BUSINESS LAW FINAL

LAW

governmental rule prescribing conduct and carrying a penalty for violation

CRIMINAL LAW

laws dealing with crimes and the punishment of wrongdoers

CRIME

an offense which is injurious to society as a whole

FELONY

serious criminal offense punishable by imprisonment for more that one year or death

MISDEMEANOR

less serious crime punishable by find and/or imprisonment of less than 1 year

CIVIL LAW

the body of law concerned with private or purely personal rights

TORT

a private or civil wrong against a person or his or her property, other than by breach of contract, for which there may be action for damages

BUSINESS LAW

rules of conduct for the performance of business transactions

STATUTES

laws which are enacted by legislative bodies

ORDINANCES

law enacted by a local unit of government

COMMON LAW

the body of law deriving from judicial decisions, rather than from statutes or constitutions

STARE DECISIS

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

Intentional Tort

personal acts against an individual

Negligence

automobile accident

Strict Liability

manufacturer of a product liable without proof of negligence for dangerous products

Constitutional Law

fundamental law that establishes the government, limits what government can and cannot do and states the underlying principles to which government will conform

Legislative Law

statutes enacted by legislative bodies

Administrative Law

the rules and regulations created by Fed. and State admin agencies (OSHA, FTC, state board rules/regulations)

U.S. Supreme Court (Fed.)

highest court in the US (1)

Circuit Courts of Appeal (Fed.)

12 judicial courts (2nd)

District Courts (Fed.)

courts of original jurisdiction (3rd)

Special Fed. Courts

US Bankruptcy Court and US Court of Fed. Claims

Appeal

request to a higher court to review a lower court’s decision

Appellate courts

courts hearing cases appealed from a lower court

Trial Court

court which conducts the original trial of a case

Plaintiff

the party who initiates a civil action

Defendant

the party against whom legal action is brought

Complaint (petition)

the document which initiates a civil lawsuit

Summons

a notice given to a defendant, attaching the complaint, and stating a time frame in which to respond

Answer

official document responding to the plaintiff’s complaint

Discovery

the formal and informal exchange of information between sides in a lawsuit

Trial

the hearing of a case

Judgement

a decision of a court

Execution

the carrying out or completion of some task

Offeror

the party who initiates or makes an offer

Offeree

the party to whom an offer is made

Termination of the Offer

*Revocation communicated prior to
acceptance
*Terms of the offer
* Lapse of a reasonable time
* Death or insanity of the offeror
* Rejection
* Counteroffer

Revocation

cancellation of an instrument by the maker or drawer; rescinding an offer

Acceptance

an agreement to an offer resulting in a contract

Rejection

refusal to accept

Counteroffer

a change to an original offer that in effect, rejects that offer and becomes a new offer

Consideration

the bargained-for exchange in a contract

Promissory Estoppel

an equitable doctrine that prevents the promisor from revoking the promise when the promisee justifiably acts in reliance upon the promise to his or her detriment

Statute of Limitations

a law that restricts the period of time which which an action may be brought to court

Disaffirmance

elections to void a voidable contract

Necessaries

Items required for living at a reasonable standard (i.e. - food, clothing, shelter)

Legally Incapacitated?

Void

Minor person or intoxicated?

Voidable

Valid Contract

legally enforceable

Void Contract

of no legal effect

Voidable Contract

would be enforceable, but due to circumstances may be set aside by one of the parties

Unenforceable Contract

an agreement which at the time is not enforceable by law

Statute of Frauds

law requiring certain contracts be in writing to be enforceable

1. Real Property - land and those objects permanently attached to land.
2. Executory bilateral contracts which cannot be completed within one year
3. Guaranty
4. Contracts made by estate fiduciary to pay estate debts using personal
funds
5. Promise made in consideration of marriage
6. Goods when price is 500.00 or more

Express Contract

a contract in which the parties express their intentions, either verbally or in
writing, at the time of the agreement.

Implied Contract

one in which the terms of the contract are implied by acts or conduct of the
parties

Quasi Contract

a contract created or implied by law to prevent unjust enrichment

Bilateral Contract

a contract which consists of mutual promises to perform future acts

Unilateral Contract

a contract formed when an act is done in consideration for a promise

Executed Contract

a contract in which the terms have been fulfilled

Executory Contract

a contract in which the terms have not been completely executed or fulfilled

Misrepresentation

false statement of a material fact

Fraud

inducing another to contract as a result of an intentionally or recklessly false statement of a material fact

Undue Influence

improper influence that is asserted by one dominant person over another, without the threat of harm

Duress

removing one’s free will and obtaining consent by means of a threat

Illegality

a. Agreements to commit crimes or torts
b. Agreements prohibited by law or contrary to public policy
(1) Usurious agreements - exceeding the maximum rate of interest which may be
charged on loans.
(2) Agreements in restraint of trade
(3) Agreements to fix prices
(4) Agreements injurious to public service
(5) Agreements to obstruct justice

Discharge

any method by which a legal duty is extinguished

Breach of Contract

failure or refusal to perform contractual obligations

Novation

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

Accord and Satisfaction

an agreement made and executed in satisfaction of the rights one has from a
previous contract

Punitive Damages

an award paid to the plaintiff in order to punish the defendant

Nominal Damages

small amount awarded when there is a technical breach but no injury

Compensatory Damages

an award paid to the injured party to cover the exact amount of their loss, but no more

Liquidated Damages

damages stipulated in a contract to be paid in the event of a breach

Rescission

to set aside or cancel a contract

Specific Performance

a remedy by which the court requires the breaching party to perform the contract

Injunction

a judicial order or decree forbidding certain conduct

Assignment

a means whereby one party in a contract conveys rights to another party, who is not a party to the original contract

Delegation

transfer of contractual duties to a third party

3rd Party Beneficiary

person not party to a contract, but whom parties intended to benefit

Creditor Beneficiary

a third-party beneficiary owed a debt by a party to a contract

Donee Beneficiary

a third-party beneficiary to whom no legal duty is owed and
performance is a gift

Uniform Commercial Code (UCC)

model act that includes provisions concerning certain sales of goods and negotiable instruments

Applies to: tangible personal property (goods) & personal property - all that is not real property
DOES NOT apply to: real property, intangible personal property, service contracts

Sale

the transfer of title to goods from the seller to the buyer for consideration

Contract to Sell

a contract to sell goods at a future time

Price

the consideration stipulated by contract, generally expressed in money

Existing goods

goods which are, at the time of the contract, in existence and owned by the seller

Future Goods

goods not in existence or not yet owned by the seller at the time the contract was created

Identified Goods

the goods specified by the buyer and seller

Bill of Lading

the contract existing between the consignor and the carrier

Bill of Sale

a document that conveys or evidences title to tangible personal property

Warranties

guarantees made by a seller that an article, good or service will conform to a certain standard or will operate in a certain manner

Express Warranties

the actual and definite statement of a seller, either verbally or in writing, at the time of the sale

Implied Warranties

warranties imposed by law, arising automatically because the
sale has been made

Usury Laws

Laws that fix the maximum rate of interest that may be charged on loans

Antitrust Laws

laws which seek to promote competition among businesses

Regulatory Agencies

FTC and State Regulatory Agencies

Product Safety Laws

The Consumer Product Safety commission has broad power to
promulgate safety standards for many products

Truth in Advertising

Demands that advertisements be limited to statements about
products that can be substantiated

Truth in Lending

Requires lenders to clearly disclose in a set, predetermined way the
total amount of interest to be charged. The disclosure must be
made prior to the extension of credit

Fair Credit Reporting

Under this law, if consumers credit application (for a job, loan, or
insurance policy) is rejected because of an unfavorable credit report,
he or she must be told so by creditor/grantor who denied credit
privileges