Business Law Final Exam Review

Flashcards for Final Exam Review

What elements are required to create a contract?

An offer, Acceptance, Consideration, Legality, Capacity, Consent, Writing

What types of contracts must be in writing to be enforceable?

Contracts Involving land, contracts that cannot be performed within one year, and contracts Involving the sale of goods of $500 or more

What is substantial performance in contract law?

Most contractual obligations are fulfilled.

What does 'good faith' mean in contract performance?

Parties must act honestly when performing obligations under a contract.

What is the effect of a 'time is of the essence' clause?

It makes a deadline strictly enforceable if clearly stated in the contract.

What constitutes a 'material' breach of contract?

One party has failed or refused to perform their duties under the contract, substantially harming the other party.

In what situations is a contract considered 'discharged'?

The contract is considered completed, or one party has breached, discharging the other.

What are expectation damages in contract remedies?

Designed to put a party in the same position they would have been in had the contract been fully performed.

What are reliance damages in contract remedies?

Designed to put the non-breaching party in the position they would have been in had the contract not existed.

What are restitution damages in contract remedies?

Designed to return to the non-breaching party any benefit bestowed on the breaching party.

What is specific performance as an equitable remedy?

Court orders the breaching party to perform under the contract.

What is an injunction as an equitable remedy?

Court order requiring a party to do something or refrain from doing something.

What is reformation in contract remedies?

Court may rewrite a contract to fix a mistake or remove an unenforceable clause.

What is a 'note' in commercial paper?

A promise to pay money.

What is a 'draft' in commercial paper?

An order for someone else to pay money.

Under what conditions does the possessor of commercial paper have the unconditional right to be paid?

The paper is negotiable, has been negotiated to the possessor, the possessor is a holder in due course, and the issuer has no real defenses.

What is the key characteristic of negotiable instruments regarding transferee rights?

The transferee’s rights are unconditional.

What is the key characteristic of non-negotiable instruments regarding transferee rights?

The transferee’s rights are conditional.

What elements are required to establish an agency relationship?

A principal, an agent, consent, control, and a fiduciary relationship.

Who can act as agents in an agency relationship?

Employees and independent contractors.

What are the primary duties of agents to principals?

Duty of loyalty, duty to obey instructions, duty of care, duty to provide information.

What are the primary duties of principals to agents?

Duty to compensate, duty to indemnify for reasonable expenses, duty to cooperate.

Under what conditions is a principal liable for the negligence of an agent?

Principals are generally liable for the negligence of employees within the scope of employment.

Who is liable for the torts of the agent?

Agents are always liable for their torts.

For what reasons can an at-will employee be fired?

Can be fired for any reason, good, bad, or none at all, if there is no specific legal exception.

What are some exceptions to employment at will that constitute wrongful discharge?

Refusing to violate the law, exercising a legal right that supports public policy, supporting societal values.

What are the key provisions of Sections 7 and 8 of the National Labor Relations Act?

Guarantees workers’ rights to organize and form unions and prohibits unfair labor practices.

What does Section 9 of the National Labor Relations Act provide?

A validly recognized union is the exclusive representative of the employees.

What does Title VII of the Civil Rights Act of 1964 prohibit?

Prohibits employers from discriminating based on race, color, religion, sex, and national origin.

What are the prohibited forms of discrimination under Title VII?

Disparate treatment, disparate impact, hostile work environment, retaliation.

What are the defenses to charges of discrimination?

Merit, seniority, bona fide occupational qualification.

What are the key considerations in business formation?

Liability, taxation, creation & management, transferability.

What is unlimited liability in business formation?

Owners are personally liable for business debts and lawsuits.

What is limited liability in business formation?

Only the business is responsible for the business’s debts and lawsuits, no liability for the owners.

What is single/pass-through taxation?

Business not taxed, but individuals are taxed.

What is double taxation?

Business is taxed and individuals are taxed also.

What is the relationship between a sole proprietorship and its owner?

No distinction between the business and the individual.

How is a sole proprietorship created and managed?

No formal steps are needed.

What is a Limited Liability Company (LLC)?

Separate legal entity that’s a hybrid between a partnership and a corporation.

What are the limitations on transferability in an LLC?

Members can transfer economic rights but not ownership rights.

Under what conditions can a court pierce the company veil in an LLC?

Failure to observe formalities, commingling assets, inadequate capitalization, fraud.

What is a partnership/general partnership?

An unincorporated association of two or more co-owners.

What is the fiduciary duty partners owe?

Obligation of good faith and fair dealing to other partners and the partnership.

What are the limitations on transferability in a partnership?

Partners can transfer economic rights but not ownership rights.

What are the elements of partnership by estoppel?

They tell other people they’re partners, or allow others to call them partners; the third party relies on this assertion; the third party suffers harm.

What is a corporation?

A separate legal entity that is recognized as a distinct legal person.

What are the requirements for creation and management of a corporation?

Must hold meetings for shareholders and directors and must keep minutes of meetings.

Under what conditions can a court pierce the corporate veil?

Failure to observe corporate formalities, commingling of personal and corporate assets, underfunding the corporation, and/or fraud.

What are the roles of directors and officers in a corporation?

Directors make major business decisions; officers make day-to-day decisions.

What rules do Directors and officers of corporations have to abide by?

They have to abide by the Business Judgment Rule and owe fiduciary duties (loyalty and care) to the corporation and shareholders

What are the main types of intellectual property?

Patents = ideas, Copyrights = expressions, Trademarks = origin/brands.

What are the requirements for utility patents?

Novel, nonobvious, utility, patentable subject matter.

What constitutes copyright infringement?

Using copyrighted material without permission.

What are the defenses to copyright infringement?

First Sale Doctrine and Fair Use Doctrine.

What is the First Sale Doctrine?

Person can sell or dispose of their lawfully obtained copy of copyrighted material

What is the Fair Use Doctrine?

Allows limited use of copyrighted material for purposes like criticism, parody, news, scholarship, education, and research.

What makes a trademark distinctive?

Fanciful and arbitrary marks are the most distinctive and easy to register.

What constitutes trademark infringement?

Likelihood of confusion among consumers as to who made the product or who provided the service.

What is real property?

Land and anything firmly attached to it (buildings, trees, fixtures).

What is tenancy in common?

Default way that multiple people own real property together.

How is property divided with Tenancy in Common?

Each co-tenant owns an equal interest in the whole property, it’s not divided up.

What happens when a co-tenant dies in Tenancy in Common?

When a co-tenant dies, their interest passes to their heirs.

How is a Joint Tenancy created?

Has to be clearly intended to be created.

How is property divided with Joint Tenancy?

Each joint tenant owns an equal interest in the whole property, it’s not divided up.

What happens when a co-tenant dies in Joint Tenancy?

When a joint tenant dies, their interest passes to the surviving joint tenants.

How is property owned with Tenancy by the Entirety?

Each spouse owns the entire property.

What happens when a spouse dies in Tenancy by the Entirety?

When one spouse dies, their interest in the property passes to the surviving spouse.

What happens when spouses get a divorce in Tenancy by the Entirety?

Divorce severs tenancy by the entirety and creates tenancy in common.

What are the types of tenancy in landlord-tenant law?

Tenancy for years, periodic tenancy, tenancy at will, tenancy at sufferance.

What is 'eviction' in landlord-tenant law?

Some act that forces a tenant to abandon the property.

What is 'actual eviction'?

If landlord prevents tenant from possessing all or part of the property.

What is 'constructive eviction'?

Substantial interference with tenant’s use and quiet enjoyment of the property.

What are the landlord’s duties?

Duty to deliver possession, quiet enjoyment, duty to maintain premises, duty to return security deposit.

What are the tenant's duties?

Duty to pay rent, duty to use property for proper purpose, duty not to damage premises, duty not to disturb other tenants.

What are 'gifts'?

Voluntary transfer of property from one person to another without consideration.

What is required to enforce a gift?

Intention to transfer ownership immediately, delivery, acceptance.

What is Bailment?

Rightful possession of personal property by someone who isn’t the owner.

What are the duties of a bailee?

Bailee must redeliver property on time to the bailor and use due care with the property.

What is the burden of proof in bailment cases?

In bailment cases, the burden of proof is on the bailee.

What is Abandoned Property?

Property owner had intent to relinquish ownership.

Who has the rights for Lost Property?

Finder has superior rights to all others except the original owner.

What is Mislaid or Misplaced Property?

Property owner intentionally placed the property but then forgot it.

Who has the rights for Mislaid or Misplaced Property?

No finder rights, property is to be turned over the land owner where it was found. Land owner has rights above all others except the original owner