Business Law Vocabulary Flashcards
The authority an agent is believed by third parties to have because of the behavior of the principal.
Apparent Authority
A creation of the tax codes in which shareholders elect to be taxed as a partnership (no double taxation) without losing corporation status.
Subcharter S Corporation
A business owned by one person who is subject to claims of creditors.
Sole Proprietorship
Land and those objects permanently attached to land.
Real Estate (Real Property)
A negotiable instrument containing a promise to pay.
Promissory Note
Partner unknown to the public with no part in management.
Dormant Partner (Sleeping Partner)
Warranties imposed by law, arising automatically because the sale has been made.
Implied Warranties
Items, required or proper and useful, for sustaining a human being at an appropriate living standard. (Examples: food, clothing and shelter).
Necessaries
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.
Commercial Paper, Negotiable Instrument
Operates in the state that granted the charter.
Domestic Corporation
The written request which initiates a civil law suit.
Complaint (Petition)
Rate of interest which exceeds the maximum that is allowed.
Usury
The person hired to perform work and who is obligated both as to the work to be done and s to the manner in which it is to be done.
Employee
Rules of conduct commanding what is right and prohibiting what is wrong.
Law
The written request which initiates a civil law suit.
Petition (Complaint)
Federal legislation intended to promote competition among businesses by prohibiting restraint of trade.
Sherman Antitrust Act
The party to initiates, or makes, an offer.
Offeror
The relationship that exists between a person identified as a principal and another by virtue of which the latter may make contracts with third persons on behalf of the principal.
Agency
Those persons under legal age; in most states (but not all), the standard is under the age of eighteen.
Minor
The party who gives up possession, but not the title of personal property in a bailment.
Bailor
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.
Process (Summons)
The transfer of title to goods from the seller to the buyer for consideration called the price.
Sale
The transfer of possession, but not the title of personal property by one party to another, under agreement.
Bailment
Failure to exercise ordinary care; omission to do something which a reasonable prudent person would do under ordinary circumstances or the doing or something which a reasonable and prudent person 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).
Negligence
A permanent judicial order or decree forbidding the performance of a certain act.
Injunction
A business owned by one person who is subject to claims of creditors.
Proprietorship
An agreement which would be an unenforceable agreement, but due to circumstances, may be set aside by one of the parties.
Voidable Contract
Person who writes his or her name on the back of an instrument.
Indorser (Endorser)
Person not party to a contract, but whom parties intended to benefit.
Third Party Beneficiary
The person who executes any draft.
Drawer
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.
Stare Decisis
An award paid to the injured party to cover the exact amount of their loss, but no more.
Compensatory Damages
The necessity that the parties desiring to enter into contracts meet all requirements.
Contractual Capacity
A contract which will be enforced by the court.
Valid Contract
A contract which consists of mutual promises to perform some future acts.
Bilateral Contract
An intended acceptance which changes or qualifies an original offer, and in effect, rejects that offer and becomes a new offer.
Counteroffer
The consideration stipulated by contract, generally expressed in monetary terms.
Price
Those contracts which must be in special form or produced in a certain way, such as under seal.
Formal Contract
A contract formed when an act is done in consideration for a promise.
Unilateral Contract
A more serious criminal offense that is punishable by death or imprisonment in a penitentiary for more than one year.
Felony
Official document detailing a defendant’s defense.
Answer
Laws which seek to promote competition among business.
Antitrust
The actual and definite statement of a seller, either orally or in writing, at the time of the sale.
Express Warranties
The party appointed by the principal to enter into a contract with a third party on behalf of the principal.
Agent
The person, company or financial institution ordered to pay a draft.
Drawee
A person who is not a party to a contract to whom the promisor of a contract owes an obligation or duty.
Creditor Beneficiary
The substitution of a new party for one of the original parties to a contract, such that the prior contract terminates and a new one substitutes for it.
Novation
Recognized as the most important statute in business law, it includes provisions which regulate certain sales of goods and negotiable instruments.
Uniform Commercial Code
The carrying out or completion of some task.
Execution
The contracting of services rather than goods.
Service Contracts
Persons who are under the influence of alcohol to the extent that their judgement may be impaired.
Intoxication
Improper influence that is asserted by one dominant person over another, without the threat of harm.
Undue Influence
Guarantee made by a seller that an article, good, or service will conform to a certain standard or will be operated in a certain manner.
Warranty
An award paid to the plaintiff in order to punish the defendant, not to compensate the plaintiff.
Punitive Damages
The annulment or cancellation of an instrument, act, or promise by the one doing or making the offer.
Revocation
A means whereby one party in a contract conveys rights to another person, who is not a party to the original contract.
Assignment
A contract in which the parties express their intentions, either orally or in writing at the time of the agreement.
Express Contract
The party who acquires possession but not the title, of personal property by one party to another, under assignment.
Bailee
Anything that may be owned.
Property
A decision of a court of law.
Judgement
The acknowledgement by a bank of a receipt of money with an agreement of repayment.
Certificate of Deposit
A person in possession of an instrument.
Bearer
Stating an untrue fact.
Misrepresentation
One in possession of a commercial paper.
Holder
The individual who initiates a civil action.
Plaintiff
One who takes initial steps to form a corporation.
Promoter
Administrative step taken after an arrested person is brought to a 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.
Booking
That which the promisor demands and receives as the price for a promise.
Consideration
Stock reacquired by a corporation.
Treasury Stock
A statute originally enacted by English Parliament, and now enacted in some form in all of the American states, listing certain types of contract which could only be enforced if in written form.
Statute of Frauds
An offense which is injurious to society as a whole.
Crime
An agreement to an offer resulting in a contract.
Acceptance
An indorsement which prevents the use of the instrument for anything except the stated use.
Restrictive Indorsement (Restrictive Endorsement)
Law enacted by a local government entity.
Ordinance
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.
Partnership
An agreement of no legal effect.
Void Contract
Courts hearing cases appealed from a lower court.
Appellate Courts
An agreement made an executed in satisfaction of the rights one has from a previous contract.
Accord and Satisfaction
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, at his or her detriment.
Fraud
One who ships goods by common carrier.
Consignor
A written order signed by one person requiring the person to whom addressed to pay a particular sum of money, to order or bearer, on demand or at a certain time.
Draft
Confirming an act which was executed without authority or an act which was voidable.
Ratification
A less serious criminal offense, generally punishable by fine and/or imprisonment of less than one year.
Misdemeanor
Moveable tangible personal property.
Goods
Pretrial steps taken to learn the details of the case.
Discovery
A check for which the bank assures that the drawer has sufficient funds to make payment.
Certified Check
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.
Malpractice
Request to a higher court to review a lower court’s decision.
Appeal
The person who executes a promissory note.
Maker
One that is incorporated in a foreign country.
Alien Corporation
The amount of the damages stipulated in a contract to be paid in the event one party breaches the contract.
Liquidated Damages
Laws which are enacted by legislative bodies.
Statutes
Having no words other than the signature of the indorser.
Blank Indorsement
A third party beneficiary to whom no legal duty is owed and for whom performance is a gift.
Donee Beneficiary
To take into police custody.
Arrest
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.
Merchant
A law that restricts the period of time within which an action may be brought to court.
Statute of Limitations
Exceeding the maximum rate of interest which may be charged on loans.
Usurious
A corporation formed by individuals to carry out some non-governmental function.
Private Corporation
Canceling, annulling, avoiding.
Recission
Those individuals actively and openly engaged in the business and held out to everyone as a partner.
General Partner
The party making the assignment.
Assignor
The party who hires people to do certain work.
Employer
An order by a depositor on the bank to pay a sum of money to a payee.
Check
Those having title to one or more shares of stock in a corporation; combined, they represent ownership of the corporation.
Shareholders (Stockholders)
Partner active in a business unknown to the public.
Secret Partner
Court which conducts the original trial and renders its decision.
Trial Court
Customs which have become recognized by the courts as binding on the community.
Common Law
All property which is not real property.
Personal Property
Person who pretends to be a partner or permits others to represent him or her as a partner.
Nominal Partner
A designation which applies to a corporation in which an outstanding share of stock and managerial control are held by a limited number of people (often members of the same family).
Close (Closely Held) Corporation
The authority of an agent, stated in the document of agreement creating the agency.
Express Authority
An agent’s authority to do things not specifically authorized in order to carry out express authority.
Implied Authority
The party to whom any negotiable instrument is made payable.
Payee
The person against whom legal action is brought.
Defendant
An individual who takes no active part in the management of a partnership, buy has capital invested in the business.
Silent Partner
Termination of a contract by performance, agreement, impossibility, acceptance of breach, or operation of law.
Discharge
Recipient of the proceeds of a life insurance policy; one who inherits property as specified in a will.
Beneficiary
Partners who have their liability for the firm’s debts limited to the amount of their investment.
Limited Partner
Any contract other than a formal contract, whether written, oral, or implied.
Simple Contract
An indorsement which limits the liability of the indorser.
Qualified Indorsement (Qualified Endorsement)
A private or civil wrong, other than by breach of contract, for which there may be action for damages.
Tort
A party who appoints a second party to serve as an agent.
Principal
One who is authorized to execute the principal’s business of a particular kind, or all the principal’s business at a particular place, if not all of one kind.
General Agent
A commercial paper made payable to bearer, i.e. the person having possession of such.
Bearer Paper
The goods specified by the buyer and seller.
Identified Goods
A body of persons elected by the stockholders to define and establish corporate policy.
Board of Directors
Goods which are not in existence at the time a contract is agreed to.
Future Goods
An indorsement which designates the particular person to whom payment is to be made.
Special Indorsement (Special Endorsement)
The body of law concerned with private or purely personal rights.
Civil Law
A token award to symbolize vindication of the wrong done to the plaintiff; generally, the award is $1.00.
Nominal Damages
A relationship of trust and confidence, such as that which exists between partners in a partnership.
Fiduciary
Laws dealing with crimes and the punishment of wrongdoers.
Criminal Law
Designation that applied when a corporation operates in any state other than where it is chartered.
Foreign Corporation
An agreement which at the current time is not enforceable by law.
Unenforceable Contract
Those contracts in which the terms have not been completely executed or fulfilled by the parties.
Executory Contract
One to whom goods are shipped by common carrier.
Consignee
Newest form of business ownership recognized by the U.S.; combines features of both the corporation and partnership.
Limited Liability Corporation
Evidences of ownership of personal property such as stock of corporations, checks and copyrights.
Intangible Personal Property
A check drawn on a bank’s own funds and signed by a responsible bank official.
Cashier’s Check
An equitable doctrine that prevents the promisor from revoking the promise when the promisee justifiably acts in reliance upon the promise to his detriment.
Promissory Estoppel
One authorized by the principal to execute specific act(s).
Special Agent
Persons who are afflicted with a serious mental disorder impairing their ability to function.
Insane
A situation in which one of the parties to a contract fails or otherwise refuses to perform the obligations established in the contract.
Breach of Contract
A corporation formed to carry out government functions.
Public Corporation
A contract remedy by which the court requires the breaching party to perform the contract.
Specific Performance
The person to whom an offer is made.
Offeree
A document of conveyance which provides written evidence of title to tangible personal property.
Bill of Sale
A person who becomes the holder of a negotiable instrument by indorsement which names him or her as the person to whom the instrument is negotiated.
Indorsee (Endorsee)
Those rules of conduct prescribed by a government and its agencies in regulating business transactions.
Business Law
A seller agrees to transfer title to goods to the buyer for a consideration (price) at a future time.
Contract to Sell
The contract existing between the cosignor (shipper) and the carrier.
Bill of Lading
The proposal to make a contract.
Offer
The act of transferring ownership of a negotiable instrument to another party.
Negotiation
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.
Negotiable Instrument (Commercial Paper)
The party to whom the assignment is made.
Assignee
Contracts in which the terms have ben fulfilled.
Executed Contract
One in which terms of the contract are implied by acts or conduct of the parties.
Implied Contract
Refusal to accept.
Rejection
An agreement between two or more competent persons which is enforceable by law.
Contract
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.
Independent Contractor
A commercial paper made payable to the order of some named party; the word order or its equivalent must be used.
Order Paper
The signature or statement of purpose by the owner on the back of negotiable instrument, which indicates the future control of the instrument.
Indorsement (Endorsement)
Those goods which are, at the time of the contract, in existence and owned by the seller.
Existing Goods
A person in possession of a negotiable instrument who accepts the negotiable instrument in good faith and for value.
Holder in Due Course
Charging a person with a crime and asking for that person’s plea.
Arraignment
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.
Duress
Power to act for someone else.
Authority
The repudiation of, or election to avoid, a voidable contract.
Disaffirmance
A business entity created by statutory law and owned by individuals known as stockholders.
Corporation
Stock that entitles owner vote.
Common Stock
Stock with an assigned face value
Par-value Stock
Stock giving special advantage as to payment of dividends, upon liquidation or both.
Preferred Stock
