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CLEP > Business Law > Flashcards

Business Law Flashcards

1
Q

Securities Act of 1933

A

Created to regulate the securities market.

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2
Q

Securities and Exchange Act of 1934

A

Created the SEC

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3
Q

Securities Exchange Commission

A

SEC, regulates the Securities Market

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4
Q

Common Stock

A

Right of Ownership with Voting Priveliges

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5
Q

Preferred Stock

A

Ownership with fixed dividends but not always voting rights.

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6
Q

Stockholders

A

Do not need to be paid back. Last investors to be paid on dissolution.

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7
Q

Registration Statement

A

Must include how the funds will be used, description of properties and business, information about the management, an independent financial statement, and any pending lawsuits.

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8
Q

Prospectus

A

Provided to investors, describes security being sold, issuing corporation, and risk attached to the security.

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9
Q

SEC Act Section 10

A

Prohibits the use of any deceptive practices

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10
Q

Investment Company Act of 1940

A

Regulated mutual funds and other investment companies

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11
Q

Blue Sky Laws

A

State statutes that prevent the sale of securities with no more basis than “so many feet of blue sky”.

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12
Q

Personal Property

A

Moveable; anything that’s not real property.

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13
Q

Real Property

A

Land and everything permanently attached, subsurface, air rights, plants, fixtures.

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14
Q

Fixtures

A

A thing that was once personal property but has become attached to real property, thus becoming part of the real property. Ex. a building.

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15
Q

Fee Simple Absolute

A

One who owns this bundle of rights is said to hold the property in its most complete form of ownership.

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16
Q

Fee Simple Defeasible

A

Ownership in fee simple that can end if a specified event or condition occurs.

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17
Q

Fee Tail

A

An estate subject to limitations concerning who may inherit the property, which is ordinarily created by a deed or a will.

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18
Q

Life Estate

A

Life tenant has rights to the land as long as they live. Can be beneficial if an older person needs money and doesn’t have any heirs.

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19
Q

Deed

A

Must contain names of buyer and seller, intent, description, the seller’s signature.

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20
Q

Adverse Possession

A

Acquisition of a title to real property by occupying it openly without the consent of the owner for a period of time specified by a state statute (3-30 years).

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21
Q

Leasehold Estate

A

An estate in reality held by a tenant under lease. Tenant has a qualified right to possess/use the land.

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22
Q

Tenancy For Years

A

Created by an express contract that leases property for a specified period of time.

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23
Q

Periodic Tenancy

A

Lease in land for an indefinite period, with payments at fixed intervals.

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24
Q

Tenancy at Will

A

Either party can terminate without notice: usually after a tenant has exceeded the tenancy for years, but still occupying with landlord’s consent.

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25
Q

Tenancy at Sufferancy

A

Tenant who, after rightfully leasing, continues (wrongfully) to occupy property after lease has terminated. Tenant has no rights to possess the property and does so only because landlord hasn’t evicted yet.

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26
Q

Settlor

A

The person who creates the trust.

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27
Q

Trustee

A

The person who holds the property for another’s benefit.

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28
Q

Beneficiary

A

The person who is benefited by the trust. Cestui Qute Trust.

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29
Q

Cestui Que Trust

A

Beneficiary. The person who is benefited by the trust.

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30
Q

Trust Res

A

Property that comprises the trust. a.k.a. corpus, principal, or subject matter.

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31
Q

Historical View

A

Emphasizes evolutionary process of law and looks to the past to discover what contemporary laws should be.

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32
Q

Legal Realism

A

1920s-1930s. Advocated a less abstract and more realistic approach to law. Takes into account customary practices.

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33
Q

Natural Law

A

The belief that the government and law should reflect universal moral and ethical principles that are inherent in human nature. One of the oldest and most significant schools of legal thought.

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34
Q

Jurisprudence

A

The science or philosophy of law.

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35
Q

Curiae Regis

A

King’s court.

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36
Q

Precedent

A

A decision that furnished an example or authority for deciding subsequent cases involving similar legal principles or facts.

In order to ensure that decisions are consistent with one another, judges in a common law system are bound to follow decisions of previous cases involving similar fact patterns

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37
Q

Stare Decisis

A

“Let the decision stand”.

The notion that judges must make decisions consistent with precedent is called

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38
Q

Binding Authority

A

Any source of law that a court must follow when deciding a case.

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39
Q

Remedy

A

The relief given to an innocent party to enforce a right or to compensate for the violation of a right.

The means to achieve justice in any matter in which legal rights are involved.

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40
Q

Equity Law

A

A branch of law, founded in justice and fair dealing, that seeks to supply a fairer and more adequate remedy when a remedy at law would be insufficient.

Chancery?

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41
Q

Case Law

A

Court decisions.

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42
Q

National Conference of Commissioners on Uniform State Laws

NCCUSL. 1892. To help promote legal uniformity between states.

A

NCCUSL. 1892. To help promote legal uniformity between states.

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43
Q

Uniform Commercial Code

A

UCC. 1952. Facilitates commerce among the states by providing a uniform, yet flexible, set of rules governing commercial transactions.

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44
Q

American Law Institute

A

ALI

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45
Q

District Attorney

A

DA

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46
Q

Civil Law

A

Spells out rights and duties that exist between persons and between persons and their governments, and the relief available when a person’s rights are violated.

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47
Q

Criminal Law

A

Has to do with wrongs committed against society for which society demands redress. Object is to punish the wrongdoer.

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48
Q

International Law

A

The body of written and unwritten laws observed by independent nations and governing the acts of individuals as well as governments.

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49
Q

Cyber Law

A

Informal term. Refers to all laws governing electronic communications and transactions, particularly those conducted via the Internet.

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50
Q

Commerce Clause

A

Article I, Section 8 of the U.S. Constitution that gives Congress the power to regulate interstate commerce.

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51
Q

Gibbon vs Ogden

A
  1. Commerce within states could also be regulated by the national government as long as the commerce “substantially affected” commerce involving more than one state.
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52
Q

Griswold v Conneticut

A
  1. Commerce within states could also be regulated by the national government as long as the commerce “substantially affected” commerce involving more than one state.
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53
Q

Freedom of Information Act

A
  1. FOIA. Allows any person to request copies of any information on themselves contained in federal government files.
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54
Q

Privacy Act

A
  1. Information on individuals cannot be shared without the person’s consent. Agencies must ensure the reliability of the information.
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55
Q

Marbury v Madison

A

Judicial review.

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56
Q

Limited Jurisdiction

A

Happens when a court is limited to specific subject matter, such as probate or divorce.

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57
Q

Original Jurisdiction

A

The case if first tried.

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58
Q

Appellate Jurisdiction

A

For the appeals process.

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59
Q

Complaint

A

Filed by the plaintiff with the court to initiate the lawsuit; served with a summons on the defendant.

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60
Q

Answer

A

Admits or denies allegations made by the plaintiff; may assert a counterclaim or an affirmative defense.

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61
Q

Motion to Dismiss

A

A request to the court to dismiss the case for stated reasons, such as the plaintiff;s failure to state a claim for which relief can be granted, or because it has been settled out-of-court, or improper venue.

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62
Q

Deposition

A

Sworn testimony by a party to the lawsuit or any witness.

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63
Q

Interrogatories

A

Written questions and answers to these questions made by parties to the action with the aid of their attorneys.

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64
Q

Various Requests

A

For admission, documents, medical examination, and so on

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65
Q

Voir Dire

A

Jury selection. “To see, to speak.”

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66
Q

Negotiation

A

The parties come together, with or without attorneys to represent them, and try to reach a settlement without the involvement of a third party.

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67
Q

Mediation

A

The parties themselves reach an agreement with the help of a neutral third party, called a mediator, who proposes solutions. At the parties’ request, a mediator may make a legally binding decision.

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68
Q

Arbitration

A

A more formal method of ADR in which the parties submit their dispute to a neutral third parts, the arbitrator, who renders a decision. The decision may or may not be legally binding, depending on the circumstances.

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69
Q

Alternative Dispute Resolution

A

ADR

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70
Q

Summary Jury Trials

A

SJTs.

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71
Q

Quid pro Quo

A

“Something for something”. To identify what each party to an agreement expects from the other, sometimes called mutual consideration.

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72
Q

Federal Torts Claim Act

A
  1. Removed the power of the federal government to claim immunity from a lawsuit for damages due to negligent or intentional injury by a federal employee in the scope of his/her work for the government.
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73
Q

Administrative Procedure Act

A

The federal act which established the rules and regulations for applications, claims, hearings and appeals involving governmental agencies.

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74
Q

Employment-At-Will

A

A provision found in many employment contracts which suggest the employee works at the will of the employer, and which the employers insert in order to avoid claims of termination in breach of contract, breach of the covenant of good faith and fair dealing, or discrimination.

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75
Q

Revocation

A

Mutual cancellation of a contract by the parties to it.

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76
Q

Renunciation

A

Giving up a right, such as a right of inheritance, a gift under a will or abandoning the right to collect a debt on a note.

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77
Q

Agent

A

A person who is authorized to act for another (the agent’s principal) through employment, by contract or apparent authority.

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78
Q

Bailor

A

A person who leaves goods in the custody of another, usually under a “contract of bailment,” in which the custodian (“bailee”) is responsible for the safekeeping and return of the property.

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79
Q

Bailment

A

The act of placing property in the custody and control of another, usually by agreement in which the holder (bailee) is responsible for the safekeeping and return of the property.

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80
Q

Bailee

A

A person, also called a custodian, with whom some article is left, usually pursuant to a contract (called a “contract of bailment”), who is responsible for the safe return of the article to the owner when the contract is fulfilled.

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81
Q

Bail

A

The money or bond put up to secure the release of a person who has been charged with a crime.

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82
Q

Truth in Lending Act

A

TILA. Requires all terms to be clearly laid out.

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83
Q

Equal Credit Opportunity Act

A

ECOA. Supposed to prevent discrimination in lending.

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84
Q

Free Credit Reporting Act

A

FCRA.

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85
Q

Fair Debt Collection Practices

A

Prevent collectors from harassing the debtor.

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86
Q

Mechanic’s Lein

A

For work done on real property.

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87
Q

Artisan’s Lein

A

For value added to personal property (possessory).

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88
Q

Judicial Lein

A

Issued by a court to ensure payment, allows seizure.

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89
Q

Lein

A

Any official claim or charge against property or funds for payment of a debt or an amount owed for services rendered. A lien is usually a formal document signed by the party to whom money is owed and sometimes by the debtor who agrees to the amount due.

the right to hold a security interest on a debtor’s property

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90
Q

Garnishment

A

The entire process of petitioning for and getting a court order directing a person or entity (garnishee) to hold funds they owe to someone who allegedly is in debt to another person, often after a judgment has been rendered. Usually the actual amounts owed have not been figured out or are to be paid by installments directly or through the sheriff.

Usually extracted from paycheck

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91
Q

Comity

A

One nation deferring to the law and judgements of another nation out of respect.

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92
Q

Act of State Doctrine

A

One nation usually will not condemn another’s actions.

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93
Q

Doctrine of Sovereign Immunity

A

Foreign national can be immune from US jurisdiction unless a) the foreign state has waived immunity or b) when the action is based upon a commercial activity in the US by the foreign state.

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94
Q

Environmental Protection Agency

A

EPA.

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95
Q

Food and Drug Administration

A

FDA.

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96
Q

Nuclear Regulatory Board

A

NRB.

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97
Q

Clean Air Act

A

Violations can cost up to $30,000 a day.

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98
Q

Clean Water Act

A

Violations can result in the company having to clean up.

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99
Q

Noise Control Act

A

Must be achievable and within reason.

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100
Q

Resource Conservation and Recovery Act

A

RCRA

101
Q

Comprehensive Environmental Response Compensation and Liability Act

A

CERCLA or Superfund. Prompted by gross negligence such as in the Hooker Chemical Co. Love Canal affair

102
Q

Partnership

A

Unlimited liability. Only taxed once. Usually share equally in gains and losses and each usually has equal voice in management.

103
Q

Corporation

A

Liability limited to investment. Taxed twice. Shares of stocks can be transferred.

104
Q

Principal

A

Employer

105
Q

Performance, Notification, Loyalty, Obedience, Accounting

A

Five duties of an agent.

106
Q

Actual Authority

A

Should be in writing if agent will be doing written contracts. Power of Attorney. Authority granted to agent.

107
Q

Apparent Authority

A

Occurs when the principal causes the third party to think someone is an agent. Any actions the implied agent takes will be treated as if he were an agent by courts.

108
Q

Fair Labor Standards Act

A
  1. Established a federal minimum wage, mandated overtime pay, and banned child labor.
109
Q

Occupational Safety and Health Act

A
  1. OSHA. Charged with keeping workplaces safe.
110
Q

Family Medical Leave Act

A

Allows employees to take up to 12 weeks per year of unpaid leave in a company with 50+ employees.

111
Q

Consolidated Omnibus Budget Reconciliation Act

A

COBRA. Allows employees to continue in a company’s group insurance plan after termination if they pay the fees.

112
Q

Corporation

A

Legally considered a person. Have rights to free speech. Solely liable for their debts. Profits taxed as individual income.

113
Q

Sherman Act

A
  1. Prohibits monopolies.
114
Q

Clayton Act

A

1914

115
Q

Federal Trade Commission Act

A
  1. FTCA. Charged with protecting the consumer from anti-competitive actions and deceptive business practices. Enforce antitrust law.
116
Q

Sherman Act Section 1

A

Prohibits any conspiring of individuals or companies to constrain competition.

117
Q

Sherman Act Section 2

A

Prohibits any attempt to gain or exercise monopoly power.

118
Q

Clayton Act Section 2

A

Deals with price discrimination

119
Q

Clayton Act Section 3

A

Prohibits tying agreements and exclusive dealing.

120
Q

Clayton Act Section 7

A

Restricts horizontal, vertical, and conglomerate mergers when they would retain free competition.

121
Q

Clayton Act Section 8

A

Disallows the same person to be director on the boards of competing firms if they meet certain size requirements (interlocking directorship).

122
Q

Department of Justice

A

DOJ. Enforce all antitrust laws, with FTC.

123
Q

Civil Rights Act of 1964 Section VII

A

Deals with employment discrimination.

124
Q

Equal Opportunity Commission

A

Governs compliance with Title VII of Civil Rights Act of 1964.

125
Q

Disparate Treatment

A

Employer treats the member of the protected class differently. Discrimination is intended.

126
Q

Disparate Impact

A

Policies employer uses during hiring tend to have a discriminatory effect. Intent to discriminate is often not present in this case.

127
Q

Equal Pay Act of 1963

A

Demands that equal work receive equal pay.

128
Q

Age Discrimination in Employment Act

A
  1. Protects those over 40 from discrimination
129
Q

Americans With Disabilities Act

A
  1. Protects those with disabilities so long as they can be reasonably accommodated and are qualified.
130
Q

University of California v Bakke

A

Affirmative Action. Said no to quota systems.

131
Q

Hoppwood v State of Texas

A

Affirmative Action. Decided that affirmative action was in effect discrimination. Stands in the 5th district though not necessarily in others.

132
Q

Non Obstante Veredicto

A

N.O.V. “Notwithstanding the verdict”. Decision of a judge to reverse the jury’s decision.

133
Q

Cross-Examination

A

Opportunity for a lawyer to question a witness of the opposite party.

134
Q

Direct Examination

A

A lawyer questioning his own witnesses

135
Q

Probate

A

The process of proving a will is valid and thereafter administering the estate of a dead person according to the terms of the will.

136
Q

Tortfeasor

A

A person who commits a civil wrong, either intentionally or through negligence.

137
Q

Tort

A

“wrong”. A civil wrong or wrongful act, whether intentional or accidental, from which injury occurs to another.

138
Q

Adhesion Contract

A

Really imbalanced. No one in their right mind would accept it.

139
Q

Breach of Contract

A

Failing to perform any term of a contract, written or oral, without a legitimate legal excuse.

140
Q

Express Contract

A

A contract in which all elements are specifically stated.

141
Q

Implied Contract

A

An agreement which is found to exist based on the circumstances when to deny a contract would be unfair and/or result in unjust enrichment to one of the parties.

142
Q

Oral Contract

A

An agreement made with spoken words and either no writing or only partially written.

143
Q

Output

A

An agreement in which a producer agrees to sell its entire production to the buyer, who in turn agrees to purchase the entire output, whatever that is.

144
Q

Quasi Contract

A

A situation in which there is an obligation as if there was a contract, although the technical requirements of a contract have not been fulfilled.

145
Q

Promissory Estoppel

A

A false statement treated as a promise by a court when the listener had relied on what was told to him/her to his/her disadvantage.

146
Q

Unilateral Contract

A

An agreement to pay in exchange for performance, if the potential performer chooses to act.

147
Q

Severable Contract

A

An agreement which is made up of several separate contracts between the same parties, such as series of sales, shipments or different pieces of equipment.

148
Q

Requirements Contract

A

A contract between a supplier (or manufacturer) and a buyer, in which the supplier agrees to sell all the particular products that the buyer needs, and the buyer agrees to purchase the goods exclusively from the supplier.

149
Q

Patent

A

Exclusive right to the benefits of an invention or improvement.

150
Q

Tortious

A

Referring to an act which is a civil wrong.

151
Q

Contract

A

An agreement with specific terms

152
Q

Covenant

A

To promise

153
Q

Specific Performance

A

Demanding a party to perform specific sections of a contract.

154
Q

Venue

A

The proper or most convenient location for trial of a case.

155
Q

Magistrate

A

Any judge of a court

156
Q

Bilateral Contract

A

An agreement in which the parties exchange promises for each to do something in the future.

157
Q

Unconscionable

A

Referring to a contract or bargain which is so unfair to a party that no reasonable or informed person would agree to it.

158
Q

Exculpatory

A

Applied to evidence which may justify or excuse an accused defendant’s actions and which will tend to show the defendant is not guilty or has no criminal intent.

159
Q

Provisional Remedy

A

A generic term for any temporary order of a court to protect a party from irreparable damage while a lawsuit or petition is pending.

160
Q

Adequate Remedy

A

A remedy (money or performance) awarded by a court or through private action (including compromise) which affords “complete” satisfaction, and is “practical, efficient and appropriate” in the circumstances.

161
Q

Election of Remedies

A

An outmoded requirement that if a plaintiff (party filing suit) asks for two remedies based on legal theories which are inconsistent (a judge can grant only one or the other), the plaintiff must decide which one is the most provable and which one he/she really wants to pursue, usually just before the trial begins.

162
Q

Novation

A

Agreement of parties to a contract to substitute a new contract for the old one.

163
Q

Pari Delicto

A

Equal fault.

164
Q

Fraud

A

The intentional use of deceit, a trick or some dishonest means to deprive another of his/her/its money, property or a legal right.

165
Q

Rescission

A

The cancellation of a contract by mutual agreement of the parties.

166
Q

Anticipatory Breach

A

When a party to a contract repudiates (reneges on) his/her obligations under that contract before fully performing those obligations.

167
Q

Statute of Limitations

A

A law which sets the maximum period which one can wait before filing a lawsuit, depending on the type of case or claim.

A statute prescribing limitations to the right of action on certain described causes of action; no action after a certain time period.

168
Q

Repudiation

A

Denial of the existence of a contract and/or refusal to perform a contract obligation. Repudiation is an anticipatory breach of a contract.

169
Q

Insurable Interest

A

A right, benefit, or advantage arising out of property that is of such nature that it may be properly indemnified

170
Q

Statute of Frauds

A

Law in every state which requires that certain documents be in writing, such as real property titles and transfers (conveyances), leases for more than a year, wills and some types of contracts.

No action shall be brought on certain contracts unless there be a note or memorandum thereof in writing, signed by the party to be charged or by his authorized agent.

171
Q

Consideration

A

The cause, motive, price, or impelling influence which induces a contracting party to enter into a contract.

172
Q

Homestead Exemption

A

Allows the debtor to retain a certain amount as a homestead exemption when going bankrupt.

173
Q

Compensatory Damages

A

Damages recovered in payment for actual injury or economic loss, which does not include punitive damages (as added damages due to malicious or grossly negligent action).

174
Q

Consequential Damages

A

Damages claimed and/or awarded in a lawsuit which were caused as a direct foreseeable result of wrongdoing.

175
Q

Damages

A

The amount of money which a plaintiff may be awarded in a lawsuit.

176
Q

Cash on Delivery

A

A type of transaction in which payment for a good is made at the time of delivery. If the purchaser does not make payment when the good is delivered, then the good will be returned to the seller

177
Q

Treble Damages

A

Tripling damages allowed by state statute in certain types of cases, such as not making good on a bad check or intentionally refusing to pay rent.

178
Q

Bankruptcy Code Chapters 1-7

A

Ordinary bankruptcy.

179
Q

Bankruptcy Code Chapter 7

A

Total liquidation.

180
Q

Bankruptcy Code Chapter 8

A

Railroad reorganization.

181
Q

Bankruptcy Code Chapter 13

A

Wage earners’ plans.

Individual repayment plan.

182
Q

Bankruptcy Code Chapter 12

A

Real property arrangements.

183
Q

Bankruptcy Code Chapter 11

A

Arrangements.

184
Q

Bankruptcy Code Chapter 10

A

Corporate reorganization.

185
Q

Bankruptcy Code Chapter 9

A

Compositions for taxing agencies.

186
Q

Mitigation of Damages

A

The requirement that someone injured by another’s negligence or breach of contract must take reasonable steps to reduce the damages, injury or cost, and to prevent them from getting worse.

187
Q

Punitive Damages

A

Damages awarded in a lawsuit as a punishment and example to others for malicious, evil or particularly fraudulent acts.

188
Q

Speculative Damages

A

Possible financial loss or expenses claimed by a plaintiff which are contingent upon a future occurrence, purely conjectural or highly improbable.

189
Q

Exemplary Damages

A

Often called punitive damages, these are damages requested and/or awarded in a lawsuit when the defendant’s willful acts were malicious, violent, oppressive, fraudulent, wanton or grossly reckless

190
Q

General Damages

A

Monetary recovery (money won) in a lawsuit for injuries suffered (such as pain, suffering, inability to perform certain functions) or breach of contract for which there is no exact dollar value which can be calculated.

191
Q

Liquidated Damages

A

An amount of money agreed upon by both parties to a contract which one will pay to the other upon breaching (breaking or backing out of) the agreement or if a lawsuit arises due to the breach.

192
Q

Primary Liability
Incurred by the maker and acceptor (a drawee who agrees to pay).

Secondary Liability
Falls on the drawer and unqualified endorsers if the drawee dishonors the instrument.

Transfer Warranty
Transferor guarantees that the transferor is entitled to enforce the instrument and everything is good to go.

Presentment Warranty
The presenter has no knowledge of unauthorized signatures, alteration, or other defect.

Insufficient Funds
Overdraft. The bank can either dishonor it or pay it and charge the customer’s account, creating an overdraft.

Stale Checks
Non-certified checks over 6 months old. Bank has option of whether or not to pay.

Stop-Payment Order
Often used when checks are stolen or when a breach of contract has occurred.

Forged or Altered Checks
Bank is liable, unless customer was negligent or the holder knew the signature was forged.

E-Money
Governed by regulation E. Includes ATM cards, Smart Cards, Stored-Value Cards, Credit card machines, Direct deposits, etc.

Depository Bank
Where a check is deposited.

Payor Bank
The bank on which a check is drawn.

Collecting Bank
Any bank except the payor bank that handles a check during the collection process.

Intermediary Bank
Any bank except the payor bank and the depository bank to which an item is transferred in the collection process.

Chattel Paper
Any writing evidencing a debt secured by personal property.

Secured Party
Creditor who holds a security interest in a debtors capital.

Debtor
One who owes payment to a creditor.

Security Interest
The interest in collateral should the debtor default on the loan.

Collateral
Subject of security interest.

A

Financing Statement
Publicly filed document giving notice of the secured party’s interest in collateral.

Perfection
Secured party protecting his rights to collateral.

Deficiency
Unless otherwise agreed, or if the collateral was intangible, the debtor may be held liable for any remaining debt after disposition.

Workouts
An alternative to Bankruptcy Code Chapter 11. An out-of-court agreement of how parties can work out a payment plan.

193
Q

Open Terms

A

Allowed by the UCC. Can be worked out later. If not filled, they can be filled according to the UCC without consent of both parties.

194
Q

Non-Merchant Terms

A

Added terms to offers are considered proposals.

195
Q

Merchants Terms

A

Additional terms become part of the contract, except when specifically rejected or they materially alter the original offer.

196
Q

Lease

A

The use of goods for a fee.

197
Q

“Hell or High Water”

A

Pay no matter what, even if goods are defective.

198
Q

Article 2a of the UCC

A

Leases.

199
Q

Goods

A

Tangible items other than real estate (not stocks or bonds).

200
Q

Merchant

A

Someone who deals with a type of good and has some expertise with that particular good; someone who by occupation claims to have unique knowledge and skills in a particular area.

201
Q

Article 2 of the UCC

A

Sales

202
Q

Sale

Bankruptcy Code Chapter 14
Maritime Commission leins.

Bankruptcy Code Chapter 15
Railroad adjustments.

Bankruptcy Act of 1938
Revised by the Chandler Act. 15 chapters

Fungible
Being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.

A

“A passing of a title from seller to buyer for a price.”Bona Fide
“In good faith”.

Warranty of Title
Automatic and guarantees the title is legally owned by the seller, free of lien, and good in question is not an infringement on another’s rights.

Express Warranties
Goods fulfill statement made by seller.

203
Q

Strict Product Liability

A

Defective when sold. Actual harm must have occurred; defect must be the cause of damage

204
Q

Full Warranty

A

Free repair of replacement for a defective part. May not cover every aspect

205
Q

Limited Warranty

A

Has a time limit. Must be clearly stated that it is limited.

206
Q

“As Is” Disclaimer

A

Voids warranties of merchantability.

207
Q

Specific Use Disclaimer

A

Voids implied warranties of fitness for a specific purpose.

208
Q

Magnuson-Moss Warranty Act

A
  1. Designed to prevent deception in warranties by making them easier to understand
209
Q

Manufacturing Defects
When product doesn’t conform to specs, even if care is exercised.

Design Defects
The design incurs unreasonable risk of harm.

Warning Defects
Sufficient warning of hazards incurred by use or reasonable misuse is not present.

Defenses to Liability
Consumer assumes risk. Product is misused. Comparative negligence.

Click-On Agreement
Agreement that arises when a buyer, engaging in a transaction on a computer, indicates his or her assent to be bound by the terms of an offer by clicking on a button that says, for example, “I agree”.

Browse-Wrap Agreement
Terms and conditions of use that are presented to an internet user at the time certain products, such as software, are being downloaded but that need not be agreed to before being able to install or sue the product.

Shrink-Wrap Agreement
An agreement whose terms are expressed in a document located inside a box in which goods (usually software) are packaged.

A

E-Contract
A contract that is formed electronically

Digital Signature
A private cryptographic key that, when matched with a corresponding public key, recognizes the signature.

Cybernotary
Manages digital signatures.

Signature Dynamics
Records the signature with a pad and stylus.

Uniform Electronic Transactions Act of 1999
UETA. Defines e-signatures.

210
Q

Implied Warranties

A

Goods are fit for standard use.

211
Q

Disclaimers

A

Can negate warranties.

212
Q

Partnering Agreements

Provide ground rules for all subsequent online transactions between two parties.

A

Uniform Computer Information Transactions Act of 2000

UCITA. Governs computer information sales and leases.

213
Q

Power of Attorney
A written document, which is usually notarized, authorizing another to act as one’s agent; can be special or general

Special Power of Attorney
Written document allowing the agent to do specified acts only.

General Power of Attorney
Written document allowing the agent to transact all business for the principal.

Contract Liability
Principle is liable if he is disclosed or partially disclosed to the third party.

Disclosed Principal
Principal’s identity is known when contract is formed.

Partially Disclosed Principal
Principal’s identity is unknown, but the third person knows that agent is or may be acting for a principal when contract is formed.

Undisclosed Principal
Principal’s identity is unknown, and third person does not know the agent is acting for someone else. Agent is liable.

Respondeat Superior
Principal is liable for agents’ actions if they were “in the scope of employment”.

A

Revocation
Mutual cancellation of a contract by the parties to it.

Fair Labor Standards Act of 1938
Established a federal minimum wage, mandated overtime pay, and banned child labor.

Sole Proprietorship
The simplest form of business. Owner pays personal income tax on all profits and is personally liable for all business debts.

Partnership
Created by agreement of the parties. Partners have unlimited liability for partnership debts.

Uniform Partnership Act of 1997
Governs partnerships. UPA.

214
Q

Limited Liability Company

A

LLC. Limited liability of corporations and tax benefits of partnerships. Profits taxed once.

215
Q

Corporation

A

Owned by shareholders. Liability is limited to investment. Profits taxed twice.

216
Q

Certificate of Partnership

A

Filing of it forms a limited partnership.

217
Q

Limited Partnership

A

Limited partner contributes capital but has no right to participate in management. A general partner is responsible for management and is liable for all partnership debts.

218
Q

Limited Liability Partnership

A

Partnership for professionals who normally do business as partners in a partnership.

219
Q

Joint Venture

A

An organization created by two or more people for one transaction or a limited activity. Usually a set time and for a specific project.

220
Q

Syndicate

A

An investment group to finance a particular project. Could be a corporation, or general or limited partnership.

221
Q

Chain-Style Business Operation

A

When a franchise operates under a franchisor’s trade name.

222
Q

Manufacturing or Processing Plan Arrangement

A

Exists when a franchisor transmits to the franchisee the essential ingredient or formula to make the product.

223
Q

Payee

A

The recipient of the funds.

224
Q

Time Drafts

A

Payable at a certain date.

225
Q

Sight Drafts

A

Payable on presentation.

226
Q

Trade Acceptance

A

A draft in which the drawer is also the payee. The drawee is the buyer of the goods.

227
Q

Promissory Note

A

Written promise by the Maker to pay the Payee.

228
Q

Holder in Due Course

A

HDC. This person acquires additional rights to the instrument than the assignor had, which means most defenses against payment are revoked. Gave something of value for the instrument; took it in good faith.

229
Q

Business Trust

A

Formed by a written trust agreement. Investors transfer cash or property to trustees in exchange for certificates of investment shares.

230
Q

Joint Stock Company

A

A hybrid. Similar to a corporation but otherwise resembling a partnership.

231
Q

Cooperative

A

An association, which may or may not be incorporated, that is organized to provide an economic service to its members.

232
Q

Distributorship

A

A manufacturer (franchisor) licenses a dealer (franchisee) to sell its product. Often has an exclusive territory.

233
Q

Promissory Notes and CDs

A

Promises to pay.

234
Q

Drawer

A

The person creating the draft.

235
Q

Destination Contract

A

Goods are not delivered until they arrive at the location given by the buyer

236
Q

Shipment Contract

A

Delivery is made when the seller puts the goods in the hands of the shipper.

237
Q

Title

A

Legal right of ownership. Passes when good are physically delivered.

238
Q

Documents of Title

A

Bill of Lading or Warehouse Receipt. When delivered, they are legally equivalent to delivering the goods themselves.

239
Q

Bill of Lading

A

Receipt for goods signed by a carrier for transport.

240
Q

Warehouse Receipt

A

Receipt for goods stored in a warehouse.

241
Q

Sale on Approval

A

Trial basis. Sold when buyer approves of goods.

242
Q

Uniform Commercial Code

A

UCC.

243
Q

UCC

A

Created by the NCCUSL to encourage and accommodate commerce by creating a uniform legal environment.

244
Q

National Conference of Commissioners on Uniform State Laws

A

NCCUSL. Developed UCC

245
Q

Business Premises

A

Who buys equipment and furnishings.

246
Q

Drawee

A

The person ordered to pay by the drawer.

247
Q

Draft, Check, Promissory Note, Certificate of Deposit

A

4 types of negotiable instruments.

248
Q

Uniform Commercial Code Article 3

A

UCC. Governs negotiable instruments.

249
Q

Drafts and Checks

A

Orders to pay.

CLEP (4 decks)

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