Business Law Exam 2 Terms

Felonies

A serious crime—such as arson, murder, rape, or robbery—that carries the most severe sanctions, ranging from more than one year in a state or federal prison to the death penalty.

beyond a reasonable doubt

The standard of proof used in criminal cases.

Misdemeanors

A lesser crime than a felony, punishable by a fine or incarceration in jail for up to one year.

crime

A wrong against society proclaimed in a statute and, if committed, punishable by society through fines, imprisonment, or death.

Petty offenses

The least serious kind of criminal offense, such as a traffic or building-code violation.

mens rea)

A wrongful mental state (“guilty mind”), or intent. It is one of the two essential elements required to establish criminal liability.

arson

The intentional burning of a building.

larceny

The wrongful taking and carrying away of another person’s personal property with the intent to permanently deprive the owner of the property.

burglary

The unlawful entry or breaking into a building with the intent to commit a felony.

actus reus

A guilty (prohibited) act. It is one of the two essential elements required to establish criminal liability.

Robbery

The act of forcefully and unlawfully taking personal property of any value from another.

forgery

The fraudulent making or altering of any writing in a way that changes the legal rights and liabilities of another.

white-collar crime

Nonviolent crime committed by individuals or business entities to obtain a personal or business advantage.

Insider trading

The purchase or sale of securities on the basis of information that has not been made available to the public.

self-defense

The legally recognized privilege to do what is reasonably necessary to protect oneself, one’s property, or someone else against injury by another.

Money laundering

Engaging in financial transactions to conceal the identity, source, or destination of illegally gained funds.

Duress

Unlawful pressure brought to bear on a person, causing the person to perform an act that she or he would not otherwise perform.

Embezzlement

The fraudulent appropriation of funds or other property by a person who was entrusted with the funds or property.

plea bargaining

The process by which a criminal defendant and the prosecutor work out an agreement to dispose of the criminal case, subject to court approval.

self-incrimination

Giving testimony in a trial or other legal proceeding that could expose the person testifying to criminal prosecution.

search warrant

An order granted by a public authority, such as a judge, that authorizes law enforcement personnel to search particular premises or property.

Entrapment

A defense in which a defendant claims that he or she was induced by a public official to commit a crime that he or she would otherwise not have committed.

probable cause

Reasonable grounds for believing that a search or seizure should be conducted.

indictment

A charge by a grand jury that a reasonable basis (probable cause) exists for believing that a crime has been committed and that a trial should be held.

exclusionary rule

A rule that prevents evidence that is obtained illegally or without a proper search warrant from being admissible in court.

grand jury

A group of citizens who decide, after hearing the state’s evidence, whether a reasonable basis (probable cause) exists for believing that a crime has been committed and that a trial ought to be held.

double jeopardy

The Fifth Amendment requirement that prohibits a person from being tried twice for the same criminal offense.

computer crime

Any violation of criminal law that involves

knowledge of computer technology for its perpetration, investigation, or prosecution.

cyber crime

A crime that occurs in the online environment.

information

A formal accusation or complaint (without an indictment) issued in certain types of actions (usually criminal actions involving lesser crimes) by a government prosecutor.

Identity theft

The illegal use of someone else’s personal information to access the victim’s financial resources.

Cyber fraud

Any misrepresentation knowingly made over the Internet with the intention of deceiving another for the purpose of obtaining property or funds.

virus

A software program that can replicate itself over a network and spread from one device to another, altering files and interfering with normal operations.

botnets

A network of compromised computers connected to the Internet that can be used to generate spam, relay viruses, or cause servers to fail.

malware

Malicious software programs, such as viruses and worms, that are designed to cause harm to a computer, network, or other device

phishing

A form of identity theft in which the perpetrator sends e-mails purporting to be from legitimate businesses to induce recipients to reveal their personal financial data, passwords, or other information.

hacker

A person who uses computers to gain unauthorized access to data.

worm

A software program that automatically replicates itself over a network but does not alter files and is usually invisible to the user until it has consumed system resources

botnet

A network of compromised computers connected to the Internet that can be used to generate spam, relay viruses, or cause servers to fail.

felony

A serious crime—such as arson, murder, rape, or robbery—that carries the most severe sanctions, ranging from more than one year in a state or federal prison to the death penalty.

misdemeanor

A lesser crime than a felony, punishable by a fine or incarceration in jail for up to one year.

misdemeanor

The least serious kind of criminal offense, such as a traffic or building-code violation.

mens rea

A wrongful mental state (“guilty mind”), or intent. It is one of the two essential elements required to establish criminal liability.

Cyberterrorists

Criminals who use technology and the Internet to cause fear, violence, and extreme financial harm.

cyberterrorist

Criminals who use technology and the Internet to cause fear, violence, and extreme financial harm.

promise

A declaration that binds a person who makes the promisor do or not do a certain act.

promisor

A person who makes a promise.

unilateral contract

A type of contract that results when an offer can be accepted only by the offeree’s performance.

bilateral contract

A type of contract that arises when a promise is given in exchange for a return promise.

promisee

A person to whom a promise is made.

objective theory of contracts

The view that contracting parties shall be bound only by terms that can be objectively inferred from promises made.

contract

A set of promises constituting an agreement between parties, giving each a legal duty to the other and the right to seek a remedy for the breach of the promises or duties.

offeror

A person who makes an offer.

offeree

A person to whom an offer is made.

Formal contracts

An agreement that by law requires a specific form for its validity.

executory contract

A contract that has not yet been fully performed

Informal contracts

A contract that does not require a specific form or method of creation to be valid.

valid contract

A contract that results when the elements necessary for contract formation (agreement, consideration, capacity, and legality) are present.

voidable contract

A contract that may be legally avoided at the option of one or both of the parties.

express contract

A contract in which the terms of the agreement are stated in words, oral or written.

executed contract

A contract that has been fully performed by both parties.

implied contract

A contract formed in whole or in part from the conduct of the parties.

void contract

A contract having no legal force or binding effect.

unenforceable contract

A valid contract rendered unenforceable by some statute or law.

informal contract

A contract that does not require a specific form or method of creation to be valid.

formal contract

An agreement that by law requires a specific form for its validity.

quasi contract

An obligation or contract imposed by law (a court), in the absence of an agreement, to prevent the unjust enrichment of one party.

quantum meruit

A Latin phrase meaning “as much as he or she deserves.” The expression describes the extent of compensation owed under a quasi contract.

extrinsic evidence

Any evidence not contained in the contract itself, which may include the testimony of the parties, additional agreements or communications, or other information relevant to determining the parties’ intent.

Quasi contracts

An obligation or contract imposed by law (a court), in the absence of an agreement, to prevent the unjust enrichment of one party.

offer

A promise or commitment to perform or refrain from performing some specified act in the future.

agreement

A mutual understanding or meeting of the minds between two or more individuals regarding the terms of a contract.

revocation

The withdrawal of a contract offer by the offeror. Unless an offer is irrevocable, it can be revoked at any time prior to acceptance without liability.

mirror image rule

A common law rule that requires that the terms of the offeree’s acceptance adhere exactly to the terms of the offeror’s offer for a valid contract to be formed.

acceptance

The act of voluntarily agreeing, through words or conduct, to the terms of an offer, thereby creating a contract.

option contract

A contract under which the offeror cannot revoke the offer for a stipulated time period (because the offeree has given consideration for the offer to remain open).

counteroffer

An offeree’s response to an offer in which the offeree rejects the original offer and at the same time makes a new offer.

mailbox rule

A common law rule that acceptance takes effect, and thus completes formation of the contract, at the time the offeree sends or delivers the acceptance via the communication mode expressly or impliedly authorized by the offeror.

e-contracts

A contract that is formed electronically.

click-on agreement

An agreement that arises when an online buyer clicks on “I agree” or otherwise indicates her or his assent to be bound by the terms of an offer.

shrink-wrap agreement

An agreement whose terms are expressed in a document located inside a box in which goods (usually software) are packaged.

forum-selection clause

A provision in a contract designating the court, jurisdiction, or tribunal that will decide any disputes arising under the contract.

e-signature

An electronic sound, symbol, or process attached to or logically associated with a record and adopted by a person with the intent to sign the record.

partnering agreement

An agreement between a seller and a buyer who frequently do business with each other concerning the terms and conditions that will apply to all subsequently formed electronic contracts.

browse-wrap terms

A term or condition of use that is presented when an online buyer downloads a product but to which the buyer does not have to agree before installing or using the product.

record

Information that is either inscribed on a tangible medium or stored in an electronic or other medium and is retrievable in visual form

e-contract

A contract that is formed electronically.

Consideration

The value given in return for a promise or performance in a contractual agreement.

Rescission

A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made.

past consideration

Something given or some act done in the past, which cannot ordinarily be consideration for a later bargain.

forbearance

The act of refraining from an action that one has a legal right to undertake.

accord and satisfaction

A common means of settling a disputed claim, whereby a debtor offers to pay a lesser amount than the creditor purports to be owed.

release

An agreement in which one party gives up the right to pursue a legal claim against another party.

estopped

Barred, impeded, or precluded.

liquidated debt

A debt whose amount has been ascertained, fixed, agreed on, settled, or exactly determined.

promissory estoppel

A doctrine that can be used to enforce a promise when the promisee has justifiably relied on the promise and when justice will be better served by enforcing the promise.

unliquidated debt

A debt that is uncertain in amount.

Contractual capacity

The capacity required by the law for a party who enters into a contract to be bound by that contract.

age of majority

The age (eighteen years, in most states) at which a person, formerly a minor, is recognized by law as an adult and is legally responsible for his or her actions.

ratification

The acceptance or confirmation of an act or agreement that gives legal force to an obligation that previously was not enforceable.