Business Law - Glossary

Question 1

an agreement to an offer resulting in a contract

Answer 1

acceptance

Question 2

an agreement made and executed in satisfaction of the rights one has from a previous contract

Answer 2

accord and satisfaction

Question 3

the party appointed by the principal to enter into a contract with a third party on behalf of the principal

Answer 3

agent

Question 4

one that is incorporated in a foreign country

Answer 4

alien corporation

Question 5

official document detailing a defendant’s defense

Answer 5

answer

Question 6

laws which seek to promote competition among businesses

Answer 6

antitrust

Question 7

the authority an agent is believed by third parties to have because of the behavior of the principal

Answer 7

apparent authority

Question 8

request to a higher court to review a lower court’s decision

Answer 8

appeal

Question 9

courts hearing cases appealed from a lower court

Answer 9

appellate courts

Question 10

charging a person with a crime and asking for that person’s plea

Answer 10

arraignment

Question 11

to take into police custody

Answer 11

arrest

Question 12

the party to whom the assignment is made

Answer 12

assignee

Question 13

a means whereby one party in a contract conveys rights to another person, who is not a party to the original contract

Answer 13

assignment

Question 14

the party making the assignment

Answer 14

assignor

Question 15

power to act for someone else

Answer 15

authority

Question 16

the party who acquires possession, but not the title, of personal property by one party to another, under agreement

Answer 16

bailee

Question 17

the transfer of possession, but not the title, of personal property by one party to another, under agreement

Answer 17

bailment

Question 18

the party who gives up possession, but not the title, of personal property in a bailment

Answer 18

bailor

Question 19

a person in possession of an instrument

Answer 19

bearer

Question 20

commercial paper payable to bearer; i.e. to the person having possession of such

Answer 20

bearer paper

Question 21

recipient of the proceeds of a life insurance policy: one who inherits property as specified in a will

Answer 21

beneficiary

Question 22

a contract which consists of mutual promises to perform some future acts

Answer 22

bilateral contract

Question 23

the contract existing between the consignor and the carrier

Answer 23

bill of lading

Question 24

a document of conveyance which provides written evidence of one’s title to tangible personal property

Answer 24

bill of sale

Question 25

having no words other than the signature of the endorser

Answer 25

blank endorsement

Question 26

a body of persons elected by the stockholders to define and establish corporate policy

Answer 26

board of directors

Question 27

administrative step taken after an arrested person is brought to police station, which involves entry of the person’s name, the crime for which the arrest was made, and other relevant facts on the police “blotter,” and which may also include photographing, fingerprinting and the like

Answer 27

booking

Question 28

a situation in which one of the parties to a contract fails or otherwise refuses to perform the obligations established in that contract

Answer 28

breach of contract

Question 29

those rules of conduct prescribed by government and its agencies in regulating business transactions

Answer 29

business law

Question 30

a check drawn on a bank’s own funds and signed by a responsible bank official

Answer 30

cashier’s check

Question 31

the acknowledgment by a bank of a receipt of money with an agreement of repayment

Answer 31

certificate of deposit

Question 32

a check for which the bank assures that the drawer has sufficient funds to make payment

Answer 32

certified check

Question 33

an order by a depositor on the bank to pay a sum of money to a payee

Answer 33

check

Question 34

the body of law concerned with private or purely personal rights

Answer 34

civil law

Question 35

a designation which applies to a corporation in which outstanding share of stock and managerial control are held by a limited number of people (often members of the same family)

Answer 35

close (closely held) corporation

Question 36

a writing drawn in a special form which can be transferred from person to person as a substitute for money or as an instrument of credit

Answer 36

commercial paper (negotiable instrument)

Question 37

customs which have become recognized by the courts as binding on the community

Answer 37

common law

Question 38

an award paid to the injured party to cover the exact amount of their loss, but no more

Answer 38

compensatory damages

Question 39

the written request which initiates a civil law suit

Answer 39

complaint (petition)

Question 40

that which the promisor demands and receives as the price for a promise

Answer 40

consideration

Question 41

one to whom goods are shipped by common carrier

Answer 41

consignee

Question 42

one who ships goods by common carrier

Answer 42

consignor

Question 43

an agreement between two or more competent person which is enforceable by law

Answer 43

contract

Question 44

a seller agrees to transfer title to goods for a consideration (price) at a future time

Answer 44

contract to sell

Question 45

the necessity that the parties desiring to enter into contracts meet all requirements

Answer 45

contractual capacity

Question 46

a business entity created by statutory law and owned by individuals known as stockholders

Answer 46

corporation

Question 47

an intended acceptance which changes or qualifies an original offer and in effect, rejects that offer and becomes a new offer

Answer 47

counteroffer

Question 48

a person who is not a party to a contract to whom the promisor of a contract owes an obligation or duty

Answer 48

creditor beneficiary

Question 49

an offense which is injurious to society as a whole

Answer 49

crime

Question 50

laws dealing with crimes and the punishment of wrongdoers

Answer 50

criminal law

Question 51

writing conveying title to real property

Answer 51

deed

Question 52

deed that transfers property to trustee for benefit of creditor

Answer 52

deed of trust

Question 53

the person against whom legal action is brought

Answer 53

defendant

Question 54

the repudiation of, or election to avoid, a voidable contract

Answer 54

disaffirmance

Question 55

termination of a contract by performance, agreement, impossibility, acceptance of breach, or operation of law

Answer 55

discharge

Question 56

pretrial steps taken to learn the details of the case

Answer 56

discovery

Question 57

operates in the state that granted the charter

Answer 57

domestic corporation

Question 58

a third party beneficiary to whom no legal duty is owed and performance is a gift

Answer 58

donee beneficiary

Question 59

a written order signed by one person requiring the person to whom addressed to pay a particular sum of money, to order or to bearer, on demand or at a certain time

Answer 59

draft

Question 60

the person, company, or financial institution ordered to pay a draft

Answer 60

drawee

Question 61

the person who executes any draft

Answer 61

drawer

Question 62

a means of removing one’s free will, obtaining consent by means of a threat to do harm to the person, his family, his property, or his earning power

Answer 62

duress

Question 63

the person hired to perform work and who is obligated both as to the work to be done and as to the manner in which it is to be done

Answer 63

employee

Question 64

the party who employs employees to do certain work

Answer 64

employer

Question 65

those contracts in which the terms have been fulfilled

Answer 65

executed contract

Question 66

the carrying out or completion of some task

Answer 66

execution

Question 67

those contracts in which the terms have not been completely executed or fulfilled by the parties

Answer 67

executory contract

Question 68

those goods which are, at the time of the contract, in existence and owned by the seller

Answer 68

existing goods

Question 69

the authority of an agent, stated in the document or agreement creating the agency

Answer 69

express authority

Question 70

a contract

Answer 70

express contract

Question 71

the actual and definite statement of a seller, either orally or in writing, at the time of the sale

Answer 71

express warranties

Question 72

largest, most complete right in property

Answer 72

fee simple estate

Question 73

a more serious criminal offense that is punishable by death or by imprisonment in a penitentiary for more than one year

Answer 73

felony

Question 74

a relationship of trust and confidence, such as that which exists between partners in a partnership

Answer 74

fiduciary

Question 75

designation that applies when a corporation operates in any state other than where it is chartered

Answer 75

foreign corporation

Question 76

those contracts which must be in special form or produced in a certain way, such as under a seal

Answer 76

formal contract

Question 77

the intentional or reckless false statement of a material fact, upon which the injured party relied, which induced the injured party to enter into a contract, to his or her detriment

Answer 77

fraud

Question 78

those goods selected which are not in existence at the time in which the contract twas created

Answer 78

future goods

Question 79

one who is authorized to execute the principal’s business of a particular kind, or all the principals business at a particular place, if not all of one kind

Answer 79

general agent

Question 80

those individuals actively and openly engaged in the business and held to everyone as a partner

Answer 80

general partner

Question 81

movable tangible personal property

Answer 81

goods

Question 82

one in possession of commercial paper

Answer 82

holder

Question 83

the goods specified by the buyer and seller

Answer 83

identified goods

Question 84

an agent’s authority to do things not specifically authorized in order to carry out express authority

Answer 84

implied authority

Question 85

one in which the terms of the contract are implied by acts or conduct of the parties

Answer 85

implied contract

Question 86

warranties imposed by law, arising automatically because the sale has been made

Answer 86

implied warranties

Question 87

one who contracts to perform certain tasks for a set fee, but who is independent of the control of the contracting party as to a means by which the contract is executed, except for specifications established in the contract

Answer 87

independent contractor

Question 88

a person who becomes the holder of a negotiable instrument by endorsement which names him or her as the person to whom the instrument is negotiated

Answer 88

endorsee

Question 89

the signature or statement of purpose by the owner on the back of a negotiable instrument, which indicates the future control of the instrument

Answer 89

endorsement

Question 90

a permanent judicial order or decree forbidding the performance of a certain act

Answer 90

injunction

Question 91

evidences of ownership of personal property, such as stock of corporations, checks, and copyrights

Answer 91

intangible personal property

Question 92

a decision of a court of law

Answer 92

judgment

Question 93

those rules of conduct commanding what is right and prohibiting what is wrong

Answer 93

law

Question 94

estate for duration of person’s life

Answer 94

life estate

Question 95

newest form of business ownership recognized in the US; combines features of both the corporation and partnership

Answer 95

limited liability company

Question 96

partners who have their liability for the firm’s debts limited to the amount of their investment

Answer 96

limited partner

Question 97

the amount of the damages stipulated in a contract to be paid in the event one party breaches the contract

Answer 97

liquidated damages

Question 98

the person who executes a promissory note

Answer 98

maker

Question 99

a breach of contract by a professional person; failure to perform a professional service with the ability and care generally exercised by others in the profession

Answer 99

malpractice

Question 100

a person who deals in goods of the kind or otherwise by occupation purports to have knowledge or skill peculiar to the practices or goods involved in the transaction

Answer 100

merchant

Question 101

those person under legal age; by most states (but not all), the standard is under the age of eighteen

Answer 101

minor

Question 102

a less serious criminal offense, generally punishable by fine and/or imprisonment of less than one year

Answer 102

misdemeanor

Question 103

stating an untrue fact

Answer 103

misrepresentation

Question 104

items, required or proper and useful, for sustaining a human being at an appropriate living standard (i.e. food, clothing, and shelter)

Answer 104

necessaries

Question 105

failure to exercise ordinary care; omission to do something which a reasonable prudent person would do under ordinary circumstances or the doing of something which a reasonable and prudent would not do; the lack of due care (a breach of a legal duty to act carefully resulting in injury to another or damage to another’s property)

Answer 105

negligence

Question 106

a writing drawn in a special form which can be transferred from person to person as a substitute for money or as an instrument of credit

Answer 106

negotiable instrument (commercial paper)

Question 107

the act of transferring ownership of a negotiable instrument to another party

Answer 107

negotiation

Question 108

a token award to symbolize vindication of the wrong done to the plaintiff, generally the award is $1.00

Answer 108

nominal damages

Question 109

the substitution of a new party for one of the original p parties to a contract, such that the prior contract terminates and a new one substitutes for it

Answer 109

novation

Question 110

a proposal to make a contract

Answer 110

offer

Question 111

the person to whom an offer is made

Answer 111

offeree

Question 112

the party who initiates, or makes an offer

Answer 112

offeror

Question 113

commercial paper made payable to the order of some named party; the word order or its equivalent must be used

Answer 113

order paper

Question 114

law enacted by a municipality

Answer 114

ordinance

Question 115

the voluntary association of two or more people who have combined their resources to carry on as co-owners of a lawful enterprise for their joint profit

Answer 115

partnership

Question 116

the party to whom any negotiable instrument is made payable

Answer 116

payee

Question 117

all property which is not real property

Answer 117

personal property

Question 118

a written request initiating a civil suit

Answer 118

petition (complaint)

Question 119

the individual who initiates a civil action

Answer 119

plaintiff

Question 120

the consideration stipulated by contract, generally expressed in money or money-worth

Answer 120

price

Question 121

a party who appoints a second party to serve as an agent

Answer 121

principal

Question 122

a corporation formed by individuals to carry out some non-governmental function

Answer 122

private corporation

Question 123

an award paid to the plaintiff in order to punish the defendant, not to compensate the plaintiff

Answer 123

punitive damages

Question 124

an endorsement which limits the liability of the endorser

Answer 124

qualified endorsement

Question 125

conforming an act which was executed without authority or an act which was voidable

Answer 125

ratification

Question 126

land and those objects permanently attached to land

Answer 126

real property

Question 127

canceling, annulling, avoiding

Answer 127

rescission

Question 128

refusal to accept

Answer 128

rejection

Question 129

an endorsement which prevents the use of the instrument for anything except the stated use

Answer 129

restrictive endorsement

Question 130

the annulment or cancellation of an instrument, act or promise by one doing or making th eoffer

Answer 130

revocation

Question 131

the transfer to title to goods from the seller to the buyer for a consideration called the price

Answer 131

sale

Question 132

the contracting of services rather than goods

Answer 132

service contracts

Question 133

those having title to one or more shares of stock in a corporation; combined, they represent ownership of the corporation

Answer 133

shareholders (stockholders)

Question 134

federal legislation intended to promote competition among businesses by prohibiting restraint of trade

Answer 134

Sherman Antitrust Act

Question 135

an individual who takes no active part in the management of a partnership, but has capital invested in the business

Answer 135

silent partner

Question 136

any contract other than a formal contract, whether written, oral, or implied

Answer 136

simple contract

Question 137

a business owned by one person who is subject to claims of crediors

Answer 137

sole proprietorship

Question 138

one authorized by the principal to execute specific act(s)

Answer 138

special agent

Question 139

an endorsement which designates the particular person to whom payment is to be made

Answer 139

special endorsement

Question 140

a contract remedy by which the court requires the breaching party to perform the contract

Answer 140

specific performance

Question 141

the principle that the decision of a higher court should serve as a guide or precedent and control the decision of a similar case in the future

Answer 141

stare decisis

Question 142

a statute originally enacted by English Parliament, and now enacted in some form in all the American states, listing certain types of contracts which could only be enforced if in written form

Answer 142

statute of frauds

Question 143

a law that restricts the period of time within which an action may be brought to court

Answer 143

statute of limitations

Question 144

laws which are enacted by legislative bodies

Answer 144

statutes

Question 145

is a creation of the tax codes; shareholders elect to be taxed as a partnership (no double taxation) without losing corporation status

Answer 145

subchapter S corporation

Question 146

a notice given to a defendant, attaching the complaint and stating a time frame in which an answer must be filed or an appearance made

Answer 146

summons (process)

Question 147

a person not party to a contract, but whom parties intended to benefit

Answer 147

third party beneficiary

Question 148

ownership; evidence of ownership of property

Answer 148

title

Question 149

a private or civil wrong, other than by breach of contract, for which there may be action for damages

Answer 149

tort

Question 150

court which conducts the original trial and renders its decision

Answer 150

trial court

Question 151

improper influence that is asserted by one dominant person over another, without the threat of harm

Answer 151

undue influence

Question 152

an agreement which at the current time is not enforceable by law

Answer 152

unenforceable contract

Question 153

recognized as the most important statute in business law, it includes provisions which regulate certain sales of goods and negotiable instruments

Answer 153

uniform commercial code

Question 154

a contract formed when an act is done in consideration for a promise

Answer 154

unilateral contract

Question 155

exceeding the maximum rate of interest which may be charged on loads

Answer 155

usurious

Question 156

a contract which will be enforced by the courts

Answer 156

valid contract

Question 157

an agreement of no legal effect

Answer 157

void contract

Question 158

a contract which would be an enforceable agreement, but due to circumstances may be set aside by one of the parties

Answer 158

voidable contract

Question 159

guarantees made by a seller than an article, good, or service will conform to a certain standard or will operate in a certain manner

Answer 159

warranties