Legal Environment of Business Terminology

Vocabulary flashcards covering key concepts from the Legal Environment of Business course.

place of delivery

The location where goods are to be delivered under a sales contract.

cover

A buyer's right to purchase substitute goods from another seller when the original seller breaches a contract.

statute of frauds

Legal requirement that certain contracts be in writing to be enforceable.

revocation

The act of withdrawing acceptance of goods by the buyer.

merchant

A person who deals in goods of a particular kind or holds themselves out as having knowledge or skill peculiar to the goods.

repudiation

A refusal by one party to perform their contractual obligations.

specific performance

A legal remedy requiring a party to a contract to fulfill their obligations under the agreement.

warranty of merchantability

An obligation that goods sold are fit for their ordinary purpose and of fair average quality.

incidental damages

Expenses incurred as a result of a breach of contract, such as costs for storing goods or finding replacement goods.

perfect tender rule

A buyer may reject goods if they fail to match the contract specifications.

assignment

The voluntary transfer of contractual rights from one party to another.

finance lease

A special type of lease transaction involving three parties.

good faith

Honesty in fact and the observance of reasonable commercial standards of fair dealing.

usage of trade

A customary standard in a particular industry or trade that can help interpret a contract.

holder

A person in possession of a negotiable instrument that is drawn, issued, or indorsed to them.

bearer

An individual entitled to receive payment from a negotiable instrument.

negotiability

The quality that allows a financial instrument to be transferred to another party.

strict product liability

Liability imposed on sellers for defective products that are unreasonably dangerous.

breach of contract

Failure to perform as required by a legal contract.

consequential damages

Damages that can be recovered for losses caused by a breach of contract that are not direct but foreseeable.

checking account

A demand deposit account held at a financial institution that allows withdrawals and deposits.

drawee

The bank or financial institution on which a check is drawn.

drawer

The person or entity that writes a check.

payee

The person or entity to whom a check is made payable.

implied warranty of fitness for a particular purpose

A warranty that arises when a seller knows the buyer's purpose for the goods and guarantees the goods will fulfill that purpose.

title

Legal ownership rights over property.

risk of loss

The allocation of responsibility for loss or damage of property under a contract.

tender

An offer by a seller to deliver goods to a buyer as per the contract.

revocation of acceptance rule

A rule that allows a buyer to reject goods if they were accepted but later found to be defective.

distance contract

A contract made between parties at a distance.

residual value

The estimated value of an asset at the end of its lease.

aleatory contract

A contract in which the performance depends on the occurrence of a specific event.

assignment of rights

The transfer of rights or benefits under a contract from one party to another.

commercial paper

A type of negotiable instrument that includes checks, promissory notes, and drafts.

insurable interest

The financial interest a party has in the safety or preservation of a property.

default

Failure to fulfill a financial obligation.

promissory note

A written promise to pay a specified sum of money to a designated person at a certain time.

ratification

The formal approval of a contract or agreement that has not yet been executed.

passing of title

The transfer of ownership from one party to another.

unconscionability

An absence of meaningful choice on the part of one party, resulting in a contract that is unjust or overwhelmingly one-sided.

bailment

The transfer of possession of personal property from one party to another for a specific purpose.

legitimate expectation

The anticipation that a certain procedure, process, or outcome will be followed.

escrow

A financial instrument held by a third party on behalf of two other parties involved in a transaction.

quasi contract

An obligation imposed by law to prevent unjust enrichment, even though there is no formal contract.

liquidated damages

An explicit provision in a contract that specifies the amount of damages in the event of a breach.

unconditional promise

A commitment to pay without conditions or contingencies.

forbearance

The postponement of a legal right such as the collection of a debt.

UCC

Uniform Commercial Code, a set of laws that govern commercial transactions.

indemnification

Compensation for harm or loss.

anti-assignment clause

A provision in a contract that restricts the ability to assign rights or obligations.

lease

A contractual agreement where one party conveys an asset to another for a specified time in exchange for payment.

partnership agreement

A contract that outlines the terms of the partnership between two or more parties.

collision waiver

A clause in a lease or rental agreement that waives liability for damages.

fair average quality

The standard of quality that goods must meet in a sales contract.

bill of lading

A document used to acknowledge the receipt of goods for shipment.