Business Law 2nd Term Final 2023

What is fair use doctrine?

Allows copyrighted material to be reproduced with permission for the following reasons: -Teaching -News Reporting -Literary Criticism -School Reports -Research

What is a patent?

-Gives an inventor exclusive right to make, use, or sell an invention
-Lasts 20 years

What is intellectual property?

-An original work fixed in a tangible medium of expression.
-Patents, copyrights, and trademarks assure that the rightful owners of intellectual property will have exclusive rights to their creations

Cost of patent?

$900 to do it yourself and $5,000-$10,000 with a lawyer

What are the requirements of an invention?

-must be useful
-must consist of a new idea

What do you have to do to use someone's patent?

-the owner gives you permission to use it or give you permission

What is a copyright?

-Gives an author, composer, photographer, etc. exclusive right to publish and sell artistic or literary work.
-Protection last the life of the author + 70 years.

Cost of copyright?

-$35-$55 for do-it-yourself
-$250-$500 with a lawyer

What are trademarks?

-Trademarks give exclusive right to use a particular word, name, or symbol to distinguish a product or business.

Cost of trademark?

$225-$600

What is real property?

-Land and anything connected to it, in the earth below, in the air above.
-Items permanently attached to property (ex. built in stoves)

What is personal property?

-Everything other than real property that can be owned

What is tangible personal property?

-Property that has substance and can be touched

What is intangible personal property?

-Property that has NO substance and cannot be touched

How is property acquired?

-Purchase
-Gift
-Inheritance

What must you do if you find a LOST item?

-Try and find the owner
-Advertise for the true owner
-Leave the item with the police

What must you do with misplaced property?

Leave the item with the business owner or find the owner.

What is abandoned property?

Property discarded by the owner without the intent to reclaim it

Three requirements of a gift of personal property?

-The donor must intend to make the gift
-The gift must be delivered
-The donee must accept the gift

Who is the lessee?

The lessee is the tenant

Who is the lessor?

The lessor is the landlord

What is waste?

Waste is damaging or destroying the property.

What is a tenancy?

Tenancy is when tenants own an interest in the real estate they lease. This is also called a leasehold estate.

What are the characteristics of Tenancy for Years?

-Any lease with a set determination date whether 1 day, 5 months, or \`5 years.
-Some states require this tenancy to be in writing; ther states require it to be in writing if it exceeds a year

What are the characteristics of Periodic Tenancy?

-Runs from one period to another like year-to-year or month-to-month
-Lease renews itself for the next period unless one party notifies the other of termination

What are the characteristics of Tenancy at Sufferance?

-A holdover tenancy
-Comes about when the tenant does not leave the property after the tenancy has expired
-Tenant is not entitled to notice to vacate but it is liable to pay rent for illegal occupancy

What are the characteristics of Tenancy at Will?

-Continues for an indefinite period of time
-Does not require a written agreement to create the tenancy
-Terminated only when one party gives notice of usually 30 days

What is a lease?

A lease is a written agreement between a lessor and a lesse. A lease creates a landlord-tenant relationship and provides the tenant with exclusive possession and control.

What are covenants to a lease?

Covenants to a lease are terms of the lease that gives right and duties of the landlord and tenant

What is eviction?

Eviction is when a landlord deprives a tenant of the possession of the premises.

Who carries out eviction?

A court appointed officer carries out an eviction.

What is constructive eviction?

Constructive eviction is when a landlord breaches a duty under a lease

What is the law of habitability?

Law of habitability states that the dwelling must be clean, properly heated, furnished with utilities, and safe.

What is a sublease?

A sublease is the transfer of part of the term of a lease, but not the remainder of it, to someone else.

When can a sublease occur?

A sublease can occur when someone is subletting as they are leaving town for a few days and need someone to reside in the property.

What is a fixture?

A fixture is an item of personal property attached to the property in such a way that they become real property.

What is a trade fixture?

A trade fixture is a fixture attached to business property that is needed to carry on the business.

When is the landlord liable for injuries?

A landlord is liable for injuries when injuries occur due to negligence in places such as hallways and stairways.

When is the tenant liable for injuries?

A tenant is held liable for injuries when it is a defect in private areas within the leased property.

What is a negotiable instrument?

A negotiable instrument is a commercial paper that is a written document giving legal rights that may be passed to others by endorsement or delivery.

What are the requirements when writing a negotiable instrument?

Must be a written instrument, signature of maker/drawer, unconditional promise or order, fixed sum of money,payable on demand or at a definite time, payable to order or bearer, dates and controlling words.

What is the most common negotiable instrument?

A check

What is an example of a draft?

A check

What is an example of a note?

A loan or CD

What are the 3 types of endorsements?

Blank endorsement, restrictive endorsement, and special/full endorsement.

Characteristics of blank endorsement?

-Simplest type of endorsement
-Least safe endorsement
-Signing your name in cursive only
-Use this type only when at bank ready to cash or deposit
-This is made payable to two people and both must endorse or one or the other person can endorse.

Characteristics of restrictive endorsement?

-Safest type of endorsement
-Used for individuals and businesses.

Characteristics of special/full endorsement?

-Used to transfer the check to someone else.
-No one else but that person can cash it.
-Pay to the order of...
-New person's name transferring check to original person's signature.

Examples of blank endorsement?

-Check made out to Joe AND Kelly Small (both sign)
-Check made out to Joe OR Kelly Small (only 1 has to sign)

Example of restrictive endorsement?

-Individual- Write "For Deposit Only", acct \#, then sign
-Business- Write "For Deposit Only" acct \# (if given), then sign business name

Example of special/full endorsement?

-Transfer a check to Kim Allen (Kim Allen's name first then your signature)
-Check when Kim Allen cashes it reads as follows: "Pay to the order of: Kim Allen, Name, and Kim Allen.

Where is an endorsement made on the check?

An endorsement is made on the back of the check.

Who is the maker of a note?

The person who promises to pay money in a note.

Who is the payee of a note?

To whom the promise to pay is made.

What is the purpose of the ABA number?

To identify the bank's location, the bank, and the federal reserve routing number.

What is the purpose of certified checks?

-The purpose of certified checks is it is your personal check guaranteed by the bank for payment due to you having the money in the bank.

What is the purpose of cashier's checks?

-The purpose of cashier's checks is that it is guaranteed by the bank, drawn on the bank's own funds, and signed by the teller.

What is the purpose of money orders?

-The purpose of money orders is to have a substitute for a check that is purchased from banks, most offices, or other places for a specific amount.

What are canceled checks?

-Canceled checks are checks that are believed to be lost or stolen so you either write a stop payment order which is binding for six months unless renewed in writing or tell the bank the stop payment order which is binding for 14 calendar days unless confirmed in writing.
-If the bank pays the check after a stop payment order has been made the bank is liable for the loss you incur.
-If someone issues a stop payment and an amount is actually owed, the person is still responsible for paying that debt amount.

What are outstanding checks?

Checks you have written and recorded but not processed by the bank yet.

What are bad checks?

-Also called a bounced check.
-Check written on an account that does not have enough funds to cover it. (insufficient funds)

What are stale checks?

-A stale check is a check that is more than six months old.
-Bank may refuse to pay the stale check.

What are non-sufficient funds?

When a check is written on an account that does not have enough funds to cover it (same as bounced checks)

What is a signature card?

A record kept at the bank that is used to identify your signature that should be used when signing your checks

What is material altercation?

Someone charges a check you wrote through no fault of yours (meaning you wrote it correctly but someone adds an extra "0" to the amount)

What is a draft?

An order to a third party to pay money (checks).

What is note?

A written promise to pay money

What is commercial paper?

A type of contract governed by Uniform Commercial code rather than general contract law.

What is payee?

Person in a note to whom the promise to pay is made

What is drawee?

The person to whom an order is given to pay money in a draft (bank)

What is drawer?

A person who orders money to be paid in a draft (you)

What is maker?

Person who promises to pay money in a note

What is endorsement?

The act of placing one's signature on an instrument, usually on the back, to transfer it to another.

What is stop payment?

Canceling a check before it has been paid by the bank.

What are the characteristics of the 3 C's of credit?

-Capacity- refers to one's ability to repay a debt
-Character- refers to one's honesty & reliability to pay a debt
-Collateral- refers to assets one has that can be sold if one cannot repay the debt

Identify the 3 C' s of credit.

-Capacity- steady job, salary, reliable income, current debts?
-Character- used credit before, pay bills on time, good credit report, provide character references?
-Collateral- have a checking account, savings account, own any stocks or bonds, own a car, own a boat?

What are the 3 major credit bureaus in the U.S?

-TransUnion
-Experian
-Equifax

What is the purpose of a credit bureau?

Obtain credit information and history on a person, generate your credit report for people who want it, and all credit bureaus can be a little different with the information that they gather.

What is the lowest credit score before someone risks being able to get a loan?

650

What are 2 forms of credit?

Open end credit and closed end credit

When financing a vehicle, what must be disclosed to the borrower?

Finance charge and APR

Know characteristics and examples of open-end credit

-Open-end credit is credit that can be increased by the debtor by continuing to buy goods on credit up to a certain amount
-A line of credit is given to this person.
-Examples are Visa, MasterCard, store credit cards like Macy's.

Know characteristics and examples of closed-end credit

-Credit that is given a specific amount which cannot be increased by making additional purchases.
-A person borrows a fixed amount with this type of credit and makes monthly installment payments.
-Examples are car loan, house loan, and boat loan.

Know characteristics of a high credit score

-You handle credit well.
-You pay credit card bills and are on time.
-Your balance is paid off each month.
-Lower credit risk so your interest rate will be lower.

Know characteristics of a low credit score

-High amount of debt
-Do not pay bills on time
-Higher interest rates

What is secured loan?

A loan which is backed up by property that the creditor can take if the loan is not repaid

What is unsecured loan?

-Three loans require no collateral
-Interest rate is much higher
-Only available to well-established business

What is collateral?

Refers to assets one has that can be sold if one cannot repay the debt

What is interest?

A fee creditors charge for lending money or extending credit

What is credit report?

A record of one's credit history.

What is credit score?

A number the credit industry gives a person based on how they have used or misused their credit.

What is default?

Failure to make timely payments on a loan

What is credit?

An arrangement in which you receive cash, goods, or services now and pay in the future

What is creditor?

The party who sells the goods on credit or lends the money

What is debtor?

The party who buys the goods on credit or borrowing the money

What is line of credit?

A maximum amount of money available to that person

What is guarantor?

Referred to as a secondary party, agrees to pay off the debt ONLY if the debtor defaults

What is surety?

Referred to as a primary party, agrees to pay off the debt outright just like the debtor would

-creditors must disclose the cost of credit in terms of APR & total finance charge

Truth in Lending Act

-protects against unauthorized use of credit cards

Truth in Lending Act