LES 305: Business Law and Ethics for Managers - Exam 1 Study Guide

Comprehensive vocabulary flashcards for Weeks 1 and 2 of Business Law and Ethics for Managers (LES 305), covering legal foundations, constitutional law, court systems, civil procedure, alternative dispute resolution, and international business law.

Law

A body of rules of action or conduct prescribed by a controlling authority and having binding legal force.

Ethics

A higher, unwritten standard representing society's expectations and moral duties that go beyond what the law requires; serves as the ceiling compared to the law as the floor.

Rule of Law

The principle that society is governed by a fair, open body of law applying equally to everyone, rather than by strength, wealth, or political power.

Black's Law Dictionary

A leading, authoritative legal dictionary used as the standard reference for the meaning of legal terms, though it is not itself a source of binding law.

Primary Authority

The actual law itself (constitutions, statutes, regulations, and case law) which courts must follow as binding authority.

Secondary Authority

Commentary about the law (treatises, Restatements, model statutes, and law review articles) that is advisory only and carries no independent binding legal force.

Common Law

Judge-made law originating from English tradition that is developed case-by-case and built on court precedent.

Civil Law System

A legal system derived from Roman law that relies primarily on the strict interpretation of a comprehensive, organized written legislative code rather than judicial precedent.

Constitutional Law

The supreme law of the land with which every other law must be consistent; rarely amended, with only $27$ amendments since $1789$.

Statutory Law

Written law enacted by the legislative branch and approved by the executive branch.

Bill

A proposed statute that has not yet been passed by the legislature or signed into law by the executive.

Ordinance

A local statute enacted by a municipal or local governing body.

Administrative Law

Regulations and rules created and enforced by federal or state executive regulatory agencies (e.g., SEC, FTC, EPA) to implement statutory enactments.

Equity Law

A body of law derived from courts that provides non-monetary remedies, such as injunctions and specific orders to act or cease acting.

Legal Remedy

A judicial remedy consisting of monetary relief (damages) awarded to an injured party.

Equitable Remedy

A non-monetary judicial remedy consisting of a court order compelling a party to perform an act or refrain from doing something (e.g., an injunction).

Public Law

The classification of law that governs relationships between individuals and their government (e.g., Business Corporation Law).

Private Law

The classification of law that governs legal relationships and transactions between private parties.

Procedural Law

The set of legal rules that prescribe the methods and steps by which a case proceeds through the court system.

Substantive Law

The body of legal rules that define, regulate, and create legal rights, duties, and obligations.

Stare Decisis

A Latin doctrine meaning 'let the decision stand,' requiring courts to adhere to earlier precedent so that cases with similar facts reach consistent, predictable outcomes.

Distinguishing a Case

The act of a court asserting an important factual or legal difference between the current case and an earlier precedent to avoid applying that precedent.

Legalese

Specialized legal technical terminology and jargon that blends Latin, French, and English, often difficult for non-lawyers to understand.

General Counsel

The chief in-house attorney within a business organization who manages legal affairs and oversees associate counsel.

Preamble to the U.S. Constitution

The introductory statement ('We the People…') outlining the broad general objectives of the Constitution without establishing government structure, granting power, or specifying procedures.

Article I of the U.S. Constitution

The constitutional article establishing Congress as the legislative branch of the federal government.

Article II of the U.S. Constitution

The constitutional article establishing the presidency as the executive branch of the federal government.

Article III of the U.S. Constitution (Article 3)

The constitutional article establishing the federal court system as the judicial branch of the federal government.

Article IV of the U.S. Constitution

The constitutional article governing the relationship between the state governments and the federal government.

Article V of the U.S. Constitution

The constitutional article specifying the formal process required to propose and ratify constitutional amendments.

Article VI of the U.S. Constitution (Supremacy Clause)

The constitutional provision establishing that the U.S. Constitution, federal statutes, and treaties are the supreme law of the land.

Article VII of the U.S. Constitution

The constitutional article setting forth the ratification requirements needed to establish the Constitution.

Federalism

The constitutional structure dividing sovereign governmental power between a central national government and regional state governments.

Enumerated Powers

Governmental powers explicitly listed and spelled out in the U.S. Constitution as belonging to the federal government (e.g., declaring war, regulating interstate commerce).

Exclusive Powers

Powers held solely by the federal government that the states are prohibited from exercising (e.g., declaring war, creating national law).

Concurrent Powers

Governmental powers shared and exercised simultaneously by both the federal government and state governments (e.g., the power to tax).

Reserved Powers

Powers not specifically granted to the federal government that are retained by the states or the people, such as general police powers over health and safety.

Checks and Balances

A constitutional framework enabling each of the three branches of government to monitor, limit, and counteract the powers of the other branches.

Judicial Review

The constitutional power of a court to examine legislative or executive actions and declare them invalid if they conflict with the U.S. Constitution.

Marbury v. Madison

The landmark $1803$ U.S. Supreme Court decision that formally established the judicial branch's power of judicial review.

Ex Post Facto Law

A law that criminalizes an act retroactively after it was committed; explicitly prohibited and always unconstitutional.

Bill of Attainder

A legislative act that pronounces a specific individual or group guilty of a crime and imposes punishment without the benefit of a judicial trial; constitutionally barred.

Void for Vagueness

A constitutional doctrine holding that a statute violating due process is invalid if it is worded so unclearly that ordinary people cannot determine what conduct is prohibited.

Commerce Clause

The Article I constitutional clause granting Congress the power to regulate commerce with foreign nations and among the several states.

Necessary and Proper Clause

The Article I constitutional provision authorizing Congress to enact all laws appropriate and required to carry out its specifically enumerated powers.

First Amendment

The constitutional amendment guaranteeing freedom of speech, assembly, and religion, and protecting political speech by both individuals and corporations.

Brandenburg v. Ohio

The Supreme Court case establishing that inflammatory or offensive speech is constitutionally protected unless it is directed to inciting imminent lawless action.

Fourth Amendment

The constitutional amendment protecting persons and corporations against unreasonable governmental searches and seizures in areas with a reasonable expectation of privacy.

Exclusionary Rule

A legal rule (also known as the 'fruit of the poisonous tree' doctrine) that excludes evidence obtained through an illegal or warrantless search from being used in trial.

Procedural Due Process

The constitutional principle under the Fifth Amendment requiring the government to follow fair, established procedures and provide appropriate notice and a hearing before depriving a person of life, liberty, or property.

Substantive Due Process

The constitutional requirement that laws must not infringe on fundamental rights, regardless of the procedural fairness utilized by the government.

Eminent Domain (Takings Clause)

The power of the government to condemn and take private property for public use without the owner's consent, provided it pays just compensation (fair market value).

Rational Basis Scrutiny

The lowest and most deferential standard of judicial review applied to ordinary economic and social legislation, requiring only that the law be rationally related to a legitimate government interest.

Intermediate Scrutiny

The medium-tier standard of judicial review applied to quasi-suspect statutory classifications, such as gender.

Strict Scrutiny

The most demanding standard of equal protection review, applied to suspect classifications (race, national origin, religion) or laws burdening fundamental constitutional rights.

Originalism

A theory of constitutional interpretation asserting that the meaning of the Constitution was permanently fixed at the time of its adoption and can change solely through formal constitutional amendment.

Living Constitution

A theory of constitutional interpretation asserting that the meaning of the Constitution is dynamic and adapts over time to changing social conditions, technologies, and values.

U.S. District Courts

The principal federal trial courts ($94$ judicial districts) responsible for hearing testimony, taking evidence, and issuing initial rulings.

U.S. Courts of Appeals

The intermediate federal appellate courts organized into $13$ geographic and specialized circuits that review lower court records without taking new evidence.

U.S. Court of Appeals for the Federal Circuit

A specialized intermediate federal appellate court with nationwide subject-matter jurisdiction over patent appeals and specific federal administrative claims.

U.S. Supreme Court

The highest court in the United States and the ultimate arbiter of federal law, comprised of $9$ justices who select cases via discretionary review.

Court of Chancery

Delaware's specialized trial court of equity that resolves complex corporate governance, fiduciary duty, and commercial disputes.

Small-Claims Court

A court of limited jurisdiction offering informal, expedited, low-cost legal resolution for disputes involving small monetary claims without requiring attorney representation.

Subject-Matter Jurisdiction

A court's statutory or constitutional authority and power to hear and decide the specific category or type of controversy presented.

Personal Jurisdiction

A court's legal authority and power over the specific parties involved in a lawsuit.

Diversity Jurisdiction

A form of federal subject-matter jurisdiction applicable when the opposing parties are citizens of different states and the amount in controversy strictly exceeds $\$75{,}000$.

Federal Question Jurisdiction

Federal subject-matter jurisdiction over civil actions arising under the U.S. Constitution, federal statutes, or treaties, applicable regardless of the dollar amount in dispute.

Venue

The most appropriate and convenient geographic location for a trial among courts that already possess valid subject-matter and personal jurisdiction.

Forum Selection Clause

A contractual provision negotiated at contract formation specifying the pre-selected court and geographic jurisdiction where future legal disputes must be litigated.

Long-Arm Statute

A state law that grants a court personal jurisdiction over an out-of-state defendant provided the defendant has sufficient minimum contacts with the forum state.

Purposeful Availment

A standard in personal jurisdiction where an out-of-state defendant deliberately and intentionally directs business or commercial activity into the forum state.

Zippo Standard

A non-binding judicial sliding-scale test assessing personal jurisdiction for internet activities based on whether a website is passive, interactive, or commercially integral.

Standing

The legal threshold requirement that a plaintiff must establish a concrete, individualized injury in fact directly caused by the defendant's conduct that the court can remedy.

Pleadings

The formal initial documents filed with the court (including the plaintiff's complaint and the defendant's answer) that establish the parties' claims and defenses.

Complaint

The initial pleading filed by the plaintiff that outlines the factual basis of the lawsuit, the legal causes of action, and the specific damages or remedies requested.

Summons

A formal court notice served on a defendant notifying them that a civil lawsuit has been filed against them and specifying the deadline to respond.

Default Judgment

A binding judgment entered by a court in favor of the plaintiff when the properly served defendant fails to file an answer or appear within the required deadline.

Counterclaim

A legal claim filed by a defendant against the plaintiff arising out of the same transaction or occurrence underlying the original complaint.

Cross-Claim

A claim asserted between co-parties in a lawsuit (e.g., one named defendant suing another co-defendant regarding liability for the alleged harm).

Affirmative Defense

A legal defense asserted in an answer where the defendant introduces new facts that, if true, defeat the plaintiff's claim even if the allegations in the complaint are factual.

Deposition

A pretrial discovery tool consisting of oral questions posed to a party or witness under oath and transcribed by a court reporter.

Interrogatories

Formal written questions submitted by one party to an opposing party during discovery that must be answered in writing under oath.

Requests for Admission

A discovery mechanism asking the opposing party to admit or deny the truth of specific factual statements in order to narrow the issues required to be proven at trial.

Requests for Production

A formal discovery request asking an opposing party to produce designated documents, electronically stored information, or physical items.

Motion to Dismiss

A pretrial procedural motion asking the court to throw out a lawsuit because of a fundamental defect, such as the court lacking subject-matter jurisdiction.

Motion for Summary Judgment

A pretrial motion asking the court to enter a judgment without proceeding to trial on the basis that there is no genuine dispute regarding any material facts.

Motion to Compel Discovery

A procedural motion asking the court to order an uncooperative party to hand over demanded evidence or responses that were improperly withheld during discovery.

Motion for Mistrial

A trial motion asking the judge to terminate an ongoing trial due to an extraordinary event or prejudicial error (such as jury tampering) that compromises fairness.

Preponderance of the Evidence

The standard of proof in civil litigation requiring the fact-finder to determine that the claim is more likely true than not (greater than a $50\%$ probability).

Voir Dire

The preliminary examination and questioning of prospective jurors by attorneys and the judge to evaluate their qualifications and detect bias.

Hung Jury

A jury that cannot reach the legally required agreement on a verdict, requiring a mistrial and retrying the case before an entirely new jury.

Class Action

A procedural lawsuit in which a group of similarly situated plaintiffs who suffered common injuries collectively sue a single defendant, sharing the litigation expense.

Negotiation

The least formal method of alternative dispute resolution involving direct, informal discussions between the disputing parties themselves without any third-party participation.

Mediation

An alternative dispute resolution method where an impartial, neutral third party facilitates discussions to help the parties reach their own voluntary, consensual agreement without rendering a decision.

Arbitration

An adjudicative alternative dispute resolution method wherein an impartial neutral arbitrator hears evidence and issues a legally binding decision or award.

Federal Arbitration Act (FAA)

A federal statute requiring courts to strictly enforce arbitration agreements and awards, permitting them to set aside an award only under narrow grounds like fraud, bias, or exceeded powers.

Public International Law

The category of international law that regulates the rights, duties, and diplomatic relations between sovereign nations and international organizations.

Private International Law

The field of international law governing cross-border commercial transactions, disputes, and legal relationships between private individuals and corporate entities.

Comity

The international legal doctrine whereby sovereign nations voluntarily recognize and respect the laws and judicial decisions of other nations out of reciprocal courtesy rather than binding mandate.

Foreign Sovereign Immunities Act (FSIA)

The federal statute establishing that foreign nations are generally immune from suits in U.S. courts unless an exception applies, such as commercial activity carried out on U.S. soil.