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Business Judgment Rule
Protects corporate officers and directors from liability for decisions made in good faith, even if they result in losses.
Sole Proprietorship (SP)
A business owned and operated by one individual; simple to establish but lacks liability protection.
Partnership
A business owned by two or more people, sharing profits, losses, and management responsibilities.
Limited Liability Company (LLC)
Combines the liability protection of a corporation with the tax benefits of a partnership.
Corporation
A separate legal entity owned by shareholders, offering strong liability protection but subject to double taxation.
The SEC
The U.S. Securities and Exchange Commission, which regulates securities markets and protects investors.
Securities Exchange Acts of 1933 and 1934
The 1933 Act regulates initial securities offerings (IPOs), while the 1934 Act governs securities trading and establishes the SEC.
IPO
Initial Public Offering; the first sale of stock by a company to the public.
Registration Statement
A detailed disclosure document filed with the SEC for an IPO.
Prospectus
A condensed version of the registration statement provided to investors.
Insider Trading
Buying or selling securities based on material non-public information.
Misappropriation Theory
Holds individuals liable for insider trading if they misappropriate confidential information.
U.S. v. Bhagat
A landmark insider trading case illustrating violations of securities laws.
Material Non-Public Information
Information not yet released to the public that could affect a company’s stock value.
Agency Law
Governs the relationship between principals and agents, where the agent acts on behalf of the principal.
Principal and Agent Roles/Duties
Principals owe compensation and reimbursement; agents owe loyalty, obedience, and care.
Respondeat Superior
Employers are liable for employees' wrongful acts committed within the scope of employment.
Employer-Employee (Master-Servant)
Traditional relationship where the employer controls the work details of the employee.
Express Agency
Formed by explicit agreement.
Implied Agency
Formed by actions or circumstances.
Apparent Agency
Arises when a principal’s actions lead others to believe an agency exists.
Agency by Ratification
Occurs when a principal approves an unauthorized action.
Power of Attorney
A legal document authorizing someone to act on another’s behalf.
Liability on Contracts
Principals are liable for contracts made by agents depending on disclosure level (fully, partially, or undisclosed).
Defenses to Vicarious Liability
Employers may claim acts were outside the scope of employment or performed by independent contractors.
Negligence/Intentional Torts
Employers may be liable for employees’ negligent acts; intentional torts often require additional factors.
Fraud
Intentional deceit; can be innocent if misrepresentation wasn’t deliberate.
Independent Contractors
Workers hired for specific tasks; generally not subject to employer’s liability.
Discrimination in Employment
Unfair treatment based on protected classes; includes disparate-treatment (intentional) and disparate-impact (neutral policies causing discrimination).
Protected Classes
Groups protected under anti-discrimination laws (e.g., race, color, gender, religion).
Lilly Ledbetter Fair Pay Act
Extends the timeframe for filing pay discrimination claims.
EEOC
Equal Employment Opportunity Commission; enforces federal anti-discrimination laws.
Sexual Harassment
Includes quid pro quo (job benefits for sexual favors) and hostile work environment (intimidating or offensive conditions).
BFOQ
Bona Fide Occupational Qualification; allows discrimination if essential for job duties.
ERISA
Employee Retirement Income Security Act; sets standards for retirement and health benefit plans.
FLSA 1938
Fair Labor Standards Act; establishes minimum wage, overtime pay, and child labor rules.
Social Security
Federal program providing retirement, disability, and survivor benefits.
FMLA
Family and Medical Leave Act; grants eligible employees up to 12 weeks of unpaid leave.
OSHA
Occupational Safety and Health Administration; ensures workplace safety and health.
Title VII of the Civil Rights Act 1964
Prohibits employment discrimination based on race, color, religion, sex, or national origin.
Affirmative Action
Policies promoting opportunities for historically disadvantaged groups.
COBRA
Consolidated Omnibus Budget Reconciliation Act; allows continued health insurance after leaving employment.
FUTA
Federal Unemployment Tax Act; funds unemployment benefits.
Finders of Lost Property
Defines ownership rights based on property’s status.
Bailments
A relationship where personal property is entrusted to another for safekeeping.
Gifting
The voluntary transfer of property without consideration.
Land Ownership
Includes surface, subsurface (mineral rights), and air rights.
Fixtures
Items attached to land or buildings, considered part of the property.
Fee Simple Absolute
Full ownership with the right to transfer, sell, or devise property.
Life Estate
Ownership limited to the duration of a person’s life.
Fee Simple Defeasible
Ownership subject to conditions or events.
Co-Ownership Types
Includes joint tenancy (with survivorship), tenancy by the entirety (for married couples), tenancy in common (shared ownership without survivorship).
Cooperatives/Condominiums
Types of property ownership; cooperative owners hold shares, condo owners own individual units.
Community Property
Equal ownership of property acquired during marriage.
Conveyance/Deeds
Transfer of property rights via legal documents.
Statute of Frauds
Requires certain contracts, including real estate, to be in writing.
Non-Possessory Interests in Land
Rights to use land without owning it (e.g., easements).
Leasehold Estate
Tenant’s rights to use property for a term.
Adverse Possession
Acquiring ownership by openly occupying land for a statutory period.
Eminent Domain
Government’s power to take private property for public use.
Takings Clause
Requires just compensation for property taken by the government.
Kelo v. City of New London
Supreme Court case broadening the scope of eminent domain.
Recording Statutes
Laws requiring property transactions to be recorded.
Transferring Property at Death
Methods include wills, intestacy laws, and trusts.
