Business Law for Accountants Vocab Flashcards
neither the federal or state governments can deprive any person of life, liberty, or property, without due process of the law
14th Amendment
nonverbal conduct that expresses opinions or thoughts about a subject, protected under the First Amendment
Compelling Government Interest
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
Establishment Clause
the provision in the First Amendment to the US Constitution that prohibits Congress from making any law “prohibiting the free exercise” of religion
Free Exercise Clause
an order granted by a public authority, such as a judge, that authorizes law enforcement personnel to search a particular premise or property
Search Warrant
reasonable grounds for believing that a search warrant should be conducted or that a person should be arrested
Probable Cause
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
Due Process Clause
requires that any government decision to take life, liberty, or property must be made equitably (with proper notice and opportunity to be heard)
Procedural Due Process
focuses on the content of legislation
Substantive Due Process
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
Equal Protection Clause
moral principals and values applied to social behavior
Ethics
ethics in a business conduct
Business Ethics
the minimum degree of ethical behavior expected of a business firm, which is usually defined as compliance with the law
Moral Minimum
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)
Triple Bottom Line
a reasoning process in which an individual links his or her moral convictions or ethical standards to the particular situation on hand
Ethical Reasoning
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
Duty-Based Ethics
an ethical philosophy that focuses on the impacts (consequences) of a decision on society or on key stakeholders
Outcome-Based Ethics
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
Principle of Rights
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
Categorical Imperative
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
Utilitarianism
the concept that corporations can and should act ethically and be accountable to society for their actions
Corporate Social Responsibility
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
Trademark
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
Dilution
a mark used in the sale or the advertising of services, such as to distinguish services of others (titles, character names, etc.)
Service Mark
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
Certification Mark (Collective Mark)
the image and overall appearance of a product - for example, the distinctive decor, menu, layout, and style of service of a particular restaurant
Trade Dress
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
Patent
If a firm makes, uses, or sells anothers patented design, product, or process without the patent owners permission
Patent Infringement
the exclusive right to authors to publish, print, or sell an intellectual property for a statutory period of time
Copyright
information or a process that gives a business an advantage over competitors who do not know the info or process
Trade Secret
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
Contract
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
Objective Theory of Contracts
the person who makes the offer
Offeror
the person to whom the offer is made
Offeree
a type of contract that arises when a promise is given in exchange for another promise
Bilateral Contract
a contract that results when an offer can be accepted only by the offeree’s performance
Unilateral Contract
a contract that by law requires a specific form, such as being executed under seal, to be valid
Formal Contract
a contract that does not require a specified form or formality in order to be valid
Informal Contract
a contract in which the terms of the agreement are fully and explicitly stated in words, oral or written
Express Contract
contract formed in whole or in part from the conduct of the parties (as opposed to an express contract)
Implied Contract
a contract that has been completely performed by both parties
Executed Contract
a contract that has not been fully performed
Executory Contract
a contract that results when the elements necessary for a contract formation (agreement, consideration, contractual capacity, and legality) are present
Valid Contract
a valid contract rendered unenforceable by some statute or law
Unenforceable Contract
a contract that may be legally avoided (canceled) at the option of one of the parties
Voidable Contract
a contract having no legal force or binding effect
Void Contract
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
Agreement
a promise or commitment to perform or refrain from performing some specified act in the future
Offer
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
Revocation
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
Option Contract
an offeree’s response to an offer in which the offeree rejects the original offer and at the same time makes a new offer
Counteroffer
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
Mirror Image Rule
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
Acceptance
a rule providing that an acceptance of an offer becomes effective on dispatch
Mailbox Rule
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
Consideration
(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
Forbearance
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
Recission
something given or some act done in the past, which cannot ordinarily be consideration for a larger bargain
Past Consideration
when a person expresses contract terms with such uncertainty that the terms are not definite, the promise is illusory
Illusory Promises
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
Accord and Satisfaction
a debt that is due and certain in amount
Liquidated Debt
a debt that is uncertain in amount
Unliquidated Debt
a contract in which one party forfeits the right to pursue a legal claim against the other party
Release
an agreement to substitute a contractual obligation for some other type of legal action based on a valid claim
Covenant Not to Sue
means any trademark that so resembles a registered trademark as to be likely to cause confusion or to deceive the public
Colorable Imitation
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
Promissory Estoppel
barred, impeded, or precluded
Estopped
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
Contractual Capacity
the legal avoidance, or setting aside, of a contractual obligation
Dissafirmance
charging an illegal rate of interest
Usury
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
Covenant Not to Compete
a court-ordered correction of a written contract so that it reflects the true intentions of the parties
Reformation
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
Unconscionable
a clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault
Exculpatory Clause
a state statute under which certain types of contracts must be in writing to be enforceable
Statute of Frauds
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
Privity of Contract
the act of transferring to another all or part of ones rights arising under a contract
Assignment
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
Delegation
one for whose benefit a promise is made in a contract but who is not a party to the contract
Third-Party Beneficiary
a contract for the sale of goods under which the ownership of goods is transferred from a seller to a buyer for a price
Sales Contracts
the passing of title (evidence of ownership rights) from seller to buyer for a price
Sale
a test that courts use to determine whether a contract is primarily for the sale fo goods or for the sale of services
Pre-Dominant Factor Test
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
Requirements Contract
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
Output Contract
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
Firm Offer
in a sale of goods, the express designation of the specific goods provided for in the contract
Identification
goods that are alike by physical nature, by agreement, or by trade usage
Fungible Goods
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
Shipment Contract
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
Destination Contract
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)
Document of Title
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
Bailment
under the UCC, the right of a party who tenders nonconforming performance to correct his or her performance within the contract period
Cured
a property interest in goods being sold or leased that is sufficiently substantial to permit a party to insure against damage to the goods
Insurable Interest
(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
Discharge
in contract law, the fulfillment of one’s duties rising under a contract; the normal way of discharging one’s contractual obligations
Performance
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
Condition
a condition in a contract that must be met before a party’s promise becomes absolute
Condition Precedent
an unconditional offer to perform an obligation by a person who is ready, willing, and able to do so
Tender
the failure, wihtout legal excuse of a promisor to perform the obligations of a contract
Breach of Contract
