Business Law for Accountants Vocab

Question 1

neither the federal or state governments can deprive any person of life, liberty, or property, without due process of the law

Answer 1

14th Amendment

Question 2

nonverbal conduct that expresses opinions or thoughts about a subject, protected under the First Amendment

Answer 2

Compelling Government Interest

Question 3

the provision in the First Amendment to the U.S. 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 3

Establishment Clause

Question 4

the provision in the First Amendment to the US Constitution that prohibits Congress from making any law “prohibiting the free exercise” of religion

Answer 4

Free Exercise Clause

Question 5

an order granted by a public authority, such as a judge, that authorizes law enforcement personnel to search a particular premise or property

Answer 5

Search Warrant

Question 6

reasonable grounds for believing that a search warrant should be conducted or that a person should be arrested

Answer 6

Probable Cause

Question 7

the provisions of the 5th and 14th Amendments to the US Constitution that guarantee that no person shall be deprived of life, liberty, or property without due process of law. Similar clauses are found in most state constitutions

Answer 7

Due Process Clause

Question 8

requires that any government decision to take life, liberty, or property must be made equitably (with proper notice and opportunity to be heard)

Answer 8

Procedural Due Process

Question 9

focuses on the content of legislation

Answer 9

Substantive Due Process

Question 10

the provision in the 14th Amendment to the US Constitution that guarantees that no state will “deny to any person within its jurisdiction the equal protection of the laws.” This clause mandates that state governments treat similarly situated individuals in a similar manner

Answer 10

Equal Protection Clause

Question 11

moral principals and values applied to social behavior

Answer 11

Ethics

Question 12

ethics in a business conduct

Answer 12

Business Ethics

Question 13

the minimum degree of ethical behavior expected of a business firm, which is usually defined as compliance with the law

Answer 13

Moral Minimum

Question 14

the idea that investors and others should consider not only corporate profits but also the corporation’s impact on people and on the planet when assessing the firm (people, planet, profits)

Answer 14

Triple Bottom Line

Question 15

a reasoning process in which an individual links his or her moral convictions or ethical standards to the particular situation on hand

Answer 15

Ethical Reasoning

Question 16

an ethical philosophy rooted in the idea that every person has certain duties to others, including both humans and the planet. Those duties may be derived from religious principles or from other philosophical reasoning

Answer 16

Duty-Based Ethics

Question 17

an ethical philosophy that focuses on the impacts (consequences) of a decision on society or on key stakeholders

Answer 17

Outcome-Based Ethics

Question 18

the principle that human beings have certain fundamental rights (to life, freedom, and the pursuit of happiness, for example). A key factor in determining whether a business decision is ethical under this theory is how the decision affects the rights of others, such as employees, consumers, suppliers, and the community

Answer 18

Principle of Rights

Question 19

a concept developed by the philosopher Immanuel Kant as an ethical guideline for behavior. In deciding whether an action is right or wrong, or desirable or undesirable, a person should evaluate the action in terms of what would happen if everyone else in the same situation, or category, acted the same

Answer 19

Categorical Imperative

Question 20

an approach to ethical reasoning in which ethically correct behavior is related to an evaluation of the consequences of a given action on those who will be affected by it. In utilitarianism reasoning, a “good” decision is one that results in the greatest good for the greatest amount of people affected by the decision

Answer 20

Utilitarianism

Question 21

the concept that corporations can and should act ethically and be accountable to society for their actions

Answer 21

Corporate Social Responsibility

Question 22

a distinctive mark, motto, device, or implement that a manufacturer stamps, prints, or otherwise affixes to the goods it produces so that they may be identified on the market and their origins made known

Answer 22

Trademark

Question 23

with respect to trademarks, a doctrine under which distinctive or famous trademarks are protected from certain unauthorized uses regardless of showing of competition or a likelihood of confusion

Answer 23

Dilution

Question 24

a mark used in the sale or the advertising of services, such as to distinguish services of others (titles, character names, etc.)

Answer 24

Service Mark

Question 25

a mark used by one or more persons, other than the owner, to certify the region, materials, mode of manufacture, quality, or accuracy of the owner's goods or services

Answer 25

Certification Mark (Collective Mark)

Question 26

the image and overall appearance of a product - for example, the distinctive decor, menu, layout, and style of service of a particular restaurant

Answer 26

Trade Dress

Question 27

a government grant that gives an investor the exclusive right or privilege to make, use, or sell his or her invention for a limited time period

Answer 27

Patent

Question 28

If a firm makes, uses, or sells anothers patented design, product, or process without the patent owners permission

Answer 28

Patent Infringement

Question 29

the exclusive right to authors to publish, print, or sell an intellectual property for a statutory period of time

Answer 29

Copyright

Question 30

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

Answer 30

Trade Secret

Question 31

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

Answer 31

Contract

Question 32

a 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's own secret, subjective intentions. Objective facts might include what a party said when entering into the contract, how a party acted or appeared, and the circumstances surrounding the transaction

Answer 32

Objective Theory of Contracts

Question 33

the person who makes the offer

Answer 33

Offeror

Question 34

the person to whom the offer is made

Answer 34

Offeree

Question 35

a type of contract that arises when a promise is given in exchange for another promise

Answer 35

Bilateral Contract

Question 36

a contract that results when an offer can be accepted only by the offeree's performance

Answer 36

Unilateral Contract

Question 37

a contract that by law requires a specific form, such as being executed under seal, to be valid

Answer 37

Formal Contract

Question 38

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

Answer 38

Informal Contract

Question 39

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

Answer 39

Express Contract

Question 40

contract formed in whole or in part from the conduct of the parties (as opposed to an express contract)

Answer 40

Implied Contract

Question 41

a contract that has been completely performed by both parties

Answer 41

Executed Contract

Question 42

a contract that has not been fully performed

Answer 42

Executory Contract

Question 43

a contract that results when the elements necessary for a contract formation (agreement, consideration, contractual capacity, and legality) are present

Answer 43

Valid Contract

Question 44

a valid contract rendered unenforceable by some statute or law

Answer 44

Unenforceable Contract

Question 45

a contract that may be legally avoided (canceled) at the option of one of the parties

Answer 45

Voidable Contract

Question 46

a contract having no legal force or binding effect

Answer 46

Void Contract

Question 47

a meeting of two or more minds in regard to the terms of a contract; usually broken down into events - an offer by one party to form a contract and an acceptance of the offer by the person to whom the offer is made

Answer 47

Agreement

Question 48

a promise or commitment to perform or refrain from performing some specified act in the future

Answer 48

Offer

Question 49

in contract law, the withdrawal of an offer by an offeror. Unless an offer is irrevocable, it can be revoked at any time prior to acceptance without liability

Answer 49

Revocation

Question 50

a contract under which the offeror cannot revoke his or her offer for a stipulated time period and the offeree can accept or reject the offer at any time during this period. The offeree must give consideration (money) for the option to be enforceable

Answer 50

Option Contract

Question 51

an offeree's response to an offer in which the offeree rejects the original offer and at the same time makes a new offer

Answer 51

Counteroffer

Question 52

a common law rule that requires for a valid contractual agreement, that the terms of the offeree's acceptance adhere exactly to the terms of the offeror's offer

Answer 52

Mirror Image Rule

Question 53

in contract law, the offeree's indication to the offeror that the offeree agrees to be bound by the terms of the offeror's proposal

Answer 53

Acceptance

Question 54

a rule providing that an acceptance of an offer becomes effective on dispatch

Answer 54

Mailbox Rule

Question 55

generally, the value given in return for a promise or a performance. The consideration, which must be present to make the contract legally binding, must be something of legally sufficient value and must be bargained for

Answer 55

Consideration

Question 56

(1) the act of refraining from exercising a legal right (2) an agreement between a lender and a borrower in which the lender agrees to temporarily cease requiring mortgage payments, to delay foreclosure, or to accept smaller payments than previously scheduled

Answer 56

Forbearance

Question 57

a remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made; may be effected through the mutual consent of the parties, by their conduct, or by court degree

Answer 57

Recission

Question 58

something given or some act done in the past, which cannot ordinarily be consideration for a larger bargain

Answer 58

Past Consideration

Question 59

when a person expresses contract terms with such uncertainty that the terms are not definite, the promise is illusory

Answer 59

Illusory Promises

Question 60

an agreement for payment (or other performance) between two parties, one of whom has a right of action against the other. After the payment has been accepted or other performance has been made, the "accord and satisfaction" is complete and the obligation is discharged

Answer 60

Accord and Satisfaction

Question 61

a debt that is due and certain in amount

Answer 61

Liquidated Debt

Question 62

a debt that is uncertain in amount

Answer 62

Unliquidated Debt

Question 63

a contract in which one party forfeits the right to pursue a legal claim against the other party

Answer 63

Release

Question 64

an agreement to substitute a contractual obligation for some other type of legal action based on a valid claim

Answer 64

Covenant Not to Sue

Question 65

means any trademark that so resembles a registered trademark as to be likely to cause confusion or to deceive the public

Answer 65

Colorable Imitation

Question 66

a doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiably relies, such a promise is binding if justice will be better served by the enforcement of the promise

Answer 66

Promissory Estoppel

Question 67

barred, impeded, or precluded

Answer 67

Estopped

Question 68

the legal ability to enter into contracts; the threshold mental capacity required by law for a party who enters into a contract to be bound by that contract

Answer 68

Contractual Capacity

Question 69

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

Answer 69

Dissafirmance

Question 70

charging an illegal rate of interest

Answer 70

Usury

Question 71

a contractual promise to refrain from competing with another party for a certain period of time and within a certain geographic area. Although covenants not to compete restrain trade, they are commonly found in partnership agreements, business sale agreements, and employment contracts. If they are ancillary to such agreements, covenants not to compete will normally be enforced by the courts unless the time period or geographic area is deemed unreasonable

Answer 71

Covenant Not to Compete

Question 72

a court-ordered correction of a written contract so that it reflects the true intentions of the parties

Answer 72

Reformation

Question 73

describes 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 73

Unconscionable

Question 74

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

Answer 74

Exculpatory Clause

Question 75

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

Answer 75

Statute of Frauds

Question 76

a contract is a private agreement between the parties who have entered into it and traditionally these parties alone have rights and liabilities under the contract

Answer 76

Privity of Contract

Question 77

the act of transferring to another all or part of ones rights arising under a contract

Answer 77

Assignment

Question 78

the transfer of a contractual duty to a third party. The party delegating the duty (the delegator) to the third party (the delegatee) is still obliged to perform on the contract should the delegatee fail to perform

Answer 78

Delegation

Question 79

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

Answer 79

Third-Party Beneficiary

Question 80

a contract for the sale of goods under which the ownership of goods is transferred from a seller to a buyer for a price

Answer 80

Sales Contracts

Question 81

the passing of title (evidence of ownership rights) from seller to buyer for a price

Answer 81

Sale

Question 82

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

Answer 82

Pre-Dominant Factor Test

Question 83

an agreement in which a buyer agrees to purchase and the seller agrees to sell all or up to a stated amount of what the buyer needs or requires

Answer 83

Requirements Contract

Question 84

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

Answer 84

Output Contract

Question 85

an offer (by a merchant) that is irrevocable without consideration for a period of time (not longer than 3 months). A firm offer by a merchant must be in writing and must be signed by the offeror

Answer 85

Firm Offer

Question 86

in a sale of goods, the express designation of the specific goods provided for in the contract

Answer 86

Identification

Question 87

goods that are alike by physical nature, by agreement, or by trade usage

Answer 87

Fungible Goods

Question 88

a contract in which the seller is required to ship the goods after they are delivered to the carrier. Generally, a contract is assumed to be a shipment contract if nothing to the contrary is stated in the contract

Answer 88

Shipment Contract

Question 89

a contract in which the seller is required to ship the goods by carrier and deliver them to a particular destination. The seller assumes liability for any losses or damage to the goods until they are tendered at the destination specified in the contract

Answer 89

Destination Contract

Question 90

a writing exchanged in the regular course of business that evidences the right to possession of goods (for example, a bill of landing or warehouse receipt)

Answer 90

Document of Title

Question 91

a situation in which the personal property of one person ( a bailor) is entrusted to another ( a bailee) who is obligated to return the bailed property to the bailor or dispose of it as directed

Answer 91

Bailment

Question 92

under the UCC, the right of a party who tenders nonconforming performance to correct his or her performance within the contract period

Answer 92

Cured

Question 93

a property interest in goods being sold or leased that is sufficiently substantial to permit a party to insure against damage to the goods

Answer 93

Insurable Interest

Question 94

(1) the termination of an obligation, such as occurs when the parties to a contract have fully performed their contractual obligations (2) the termination of a bankruptcy debtors obligation to pay debts

Answer 94

Discharge

Question 95

in contract law, the fulfillment of one's duties rising under a contract; the normal way of discharging one's contractual obligations

Answer 95

Performance

Question 96

a possible future event, the occurrence or nonoccurrence of which will trigger the performance of a legal obligation or terminate an existing obligation under a contract

Answer 96

Condition

Question 97

a condition in a contract that must be met before a party's promise becomes absolute

Answer 97

Condition Precedent

Question 98

an unconditional offer to perform an obligation by a person who is ready, willing, and able to do so

Answer 98

Tender

Question 99

the failure, wihtout legal excuse of a promisor to perform the obligations of a contract

Answer 99

Breach of Contract