Contract Negotiation and Bankruptcy Principles

These flashcards cover key vocabulary and concepts related to contract negotiation and bankruptcy, preparing the student for their upcoming exam.

Operative Language

The language in which a contract is written and can be enforced legally.

Choice of Law Clause

A provision in a contract that specifies which jurisdiction's laws will govern the contract.

Binding Arbitration

A method of resolving disputes outside of court, where an arbitrator makes a legally binding decision.

Force Majeure Clause

A contract provision that frees both parties from liability or obligation when an extraordinary event occurs.

Subrogation

The right of a surety to step into the shoes of a creditor after paying a debt.

Mechanic's Lien

A security interest in the title to property for the benefit of those who have supplied labor or materials that improve the property.

Chapter 7 Bankruptcy

A type of bankruptcy that involves the liquidation of assets to pay off debts.

Chapter 11 Bankruptcy

A reorganization bankruptcy primarily for businesses that allows them to restructure their debts.

Chapter 13 Bankruptcy

A type of bankruptcy for individuals with regular income that allows them to develop a plan to repay all or part of their debts.

Suretyship

A commitment by a third party to fulfill an obligation or pay a debt if the primary party fails to do so.

Garnishment

A legal process through which a creditor can collect what a debtor owes by taking money directly from the debtor's paycheck.

Lien Clause

A provision that secures a claim against an asset until a debt or obligation is fulfilled.

Exemption Rights

Legal provisions that protect a debtor’s property from being seized by creditors.

Civil Rights Act, Title VII

A U.S. federal law that prohibits employment discrimination based on race, color, religion, sex, or national origin.

Involuntary Bankruptcy

A bankruptcy petition filed by creditors against a debtor, typically because the debtor has not paid their debts.

Arbitration Association

An organization that provides arbitration services, including appointing arbitrators and overseeing arbitration proceedings.