Business law Flashcards
Definition of Law?
A law is a rule made by an authority and that must be obeyed. A law is commonly made by a government, which citizens must follow or face punishment. For example, in most places there are laws about not stealing
Difference between Private and Public law?
Public laws are laws intended for general application, such as those that apply to the nation as a whole or a class of individuals.
Private laws are enacted for the benefit of a particular individual or small group, such as claims against the government or individual immigration or naturalization matters.
Definition of an agreement?
An agreement is mutual understanding between two or more parties regarding their rights and responsibilities.
2 type of agreement;
1) verbal agreement
2)Written agreements: formal contracts that are documented
Definition of a subject and object of law?(Who can enter into an agreement, limited capacity and full capacity.)
subject of law:
Under the rule of law, the law should apply to all people equally no matter if they are the King or a servant, if they are rich or poor. As all people are equally subject to the law, all people must equally answer for their actions under the law and the law must be applied to each person in the same way.
object of law: Legal objects refer to the subject matter of a legal contract or transaction. These can be tangible or intangible items such as property, services, or monetary exchanges. The legality of these objects is an essential factor in the validity of a contract or agreement.
Minors: Typically, individuals under the age of 18 cannot legally enter into contracts.
Mental Incapacity: Individuals who are mentally impaired or lack the cognitive ability to understand the contract’s terms.
Intoxication: People who are under the influence of drugs or alcohol may not have the capacity to contract.
Legal Restrictions: Certain individuals, such as those declared bankrupt or subject to legal restrictions, may be prohibited from entering into contracts.
Rule of law
the rule of law means that everyone including the government and business follow the law.
Ensures;
-all people and organizations are treated the same under the law, no matter the status
- laws should apply equally to everyone
- people in power can be held responsible for their actions
Types of legislative acts of Georgia
The following hierarchy shall govern legislative acts of Georgia:
1) the constitution of Georgia, the constitutional law of Georgia
2) an organic law of Georgia, decree of president of Georgia
3)A law of Georgia, Rules of procedure of the parliament of Georgia
Law and businesses connection between them
Laws provide the structure and stability necessary for businesses to operate efficiently, ethically, and sustainably. Understanding and navigating this relationship is crucial for business success, legal compliance, and fostering a fair and competitive market environment.
Bank guarantee
A bank guarantee is a promise by a financial institution to meet the liabilities of a business or individual if they don’t fulfill their obligations in a contractual transaction.
Surety agreement
A Legal contract in which one party agrees to be responsible for the debt or obligation of another party.
Risk associated :
-Financial liability : if the borrower default the bank can demand repayment for the guaranteer
-credit impact: surety agreement can negatively affect the guarantors credit score of the borrow defaults in the guarantees future borrowing ability
Definition of collateral
Collateral is an asset or property that a borrower offers to a lender as security for a loan. If the borrower fails to repay the loan, the lender an take away possession of the collateral to recover the debt
Business judgment rule
The business judgment rule is legal principal designed to protect cooperate, directors, and officers for personal liability from the decisions they make on the behalf of the company.
A fiduciary duties
the legal responsibility to act solely in the best interest of another party. “Fiduciary” means trust, and a person with a fiduciary duty has a legal obligation to maintain that trust.
LEPL,
Legal Entity that combines aspects of limited liabilities with a commercial purpose. This structure is used for organizations that provide public services
characteristics:
-limited liability or member that are not responsible for entity’s debt
-established for non-profit objectives like education and charity
-governed by regulations that may differer from for-profit entitites.
private company,
a type of business entity that is owned by private individuals. it doesn’t offer shares to the public.
Characteristics:
-owners personal assets are protected from the company’s debt
-shares aren’t traded on public stock exchange
-used for small to medium-sized business.
-subject to less scrutiny
non-entrepreneur legal entities
organizations that don’t operate for profit.
Characteristics:
-doesn’t distribute profits to members
-includes non-profit organizations, foundations
-eligible for tax exemptions and benefits
- governed by specific laws and regulations regarding their formation, operation
