Glossary

Question 1

Accredited Investors [definition]

Answer 1

institution (such as banks and insurance companies) or individuals (with a net worth of more than $1 million or an annual income of more than $200,000)

Question 2

Adopt [definition]

Answer 2

agree to be bound by the terms of a contract

Question 3

adversary system

Answer 3

A system based on the assumption that if two sides present their best case before a neutral party, the truth will be established

Question 4

After-acquired property [definition]

Answer 4

Items that the debtor obtains after the parties have made their security agreement.

Question 5

Agent [definition]

Answer 5

In an agency relationship, the person who is acting on behalf of a principal

Question 6

Apparent authority [definition]

Answer 6

A principal does something to make an innocent third party believe that an agent is acting with the principal’s authority, even though the agent is not authorized

Question 7

Arbitration [definition]

Answer 7

A form of ADR in which a neutral third party has the power to impose a binding decision

Question 8

Assignee [definition]

Answer 8

The person receiving an assignment—a transfer of contract rights to a third party

Question 9

Assignment [definition]

Answer 9

A transfer of contract rights to a third party

Question 10

Assignor [definition]

Answer 10

The person making an assigment

Question 11

Attorney-in-fact [definition]

Answer 11

The person who has the authority under a power of attorney to act for the principal

Question 12

Beneficiary [definition]

Answer 12

Someone who receives the financial proceeds of a trust

Question 13

Bilateral contract [definition]

Answer 13

A contract where both parties make a promise

Question 14

Blue sky laws [definition]

Answer 14

State statutes regulating securities

Question 15

Bona fide occupational qualification (BFOQ) [definition]

Answer 15

An employer is permitted to establish discriminatory job requirements if they are essential to the position in question

Question 16

Breach of duty [definition]

Answer 16

A defendant breaches his duty of due care by failing to behave the way a reasonable person would under similar circumstances

Question 17

C corporation [definition]

Answer 17

A corporation that provides limited liability to its owners, but is a taxable entity

Question 18

Categorical imperative [definition]

Answer 18

An act is only ethical if it would be acceptable for everyone to do the same thing

Question 19

Choice of forum [definition]

Answer 19

Determines the state in which any litigation would take place

Question 20

Clean opinion [definition]

Answer 20

An unqualified opinion. The company’s financial statements fairly present its financial condition in accordance with GAAP

Question 21

Codicil [definition]

Answer 21

An amendment to a will

Question 22

Comment letter [definition]

Answer 22

A letter from the SEC to an issuer listing changes that must be made to the registration statement

Question 23

Commerce Clause [definition]

Answer 23

Gives Congress the power to regulate commerce with foreign nations and among states

Question 24

Commercial exploitation [definition]

Answer 24

Prohibits the unauthorized use of another person’s likeness or voice for business purposes

Question 25

Common law [definition]

Answer 25

Legal precedents created by appellate courts

Question 26

Comparative negligence [definition]

Answer 26

A plaintiff may generally recover even if she is partially responsible

Question 27

Compensatory damages [definition]

Answer 27

Are those that flow directly from the contract

Question 28

Concerted action [definition]

Answer 28

Tactics taken by union members to gain bargaining advantage

Question 29

Consequential damages [definition]

Answer 29

Damages resulting from te unique circumstances of the injured party

Question 30

Consideration [definition]

Answer 30

The inducement, price, or promise that causes a person to enter into a contract and forms the basis for the parties' exchange

Question 31

Contract [definition]

Answer 31

A promise that the law will enforce

Question 32

Contributory negligence [definition]

Answer 32

A plaintiff who is even slightly negligent recovers nothing

Question 33

Covenant [definition]

Answer 33

A promise in a contract

Question 34

Creditor beneficiary [definition]

Answer 34

Wen the contracting party intended the benefit in fulfillment of some duty or debt

Question 35

Debtor [definition]

Answer 35

Another term for bankrupt

Question 36

Debtor in possession [definition]

Answer 36

Under Chapter 11, the bankrupt, in essence, serves as trustee

Question 37

Deferred annuity contract [definition]

Answer 37

Te owner makes a lump-sum payment now but receives no income until a later date

Question 38

Delegatee [definition]

Answer 38

A person who receives an obligation under a contract from someone else

Question 39

Delegator [definition]

Answer 39

A person who gives his obligation under a contract to someone else

Question 40

Difference principle [definition]

Answer 40

Rawls's suggestion that society should reward behavior that provides the most benefit to the community as a whole

Question 41

Disaffirm [definition]

Answer 41

To give notice of refusal to be bound by an agreement

Question 42

Dissociation [definition]

Answer 42

When a partner leaves a partnership

Question 43

Donee [definition]

Answer 43

A person who receives a gift of property

Question 44

Donee beneficiary [definition]

Answer 44

Wen the contracting party intended the benefit as a gift

Question 45

Due diligence [definition]

Answer 45

A reasonable investigation of a registration statement

Question 46

Electronic Communications Privacy Act of 1986

Answer 46

A federal statute prohibiting unauthorized interception of, access to, or disclosure of wire and electronic communications

Question 47

Exculpatory clause [definition]

Answer 47

A contract provision that attempts to release one party from liability in the event the other party is injured

Question 48

Express authority [definition]

Answer 48

Either by words or conduct, the principal grants an agent permission to act

Question 49

Express warranty [definition]

Answer 49

A guarantee, created by the words or actions of the seller, tat goods with meet certain standards

Question 50

Factual cause [definition]

Answer 50

The defendant's breach led to the ultimate harm

Question 51

Fair use doctrine [definition]

Answer 51

Permits limited use of copyrighted material without permission of the author