Chapter 7 - Contract and Business Law - Terminology Flashcards
actions or threats used by debt collectors to harass a debtor
abusive debt collection practices
a manifestation of assent to the terms made by the offeror in a manner invited or required by the offeror
acceptance
payment by one party and acceptance of it by another in full satisfaction of a disputed claim
accord and satisfaction
unforeseen occurrences not caused by a human being or a human agency
acts of God
a consideration that is reasonably proportional under the circumstances
adequacy for consideration
accumulation of capital assets, usually cash, from difference sources. In corporations usually occrs as a result of the sales of securities to investors.
aggregation of capital
unclear meaning of terms or words
ambiguity
The rate of interest actually paid by a borrower when the lender’s fees and “points” are considered; the true rate of interest received from money invested when the compounding factor is included
annual percentage rate of interest (APR)
document signed by organizers of a corporation setting forth the name, purpose, authorized capital stock and other requirements of a corporation
articles of incorporation
one to whom a legal right is transferred
assignee
transfer of legal rights
assignment
one who assigns legal rights
assignor
attempting to sell a customer a higher-priced item after having advertised a similar item for a lower price
bait and switch advertising
legal process by which honest debtors obtain relief under laws designed to protect them from their creditors
bankruptcy
a contract between parties based on exchange of promises
bilateral contract
common name for statutory laws designed to protect investors from securities fraud
blue sky laws
the violation of a provision in a legally enforceable agreement that gives the damaged party the right to recourse in a court of law
breach of contract
legal ability to enter into a binding agreement
capacity to contract
“Let the buyer beware.” Common law maxim requiring the consumer to judge the quality of a product before making a purchase
caveat emptor
a legal charter to conduct business as a corporation issued y a government, usually the state
certificate of incorporation
a written document by a depositor directing the bank to pay a certain sum to the order of a named payee
check
a corporation whose stock is held by a small group of stockholder who often actively conduct the corporate business
closely held corporations
cash or other asset pledged as security for repayment of a debt
collateral
short-term unsecured debt instruments
commercial paper
class of corporate security whose holders have the right to vote to elect directors
common stock
amount awarded a plaintiff to compensate for injury for losses suffered
compensatory damages
a benefit or detriment bargained for by parties who form a contract
consideration
pattern of uninterrupted management
continuity of management
a certificate of incorporation issued by federal or state government authorizing an organization to conduct business as a corporation
corporate charter
an entity with legal powers chartered under law and designed to exist indefinitely where ownership is vested in stockholders
corporation
a contract not to act in competition
covenant not to compete
one who possesses a credit card that allows the cardholder to obtain credit in accordance with the terms of a contract between the cardholder and issuing institution
credit cardholders
a body corporate organized and existing under law
de jure corporation
one to whom a power, authority, or responsibility has been transferred
delegatee
one who transfer a power, authority or responsibility
delegator
repudiate; disavow. For example, a minor disavowing a contract.
disaffirm
the object of a debtor who files a bankruptcy proceeding. In meeting requirements of the law, the person receives release from most debts.
discharge from debts
a corporation doing business in the state of its incorporation
domestic corporation
a written order drawn on one party by another and requesting that payment be made to a third party
draft
party on whom a draft is drawn
drawee
party who draws an order on another party requesting the drawee to make payment to a third party
drawer
a contract that has been completely performed
executed contract
an agreement not yet performed by the parties
executory contract
a contract where the terms have been expressed orally or in writing by the parties
express contract
powers explicitly granted by the contract
express powers
a law that requires persons who operate a business under a name other than their own to register that fact with a government office
fictitious name laws
a document filed with an appropriate government office that notifies the public that specified property is subject to existing law
financing statement
a contract provision excusing performance when a superior force makes performance impossible (Act of God)
force majeure clauses
a corporation doing business or maintaining an office in a state other than its state of incorporation
foreign corporation
a contract that complies with specific requirements of law
formal contracts
a written consumer product warranty that complies with the Magnuson-Moss Warranty Act.
full warranty
a party (bank or employer) who is required to withhold payment due or to become due to someone and pay it over o the garnishor
garnishee
court action requiring a party who is indebted to a person to withhold payment and pay a sum over to a creditor (garnishor) who instituted garnishment proceedings
garnishment
a party who institutes a garnishment proceeding
garnishor
a member of a partnership who shares with other partners the management and the profits and losses of the business
general partner
any act that violates a provision of law
illegal act
deceptive; based on a false impression. Courts will not enforce contracts where a party has made a vague, insubstantial, or deceptive promise.
illusory
an agreement or acquiescence manifested by a person’s actions or inaction
implied contract
powers not specifically enumerated but implied in a contract
implied powers
a warranty that is implied based on the nature of the transaction, the relationship of parties and the circumstances and customs
implied warranty
a warranty under the UCC that goods are suitable for the buyer’s intended use
implied warranty of fitness of goods
a warranty imposed on merchants that goods sold are such as to allow the buyer to assume they are as defined in the UCC
implied warranty of merchantability
where circumstances beyond the control of a contracting party make it impossible to perform under a contract
impossibility of performance
contract for which the law does not prescribe a set form
informal contracts
information concerning financial matters and prospective actions of a corporation available only to persons within the corporation
insider information
court proceeding resulting in appointment of a guardian to exercise control over a ward, the ward’s property, or both
legal guardianship
statutes that provide a means for a consumer who buys goods that are defective (frequently autos) to obtain necessary repairs or replacement of the goods
lemon laws
a characteristic of certain forms of investment where the investor’s liability is limited to his or her investment.
limited liability
a business structure combining aspects of both corporations and partnerships, in which the members are insulated from actions of others in the company
limited liability company
a partner in a limited partnership whose liability for debts of the partnership is generally limited to the partner’s investment
limited partner
a partnership with at least one general partner and one or more limited partners organized under statutory law
limited partnership
a warranty that expressly includes certain limitations of the warrantor’s liability
limited warranty
a fixed amount of damages that parties agree to in the event of a breach of contract
liquidated damages
a term commonly applied to a person who signs a promissory note
maker
an understanding between parties manifested by an offer and an acceptance
mutual assent
where each of the parties to a contract was mistaken as to a fact material to the formation of a contract
mutual mistake
transferable by endorsement and delivery
negotiable
commercial paper signed by the maker or drawer containing an unconditional promise or order to pay a sum certain in money, made payable on the demand or at a fixed time to the order of someone or to the bearer
negotiable instrument
a token amount awarded to a plaintiff who proves the defendant liable but fails to prove actual damages
nominal damages
duties that cannot be legally transferred to others
non-delegable duties
refers to contracts that do not comply with requirements for negotiability under the UCC. One who acquires a non-negotiable instrument or contract takes it subject to all defenses between the original parties
non-negotiable
failure to perform as required by a contract
non-performance
statement or conduct by a person constituting a proposal to enter a contract
offer
one to whom an offer has been made
offeree
one who makes an offer
offeror
A rule of law providing that when a contract is complete, oral agreements made prior to or at the time of execution of the contract cannot be admitted in evidence to vary or contradict the terms of the contract absent fraud, mistake or illegality
parol evidence rule
an association of two or more people who carry on business for profit as co-owners and share in the profits and losses
partnership
something done or given in the past that cannot serve as consideration in the present for a contract
past consideration
party to whom a negotiable instrument is payable
payee
fulfillment of a promise under a contract
performance
indefinite lifetime, a characteristic of a corporation
perpetual existence
to disregard the identity of a corporation as an entity separate from its shareholders and hole the stockholders liable
pierce the corporate veil
a duty, the performance of which does not constitute a valid consideration for a contract
pre-existing duty
shares of corporate stock that receive preference in payment of fixed dividends and priority in receiving assets upon dissolution of the corporation
preferred stock
party to whom a contractual promise has been made
promissee
party who makes a contractual promise
promisor
a doctrine of contract law under which a promise, even though made without consideration, may be legally enforceable if the promise induces action on the part of the promissee
promissory estoppel
a written promise to pay a certain sum to or to the order of another
promissory note
guidelines (usually unwritten) by which courts make determinations whether certain acts are beneficial or harmful to society
public policy
corporations whose securities are traded in public markets
publicly traded corporations
exaggerated, but not fraudulent, claims by a seller or sales person
puffing
a sum of money awarded to the plaintiff in a civil case as a means of punishing the defendant for wrongful action
punitive damages
an act or event that a reasonable person would anticipate to occur as a result of a prior act or event
reasonably foreseeable
cancellation. An equitable remedy that annuls a contract
rescission
an investment in a stock or bond issued by a corporation
security
a written contract between a debtor and a creditor granting the creditor a security interest in collateral
security agreements
a business owned a operated by one individual
sole proprietorship
a court-imposed requirement that a party perform obligations incurred under a contract
specific performance
a statutory law patterned after an English statute that requires certain contracts to be in writing
statute of frauds
a written contract whereby one party agrees to become liable for the debt or default of another party
suretyship
a person designated to receive payment of an obligation as a result of a contract between other persons
third-party creditor beneficiary
a person designated to receive something of value as a result of a contract between other persons
third-party donee beneficiary
ability to readily transfer ownership interests in a corporation by simply endorsing stock certificates
transferability of ownership
refers to acts committed by a corporation beyond the scope of its legal authority
ultra vires acts
contracts tat result In oppression against consumers who have no real choice as to the terms imposed
unconscionable consumer contracts
Model code adopted by most states to help facilitate interstate commerce
Uniform Commercial Code
a contract formed by a promise being made in exchange for performance of an act
unilateral contract
mistake made by only one party to a contract concerning a material aspect of the contract
unilateral mistake
a rate of interest charged to a borrower that exceeds the maximum rate allowed by law
usurious rate of interest
an agreement that cannot be enforced by law
void contract
an agreement that a party can choose to set aside
voidable contract
