Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Leg Bus Issues > Midterm > Flashcards

Midterm Flashcards

1
Q

Accountants are subject to three main types of liability under contract law:

A

Negligence
Breach of Contract
Fraud

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

An Accountant is liable for negligence if

A

Accountant failed to exercise care of a competent, reasonable professional that causes loss/injury to client.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

GAAP & GAAS when it comes to negligence

A

They are minimum duty of care standards

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Accountant steps to avoid potential liability of negligence:

A

Qualified opinion
Disclaimer (must be specific)
If unaudited, must be clearly marked

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Actual Fraud

A

Intended Fraud

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Constructive Fraud

A

Unintended Fraud

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Three approaches to third-party liability:

A

Privity
Restatement
Reasonably Foreseeable users

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Privity

A

Accountant Friendly, minority

Very narrow group may hold accountant liable: Third parties in privity of contract (known purpose, known party, and accountant must agree)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Restatement

A

In the middle, majority

Third parties who were known recipients or in a class of known recipients of accountant’s work

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Reasonably Foreseeable Users

A

Not Accountant Friendly, minority

Anyone can sue the accountant as long as they are reasonably foreseen

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Working papers

A

Various documents used and developed during audit. Accountant is legal owner, but client may access at any time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Accountant-client privilege existing

A

Does not exist under federal law, but some states have found that there is a limited version.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Attorney-client privilege & Accountants

A

Accountants can be used for the purpose of seeking help, must keep information confidential.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Securities Act of 1933 Section 11

A

Accountants are liable to security purchasers for misstatements and omissions of material facts made in statements filed with the Securities and Exchange Commission (SEC)

Don’t have to prove you relied on this

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Securities Act of 1933 Section 15

A

Extends liability to controlling persons when a Section 11 violation occurs (Ex. Corporate Directors)

Don’t need involvement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Defenses to 1933 Act Liability

A

Must at least live up to GAAP and GAAS and provide evidence of due diligence.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Securities Exchange Act of 1934 Section 18

A

Accounts liable for fraudulent statements made in documents filed with the SEC. Must show the fraud.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Defenses to Section 18 of Securities Exchange Act of 1934:

A

Accountant’s good faith is a defense

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Good faith is disproven by:

A

-Scienter (Accountant acted knowingly illegally)
-Reckless Conduct
-Gross negligence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Private Securities Litigation Reform Act (PSLRA) of 1995

A

Requires accountants to use adequate procedures when performing audits to detect any illegal acts of the company being audited.

If accountant stays silent, they’re aiding & abetting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Aiding & Abetting

A

Helping with a crime

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Sarbanes-Oxley Act of 2002

A

Created the Public Company Accounting Oversight Board (PCAOB) to limit fraud

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Dodd-Frank Act of 2010

A

Creates Financial Stability Oversight Board with powers to monitor various financial proposals and their accounting methods

Amends and strengthens Sarbanes-Oxley Act.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

How to prove fraud

A

-Accountant misrepresented a material fact
-Accountant acted with intent to deceive
-Client justifiably relied on the misrepresentation
-Client suffered an injury by relying on the fraudulent information

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Intellectual Property

A

Property that results from one’s mind and creative efforts, rather than physical efforts.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Trademark

A

A distinctive nonfunctional mark, word, design, picture, or arrangement used by a producer in conjunction with a product that tends to cause a consumer to identify the product with the producer. Ex. McDonals Gold Arches

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Trademark process

A

Trademarks must be registered with U.S. Patent and Trademark Office to be protected in interstate use.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Remedies for trademark infringement:

A

Money damages
Injunction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Service Mark

A

Mark used in conjunction with a service

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Product trademark

A

Mark affixed to a goods, its packaging, or its labeling

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

*Collective Mark

A

Mark identifying producers as belonging to a larger group (Ex. Trade Union)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Certification Mark

A

Mark licensed by a group

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

*USPTO Trademark Registration

A

*Registrant summits drawing and evidence on first use

PTO Registers unless mark is generic, descriptive, immoral, deceptive, disparaging, etc.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

*Color as a Trademark

Supreme Court in 1995

A

Color can act as a symbol that has developed secondary meaning (customers identify Qualitex’s green color) and identifies the product’s source

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Preliminary Injunction

A

Order the poser to stop copying during court process. Must demonstrate you will win and you’re the good guy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

*Does economic power matter of either brand in a trademark case?

A

Economic power DOESN’T MATTER

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Trade Dress

A

A product’s overall appearance and image

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

*Trade Dress Protections

A

Same protection as a trademark

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Must prove three things to win a trade dress infringement claim:

A

-Trade dress is primarily nonfunctional
-Trade dress is inherently distinctive or has acquired a (recognized) secondary meaning
-Alleged infringement creates a likelihood of confusion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

*Relationship between Trademark dilution and Trademark Infringement

A

They are NOT THE SAME

Dilution additionally requires that the mark be famous and does not require a showing of consumer confusion.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Trademark dilution

A

When something is very similar to a famous trademark.

42
Q

Trademark infringement

A

When something takes sales and causes confusion.

43
Q

Copyright

A

Protects fixed form of the expression of an original, creative idea

44
Q

Test for enforcing copyright associated with utility item:

A

-The design must be separately identifiable
-Capable of existing independently (out of context of the utility item)
-Must be original

45
Q

Remedies for Copyright infringement:

A

Injunction
Money damages (only if the work is registered)

46
Q

Who owns employee-created copyright works?

A

Employer usually owns the copyright rights, but it is usually covered in the job agreement.

47
Q

Fair-Use Doctrine

A

Most common defense against copyright infringement.

Provides that a person may reproduce a portion of copyrighted work for purposes of criticism, comment, news reporting, teaching, scholarship, research, and MAYBE parody.

48
Q

Are parodies protected under fair use?

A

If it is transformative

49
Q

What determines if something is protected under fair use?

A

-Purpose and character of use
-Nature of copyrighted work
-Amount used
-Effect on market

50
Q

No Electronic Theft Act 1997

A

Punished people to infringed on copyright who didn’t make a profit from it.

51
Q

Digital Millenium Copyright Act

A

Outlaws manufacture, sales, or distribution of encryption-breaking devices that can be used to illegally copy software.

52
Q

Patent

A

A product, process, invention, machine, or plant produced by asexual reproduction

53
Q

Patent Requirements:

A

-Subject matter must be patentable
-Object muse be novel, useful, and non obvious

54
Q

Remedies for patent infringement:

A

-Money damages
-Injunction

55
Q

Venue considerations

A

Sophisticated judges; juries that tend to give big damages awards

56
Q

America Invests Act 2011

A

First person to file a patent has the rights to the invention

Made it easier and more affordable for small businesses and sole entrepreneurs to apply for patents.

57
Q

Trade Secrets

A

Process, product, method of operation, or information that gives a businessperson a competitive advantage

58
Q

Remedies for trade secret infringement:

A

-Money damages
-Injunction

59
Q

The Uniform Commercial Code

A

A statutory source of U.S. contract law involving sale of goods

60
Q

Article 2 of the UCC and common law relationship

A

When Article 2 is silent on an issue of sales contract information or interpretation, common law rules apply.

61
Q

UCC article 1

A

General provisions

62
Q

UCC article 2

A

Sales

63
Q

UCC article 2A

A

Leases

64
Q

UCC Article 3

A

Negotiable instruments

65
Q

What happens if a state has passed statutory law regarding contracts?

A

It always overrules common law

66
Q

Types of contracts:

A

-Goods
-Services
-Real property (Ex. House)
-Intangible property (shares of a company)

67
Q

Sales

A

Passing of title from seller to buyer for a price

68
Q

Goods

A

Tangible things that can be moved (Ex. Cars, furniture, electronics)

Not real estate or services

69
Q

Are items take from the land goods or real estate?

A

Goods if removed by owner
Real estate if removed by buyer

70
Q

*Mixed goods and services contracts

A

Contracts that include both goods and services

71
Q

*Predominant Purpose

A

UCC applies to a mixed contract if goods are predominant part of transaction

72
Q

Merchant

A

Buyers OR Sellers who
-Deal in goods of the kind involved or
-By occupation, represent themselves as having knowledge and skill unique to goods involved in transaction or
-Employ a merchant as a broker, agent, or other intermediary.

73
Q

Lease

A

Transfer of right to possession and use of goods for a term in return for consideration

74
Q

Lessor

A

Person who transfers right to possession and use of goods under lease

75
Q

Lessee

A

Person who acquires right to possession and use of goods under lease

76
Q

Consumer leases

A

Lease for personal use of goods valued under $25,000

77
Q

Finance leases

A

Three parties

Bank or finance company acquires title and then leases goods to the lessee.

78
Q

UCC when it comes to contract formation

A

UCC is more relaxed and flexible. Contracts for sale or lease of goods may be made in any manner sufficient to show agreement.

79
Q

UCC when it comes to contract formation OFFER AND ACCEPTANCE

A

-Offers valid even if some terms are left open
-Mirror-image rule does not strictly apply
-Mutual consideration is required
-Allowed to modify with no consideration

80
Q

UCC when it comes to open terms

A

Under the UCC, court will fill in certain terms an offer leaves open.

81
Q

Merchant’s Firm Offer:

A

-Made by merchant
-Offer in writing
-Assurances it will remain open for up to three months
-Remains open despite lack of consideration for keeping it open.

82
Q

If firm offer states no expiration time,

A

UCC supplies a three-month irrevocability period

83
Q

Under UCC, Offeree may accept an offer by…

A

Any reasonable means of communication

84
Q

Under UCC, if the last set of negotiations is not specifically rejected,

A

Then the last terms standing are the ones that apply to the transaction.

85
Q

UCC assumes terms found in the battle of the forms are

A

Part of the contract, whether expressly agreed to or not.

86
Q

Under UCC Statute of Frauds, Contracts for sale of goods must be in writing if goods valued at

A

$500 or more

87
Q

Under UCC Statute of Frauds, lease contracts must be in writing if lease payments are

A

Over $1,000

88
Q

Exceptions to UCC Statute of Frauds:

A

-Buyer/lessee ordered goods made to meet specific needs.
-Goods aren’t suitable for sale/lease in ordinary course of business
-Seller/lessor has substantially begun manufacture of goods or made commitments for their procurement

89
Q

Between merchants, statue of frauds is satisfied by

A

A writing by either party sent to the other party if the recipient does not object within 10 days (even if recipient doesn’t acknowledge)

90
Q

Between non merchants, statue of frauds is satisfied by

A

Writing

91
Q

Parol Evidence

A

Info from outside a written contract

92
Q

Parol Evidence is admissible in a legal dispute regarding a contract if:

A

-The additional terms it provides are consistent with the contracts terms or
-The evidence helps in interpreting the agreement (including Course of performance, Course of Dealing, or Usage of trade)

93
Q

Course of performance

A

Previous conduct of the parties regarding the contract in question

94
Q

Course of dealing

A

The way the parties have interacted in past transactions

95
Q

Usage of trade

A

The way others in a specific place, vocation, trade, or industry usually conduct business.

96
Q

Unconscionable agreement

A

An agreement so unfair or one-sided the court refuses to enforce it.

Court can either reject or remove the unfair terms

97
Q

Contracts for the International Sale of Goods

A

United Nations treaty governing International business-to-business sales contracts

98
Q

Why Contracts for the International Sale of Goods is important:

A

-Governs international sales contracts
-Provides clarity, predictability, and uniformity for global business.

99
Q

Trump Case

A

Trump put back on the ballet in Colorado because Section 3 of the 14th Amendment was enacted after the civil war and the Colorado Supreme Court had no authority to take that step.

100
Q

The justices in the trump case

A

All agreed but liberal judges had a dissent talking about the problem of Trump. Amy Coney Barrett talked about not disagreeing and keeping the country unified.

Leg Bus Issues (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions