FBLA BUSINESS LAW STATE

Term

Definition

Statutory Law

Law created by a legislative body (e.g. Congress or state legislature) and signed into law by an executive.

Common Law

Law developed through court decisions and precedents rather than written statutes.

Tort

A civil wrong (not a criminal act) that causes harm to another person and may result in civil liability.

Negligence

Failure to exercise the standard of care a reasonable person would use resulting in harm to another.

Negligence Per Se

Negligence established by proving the defendant violated a statute designed to protect the class of people the plaintiff belongs to.

Strict Liability

Liability without fault — a party is responsible for damages regardless of intent or care taken (e.g. dangerous products).

Vicarious Liability

Liability imposed on one party for the wrongful acts of another (e.g. employer liable for employee's actions).

Defamation

A false statement of fact that harms another's reputation; includes libel (written) and slander (spoken).

Embezzlement

Fraudulent taking of money or property by someone entrusted with it (e.g. an employee stealing from employer).

Larceny

The unlawful taking of someone else's property with intent to permanently deprive them of it.

Robbery

Taking property from a person by force or threat of force.

Burglary

Unlawfully entering a building with intent to commit a crime inside.

Extortion

Obtaining property or services through coercion or threats.

Bribery

Offering something of value to influence a public official's actions.

White Collar Crime

Non-violent financially motivated crimes typically committed in business settings (e.g. fraud

Litigation

The process of resolving disputes through the court system.

Arbitration

A form of alternative dispute resolution where a neutral third party (arbitrator) makes a binding decision.

Mediation

A form of alternative dispute resolution where a neutral third party helps parties reach a voluntary agreement.

Misdemeanor

A less serious crime typically punishable by fines or less than one year in jail.

Felony

A serious crime typically punishable by more than one year in prison.

Offer

A proposal by one party to another indicating willingness to enter into a contract on specific terms.

Acceptance

An agreement by the offeree to the terms of the offer creating a binding contract.

Consideration

Something of value exchanged between parties to a contract; required for a valid contract.

Capacity

The legal ability to enter into a contract; minors and mentally incapacitated persons generally lack full capacity.

Legality

A contract must have a lawful purpose to be enforceable.

Void Contract

A contract with no legal effect from the start (e.g. contract for illegal activity).

Voidable Contract

A contract that one party may choose to cancel (e.g. a contract entered into by a minor).

Express Contract

A contract where the terms are explicitly stated orally or in writing.

Implied Contract

A contract formed by the conduct of the parties rather than written or spoken words.

Breach of Contract

Failure by one party to fulfill their obligations under a contract.

Statute of Frauds

Law requiring certain contracts to be in writing to be enforceable (e.g. real estate

Undue Influence

Improper pressure by one party over another that overcomes their free will in entering a contract.

Duress

Threat or use of force that compels a person to act against their will when forming a contract.

UCC (Uniform Commercial Code)

A set of laws governing commercial transactions including the sale of goods in the U.S.

Sole Proprietorship

A business owned and operated by one person; simplest form with unlimited personal liability.

General Partnership

A business owned by two or more people who share management and unlimited liability.

Limited Partnership

A partnership with at least one general partner (unlimited liability) and one limited partner (liability only to investment).

Corporation

A legal entity separate from its owners that provides limited liability to shareholders.

S Corporation

A corporation that passes income/losses directly to shareholders to avoid double taxation.

LLC (Limited Liability Company)

A business structure combining corporate limited liability with partnership tax benefits.

Franchise

A licensing arrangement where a franchisor grants a franchisee the right to operate a business using its brand/model.

Board of Directors

The elected governing body of a corporation responsible for major decisions and oversight of officers.

Merger

Two companies combining to form one new entity.

Conglomerate

A corporation made up of companies in unrelated industries.

SEC (Securities and Exchange Commission)

Federal agency that regulates the securities industry and enforces laws against insider trading and fraud.

Antitrust Laws

Laws designed to promote competition and prevent monopolies (e.g. Sherman Act).

Agent

A person authorized to act on behalf of another party (the principal) in business dealings.

Principal

The party who authorizes an agent to act on their behalf.

Independent Contractor

A person who contracts to do work for another but is not an employee and controls how work is done.

OSHA

Occupational Safety and Health Administration — federal agency that sets and enforces workplace safety standards.

Employment at Will

Employment relationship where either party can terminate at any time for any lawful reason.

Collective Bargaining

Negotiation between an employer and a labor union representing employees over wages and conditions.

Title VII (Civil Rights Act)

Federal law prohibiting employment discrimination based on race

ADA (Americans with Disabilities Act)

Federal law prohibiting discrimination against people with disabilities in employment and public accommodations.

FMLA (Family and Medical Leave Act)

Federal law entitling eligible employees to unpaid leave for family or medical reasons.

Workers' Compensation

Insurance providing benefits to employees injured or ill due to their job.

Bait and Switch

Deceptive practice of advertising a product at a low price then pushing customers to buy a more expensive one.

Usury

Charging illegally high interest rates on a loan.

Express Warranty

An explicit written or spoken guarantee about a product's quality or performance.

Implied Warranty of Merchantability

An implied guarantee that a product is fit for its ordinary intended purpose.

Negligence Product Liability

Liability when a manufacturer fails to exercise reasonable care in making a product safe.

FTC (Federal Trade Commission)

Federal agency that enforces consumer protection laws and prohibits unfair or deceptive business practices.

Negotiable Instrument

A written document guaranteeing payment of a specific sum (e.g. checks

Promissory Note

A written promise by one party to pay a specific sum to another party at a specified time.

Endorsement

Signing the back of a negotiable instrument to transfer it to another party.

Secured Transaction

A loan where the borrower pledges collateral (security interest) to the lender.

Lien

A legal claim against property as security for a debt.

Chapter 7 Bankruptcy

Liquidation bankruptcy — debtor's non-exempt assets are sold to pay creditors; remaining eligible debts discharged.

Chapter 11 Bankruptcy

Reorganization bankruptcy primarily for businesses to restructure debts while continuing operations.

Chapter 13 Bankruptcy

Reorganization bankruptcy for individuals with regular income to repay debts under a court-approved plan.

Real Property

Land and anything permanently attached to it (buildings

Personal Property

Movable property that is not real estate (e.g. cars

Fixture

Personal property that has been permanently attached to real property and is treated as part of it.

Easement

The legal right to use another person's land for a specific purpose (e.g. utility lines).

Deed

A legal document that transfers ownership of real property from one party to another.

Patent

Exclusive legal right granted to an inventor to make

Copyright

Legal protection for original creative works (writing

Trademark

A symbol

Zoning

Government regulations controlling how land in certain areas can be used.

Bailment

Temporary transfer of possession of personal property from one party (bailor) to another (bailee) for a specific purpose.

Computer Fraud and Abuse Act

Federal law criminalizing unauthorized access to computers and computer-related fraud.

Software Piracy

Unauthorized copying or distribution of copyrighted software.

E-Commerce

Commercial transactions conducted electronically over the internet.

Prenuptial Agreement

A contract made before marriage specifying how assets will be divided in the event of divorce.

Common Law Marriage

A legally recognized marriage between two people who live together and present themselves as married without a ceremony.

Annulment

A legal declaration that a marriage was never valid from the start.

Power of Attorney

A legal document authorizing one person to act on behalf of another in legal or financial matters.

Will (Testament)

A legal document expressing a person's wishes for the distribution of their estate after death.

Executor

A person named in a will to carry out the deceased's wishes and administer the estate.

Trust

A legal arrangement where one party (trustee) holds assets for the benefit of another (beneficiary).

Living Will

A document stating a person's wishes regarding medical treatment if they become incapacitated.

Intestate

Dying without a valid will; assets distributed according to state law.

Abstract of Title

A summary of the legal history of a piece of property including all transfers and encumbrances.

Title Search

An examination of public records to determine the legal ownership of property and identify any claims against it.

Eminent Domain

The right of the government to take private property for public use with just compensation.