bar Subjects. 2013 . Foreign Investment b. . Policy of the Law 2. No. have been omitted or are expressly excluded from the coverage of the 2013 Bar Examinations.2013 Bar Examination Coverage 17 Mercantile Law C. 2. Foreign Investments Act (R.are examinable materials within the coverage of the 2013 Bar Examinations. Domestic Market Enterprise 3. “Doing Business” in the Philippines c. Foreign Investment Negative List IMPORTANT NOTES: 1.A. Registration of Investments on Non-Philippine Nationals 4. “Independent Civil Actions” mentioned in the Civil Code shall be included as a topic in Remedial Law rather than in Civil Law. 7042) 1. The appreciation of the fact situations in. 3. Note also that many special laws. Listings whose subject matters run across several Bar Subjects shall be deemed to include only the subject matters specific to the given Bar Subject. Foreign Investments in Domestic Market Enterprise 6. and the answers to. For example. Note that there may be specific identification of the covering Bar Subject where a topic may be common to several Bar Subjects. Export Enterprise d.pertinent to a given Bar subject and its listed topics. This listing of covered topics is not intended and should not be used by the law schools as a course outline. rules or specific topics. “Impeachment” is generally a topic under Political Law but is listed also under Legal and Judicial Ethics for the ethical components of this Bar Subject.

Master your semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master your semester with Scribd & The New York Times

Cancel anytime.