Business Law for Accountants Pt.2 Flashcards

Question

Supremacy clause

Answer 1

gives precedence to federal law over state laws and state constitutions

Answer 2

The concept of corporations can, and should act ethically and be accountable to society for their actions

Answer 3

Groups, other than the company’s shareholders, that are affected by corporate decisions - employees - customers - creditors - suppliers - community

Answer 4

sustainability framework that measures a business's success in three key areas: profit, people, and the planet

Answer 5

I - Inquiry: clarify the nature of the problem, identify the stakeholders, determine whether there are any legal issues D - Discussion: each action should be thoroughly analyzed D - Decision: articulate the reasons you arrived at the decision to serve as documentation explaining why the plan of action was ethical R - Review: determine what you could have done better

Answer 6

process in which a person examines the situation at hand in light of their moral convictions or standards

Answer 7

An ethical philosophy, rooted in the idea that every person has certain duties to others CANT WORRY ABOUT CONSEQUENCES, I JUST HAVE TO DO MY DUTY

Answer 8

THE RIGHT THING TO DO PRODUCES A BETTER WORLD OR THE ACTION AT HAND WILL NOT LEAD TO A BETTER WORLD

Answer 9

A code of ethics is only as good as the commitment of the organization to following the code

Answer 10

An action that affects the majority negatively may be ethical if the opposite decision would affect a few individuals in a severe manner

Answer 11

philosophical reasoning

Answer 12

The principle that human beings have certain fundamental rights ***believe that a key factor in determining whether a business decision is ethical is how that decision affects the rights of various groups

Answer 13

an informal term used to refer to both new laws and modifications of traditional laws that relate to the online environment

Answer 14

ordering a party to perform an agreement as promised

Answer 15

organizes the issues and approaches them systematically

Answer 16

CEO and CFO

Answer 17

- Judicial - "Let the decision stand" - Common law doctrine includes the practice of deciding new cases with reference to former decisions, or precedents - A higher court's decision is binding on lower courts

Answer 18

Codification of the general rules and regulations adopted by administrative agencies

Answer 19

take the form of monetary damages—an amount given to a party whose legal interests have been injured

Answer 20

evidence is presented and testimony given - BOTTOM TIER

Answer 21

court that hears the appeal of a trial court's decision

Answer 22

After appellate decisions have been published, they are cited by name, case, and volume of the reporter

Answer 23

omission of words or sentences for the sake of readability or brevity

Answer 24

omission of an entire paragraph or more

Answer 25

guarantees that no person “shall be compelled in any criminal case to be a witness against himself" An accused person cannot be forced to give testimony that might subject him or her to any criminal prosecution

Answer 26

provision in the Fourteenth Amendment that guarantees that no state will “deny to any person within its jurisdiction the equal protection of the laws mandates that state governments treat similarly situated individuals in a similar manner

Answer 27

If a law or action prohibits or inhibits some persons from exercising a fundamental right - the court will evaluate the constitutionality of governmental discrimination. Under this standard, the classification must be necessary to promote a compelling state interest. Compelling state interests include remedying past unconstitutional or illegal discrimination but do not include correcting the general effects of “society’s discrimination

Answer 28

applied in cases involving discrimination based on gender or legitimacy Laws using these classifications must be substantially related to important government objectives

Answer 29

how long after an event a particular type of action can be brought

Answer 30

In matters of economic or social welfare, a classification will be considered valid if there is any conceivable rational basis on which the classification might relate to a legitimate government interest

Answer 31

gives government officials increased authority to monitor Internet activities (such as e-mail and website visits) and to gain access to personal financial and student information

Answer 32

an agreement, or contract, permitting the use of a trademark, copyright, patent, or trade secret for certain purposes

Answer 33

fees to be paid for the privilege of using an intellectual property

Answer 34

A type of intellectual property that identifies a product

Answer 35

Prohibits, trademark infringement, trademark dilution, and false advertising

Answer 36

the name or logo is being used but the product itself is not

Answer 37

1. plaintiff owns a famous mark that is distinctive 2. defendant has begun using a mark in commerce that allegedly is diluting the famous mark 3. similarity between the defendant’s mark and the famous mark gives rise to an association between the marks 4. association is likely to impair the distinctiveness of the famous mark or harm its reputation

Answer 38

1. if it is currently in commerce 2. if the applicant intends to put it into commerce within six months

Answer 39

when a trademark is copied to a substantial degree or used in its entirety by another, intentionally or unintentionally

Answer 40

owner must show that the defendant’s use of the mark created a likelihood of confusion about the origin of the defendant’s goods or services BUT owner does not need to prove that the infringer acted intentionally or that the trademark was registered

Answer 41

a judicial order that orders a party to cease engaging in specific activity or to undo some wrong

Answer 42

Fanciful Arbitrary Suggestive

Answer 43

most descriptive - uses invented words - "google" or "kleenex"

Answer 44

uses common words in an uncommon way that is not descriptive of the product - "Dutch boy" as a paint color

Answer 45

indicate something about a product’s nature, quality, or characteristics, without describing the product directly - "Dairy Queen" suggests an association with milk but not directly to ice cream

Answer 46

association a specific term or phrase with specific trademarked items - "Calvin Klein" with designer clothing

Answer 47

a trademark that is used to distinguish the services Ex. Airlines

Answer 48

refer to an entire class of products - "bicycle" and are NOT protected

Answer 49

used by one or more persons, other than the owner, to certify the region, materials, mode of manufacture, quality, or other characteristic of specific goods or services Ex. Seal of approval

Answer 50

image and overall appearance of a product Ex. McDonald's arches

Answer 51

mark used by members of a cooperative, association, or other organization to certify the region, materials, mode of manufacture, quality, or accuracy of the specific goods or services Ex. movie credits

Answer 52

enacted to combat counterfeit goods - makes it a crime to traffic intentionally in or attempt to traffic in counterfeit goods or services

Answer 53

may be fined up to $2 million or imprisoned for up to ten years defendant must forfeit and destroy counterfeit products defendant must also pay restitution in an amount equal to the victim’s actual loss DOES NOT APPLY TO FOREIGN COUNTERFEITERS

Answer 54

indicates part or all of a business’s name - only protected if the trade name is also the name of the company's trademarked product Ex. Coca-Cola

Answer 55

grant from the government that gives an inventor the exclusive right to make, use, or sell their invention for a period of twenty years

Answer 56

the first person to file

Answer 57

provides searchable databases covering U.S. patents granted since 1976

Answer 58

Anything excepts laws of nature, natural phenomenon, and abstract ideas, including algorithms

Answer 59

that the invention, discovery, process, or design is novel, useful, and not obvious in light of current technology

Answer 60

when someone other than the owner makes, uses, or sells another’s patented design, product, or process without the patent owner’s permission

Answer 61

injunction damages for royalties damages for royalties

Answer 62

INTANGIBLE + Intellectual property right protecting the original expression of an idea - must be recorded in some tangible way Ex. Books and music

Answer 63

The entire life of the creator + 70 years

Answer 64

governs copyrights

Answer 65

Reproduction Development of derivatives Distribution Public

Answer 66

whenever the form or expression of an idea is copied

Answer 67

actual damages or statutory damages imposed at the court’s discretion criminal proceedings for willful violations.

Answer 68

exception to liability for copyright infringement allowing use of copyrighted materials without obtaining permission as long as the use can be considered fair allows the free use of copyrighted material for criticism, comment, news reporting, teaching -including multiple copies for classroom use-, scholarship, or research

Answer 69

1. Purpose and Character - 2. Nature of the Work 3. Amount 4. Market Effect

Answer 70

the owner of a particular item that is copyrighted can, without the authority of the copyright owner, sell or otherwise dispose of it Ex. resale of college textbooks

Answer 71

Information, ideas, or a process that gives a business an advantage over competitors who do not know the information or process

Answer 72

Harmful actions against companies (Ex. Bribing an employee to break a contract in a way that hurts the employer)

Answer 73

Protect intellectual property

Answer 74

all contracts except when it has been modified or replaced by statutory law

Answer 75

Contracts for the sale and lease of goods

Answer 76

an agreement that can be enforced in court, formed by two or more parties, each of whom agrees to perform or to refrain from performing some act now or in the future.

Answer 77

theory under which the intent to form a contract will be judged by outward, objective facts as interpreted by a reasonable person, rather than by the party

Answer 78

1. Agreement - includes an offer and an acceptance 2. Consideration - something of value received or promised, such as money, to convince a person to make a deal (bargained for) 3. Contractual capacity - law must recognize both parties as competent 4. Legality - contract’s purpose must be to accomplish some goal that is legal and not against public policy

Answer 79

- What the party said when entering into the contract. - How the party acted or appeared (intent may be manifested by conduct as well as by oral or written words). - circumstances surrounding the transaction.

Answer 80

- Voluntary consent: consent of both parties must be voluntary. If a contract was formed as a result of fraud, undue influence, mistake, or duress, the contract may not be enforceable. - Form: contract must be in whatever form the law requires. Some contracts must be in writing to be enforceable

Answer 81

promise for a promise - two sided - contract is made at one point in time and both perform it at a later point in time

Answer 82

promise for an act - one-sided contract agreement in which an offeror promises to pay only after the completion of a task (Ex. I promise to give you my laptop but you have to pay me right now) Person accepting performs their promise immediately

Answer 83

contracts that require a special form such as being executed under seal, to be valid

Answer 84

contract that does not require a specified form or formality in order to be valid

Answer 85

contract in which the terms of the agreement are fully and explicitly stated in words, oral or written

Answer 86

contract where the conduct of the parties, rather than their words, creates and defines the terms of the contract

Answer 87

- plaintiff furnished some service or property - plaintiff expected to be paid for that service or property, and the defendant knew or should have known that payment was expected - defendant had a chance to reject the services or property and did not

Answer 88

contract that has been fully performed on both sides

Answer 89

contract that has not been fully performed by both parties

Answer 90

1. offeror must have a serious intention to become bound by the offer 2. offeror must have a serious intention to become bound by the offer 3. offer must be communicated

Answer 91

not determined by the subjective intentions, beliefs, and assumptions of the offeror - but determined by what a reasonable person in the offeree’s position would conclude that the offeror’s words and actions meant

Answer 92

- Expressions of opinion - Statements of future intent - Preliminary negotiations: request or invitation to negotiate - Invitations to bid - Advertisements and price lists - Auctions

Answer 93

1. identification of the parties 2. identification of the parties including the work to be performed, with specific identification of such items 3. including the work to be performed, with specific identification of such items 4. time of payment, delivery, or performance

Answer 94

withdrawal of an offer by an offeror

Answer 95

- Express repudiation - "I withdraw" - Performance of acts that are inconsistent with the existence of the offer

Answer 96

created when an offeror promises to hold an offer open for a specified period of time in return for a payment

Answer 97

requires the offeree’s acceptance to match the offeror’s offer exactly—to mirror the offer Any change in, or addition to, the terms of the original offer automatically terminates that offer and substitutes the counteroffer.

Answer 98

1. Lapse of time 2. Destruction of subject matter 3. Death or incompetence 4. Supervening illegality -statute or court decision that makes an offer illegal

Answer 99

ule providing that an acceptance of an offer becomes effective on dispatch - NOT when it is received

Answer 100

doctrine that applies when a person who has reasonably and substantially relied on the promise of another may be able to obtain some measure of recovery

Answer 101

1. must be a clear and definite promise 2. promisor should have expected that the promisee would rely on the promise 3. promisee reasonably relied on the promise by acting or refraining from some act 4. promisee’s reliance was definite and resulted in substantial detriment 5. Enforcement of the promise is necessary to avoid injustice

Answer 102

Barred, impeded, or precluded, prevented

Answer 103

he legal ability to enter into a contractual relationship

Answer 104

The legal avoidance, or setting aside, of a contractual obligation

Answer 105

Charging an illegal rate of interest

Answer 106

- Contracts to Commit a Crime - Usury - Gambling

Answer 107

a contract or clause that is void on the basis of public policy because one party is forced to accept terms that are unfairly burdensome and that unfairly benefit the dominating party

Answer 108

clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault

Answer 109

state statute under which certain types of contracts must be in writing to be enforceable

Answer 110

- Contracts involving interests in land - Contracts that cannot by their terms be performed within one year from the day after the date of formation - Collateral, or secondary, contracts, such as promises to answer for the debt or duty of another - Promises made in consideration of marriage - Contracts for the sale of goods priced at $500 or more

Answer 111

One for whose benefit a promise is made in a contract but who is not a party to the contract

Answer 112

Common law doctrine which provides that you cannot either enforce the benefit of or be liable for any obligation under a contract to which you are not a party

Answer 113

governs sales contracts, or contracts for the sale of goods

Answer 114

the passing of title [evidence of ownership rights] from the seller to the buyer for a price

Answer 115

an item of property must be tangible, and it must be movable

Answer 116

Test that courts use to determine whether a contract is primarily for the sale of goods or for the sale of services

Answer 117

person who is engaged in the purchase and sale of goods - a person who deals in goods of the kind involved in the sales contract (merchant for one type of goods is not necessarily a merchant for another type) - a person who, by occupation, holds himself or herself out as having knowledge and skill unique to the practices or goods involved in the transaction - a person who, by occupation, holds himself or herself out as having knowledge and skill unique to the practices or goods involved in the transaction

Answer 118

buyer agrees to purchase and the seller agrees to sell all or up to a stated amount of what the buyer requires

Answer 119

seller agrees to sell and the buyer agrees to buy all or up to a stated amount of what the seller produces

Answer 120

offer (by a merchant) that is irrevocable without consideration for a period of time (not longer than three months) - must be in writing and must be signed by the offeror

Answer 121

contract is formed according to the terms of the original offer and does not include any of the additional terms in the acceptance

Answer 122

Additional terms automatically become part of the contract unless one of the following conditions arises: - The original offer expressly limited acceptance to its terms. - The new or changed terms materially alter the contract. - The offeror objects to the new or changed terms within a reasonable period of time.

Answer 123

1. Specially manufactured goods - goods that are specially manufactured for a particular buyer or lessee, the goods are not suitable for selling or leasing to others 2. Admissions - admits in pleadings, testimony, or other court proceedings that a sales or lease contract was made 3. Partial performance - payment has been made and accepted or goods have been received and accepted

Answer 124

takes place when specific goods are designated as the subject matter of a sales or lease contract

Answer 125

title passes to the buyer at the time and place of SHIPMENT

Answer 126

title passes to the buyer when the goods are tendered at that destination - occurs when the seller places or holds conforming goods at the buyer’s disposal, enabling the buyer to take possession

Answer 127

Once goods exist and are identified - unless otherwise explicitly agreed Without an explicit agreement to the contrary, title passes to the buyer at the time and the place the seller performs by delivering the goods

Answer 128

when the goods are delivered to the carrier

Answer 129

when the goods are tendered to the buyer or lessee at the specified destination

Answer 130

buyer has an insurable interest in identified goods seller has an insurable interest in goods as long as he or she retains title to the goods.

Answer 131

common law

Answer 132

a qualification in a contract based on a possible future event

Answer 133

conditions expressly stated in a contract must fully occur in all respects for complete performance conditions expressly stated in a contract must fully occur in all respects for complete performance

Answer 134

- party must have performed in good faith / intentional failure to comply with the contract terms is a breach - performance must not vary greatly from the performance promised / omission, variance, or defect in performance is considered minor if it can easily be remedied by compensation - performance must create substantially the same benefits as those promised

Answer 135

An assertion or action by a party indicating that they will not perform an obligation that they are contractually obligated to perform at a future time - treated as a breach of contract

Answer 136

agreement between the parties to cancel their contract, releasing the parties from further obligations

Answer 137

when both of the parties to a contract agree to substitute a third party for one of the original parties

Answer 138

A previous valid obligation An agreement by all parties to a new contract The extinguishing of the old obligation A new contract that is valid

Answer 139

parties agree to accept performance that is different from the performance originally promised

Answer 140

- When one of the parties to a personal contract dies or becomes incapacitated prior to performance - When the specific subject matter of the contract is destroyed - When a change in law renders performance illegal

Answer 141

doctrine under which a seller may be excused from performing a contract when: - a contingency occurs - the contingency’s occurrence makes performance impracticable - the nonoccurrence of the contingency was a basic assumption on which the contract was made

Answer 142

court-created doctrine under which a party to a contract will be relieved of his or her duty to perform when the objective purpose for performance no longer exists due to reasons beyond that party’s control

Answer 143

to transfer and deliver conforming goods

Answer 144

Goods that conform to the contract description in every way

Answer 145

1. Place the goods into the hands of the carrier 2. Make a contract for their transportation that is reasonable according to the nature of the goods and their value. (For instance, certain types of goods need refrigeration in transit.) 3. Obtain and promptly deliver or tender to the buyer any documents necessary to enable the buyer to obtain possession of the goods from the carrier 4. Promptly notify the buyer that shipment has been made

Answer 146

seller agrees to deliver conforming goods to the buyer at a particular destination

Answer 147

common law rule under which a seller is required to deliver to the buyer goods that conformed perfectly to the requirements stipulated in the contract

Answer 148

- Cure: refers to the right of the seller or lessor to repair, adjust, or replace defective or nonconforming goods - Substitution of Carriers - Commercial Impracticability: occurrences unforeseen by either party - Destruction of Identified Goods - Assurance and Cooperation: if one party has “reasonable grounds” to believe that the other party will not perform, the first party may in writing “demand adequate assurance of due performance

Answer 149

- payment - right to inspect the goods before making payment - demonstrate acceptance - partial acceptance - anticipatory repudiation

Answer 150

1. good title 2. no liens 3. no infringements

Answer 151

an interest in the goods that secures payment or performance of an obligation

Answer 152

arise when a seller indicates that the goods conform to any declaration that something is true about the goods

Answer 153

warranty that the law derives by inference from the nature of the transaction or the relative situations or circumstances of the parties

Answer 154

warranty that goods being sold or leased are reasonably fit for the ordinary purpose for which they are sold or leased, are properly packaged and labeled, and are of fair quality

Answer 155

arises in the sale or lease of goods when a seller knows: - the particular purpose for which a buyer will use the goods - That the buyer is relying on the skill and judgment of the seller or lessor to select suitable goods

Answer 156

mistake must involve some material fact—a fact that a reasonable person would consider important when determining their course of action Only a mistake of fact makes a contract voidable

Answer 157

If a mistake concerns the future market value or quality of the object of the contract, the mistake is one of value, and the contract normally is enforceable

Answer 158

mistake that occurs when one party to a contract is mistaken as to a material fact

Answer 159

mistake that occurs when both parties to a contract are mistaken about the same material fact

Answer 160

Persuasion that is less than actual force but more than advice and that induces a person to act according to the will or purposes of the dominating party

Answer 161

- Right to Cancel the Contract - Right to Withhold Delivery -Right to Resell or Dispose of the Goods - Right to Recover Damages for the Buyer’s Nonacceptance - Right to Stop Delivery of Goods in Transit

Answer 162

- Right to Cancel the Contract - Right to Obtain Goods upon Insolvency - Right to Obtain Specific Performance - Right of Cover ( substitute goods) - Right to Replevy Goods ( recover goods) - Right to Recover Damages - Right to Reject the Goods - Right to Revoke Acceptance -Right to Recover Damages for Accepted Goods

Answer 163

in a case regarding fraudulent representations made during the sale of a house, the damages would be the difference between the value of the property as it actually is and the value it would have had if it had been as represented

Answer 164

focuses on the fairness of the process leading to the formation of the agreements

Answer 165

focuses on whether the terms of the agreements are so one-sided that it unfairly benefits one of the parties to the agreement

Answer 166

Liquidated damages are for damages difficult to estimate

Answer 167

Express contract in which third party promises to be primarily responsible for the debtors obligation AS SOON AS THE BORROWER DEFAULTS

Answer 168

Person who agrees to satisfy the debt of another only after the principal debtor defaults - ONLY HAS TO PAY AFTER EVERY OTHER LEGAL REMEDY HAS BEEN EXHAUSTED

Answer 169

1. Material modification - any material modification to the terms of the original contract without the surety’s consent 2. Surrender of property - if a creditor surrenders the collateral to the debtor or impairs the collateral without the surety’s consent 3. Payment

Answer 170

1. Incapacity and bankruptcy - may assert his or her own incapacity or bankruptcy as a defense but not that of the debtor’s 2. Statute of limitations 3. Fraud

Answer 171

1. The Right of Subrogation 2. The Right of Reimbursement 3. The Right of Contribution

Answer 172

Any right that the creditor had against the debtor now becomes the right of the surety

Answer 173

Surety is entitled to receive from the debtor all outlays made on behalf of the suretyship arrangement

Answer 174

The right of a co-surety who pays more than his or her proportionate share on a debtor’s default to recover the excess paid from other co-sureties

Answer 175

the legal process by which the lender repossesses and auctions off the property that has secured the loan

Answer 176

postponement of part or all of the payments on a loan for a limited time

Answer 177

sale of the property for less than the balance due on the mortgage loan

Answer 178

A court order issued post-judgment that directs the sheriff to seize and sell any of to seize the debtor’s property in the debtor’s possession

Answer 179

A court order prior to trial, directing seizure of nonexempt property

Answer 180

Statutory lien created to ensure payment for work performed (Ex. Building)

Answer 181

Lien that permits a worker to retain possession of an item until it is paid for

Answer 182

agreement formed between a debtor and his or her creditors in which the creditors agree to accept a lesser sum than that owed by the debtor in full satisfaction of the debt

Answer 183

the rate of interest paid by the borrower changes periodically

Answer 184

a fixed, or unchanging, rate of interest, so the payments remain the same for the duration of the loan

Answer 185

requires the borrower to pay a penalty if the mortgage is repaid in full within a certain period

Answer 186

legal principle that states that if someone promises to pay for someone else's debt, and the main reason for making that promise is for their own benefit - does not need to have that promise in writing

Answer 187

law permitting a debtor to retain the family home free from the claims of unsecured creditors or trustees in bankruptcy

Answer 188

- Household furniture - Clothing and certain personal possessions, such as family pictures or a Bible. - A vehicle (or vehicles) for transportation - Certain classified animals, usually livestock but including pets. - Equipment that the debtor uses in a business or trade, such as tools or professional instruments

Answer 189

Chapter 7 - liquidation proceedings / selling of all nonexempt assets and the distribution of the proceeds to the debtor’s creditors Chapter 11 - governs reorganizations Chapter 12 - for family farmers and fishermen Chapter 13 - for individuals / provide for the adjustment of debts by persons with regular incomes but allows a debtor to retain possession of their assets

Answer 190

1. To protect a debtor by giving him or her a fresh start without creditors’ claims. 2. To ensure equitable treatment of creditors who are competing for a debtor’s assets.

Answer 191

a debtor whose debts result primarily from the purchase of goods for personal, family, or household use

Answer 192

An agreement between a debtor and a creditor in which the debtor voluntarily agrees to pay a debt dischargeable in bankruptcy

Answer 193

- must be made before the debtor is granted a discharge - must be signed and filed with the court

Answer 194

a person appointed by the court to manage the debtor’s funds / sells the nonexempt assets and distributes the proceeds to creditors

Answer 195

the document that is filed with a bankruptcy court to initiate bankruptcy proceedings

Answer 196

- list of both secured and unsecured creditors, addresses, and amount of debt owed to each - statement of the financial affairs of the debtor - list of all property owned by the debtor, including property that the debtor claims is exempt - list of current income and expenses - certificate of credit counseling - proof of payments received from employers within 60 prior to the filing of the petition - statement of the amount of monthly income, itemized to show how the amount is calculated - copy of the debtor’s federal income tax return for the most recent year ending immediately before the filing of the petition

Answer 197

determine a debtor’s eligibility for Chapter 7 bankruptcy

Answer 198

- if the debtor has been convicted of a violent crime or a drug-trafficking offense - if the debtor fails to pay post petition domestic-support obligations (which include child and spousal support)

Answer 199

court’s grant to relieve the debtor of the immediate obligation to pay the debts listed in the bankruptcy petition

Answer 200

- If the debtor has twelve or more creditors, three or more of these creditors having unsecured claims totaling at least $16,750 must join in the petition. - If a debtor has fewer than twelve creditors, one or more creditors having a claim totaling $16,750 or more may file

Answer 201

- debtor is not paying debts as they come due. - general receiver, assignee, or custodian took possession of, or was appointed to take charge of, substantially all of the debtor’s property within 120 days before the filing of the petition.

Answer 202

suspension of almost all litigation and other action by creditors against the debtor or the debtor’s property is effective the moment the debtor files a petition in bankruptcy

Answer 203

protects secured creditors from losing their security as a result of the automatic stay

Answer 204

- Domestic-support obligations, including any debt owed to or recoverable by a spouse, a former spouse, a child of the debtor, that child’s parent or guardian, or a governmental unit - Proceedings against the debtor related to divorce, child custody or visitation, domestic violence, and support enforcement - Investigations by a securities regulatory agency (such as an investigation into insider trading) - Certain statutory liens for property taxes

Answer 205

terminates forty-five days after the creditors’ meeting unless the debtor redeems or reaffirms certain debts

Answer 206

consists of all the debtor’s interests in property, wherever located, including: - community property - property transferred in a transaction voidable by the trustee - proceeds and profits from the property of the estate

Answer 207

a property transfer or payment made by the debtor that favors one creditor over others - ILLEGAL

Answer 208

creditor who has received a preferential transfer from a debtor

Answer 209

REORGANIZATION - generally involves a corporate reorganization

Answer 210

or small-business debtors whose liabilities do not exceed a specified amount (about $2.7 million) and who do not own or manage real estate

Answer 211

a debtor who is allowed to continue in possession of the estate in property (the business) and to continue business operations CHAPTER 11 ONLY

Answer 212

provision of the Bankruptcy Code that allows a court to confirm the plan over the objections of a class of creditors

Answer 213

void a judgment on a discharged debt and prohibit an action to collect it

Answer 214

domestic support

Answer 215

filing for Chapter 7 Liquidation after dismissal of two or more bankruptcy petitions during the prior year

Answer 216

Payment or transfer of property by a debtor favoring one creditor over others

Answer 217

A plan to conserve and administer debtor’s assets for an eventual return to successful operation and solvency

Answer 218

provides for adjustment of debts to an individual debtor with regular income The debtor continues in business or possession of assets Most debts are discharged after the plan period

Answer 219

By subtracting living expenses and secured debt payments from monthly income

Answer 220

Liquidation under Chapter 7 of the Bankruptcy Code

Answer 221

simplest form of business - the owner is the business

Answer 222

- Taxes: pays only personal income taxes on the business’s profits / profits are reported as personal income on the proprietor’s personal income tax return - Flexibility: free to make any decision they wish concerning the business

Answer 223

- proprietor alone bears the burden of any losses or liabilities incurred by the business - creditors can pursue the owner’s personal assets to satisfy any business debts - lacking continuity after the death of the proprietor / when the owner dies, so does the business—it is automatically dissolved

Answer 224

governs the operation of partnerships in the absence of express agreement

Answer 225

- sharing of profits or losses. - joint ownership of the business. - equal right to be involved in the management of the business.

Answer 226

written agreement that sets forth each partner’s rights and obligations with respect to the partnership

Answer 227

a business entity that has no tax liability

Answer 228

When a third person has reasonably and detrimentally relied on the representation that a non-partner was part of a partnership

Answer 229

actions taken in the best interests of another person or entity

Answer 230

refraining from “grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law

Answer 231

requires partners to put the firm's interests ahead of their own

Answer 232

third party must sue ALL of the partners as a group, but each partner can be held liable for the full amount

Answer 233

a third party has the option of suing all of the partners together or one or more of the partners separately

Answer 234

occurs when a partner ceases to be associated in the carrying on of the partnership business and entitles the partner to have their interest purchased by the partnership

Answer 235

- partner’s voluntarily giving notice of an express will to withdraw - occurrence of an event specified in the partnership agreement - unanimous vote of the other partners - order of a court or arbitrator if the partner has engaged in wrongful conduct that affects the partnership/business - partner’s declaring bankruptcy

Answer 236

the actual process of collecting, liquidating, and distributing the partnership assets

Answer 237

the closing down or dismissal of an assembly, partnership

Answer 238

buyout agreement

Answer 239

document that is filed when an LLC is formed

Answer 240

- Limited Liability - Flexibility in Taxation - Foreign investors are allowed to become LLC members

Answer 241

state LLC statutes are not uniform so state LLC statutes are not uniform

Answer 242

agreement in which the members of an LLC set forth the details of how the business will be managed and operated

Answer 243

once assets have been sold, assets have been sold in order of: - debts to creditors - members’ capital contributions - remaining amounts are then distributed to members in equal shares or according to the operating agreement

Answer 244

liability of all partners is limited to the amount of their investments in the firm

Answer 245

federal rules

Answer 246

when the court completely disregards the separate entity aspect of a corporation and holds the shareholders personally liable for corporate debts and obligations

Answer 247

a partnership

Answer 248

corporation formed in another country but doing business in the United States

Answer 249

corporation formed by the government to meet some political or governmental purpose

Answer 250

Any corporation whose shares are publicly traded in a securities market

Answer 251

corporation whose shares are held by relatively few persons

Answer 252

agreement between shareholders that restricts the transferability of shares

Answer 253

small and simple - can choose to be taxed differently - corp pays no taxes but promise that all profits flow to shareholders

Answer 254

- corporation must be domestic - corporation must not be a member of an affiliated group of corporations - shareholders must be individuals, estates, or certain trusts and tax-exempt organizations ( cannot by partnerships) - shareholders must be individuals, estates, or certain trusts and tax-exempt organizations - corporation must have only one class of stock - shareholders must be US citizens

Answer 255

for-profit corporation that seeks to have a material positive impact on society and the environment

Answer 256

found in its articles of incorporation - powers of the national government that are explicitly listed in the Constitution

Answer 257

Acting or done beyond one’s legal power

Answer 258

courts will not hold corporate officers and directors liable for honest mistakes of judgment and bad business decisions that were made in good faith

Answer 259

certificate issued by a corporation evidencing the ownership of a specified number of shares in the corporation

Answer 260

shareholder's preference over all other purchasers to subscribe to or purchase a prorated share of a new issue of stock

Answer 261

rights given by a company to buy stock at a stated price by a specified date

Answer 262

distribution of corporate profits or income ordered by the directors and paid to the shareholders in proportion to their shares in the corporation

Answer 263

A suit brought by a shareholder to enforce a corporate cause of action against a third person

Answer 264

Authorization to represent a corporate shareholder to serve as his or her agent and vote his or her shares in a certain manner

Answer 265

the minimum number of members that must be present to make the proceedings of that meeting valid

Answer 266

agreement under which a shareholder assigns the right to vote his or her shares to a trustee

Answer 267

Shares of stock less than the fair market value

Answer 268

separate and apart

Answer 269

“Let the master answer” - principals are responsible for their agents

Answer 270

Partnership tax return - pays taxes on the business profits on the proprietor's personal tax return

Answer 271

Agency law - each are found to have knowledge and responsibility for acts under the partnership

Answer 272

The agreement will control because it memorializes intent

Answer 273

within 102 days

Answer 274

Sole proprietorship

Answer 275

How members’ interests may be transferred

Answer 276

C corporation

Answer 277

S corporation

Answer 278

Double taxation

Answer 279

a person having a duty created by his or her undertaking to act primarily for another’s benefit

Answer 280

One who works for, and receives payment from, an employer but whose working conditions and methods are not controlled by the employer not an employee but may be an agent

Answer 281

1. agreement of the parties 2. ratification 3. estoppel 4. operation of law

Answer 282

express or implied agreement that the agent will act for the principal and that the principal agrees to have the agent so act

Answer 283

When someone adopts or approves of someone else’s actions on their behalf after they’ve occurred

Answer 284

A person who gives the impression that they are acting as an agent for another person or business

Answer 285

agency in the absence of a formal agreement (usually family)

Answer 286

act of accepting and giving legal force to an obligation that previously was not enforceable -

Answer 287

- agent must have acted on behalf of an identified principal - principal must know all of the material facts involved in the transaction - principal must affirm the agent’s act in its entirety - principal must have the legal capacity to authorize the transaction at the time the agent engages - principal’s affirmation must occur before the third party withdraws - principal must observe the same formalities when ratifying the act as would have been required to authorize it initially

Answer 288

- Death or insanity - Impossibility - Changed circumstances - Bankruptcy - War

Answer 289

Authority declared in clear, direct, and definite terms - generally given in written or oral terms

Answer 290

rule that requires that if the contract is in writing, then the agent's authority must be in writing

Answer 291

Authority that is created not by an explicit oral or written agreement but by implication or inference Ex. Principal asks an agent to take their car to the mechanic - the agent has the implied authority to drive that car

Answer 292

that is only apparent, not real -arises when the principal causes a third party to believe that the agent has authority Ex. Mechanic attempts to sell your car on behalf of the dealership - cannot sell YOUR car as an agent on behalf of the principal (the dealership)

Answer 293

1. performance 2. notification 3. loyalty 4. obedience 5. accounting

Answer 294

agent must use reasonable diligence and skill when performing duties

Answer 295

agent is required to notify the principal of all matters that concern the subject of the agency

Answer 296

agent has a duty to act solely for the principal's benefit

Answer 297

agent must follow all lawful and stated instructions from the principal

Answer 298

agent must provide records of all property and funds received or paid out on the principal's behalf

Answer 299

1. compensation 2. reimbursement / indemnification 3. cooperation 4. safe working conditions

Answer 300

the presented information is true but incomplete and may therefore lead consumers to a false conclusion

Answer 301

Advertising a product at an attractive price and then telling the consumer that the advertised product is not available or is of poor quality and encouraging her or him to purchase a more expensive item

Answer 302

protects trademarks, and it also covers false advertising claims

Answer 303

Laws that allow buyers of goods sold in certain transactions to cancel their contracts within three business days

Answer 304

disclosure law administered by the Federal Reserve Board that requires sellers and lenders to disclose credit terms and loan terms so that individuals can shop around for the best financing arrangements

Answer 305

set of rules issued by the Federal Reserve Board of Governors to implement the provisions of the Truth in- Lending Act

Answer 306

prohibits the denial of credit solely on the basis of race, religion, national origin, color, gender, marital status, or age

Answer 307

protects consumers against inaccurate credit reporting and requires that lenders and other creditors report correct, relevant, and up-to-date information

Answer 308

attempts to curb perceived abuses by collection agencies

Answer 309

amendment to the FCRA to prevent identity theft, and improve the accuracy of consumer records

Answer 310

governs initial sales of stock by businesses

Answer 311

guides the determination of what types of contracts can be considered securities

Answer 312

written document required by securities laws when a security is being sold

Answer 313

any type of written, electronic, or graphic offer that describes the issuer or its securities and includes a legend indicating that the investor may obtain the prospectus at the SEC’s website

Answer 314

- Government-issued securities - Bank and financial institution securities - Short-term notes and drafts - Securities of nonprofit, educational, and charitable organizations

Answer 315

allows companies to sell securities to the public without registering with the SEC

Answer 316

permits the public resale of restricted or control securities if a number of conditions are met, including how long the securities are held, the way in which they are sold, and the amount that can be sold at any one time

Answer 317

law that regulates the secondary trading of securities in the United States to create a fair and transparent environment for investors by preventing fraud and requiring companies to disclose important information

Answer 318

purchase or sale of securities on the basis of information that has not been made available to the public

Answer 319

to reduce the number of frivolous securities lawsuits

Answer 320

must have acted knowingly, willfully, intentionally, or in reckless disregard of the law

Answer 321

set of policies specifying the rights and responsibilities of the various participants in a corporation and spelling out the rules and procedures for making corporate decisions

Answer 322

mandates certain practices in financial record keeping and reporting for corporations and establishes criminal penalties for intentional fraudulent reporting

Answer 323

1. US Constitution 2. Statutory law 3. Regulations created by administrative agencies 4. Case law and common law doctrines

Answer 324

Books and articles that summarize and clarify primary sources - Ex. Legal encyclopedias

Answer 325

Land Items of value Money

Answer 326

Court which the only remedies that can be granted are things of value - distinct from courts of equity

Answer 327

A court that decides controversies and administers justice accordingly

Answer 328

Injunction Specific performance Rescission Restitution Reformation

Answer 329

1. Whoever seeks equity must do equity 2. Where there is equal equity, the law must prevail 3. One seeking the aid of an equity court, must come to the court with clean hands

Answer 330

Propositions of law that have to do with fairness

Answer 331

The equitable doctrine, that bars a parties right to legal action, if the party has neglected for an unreasonable length of time to act on their rights

Answer 332

Law: filing complaint Equity: filing petition

Answer 333

Law: judge or jury Equity: judge, no jury

Answer 334

Law: judgement Equity: decree

Answer 335

Law: monetary damages or property Equity: injunction, specific performance, or rescission

Answer 336

1. A court should not overturn its own precedents unless there is a compelling reason to do so 2. Decisions made by a higher court are binding on lower courts

Answer 337

Any legal authority or source of law that a court may look to for guidance, but need not follow in making its decision

Answer 338

Issue - what are they key facts and issues? Rule - what rule of law applies to the case? Application - how does the rule of law apply to the case? Conclusion - what conclusion should be drawn?

Answer 339

Previous case involving factual circumstances and issues that are similar to those in the case before the court

Answer 340

All laws that define, describe, regulate, and create legal rights and obligations

Answer 341

Enforcement of substantive law

Answer 342

The branch of law, dealing with the definition and enforcement of all private or public rights, as opposed to criminal matters

Answer 343

The branch of law that defines and punishes wrongful actions committed against the public

Answer 344

Arranges all existing federal laws by assigning each 52 subjects a title and title number

Answer 345

Party appealing the case

Answer 346

Party against whom the appeal is taken

Answer 347

Core opinion that presents the views of one or more judges or justices, who disagreed with the majority decision

Answer 348

A court opinion written by the court as a whole instead of being offered by a judge or justice

Answer 349

Clause in article 5 of the US Constitution that requires states not to discriminate against one another citizens

Answer 350

A clause in article 5 of the US Constitution that ensures that the rights established under deeds, wills, contracts, etc. and will be honored by the other states

Answer 351

The prohibition against states passing legislation that discriminated against or excessively burdens interstate commerce

Answer 352

Nonverbal expressions of opinions or thoughts about a subject - protected under the first amendment, guarantee of freedom of speech

Answer 353

Laws that regulate the time, manner, and place – but not the content

Answer 354

Fighting words, or words that are likely to incite others to respond violently – also includes defamatory speech

Answer 355

Provision in the first amendment of the US constitution that prohibits Congress from establishing a state sponsored religion, as well as from passing laws that promote religion, or show a preference for one religion over another

Answer 356

Provision in the first amendment to the US Constitution that prohibits Congress for making any law prohibiting the free exercise of religion

Answer 357

When religious practices work against Public policy in the public welfare, the government can act. Ex. Requirement that a child receive certain types of vaccinations or medical treatment if their is in danger regardless of child or parents, religious beliefs.

Answer 358

Requires that any government decision must give a person proper notice, and an opportunity to be heard

Answer 359

limits what the government may do in it’s legislative and executive capacities – must be fair and further a legitimate governmental objective

Answer 360

Company may increase its profits by continuing to sell a product, even though it knows that the product is defective

Answer 361

1. Offerer must have serious intention to become bound by offer 2. Terms of the offer must be reasonably certain so that parties and court can ascertain the terms of the contract 3. Offer must be communicated

Answer 362

- expressions of opinion - statements of future intent - preliminary negotiations - invitations to bid - advertisements - live and online auctions

Answer 363

1. Express repudiation of the offer (I withdraw) 2. Performance of acts that are inconsistent with the existence of the offer and are made known to the offeree

Answer 364

Mirror image rule where an offer must be accepted exactly with no modifications

Answer 365

A promise that is unenforceable due to indefiniteness (Ex. I’ll give you $10 if I feel like it)

Answer 366

When a debtor offers to pay and a creditor accepts a lesser amount than the creditor originally claimed was owed. Accord = agreement Satisfaction = performance

Answer 367

A debt that is due and certain in amount

Answer 368

A test that courts use to determine whether a contract is primarily for the sale of goods or for the sale of services

Answer 369

Portion of a corporations profits that has not been paid out as dividends

Answer 370

Document that is filed when a business is incorporated and that contains basic info about the corporation

Answer 371

The action of a court to disregard the corporate entity and hold the shareholders personally liable for corporate debts and obligations

Answer 372

Number of members of a decision making body that must be present before business may be transacted

Answer 373

Profits earned by a purchase and sale of the same security within a 6 month period

Answer 374

Reduce difficulties for businesses conducting trade and commerce

Answer 375

Remedy is usually monetary damages

Answer 376

Fanciful Arbitrary Suggestive

Answer 377

goods tendered must comply with what was contracted

Answer 378

When the seller promises to cure and fails within a reasonable amount of time

Answer 379

Mortgages, HELOC, and Auto loans

Answer 380

Credit cards, utilities, and hospitals

Answer 381

To see if the debtor is actually able to pay the creditor during chapter 7 bankruptcy filings

Answer 382

Confirmation of a reorganization plan by the court over any objections of a creditor

Answer 383

Establishes partnership as separate legal entities, not as an aggregate of partners

Answer 384

What ought to be the case

Answer 385

Members who are creditors

Answer 386

Member personally guarantees a business loan

Answer 387

Shareholders

Answer 388

Exaggerated claims used to entice customers into making purchases

Answer 389

Public Company Accounting Oversight Board (PCAOB)

Answer 390

Outside directors

Answer 391

Certification by the CEO and CFO for accuracy of information

Answer 392

any action that affects stakeholders negatively is an unethical decision

Answer 393

No, anything that is not CREATED or INVENTED cannot be patented

Answer 394

WHAT, and HOW MANY

Answer 395

Identification of a destination

Answer 396

Chapter 11

Answer 397

When the partnership has no agreement in place