FIN 240 – Law & Legal Reasoning Study Guide

These flashcards summarize key concepts from the FIN 240 lecture notes, covering fundamental principles of law and legal reasoning essential for exam preparation.

What is the definition of law?

Law consists of enforceable rules that govern relationships between individuals, and between individuals and society.

What are the purposes of law in business?

Establishes rights, duties, obligations, and privileges; reflects the values and ethics of society; provides predictability and stability for business decisions; minimizes disputes and clarifies what conduct may lead to liability.

What are the four primary sources of American law?

Constitutional Law, Statutory Law, Administrative Law, Case Law & Common Law.

What is the significance of the U.S. Constitution in American law?

It is the supreme law of the land.

What is the meaning of Stare Decisis?

The doctrine that courts follow precedent to ensure consistency and predictability.

What are binding and persuasive authorities?

Binding authority must be followed, while persuasive authority may guide but is not required.

What is the IRAC method in legal reasoning?

It stands for Issue, Rule, Application, Conclusion.

What is the difference between legal and equitable remedies?

Legal remedies provide compensation typically in monetary terms, while equitable remedies involve court orders such as injunctions or specific performance.

What is the purpose of the Bill of Rights?

To protect individual rights against government actions.

What does the due process clause guarantee?

Fair procedures when taking life, liberty, or property.

What are the requirements for a contract to be legally enforceable?

Agreement, consideration, capacity, and legality.

What is the role of the Uniform Commercial Code (UCC)?

It simplifies, clarifies, and modernizes commercial law across states, governing contracts for the sale and lease of goods.

What types of damages can be awarded in tort cases?

Compensatory damages (general and special) and punitive damages.

What is the definition of a trademark?

A distinctive word, phrase, symbol, or design that identifies the source of goods or services.

What are the elements required to prove negligence?

Duty of care, breach of duty, causation, and damages.

What is the difference between a felony and a misdemeanor?

Felonies are serious crimes punishable by more than one year in prison, while misdemeanors are less serious offenses punishable by less than one year.

What is meant by contractual capacity?

The legal ability of parties to enter into a contract.

What is an example of a defense to criminal liability?

Self-defense, necessity, insanity, mistake, duress, or entrapment.

What is a patent?

A government grant giving an inventor exclusive rights to make, use, or sell their invention for a limited period.

How can a contract be discharged by operation of law?

Events such as bankruptcy, impossibility, or frustration of purpose.