254 final

Right-legal capacity to require another person to perform or refrain from an action. Duty-an obligation of law imposed on a person to perform or refrain from performing a certain act. Right of privacy-officers can’t search home unless reasonable suspicion. Statutory law-legislative acts declaring, commanding, or prohibiting something. Administrative regulations-rules made by state & federal admin agencies. Private law-the rules and regulations parties agree to as part of their contractual relationships (landlords/tenants). Case law-law found in judicial decisions. Precedent-a decision of the court that stands as the law for a particular problem in the future. Common law-the body of unwritten principles based upon the usages and customs of the community that were recognized/enforced by courts. Substantive law-the law that defines rights and liabilities (creates). Procedural Law-specifies the steps that must be followed in enforcing those rights and liabilities. Criminal law-laws that define wrongs against society. Civil laws-the laws that define the rights of one person against another. Equity-equitable remedies stop the harm (stop producing a copy). Subject matter jurisdiction-authority to hear a particular type of case. Original jurisdiction- authority to hear a controversy when first brought to court. General jurisdiction- the power to hear and decide most controversies involving legal rights and duties. Limited(special) jurisdiction-authority to hear only particular cases. Appellate jurisdiction-the power of a court to hear and decide a given class of cases on appeal from another court or admin agency. Reversible error- an error or defect in court proceedings of so serious a nature that on appeal the appellate court will set aside proceedings of the lower court. Affirm-action taken by an appellate court that approves the decision of the court below. Reverse-appellate court sets aside verdict of a lower court. Remand-appellate sends a case back to trial court for additional hearings or a new trial. Federal district court-94 districts, general trial court of the federal system. En banc-full panel of judges on the appellate court hears a case. Small claims-courts that resolve disputes between parties when those disputes do not exceed a minimal level, no lawyers permitted. Plaintiff-civil. Prosecutor-criminal. Answer-defendant files to admit or deny facts from plaintiff. Motion to dismiss-attack the other party’s pleading as not stating a cause of action or a defense. Demurrer-dismiss the other party’s pleading for not stating a cause of action or a defense. Discovery-procedures for ascertaining facts prior to the time of trial in order to eliminate the element of surprise in litigation. Deposition-testimony of a witness out of court under oath. Impeach-using prior inconsistent evidence to challenge credibility of a witness. Motion for summary judgment-request that the court decide a case on the basis of law only. Expert witness-special knowledge in a particular field whose opinion is admissible as an aid to the trier of fact. Voir dire-the preliminary examination of a juror or a witness to ascertain fitness to act as such. Peremptory challenge-used to remove a juror for any reason except discriminatory. Admissibility-the quality of the evidence in a case that allows it to be presented to the jury. Direct exam-exam of a witness by their attorney. Cross exam-exam of witness by adverse party attorney. Directed verdict-by the trial judge to the jury to return a verdict in favor of a specified party to the action (evidence is true but no basis for recovery). Judgment nov-verdict clearly wrong as a matter of law. Arbitration-settlement of disputed questions by one or more arbitrators. Mediation-neutral person acts as messenger between two sides. Reference to a third person- settlement that allows non party to resolve the dispute. Summary jury trial-mock or dry-run trial for parties to get a feel for how their cases will play to a jury. Rent-a-judge-hire a judge to hear the case. Limited partnership-formed by one or more general partners and one or more limited partners. Limited partner-partner who does not take part in management nor appears to the public as a general partner. Takes on unlimited liability. General partner-partner who co-owns a business, takes part in management and publicly engages. Limited Partnership Agreement-capital contributions, firm name, management/control of the firm, right to sue, dissolution. LLC-owners/managers not personally liable for debts of entity, acting as agents for entity. Contains formation, capital contributions, management (operating agreement), distributions, LLC property, assignment, dissolution, disregarding LLC. Shareholders of a close corporation may be treated as partners for tax purposes. Natural law-system of principles to guide human conduct independent of enacted law. Positive law-law enacted by government authority. Civil disobedience-natural law proponents violate positive law. Kant’s categorical imperative-standard of ethics that requires we avoid one-sided analysis of ethical issues. Rights/entitlement theory-we all have a set of rights that must be honored and protected by government. Ethical egoism-we should all act in our own self interest. Utilitarians-based on doing the most good for the most people in making decisions. Moral relativists-those who make decisions based on circumstances and not on the basis of any predefined standards. Blanchard and Peale Test- is it legal, is it balanced, how does it make me feel? Front of the newspaper-do you want to see it on the paper? Laura Nash model- have you defined the problem, how did the situation occur, what was your intention, can you discuss your decision with the affected parties, can you discuss with your family and friends? Real property- land and all rights in land. Land-earth, including all things embedded in or attached. Air rights-the space above the surface of property that is part of owner’s interests and rights. Easement- permanent right that one has in the land of another (right to cross, profits, remove minerals). Dominant tenement-land that is benefited by an easement. Servient tenement-land subject to an easement. Easement by implication/necessity-arises from circumstances vs grantee’s right to use retained by grantor by going to and from land. Prescription-acquisition of an easement by making hostile, visible, and notorious use of the land for the period specified by law. License-personal, revocable privilege to perform an act or series of acts on the land of another. Lien-claim or right, against thorough judgment. Tax lien-lien on property for nonpayment of taxes. Judgment lien-lien obtained through the courts. Mechanic’s lien-claim by laborers or suppliers for property improvements. Fixture-personal property attached to or adapted to real estate, machinery and equipment usually not considered. Fee simple estate-highest level of land ownership. Life estate-estate for duration of life. Leasehold estate-interest of a tenant in rented land. Estate in fee-owner has absolute and entire interest in the land. Licensee-someone on another’s premises with the express or implied permission of the owner. Invitees-persons who enter another’s land via invitation, connected with the owner’s business or an activity the occupier conducts on the land. Attractive nuisance doctrine-imposing liability on a landowner for injuries sustained by children playing on the land when the landowner permits a condition to exist or maintains equipment that a reasonable person should realize would attract small children who could not realize the danger. Condominium-combo of co-ownership and individual ownership. Co-ownership-real property owned by one or several persons, method determines the extent of the owners’ rights. Grantor/grantee-owner who transfers land to new owner/transferee of land. Quitclaim deed-grantor grants only whatever right or title the grantor may have in the property without specifying or warranting transfer of any particular interest. Warranty deed-grantor conveys a specific estate or interest to the grantee. Acceptance-acceptance of a draft, offer to make a contract, goods delivered by seller, or a gift or deed. Recorder-public official in charge of deeds. Race statute-first party to record deed holds the title. Notice statute-last good faith or bona fide purchaser holds the title. Notice race statute-first bona fide purchaser to record deed holds title. Abstract of title-provides a history of all public documents related to the property. Eminent domain-power of government to take private property against the objection of the owner, provided the taking is for a public purpose and just compensation is made. Adverse possession-hostile possession of real estate. Assumption-mortgage transfers in which the transferee and mortgagor are liable and property is subject to foreclosure if payments not made. Foreclosure-procedure for enforcing a mortgage resulting in the public sale of the property. Redemption-buying back one’s property which had been sold because of a default. Tenancy for years-tenancy for a fixed period of time, even though the time is less than a year. Periodic tenancy-tenancy that continues indefinitely for a specified rental period until terminated; often called month-to-month. Tenancy at will-holding of land for an indefinite period that may be terminated at any time by the landlord or by the landlord+tenant together. Tenancy at sufferance-lease arrangement in which the tenant occupies the property at the discretion of the landlord. Covenant of quiet enjoyment-landlord stays the fuck out. Constructive eviction-act or omission of the landlord substantially deprives the tenant of the use and enjoyment of the premises (roof is leaking). Escalation clauses-provision for the automatic increase of rent at periodic intervals. Warranty of habitability-implied warranty that the leased property is fit for dwelling by tenants. Forcible entry and detainer-restores the property to landlord unless tenant pays. Landlord liability- liable when criminal acts of third persons are reasonably foreseeable, liable when failed to keep property safe, liable when failure to use due care causes harm to licensees and invitees. Underwriter-insurer. Insurance agent/broker- agent of insurance company vs independent contractor. Insurable interest-if destruction of the property will cause a direct pecuniary loss. Life insurance nonpayment-normally other policies lapse with nonpayment, but insured is allowed a month to make payment of the premium due. Contract modified-if both insurer and insured agreed to the change. Breach of policy-if reasonable basis that claim is not covered, refusal to pay does not subject to liability for a breach of good faith or a statutory penalty. Subrogation-right of a party secondarily liable to stand in the place of the creditor (third party that caused insured to sustain the loss). Homeowners insurance-combination of standard fire and comprehensive personal liability insurance. Coinsurance clause-requires insured to maintain insurance on the covered property up to a certain amount or a certain percentage of the value (generally 80%), value of 400k insured at 240k, suffers 160k loss but only receives 120k because should’ve been insured at 320k. Life insurance-term insurance-specific number of years, whole life-ordinary life insurance, endowment-insurance that pays the face amount of the policy if the insured dies within the policy period. Double indemnity-provision for payment of double the amount specified if death is caused by accident and occurs under specific circumstances. Incontestability clause-insurer cannot dispute the policy on the ground of misrepresentation or fraud of the insured. Agent-person or firm authorized by the principal to make contracts with third persons on behalf of the principal. Principal-person or firm who employs an agent who is primarily liable to the third person or creditor. Independent contractor-performance of work is controlled by contractor, not the owner. Special agent-agent authorized to transact a specific transaction or do a specific act. General agent-authorized by the principal to transact all affairs in connection with a particular type of business. Universal agent-authorized to do all acts that can lawfully be delegated to a representative. Power of attorney-written authorization of an agent to perform a certain act (attorney in fact is agent authorized). Apparent authority-only the appearance of authority but no actual authority, and the appearance was created by the principal. Conditions for ratification-agent must have purported to act on behalf of or as agent for the identified principal, principal must have been capable of authorizing the act both at the time of the act and the time it was ratified, the principal must have full knowledge of all material facts. Ratification-an agent attempts to do an act on behalf of the principal that was not authorized, or a person who is not an agent attempts to act as an agent. Apparent authority-appearance of authority created by the principal’s words or conduct. Customary authority-agent can do an act that according to community custom, usually accompanies the transaction. Unauthorized Action- If a person makes a contract as agent for another but lacks authority to do so, the contract does not bind the principal. If an agent’s act causes loss to the third person, that person may generally hold the agent liable for the loss. Disclosed principal- principal whose identity is made known by the agent as well as the fact that the agent is acting on the principal’s behalf. Partially disclosed principal-principal whose existence is made known but whose identity is not. Undisclosed principal-principal on whose behalf an agent acts without disclosing to the third party the fact of agency or the identity of the principal. Agent liability-agents are liable for harm caused to third persons by the agents’ fraudulent, intentional, or negligent acts. Simple contract w principal disclosed-Third party and principal may sue each other in breach. Simple contract w partially disclosed-The third person may recover from either the agent or the principal. Simple contract undisclosed-The third person may sue the principal upon learning of their existence, but can sue from the agent or principal or both. Vicarious liability-imposing liability for the fault of another. Respondeat superior- doctrine that the principal or employer is vicariously liable for unauthorized torts committed by an agent or employee while acting within the scope of the agency or the course of employment, respectively. Collective bargaining contract-identification of the work belonging exclusively to designated classes of employees, wage and benefit clauses, promotion and layoff clauses, management rights clause, and a grievance procedure. Employment at will doctrine-the employer has historically been allowed to terminate the employment contract at any time for any reason or no reason. Justifiable discharge-nonperformance of duties, misrepresentation or fraud in obtaining the employment, disobedience of proper directions, disloyalty, theft or other dishonesty, possession or use of drugs or intoxicants, misconduct, or incompetence. SOX-prohibits a publicly traded company or any agent of it from taking an adverse employment action against an employee who provides information, testifies, or otherwise assists in proceedings regarding fraud, any violation of an SEC rule, federal law protecting shareholders against fraud. Dodd Frank-wider range of protection for whistleblowers, covers employees who extend credit, service loans, provide real estate settlement services, and provide financial advice. Expands SOX statute of limitations from 90 to 180 days, DF limitations period is six years. Allows an immediate lawsuit in federal court and double back pay recovery. Shop right- right of an employer to use in business without charge an invention discovered by an employee during working hours and with the employer’s manual and equipment. FLSA-workers at enterprises engaged in interstate commerce are covered by FLSA and cannot be paid less than a specified minimum wage. NLRA-protects union and nonunion employees and grants the right to engage in forming, joining, or assisting a union. Right to work laws- laws restricting unions and employees from negotiating clauses in their collective bargaining agreements that make union membership compulsory. Economic strikers-union strikers trying to enforce bargaining demands when an impasse has been reached in the negotiation process. Primary picketing-legal presentations in front of a business notifying the public of a labor dispute. Mass picketing-illegal tactic of employees massing together to effectively shut down entrances of the employer’s facility. Secondary picketing-picketing an employer with which a union has no dispute to persuade the employer to stop doing business with a party to the dispute, generally illegal under the NLRA. ERISA-Sets forth fiduciary standards and requirements for administration, vesting, funding, and termination insurance. Vesting-right of an employee to pension benefits paid into a pension plan in the employee’s name by an employer. Defined contribution plan-benefits solely defined on the amounts contributed by each employee with matching contributions by the employer. Defined benefit plan-an employer established pension fund obligating the employer to make specified future payments to participants upon retirement. Pension Benefit Guaranty Corporation-an insurance plan to protect employees covered by defined benefit plans in case an employer is unable to meet its payment obligations. Family and Medical Leave Act-entitles eligible employees to a total of 12 workweeks of unpaid leave during any 12 month period because of birth, care for spouse, or serious health condition. To be eligible, an employee must have been employed by a covered employer (employs 50 or more employees) for at least 12 months and have worked at least 1250 hours. USERRA-requires returning reservists to be promptly reemployed and returned to the same or comparable positions of seniority, status, and pay. OSHA-employers have a general duty to furnish each employee a place of employment that is free from hazards that are likely to cause death or serious injuries. Right to know-law that guarantees individual workers the right to know if there are hazardous substances in their workplaces. Workplace injury defenses-employer is not liable if the employee is harmed by the act of a fellow employee. Federal Wiretapping Act-unlawful to intercept oral and electronic communications. Disparate treatment-an employer treats some individuals less favorably because of their race, color, religion, sex, or national origin. Disparate impact-employer’s facially neutral employment practices, although neutrally applied, have a significantly adverse or disparate impact on a protected group. Protected classes-race and color, religion, garments worn for religious reasons, pregnant women. Tangible employment action-a supervisor performs an official act such as discharge, demotion, or undesirable reassignment because of the employee’s refusal to submit to the supervisor’s demand for sexual favors. Hostile work environment-supervisor’s conduct does not affect an employee’s economic benefits but causes anxiety and poisons the work environment for the employee. Nonsupervisors-an employer is liable for the sexual harassment caused its employees by coworkers or customers only when it knew or should have known of the misconduct and failed to take prompt remedial action. ADA-employer’s obligation to make reasonable accommodations for individuals with disabilities to include making existing facilities accessible to and usable, restructuring jobs, providing modified work schedules, and acquiring or modifying equipment or devices, excludes employees who are currently engaging in the illegal use of drugs. Contract-an agreement between competent parties based on the genuine asset of the parties that is supported by consideration made for a lawful objective and in the form required by law, if any. Privity-succession or chain of relationship to the same thing or right. Privity of contract-relationship between a promisor and the promisee. Formal contract-written contracts or agreements whose formality signifies the parties’ intention to abide by the terms. Contract under seal-contract executed by affixing the seal or making an impression on the paper such as wax attached to the document. Recognizance-obligation entered into before a court to do some act, such as appear at a later date for a hearing. Informal contract-simple oral or written contract. Express contract-agreement of the parties manifested by their words, whether spoken or written. Implied contract-contract expressed by conduct or implied or deduced from the facts. Valid contract-binding and enforceable. Voidable contract-agreement that is otherwise binding and enforceable but may be rejected at the option of one of the parties as the result of specific circumstances. Void agreement-agreement that cannot be enforced. Executed contract-agreement that has been completely performed. Executory contract-agreement by which something remains to be done by one or both parties. Bilateral contract-agreement under which one promise is given in exchange for another. Unilateral contract-contract under which only one party makes a promise. Option contract-contract to hold an offer to make a contract open for a fixed period of time. Right of first refusal-right of a party to meet the terms of a proposed contract before it is executed, such as a real estate purchase. Cost plus contract-contractor due payment for all costs spent on a project plus a stated percentage as contractor’s profit. Fixed price contract-the contractor is due payment of the total amount stated in the contract, which reflects all the costs and profit for the project. If the builder underestimates the cost, they will lose money. Quasi contract- court imposed obligation to prevent unjust enrichment in the absence of a contract. Plaintiff recovers the reasonable value of the benefit conferred on the defendant. Quantum meruit-as much as deserved, an action brought for the value of the services rendered when there was no express contract as to the purchase price. Divisible contract-agreement consisting of two or more parts, each calling for corresponding performance of each part by the parties. Requirements contract-contract to buy all requirements of the buyer from the seller. Output contract-contract of a producer to sell its entire production or output to a buyer. Revocation-no particular words or form are required to constitute, just any words indicating the offeror’s termination of the offer are sufficient. Effective only when it is made known to the offeree. Option contract-binding promise to keep an offer open for a stated period.Offer terminates on that date if not yet accepted. Firm offer-offer stated to be held open for a specified time under the UCC with respect to merchants. Contractual capacity-ability to understand that a contract is being made and to understand its general meaning. Factual incapacity-mental condition caused by medication, drugs, alcohol, illness, or age. Minors-a contract made by a minor is voidable at the election of the minor. After a lapse of reasonable time, the contract is deemed ratified and cannot be avoided. Status quo ante-original positions of the parties. Necessaries-things indispensable or absolutely necessary for the sustenance of human life. Minors cannot avoid-educational loan, contract for medical care, contract made while running a business, approved by court, made in performance of a legal duty, relating to bank accounts, insurance policies, or corporate stock. Parent-not liable unless child is acting as the agent of the parent. Cosigner-bound independently of the minor, if minor disaffirms cosigner remains bound. Unilateral mistake-does not affect the contract when the mistake is unknown to the other contracting party. Mutual mistake-contract is voidable by the adversely affected party if the mistake has a material effect on the agreed exchange. Reformation-remedy by which a written instrument is corrected when it fails to express the actual intent of both parties because of fraud, accident, or mistake. Fraud-making of a false statement of a past or existing fact, with knowledge of its falsity or with reckless indifference as to its truth, and the consequence that the listener is harmed. Statements of opinions are not regarded as fraudulent. A fraudulent statement by one party has no importance unless the other party relies on the statement’s truth. To recover damages, proof of harm is required. Negligent misrepresentation-speaker failed to exercise due care regarding material information communicated to the listener but did not intend to deceive. Confidential relationship-relationship in which, because of the legal status of the parties or their respective physical or mental conditions or knowledge, one party places full confidence and trust in the other. Failure to disclose information may be regarded as fraudulent. Active concealment-Positive act of hiding information from the other party by physical concealment. Undue influence-influence that is asserted upon another person by one who dominates that person. Physical duress-threat of physical harm to person or property. Economic duress-threat of financial loss. Duress-conduct that deprives the victim of free will and that generally gives the victim the right to set aside any transaction entered into under such circumstances. Consideration-promise or performance that the promisor demands as the price of the promise. What each party gives up to the other in making their agreement. A benefit received by the promisor or a detriment incurred by the promisee. Gifts-promises to make gifts are unenforceable under the law of contracts because of lack of consideration. Forbearance-refraining from doing an act. Illusory promise-promise that in fact does not impose any obligation on the promisor. Cancellation provision-crossing out of a part of an instrument or a destruction of all legal effect on the instrument, whether by act of party, upon breach by the other party, or pursuant to agreement or decree of court. Conditional promise-promise that depends on the occurrence of a specified condition in order for the promise to be binding. Liquidated debt-a promise to pay part of an amount that is admittedly owed is not consideration for a promise to discharge the balance (if you owe 100k and pay 80k, even if the other dude accepts, he can sue you for the 20k). Composition of

creditors-agreement among creditors that each shall accept a part payment as full payment in consideration of the other creditors doing the same. Past consideration-something that has been performed in the past and cannot be consideration for a promise made in the present. Moral obligation-considered gratuitous promises and unenforceable and lack consideration. Promissory estoppels-a promisor may be prevented from asserting that their promise is unenforceable because the promisee gave no consideration for the promise... the promisor makes a promise that lacks consideration, promisor intends or should reasonably expect that the promisee will rely on the promise, the promisee in fact relies on the promise in some definite and substantial manner, and enforcement of the promise is the only way to avoid injustice. In pari delicto-equally guilty. Illegal agreement-void if it calls for the commission of any act that constitutes a crime. Good faith-absence of knowledge of any defects or problems. Unconscionability-a provision in a contract that gives what the court believes is too much of an advantage over a buyer. Contract of adhesion-contract offered by a dominant party to a party with inferior bargaining power on a take it or leave it basis. Lettery-any plan by which a consideration is given for a chance to win a prize, there must be payment of money or something of value for a chance to win, a prize must be available, and the price must be offered by lot or chance. Licensed callings-statutes frequently require that a person obtain a license, certificate, or diploma before practicing certain professions. A contract made by an unlicensed person is unenforceable. Sale of business-when a going business is sold, it is commonly stated in the contract that the seller shall not go into the same or a similar business again within a certain geographic area and/or for a certain period of time. Noncompete clauses-usually disfavored but may be enforceable if it is narrowly drawn to protect the employer’s legitimate business interests, it is not unduly burdensome on the employee’s ability to earn a living, the geographic restriction is not overly broad, and a reasonable time limitation is given. Usury-committed when money is loaned at a higher rate of interest than the law allows.Statute of frauds-requires that certain kinds of transactions be evidenced in writing in order to be binding or enforceable. All contracts to sell land, buildings, interests in land (mortgages) must be evidenced by a writing. Leases also are interests in land, except in some states where a lease for one year or less does not have to be in writing. Suretyship-undertaking to pay the debt or be liable for the default of another. Personal representative-administrator or executor who represents decedents under UPC. Executor-person named in a will to administer the estate of the decedent. Administrator-person appointed to wind up and settle the estate of a person who has died without a will. Decedent-a person whose estate is being administered. Parol evidence rule-based on the theory that either there never was an oral agreement or, if there was, the parties abandoned it when they reached the stage in negotiations of executing their written contract. Incorporation by reference-the contract consists of both the original document and the detailed statement that is incorporated in it. Nature of writing-when there is a conflict between a printed part and a typewritten part, the type prevails. Usage of trade-language and customs of an industry. Article 2-section of the UCC that governs contracts for the sale of goods. Goods-tangible personal property. Existing goods-goods that physically exist and are owned by the seller at the time of a transaction. Future goods-goods that exist physically but are not owned by the seller and goods that have not yet been produced. Bailment-relationship that exists when personal property is delivered into the possession of another under an agreement express or implied, that the identical property will be returned or will be delivered in accordance with the agreement (bailor, bailee). Gift-title to an owner’s personal property voluntarily transferred by a party not receiving anything in exchange. Mailbox rule-timing standards for acceptance tied to proper acceptance. Mirror image rule-common law contract rule on acceptance that requires language to be absolutely the same as the offer. Battle of the forms-merchants’ exchanges of invoices and purchase orders with differing boilerplate terms. Price-if the price for the goods is not expressly fixed by the contract, the price may be an open term. Output contract-contract of a producer to sell its entire production or output to a buyer. Requirements contract-contract in which the buyer buys its needs from the seller. Parol evidence rule-rule that prohibits the use of external evidence to contract the terms in the four corners of the record. Course of dealing-pattern of performance between two parties to a contract. Usage of trade-language and customs of an industry. Specially manufactured goods-no record is required when the goods are specially made for the buyer and are of such an unusual nature that they are not suitable for sale in the ordinary course of the seller’s business. Receipt and acceptance-an oral sales contract may be enforced if it can be shown that the goods were delivered by the seller and were both received and accepted by the buyer even if the amount involved is over $500 and there is no record. CISG-uniform international contract code contracts for international sale of goods. Consumer lease-lease of goods for personal, family, or household use. Nonconsumer lease-also known as commercial lease, not a consumer lease. Finance lease-three party lease agreement in which there is a lessor, a lessee, and a financier. Default-If the lessee defaults, the lessor is entitled to recover any rent due, future rent, and incidental damages. Seller’s Remedy of Stopping Shipment-when buyer has breached the contract prior to the time the goods have arrived, the seller can stop the goods from coming into the buyer’s possession. Resale by seller-when the buyer has breached the contract, the seller may resell any of the goods the seller still holds. Lost profits-if the market and resale price measures of damages do not place the seller in the same position before the buyer performed, the seller is permitted to recover lost profits. Incidental damages-incurred by the nonbreaching party as part of the process of trying to cover or sell, includes storage fees, commissions, etc. Secured transaction-credit sale of goods or a secured loan that provides special protection for the creditor. Revocation of acceptance-buyer may revoke acceptance of the goods when they do not conform to the contract. Nondelivery-if the seller fails to deliver the goods as required, the buyer is entitled to collect from the seller damages for breach of contract. They may also choose to purchase substitute goods or cover. Consequential damages-damages the buyer experiences as a result of the seller’s breach with respect to a third party. Cancellation by buyer-may cancel or rescind the contract if the seller fails to deliver the goods and are entitled to recover as much of the purchase price as has been paid. Buyer’s resale-when buyer is in possession after rightfully revoking acceptance, they can resell the goods. Liquidated damages-provision stipulating the amount of damages to be paid in event of default or breach of contract. Exclusion of damages-the sales contract may provide that in case of breach, no damages may be recovered or no consequential damages may be recovered. Crime-violation of the law that is punished as an offense against the state or government. Consists of a mental state and an act or omission. Felony-criminal offense that is punishable by confinement in prison for more than one year or by death. Misdemeanor-criminal offense with a lesser sentence that is neither treason nor a felony. Corporate liability-corporation may also be held liable for crimes based on the failure of its employees to act. Forfeiture-defendant’s rights in any property used or gained from a crime be confiscated. Officer and Executive Banishment from Business Fields-rapidly increasing forms of business crime punishment is barring executives and officers from working in their fields if they have a criminal conviction. White Collar Crime Penalty Enhancement Act-federal reforms passed as a result of the collapses of companies such as Enron, penalties for mail and wire fraud increased from max of 5 years to a max of 20 years. Penalties for violations of pension laws increased from 1 to 10 years and fines increased from 5k to 100k (500k for entities). Conspiracy-agreement between two or more persons to commit an unlawful act. RICO Act-federal law targeting organized crime and provides penalties and civil recovery for multiple criminal offenses. Predicate act-qualifying underlying offense for RICO liability. Extortion-illegal demand by a public officer acting with apparent authority, blackmail is the non public officer version. FCPA-makes it a felony to influence decision makers in other countries for the purpose of obtaining businesses. Counterfeiting-making with fraudulent intent, a document or coin that appears to be genuine but is not because the person making it did not have the authority to make it. Forgery-consists of the fraudulent making or material altering of an instrument, such as a check, that attempts to create or changes a legal liability of another person. Consists of signing another’s name with intent to defraud. Perjury-consists of knowingly giving false testimony. Embezzlement-statutory offense of unlawfully converting the property entrusted by the owner. SOX Obstruction of Justice-requires auditors to retain their work papers for a client’s audit for at least five years. Corporate fraud SOX-if a corporate officer fails to comply with financial statement certification, penalties range from fines of 2.5mil and 10 years to 25 mil and 20 years. Larceny-wrongful or fraudulent taking of the personal property of another by any person with fraudulent intent. Robbery-taking of personal property from the presence of the victim by use of force or fear. Computer crime-wrongs committed using a computer or with computer knowledge. ECPA-prohibits unauthorized access to live communications. EEA-felony to download, copy, transmit, or in any way transfer proprietary files from a computer to an unauthorized person. Fourth Amendment-privacy protection in the US Constitution, protects against unreasonable search and seizures. Fifth Amendment-prevents compelling a person to be a witness against himself. Miranda warnings-come from a case interpreting the extent of the Fifth Amendment rights. Sixth Amendment-right to a speedy trial. Tort-civil wrong that interferes with one’s property or person. Negligence-failure to exercise due care under the circumstances in consequence of which harm is caused. Strict liability-civil wrong for which there is absolute liability because of the inherent danger in the underlying activity. Tort examples-assault, battery, emotional damages, defamation. Absolute privilege-complete defense against the tort of defamation, as in speeches of members of Congress. Qualified privilege-media privilege to print inaccurate information without liability for defamation, so long as a retraction is printed and there was no malice. Trade libel-written defamation about a product or service. Product disparagement-false statements made about a product or business. Contract interference-tort in which a third party interferes with others’ freedom to contract. Malpractice-when services are not properly rendered in accordance with commonly accepted standards, negligence by a professional in performing their skill. Breach of duty-second element of negligence. Causation-connects the duty and the breach of duty to the injuries to the plaintiff. Damages-entitled to compensation for past and future pain and suffering, past and future physical impairment, past and future medical care, and past and future loss of earning capacity. Contributory negligence-negligence of the plaintiff that contributes to injury and at common law bars recovery from the defendant although the defendant may have been more negligent than the plaintiff. Assumption of risk-written agreement releases the defendant from prospective liability for personal injuries sustained as a result from the defendant’s negligent conduct. Immunity-governments are generally immune from tort liability. Express warranty-a statement of fact or promise of performance relating to the goods. Seller’s opinion-a statement about the value of goods or the seller’s opinion does not create a warranty. Full warranty-obligation of a seller to fix or replace a defective product within a reasonable time without cost to the buyer. Limited warranty-does not provide complete protection. CPSIA-imposes standards for product safety. Implied warranty-warranty that was not made expressly but is implied by law. Implied warranty of merchantability-goods are fit for the ordinary purposes for which they are sold. Necessity of defect-buyer must show that the product is defective and the defect caused harm. Scope of professional responsibilities-Accountants are not insurers of the content of financial statements they prepare and are not liable for detecting fraud. They are liable to the client if they negligently fail to detect or fraudulently conceal signs that an employee of the client is embezzling or the internal audit controls are not being observed. Misrepresentation-false statement of face made innocently. Limitation of liability clause-provision in a contract stating that one of the parties is not liable for damages in case of breach, also called exculpatory clause. Privity rule-only the party in privity with the accountant (client) may recover from the accountant. Known User Rule-accountant is liable to third parties as a result of negligence when the accountant knew that the third party would be using the accountant’s work product. Foreseeable User Rule-imposes liability on the accountant for negligent malpractice when she can foresee the parties who will rely on her work in the financial statements. Comparative negligence-defense to negligence that allows plaintiff to recover reduced damages. PCAOB-created by SOX, five presidential appointees, no more than two members can be CPAs. SOX/Audit-requires audit firms to change audit partners at least once every five years. Sherman Antitrust Act-federal statute prohibiting combinations and contracts in restraint of interstate trade (no monopolies). Divestiture order-a court order to dispose of interests that could lead to a monopoly. Clayton Act-federal law that prohibits price discrimination. Robinson Patman Act-prohibits price discrimination in interstate commerce. Price discrimination-a seller charging different prices to different buyers for commodities of similar grade and quality without marginal cost differences. Tying-the anti competitive practice of requiring buyers to purchase one product in order to get another. Treble damages-three times the damages actually sustained. Administrative law-law governing admin agencies. Admin Procedure Act-federal law that establishes operating rules for admin agencies. FOIA-permits citizens to request documents and records from admin agencies. Open meeting law-requires advance notice of agency meetings and public access. Federal Register Act-requires agencies to make public disclosure of proposed rules, passed rules, and activities. Federal Register-govt publication issued five days a week that lists all admin regulations, presidential proclamations, executive orders, and other documents directed to be published. Public comment period-public can make input on proposed rules. Informal settlements-negotiated disposition of a matter before an admin agency. Consent decrees-informal settlements of enforcement actions brought by agencies. Intervenors-third parties who have an interest in the issues being determined by an ALJ. Warehouse-entity engaged in the business of storing the goods of others for compensation. Warehouse receipt-receipt issued for stored goods. Depositor-person or bailor who gives property for storage. Issuer-warehouse that prepares a receipt of goods it received for storage. Document of title-evidence that a person is entitled to receive, hold, and dispose of the document and the goods it covers. Nonnegotiable warehouse receipt-states the covered goods will be delivered to a specific person. Negotiable warehouse receipt-covered goods will be delivered “to the order of”. Field warehousing-stored goods under the exclusive control of a warehouse but kept on the owner’s premises. Carrier-undertaking the transportation of goods. Common carrier-transports to the general public. Contract carrier-transports on behalf of individual contracts. Private carrier-carrier owned by the shipper. Bill of lading-document issued by a carrier reciting the receipt of goods and the terms of the contract, regulated by FBDA or UCC. Airbill-document of title issued to a shipper with goods sent via air. COD Shipment-may not make delivery of the goods without receiving payment first. Factor-bailee to whom goods are consigned for sale. Conversion-act of taking personal property by a person not entitled to it and keeping it from its true owner without consent. Hotelkeeper-one regularly engaged in the business of offering living accommodations to transient persons. Trademark-mark that identifies a product. Service mark-mark that identifies a service. Distinctiveness-capable of serving the source identifying function of a mark. Acquired distinctiveness-through advertising, use, and association, an ordinary descriptive word or phrase has taken on a new source identifying meaning and functions as a mark in the eyes of the public. Secondary meaning-a legal term signifying the words in question have taken on a new meaning with the public, capable of serving a source identifying function of a mark. Trade dress-a product’s total image including its overall packaging look. Cybersquatters-term for those who register and set up domain names on the Internet for resale to the famous users of the names. ACPA-prohibit cybersquatting. Copyright-exclusive right given by federal statute to the creator of a literary or an artistic work to use, reproduce, and display the work. Copyright holder rights-reproduce the work, prepare derivative works, distribute copies of recordings of the work, publicly display the work. Fair Use-purpose and character of the use, nature of the copyrighted work, amount and substantiality of the portion used in relation to the copyrighted work as a whole, the effect of the use on the potential market for or value of the copyrighted work. Utility patents-inventors of any new and useful process, machine, manufacture, or composition of matter or any new and useful improvement of such devices have the right to obtain a patent. Design patents-14 years, protects new and nonobvious ornamental features. Plant patents-protects the inventors of asexually reproduced new varieties of plants, 20 years. Prior art-showing that an invention as a whole would have been obvious to a person of ordinary skill in the art when the invention was patented. Trade secret-any formula, device, or compilation of information that is used in one’s business and is of such a nature that it provides an advantage over competitors who do not have the information. DTSA-federal cause of action to protect trade secrets. Economic espionage act-knowingly stealing, soliciting, or obtaining trade secrets by copying, downloading, uploading or other means with the intention that it will benefit a foreign government is a crime. Chapter 7 bankruptcy-liquidation form of bankruptcy under federal law. Liquidation-process of converting property into money. Chapter 11 Bankruptcy-way for a debtor to reorganize and continue a business with protection from overwhelming debts and without the requirement of liquidation. Chapter 13 Bankruptcy-proceeding of consumer debt, works with debtors to develop a plan to repay. Voluntary bankruptcy-proceeding in which the debtor files the petition for relief. Means test-new standard under the Reform Act that requires the court to find that the debtor does not have the means to repay creditors. Involuntary bankruptcy-proceeding in which a creditor or creditors file the petition for relief with the bankruptcy court. Automatic stay-order to prevent creditors from taking action such as filing suits or seeking foreclosure against the debtor. Order of relief-the order from the judge that starts the protection for the debtor. Trustee in bankruptcy-impartial person elected to administer the debtor’s estate. Preferential transfers-transfers by the debtor prior to the declaration of bankruptcy in order to conceal, shelter, or transfer property to friends, relatives, or creditors. Insolvency-excess of debts and liabilities over assets, or inability to pay debts as they mature. Balance sheet test-comparison of assets to liabilities made to determine solvency. Insider-for individuals, a relative, a general partner. Voidable preferences-transfers of property by a debtor to one or more specific creditors to enable those creditors to obtain payment for debts owed. Proof of claim-written statement, signed by the creditor or an authorized representative, setting forth any claim made against the debtor and the basis for it. Discharge in bankruptcy-order of the bankruptcy court relieving the debtor from obligation to pay the unpaid balance of most claims.