Exam 2: Week 9, 10, 11 Vocab words

Assumption of risk - Defense in negligence cases that prevents an injured party from
recovering if it can be established that the injured party realized the risk and engaged in the
conduct anyway.
Bait and switch - Term given to advertising technique in which a low-price product is
advertised and then the customer is told that the product is unavailable or is talked into a
higher-priced product; prohibited by the FTC.
Caveat emptor - Latin term for “Let the buyer beware”.
Comparative negligence - In negligence, a defense that allocates responsibility for an
accident between the plaintiff and defendant when both were negligent and allocates the
recovery in proportion to liability.
Consent decree - For administrative agencies, a type of plea bargain; a settlement
document for an administrative agency’s charges.
Contributory negligence - Negligence defense that bars an injured party from recovering
any damages if the injured party acted in a negligent way and contributed to her own
injuries.
Corrective advertising - FTC remedy that requires a company to run ads explaining
previous deceptive ads or run a new statement in future ads.
Disclaimers - A provision in a contract that eliminates liability such as a warranty
disclaimer or a disclaimer of tort liability.
Express warranty - Expressed promise by seller as to the quality, abilities, or performance
of a product.
Federal Trade Commission (FTC) - Federal agency responsible for regulation of unfair
and deceptive trade practices, including deceptive advertisements.
Implied warranty of fitness for a particular purpose- Warranty given by seller to buyer
that promises goods will meet the buyer’s specified needs.
Implied warranty of merchantability - A warranty that the goods are of average quality;
given in every sale of goods by a merchant.
Misuse - In product liability, a defense based on the plaintiff’s failure to follow instructions
or use of a product for improper purposes.
Privity - Direct contractual relationship. For example, if I sell my car to you, we have
privity of contract because we are the parties to that contract. If you sell the car to a
friend, I do not have privity with the friend.
Strict liability - Liability without fault
Unconscionable - A defense to an otherwise valid contract that is grossly unfair to one
side in the contract.

Age Discrimination in Employment Act - Federal law that prohibits job discrimination on
the basis of age.
Americans with Disabilities Act - Federal law that prohibits discrimination in the workplace
against persons with disabilities and requires employers to make reasonable accommodations
for employees with disabilities who are otherwise qualified to perform a job.
Bona Fide Occupational Qualification (BFOQ) - A justification for discrimination if it can
be established that gender, religion, national origin, etc., is required for a job.
Civil Rights Act of 1964 - Law that prevents discrimination in housing, education, ad
employment.
Disparate Impact - Theory for establishing discrimination; involves using statistical analysis
to demonstrate that a particular practice or an employer’s hiring practices have a greater
impact on protected classes.
Disparate Treatment - In discrimination law, the application of different rules or standards
to people of different races, genders, or national origins.
Equal Employment Opportunity Act of 1972 - Federal law that established the EEOC
which enforces Title VII.
Equal Employment Opportunity Commission (EEOC) - Federal agency responsible for
the enforcement of Title VII and other federal antidiscrimination laws.
Equal Pay Act of 1963 - Law that prohibits wage discrimination on the basis of age, race,
sex, ethnicity, and so on.
Lilly Ledbetter Fair Pay Act - Federal law that extended the statute of limitations for
employees to bring discrimination suits against employers for pay discrimination; time is now
measured from each paycheck and not limited to 180 days from the act of discrimination.
Pattern or Practice of Discrimination - In employment discrimination, a theory for
establishing discrimination based on a pattern of dealing with minorities, women, and certain
ethnic groups.
Pregnancy Discrimination Act - Federal law prohibiting discrimination in hiring or
promotion decisions on the basis of pregnancy or plans for pregnancy.
Quotas - Affirmative action plans that dictate a specific number of minority or female
applicants be accepted for jobs, graduate school, and so on. Outlawed by U.S. Supreme Court;
can only have affirmative action goals, not specific quotas.
Rehabilitation Act of 1973 - Federal law prohibiting discrimination by federal contractors
on the basis of a handicapping condition.
Right-To-Sue Letter - Letter issued by the EEOC to a complainant after all necessary
administrative steps have been taken in the case; permits the complainant to pursue court
action.

Sexual Harassment - Unlawful suggestions, contact, or other advances in the workplace;
prohibited under federal law.
Title VII - Portion of the Civil Rights Act of 1964 that prohibits employment discrimination.

American Competitiveness in the Twenty-First Century Act - Federal law that increased
the number of highly skilled immigrants that are allowed to work in the US.
Antiterrorism and Effective Death Penalty Act - One of several post 9/11/2001 federal
statutes passed to increase grounds for deportation and penalties for criminal conduct for
terrorist activities.
Employee Retirement Income Security Act of 1974 (ERISA) - Congressional act
establishing requirements for disclosure and other procedures with relation to employees’
retirement plans.
Equal Pay Act of 1963 - Act prohibiting wage discrimination on the basis of age, race, sex,
ethnicity, etc.
Fair Labor Standards Act (FLSA) - Federal law covering minimum wages, maximum hours,
overtime, and compensatory time.
Federal Insurance Contributions Act (FICA) - Federal law that requires the joint
contribution by employers and employees of the funds used for the Social Security system.
Immigration Act of 1990 - Federal law that requires an I-9 form for every employee.
Immigration and Naturalization Act (INA) - Original federal act governing employer
obligations on employing immigrants
Independent Contractor - Person who works for another but is not controlled in her day-
to-day conduct
Minimum Wage - Under FLSA, all employees must be paid a minimum wage.
Occupational Safety and Health Administration (OSHA) - A federal agency that develops
and enforces safety standards in the workplace.
Overtime Pay - Pay rate required for work beyond the maximum forty-hour work week for
covered workers.
Pension Protection Act of 2006 - Federal law that imposes additional funding and
disclosure requirements on employers who have employee pension plans.
Right-To-Work Laws - State laws that prohibit closed and union shops from requiring
employees to join a union in order to work.
Social Security Act of 1935 - Federal legislation that provides for the benefits of Social
Security and the payment mechanisms through FICA deductions.
U.S. Department of Homeland Security (DHS) - Federal agency that is an umbrella for
several existing agencies that was designed to bring together all the functions related to
emergencies, immigration, border security, and antiterrorism efforts.
USA Patriot Act - Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act - Federal law that permits expanded warrant
and investigation techniques for federal agencies as well as the sharing of information about

suspected terrorists; also imposes control on large cash transactions for banks, real property,
and vehicles.
Unemployment Compensation - Funds paid to individuals who are involuntarily terminated
from their jobs while they are seeking new employment.
Workers’ Compensation - State system that provides payments for workers who are injured
on the job

Acceptance - Offeree's positive response to offeror's proposed contract.
Article 2 of the Uniform Commercial Code (UCC) - Uniform laws adopted in forty-nine
states governing sales contracts for goods; are tangible and moveable.
Bilateral Contract - Contract in which both parties make promises to perform; a promise is
given in return for another promise.
Bill of Lading - Receipt for goods issued by a carrier; used as a means of transferring title
in exchange for payment or a draw on a line of credit.
Charitable Subscriptions - A promise to make payment to a charitable organization; a
pledge; it is enforceable even though the charity gives nothing in exchange.
Common law - British law and customs that were adopted in the US by judicial precedent.
In contracts, the common law rules apply to contracts for services and real estate.
Consideration - Money or something of value; a legal detriment.
Counteroffer - A new offer made in return by one who rejects an unsatisfactory offer.
Digital Signature - Authorization for a contract provided via electronic means.
Electronic Signatures in Global and National Commerce Act of 2000 (E-SIGN) - A
federal law that recognizes digital signatures as authentic for purposes of contract formation;
E-sign puts electronic signatures on equal footing with signatures on paper contracts.
Executed Contracts - Contracts in which performance has been completed.
Executory Contracts - Contracts that have been entered into but not yet performed.
Express Contract - Contract agreed to orally or in writing.
Force Majeure - Clause in a contract that excuses performance in the event of war, embargo,
or other generally unforeseeable event.
Implied Contract - A contract that arises from circumstances and is not expressed verbally
or in writing by the parties.
Mailbox Rule - Acceptance is effective upon mailing if properly done.
Merchant's Firm Offer - Under §2-205 of the UCC, an offer required to be held open if made
in writing by a merchant, even though no consideration is given.
Merchants' Confirmation Memoranda - UCC rule stating that the confirmation of an oral
agreement sent by one party to the other and signed only by the sender is effective unless
the recipient rejects it.
Offer - Indication of present intent to enter into a contract.
Offeree - In contract negotiations, the person to whom the offer is made.
Offeror - In contract negotiations, the person who makes the offer.

Option Contract - An agreement to hold an offer open for a period of time in exchange for
money or other consideration.
Parol Evidence Rule - Oral evidence cannot be used to contradict or add to the terms of a
written contract that appears to be the final expression of the agreement.
Promissory Estoppel - A promise that causes another to act in reliance upon it; if the
reliance is reasonable, the promise is enforceable.
Quasi-Contract - A theory used to prevent unjust enrichment when no contract is formed;
the court acts as if a contract had been formed and awards damages accordingly. One of the
parties has received a benefit at the other's expense, knowing that payment would be
expected.
Revocation - The retraction by the offeror of an outstanding offer.
Statute of Frauds - Statutes that require certain contracts to be in writing.
Stipulated Means - In contracts, a method of acceptance specified or stipulated in the offer;
if these means are followed by the offeree, the mailbox rule applies for the timing of the
acceptance.
UN Convention on Contracts for the International Sale of Goods (CISG) - U.N. rules
that are similar to Article II of the UCC governing certain international transactions for the
sale of goods.
Unenforceable Contract - A contract that cannot be enforced due to a procedural error.
Uniform Computer Information Transactions Act (UCITA) - Uniform law that governs
sales of software, databases, and other products used on computers.
Uniform Electronic Transactions Act (UETA) - Uniform law for states that provides the
rule for forming electronic contracts.
Unilateral Contract - Contract in which one party promises to perform in exchange for the
performance of the other party.
Void Contract - A contract that is not enforceable by either party.
Voidable Contract - A contract in which one party can choose not to perform.

Accord and Satisfaction - An agreement (accord) to pay a certain amount, the payment of
which constitutes full payment (satisfaction) of that debt.
Assignment - In contract law, the transfer of the benefits under a contract to a third party;
the third party has a right to benefits but is subject to any contract defenses.
Bill of Lading - Receipt for goods issued by a carrier; used as a means of transferring title
in exchange for payment or a draw on a line of credit.
Capacity - The ability to legally enter into a contract.
Commercial Impracticability - Contract defense for nonperformance under the UCC that
excuses a party when performance has become impossible or will involve much more than
what was anticipated in the contract negotiations.
Compensatory Damages - Damages to put nonbreaching party in the same position he
would have been in had the breach not occurred.
Conditions - Events that must occur before contract performance is due.
Conditions Concurrent/Contemporaneous - In contracts, the conditions that must occur
simultaneously for contract performance to be required; for example, in an escrow closing in
real property, an agent collects title, insurance, funds, and other documents and sees that all
the exchanges under the contract occur at the same time; the parties perform their part of
the agreement at the same time.
Conditions Precedent - In contracts, an event or action that must take place before a
contract is required to be performed; for example, qualifying for financing is a condition
precedent for a lender's performance on a mortgage loan.
Confidential Relationship - A relationship with a high degree of trust and reliance.
Consequential Damages - Damages resulting from a contract breach, such as penalties or
lost profits.
Contract Defense - Situation, term, or event that makes an otherwise valid contract invalid.
Covenants not to Compete - Promises to protect employers and buyers from loss of
goodwill through employee or seller competition.
Delegation - Transfer of obligations under a contract; generally accompanied by assignment
of benefits.
Duress - A physical or mental force that was used to obtain the agreement to enter into the
contract without voluntary consent.
Exculpatory Clause - Clause that attempts to hold a party harmless in the event of damage
or injury to another's property.
Fraud - Intentional deception in contract negotiation that is relied on by the other party.

Impossibility - Contract defense that excuses performance when there is no objective way
to complete the contract.
Incidental Damages - Damages suffered by the nonbreaching party to a contract as a result
of the breach; for example, late performance fees on a buyer's contract because the seller
failed to deliver on time.
Letter of Credit - Generally used in international transactions; an assurance by a bank of
the seller's right to draw on a line of credit established for the buyer.
Liquidated Damages - Damages agreed to in advance and provided for in the contract;
usually appropriate when it is difficult to know how much the damages will be.
Material Fact/Material Misstatement - A statement of fact that would influence an
individual’s decision to buy or sell.
Minor/Infant - An individual under the age of majority; generally someone under the age
of 18.
Misrepresentation - In contract formation, misstatements of materials facts without the
intent to deceive the other party.
Novation - Process of reworking a contract to substitute parties or terms, so that the old
contract is abandoned, and the new contract becomes the only valid contract.
Puffing - An opinion about the quality of goods and products.
Rescission - Process of revocation or cancellation of a contract.
Scienter - Intent to defraud.
Substantial Performance - Contract defense for performing a contract slightly differently
from what was agreed upon; justification for substitute but equal performance; generally
applicable in construction contracts.
Unconscionable - Term used to describe contracts that are grossly unfair to one side in the
contract; a defense to an otherwise valid contract.
Undue Influence - Contract defense based on one party taking advantage of a relationship
of trust and confidence.
Void Contract - A contract that neither side can enforce.
Voidable Contract - A contract that one side can choose not to perform.