question

Securites Act of 1933

answer

Created to regulate the securities market.

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Securities and Exchange Act of 1934

answer

Created the SEC.

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Securities Exchange Commission

answer

SEC. Regulates the securities market.

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Common Stock

answer

Right of ownership with voting privileges.

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Preferred Stock

answer

Ownership with fixed dividends but not always voting rights.

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Stockholders

answer

Do not need to be paid back. Last investors to be paid on dissolution.

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Registration Statement

answer

Must include how the funds will be used, description of properties and business, information about the management, an independent financial statement, and any pending lawsuits.

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Prospectus

answer

Provided to investors, describes security being sold, issuing corporation, and risk attached to the security.

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SEC Act Section 10

answer

Prohibits the use of any deceptive practice.

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Investment Company Act of 1940

answer

Regulated mutual funds and other investment companies.

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Blue Sky Laws

answer

State statutes that prevent the sale of securities with no more basis than "so many feet of blue sky".

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Personal Property

answer

Moveable; anything that's not real property.

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Real property

answer

Land and everything permanently attached, subsurface, air rights, plants, fixtures.

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Fixtures

answer

A thing that was once personal property but has become attached to real property, thus becoming part of the real property. Ex. a building.

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Fee Simple Absolute

answer

One who owns this bundle of rights is said to hold the property in its most complete form of ownership.

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Fee Simple Defeasible

answer

Ownership in fee simple that can end if a specified event or condition occurs.

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Fee Tail

answer

An estate subject to limitations concerning who may inherit the property, which is ordinarily created by a deed or a will.

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Life Estate

answer

Life tenant has rights to the land as long as they live. Can be beneficial if an older person needs money and doesn't have any heirs.

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Deed

answer

Must contain names of buyer and seller, intent, description, the seller's signature.

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Adverse Possession

answer

Acquisition of a title to real property by occupying it openly without the consent of the owner for a period of time specified by a state statute (3-30 years).

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Leasehold Estates

answer

An estate in reality held by a tenant under lease. Tenant has a qualified right to possess/use the land.

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Tenancy for Years

answer

Created by an express contract that leases property for a specified period of time.

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Periodic Tenancy

answer

Lease in land for an indefinite period, with payments at fixed intervals.

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Tenancy at Will

answer

Either party can terminate without notice: usually after a tenant has exceeded the tenancy for years, but still occupying with landlord's consent.

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Tenancy at Sufferance

answer

Tenant who, after rightfully leasing, continues (wrongfully) to occupy property after lease has terminated. Tenant has no rights to possess the property and does so only because landlord hasn't evicted yet.

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Settlor

answer

The person who creates the trust.

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Trustee

answer

The person who holds the property for another's benefit.

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Beneficiary

answer

The person who is benefited by the trust. Cestui Qute Trust.

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Cestui Que Trust

answer

Beneficiary. The person who is benefited by the trust.

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Trust Res

answer

Property that comprises the trust. a.k.a. corpus, principal, or subject matter.

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Historical View

answer

Emphasizes evolutionary process of law and looks to the past to discover what contemporary laws should be.

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Legal Realism

answer

1920s-1930s. Advocated a less abstract and more realistic approach to law. Takes into account customary practices.

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Natural Law View

answer

The belief that the government and law should reflect universal moral and ethical principles that are inherent in human nature. One of the oldest and most significant schools of legal thought.

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Jurisprudence

answer

The science or philosophy of law.

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Curiae Regis

answer

King's court.

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Precedent

answer

A decision that furnished an example or authority for deciding subsequent cases involving similar legal principles or facts.

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Stare Decisis

answer

"Let the decision stand".

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Binding Authority

answer

Any source of law that a court must follow when deciding a case.

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Remedy

answer

The relief given to an innocent party to enforce a right or to compensate for the violation of a right.

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Equity

answer

A branch of law, founded in justice and fair dealing, that seeks to supply a fairer and more adequate remedy when a remedy at law would be insufficient.

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Case Law

answer

Court decisions.

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National Conference of Commissioners on Uniform State Laws

answer

NCCUSL. 1892. To help promote legal uniformity between states.

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Uniform Commercial Code

answer

UCC. 1952. Facilitates commerce among the states by providing a uniform, yet flexible, set of rules governing commercial transactions.

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American Law Institute

answer

ALI.

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District Attorney

answer

DA.

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Civil Law

answer

Spells out rights and duties that exist between persons and between persons and their governments, and the relief available when a person's rights are violated.

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Criminal Law

answer

Has to do with wrongs committed against society for which society demands redress. Object is to punish the wrongdoer.

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International Law

answer

The body of written and unwritten laws observed by independent nations and governing the acts of individuals as well as governments.

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Cyberlaw

answer

Informal term. Refers to all laws governing electronic communications and transactions, particularly those conducted via the Internet.

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Commerce Clause

answer

Article I, Section 8 of the U.S. Constitution that gives Congress the power to regulate interstate commerce.

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Gibbons v. Ogden

answer

1824. Commerce within states could also be regulated by the national government as long as the commerce "substantially affected" commerce involving more than one state.

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Griswold v. Connecticut

answer

1965. Justice Douglas read the right to privacy into the constitution by linking concepts from several other amendments together.

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Freedom of Information Act

answer

1966. FOIA. Allows any person to request copies of any information on themselves contained in federal government files.

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Privacy Act

answer

1974. Information on individuals cannot be shared without the person's consent. Agencies must ensure the reliability of the information.

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Marbury v. Madison

answer

Judicial review.

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Limited Jurisdiction

answer

Happens when a court is limited to specific subject matter, such as probate or divorce.

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Original Jurisdiction

answer

The case if first tried.

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Appellate Jurisdiction

answer

For the appeals process.

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Complaint

answer

Filed by the plaintiff with the court to initiate the lawsuit; served with a summons on the defendant.

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Answer

answer

Admits or denies allegations made by the plaintiff; may assert a counterclaim or an affirmative defense.

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Motion to Dismiss

answer

A request to the court to dismiss the case for stated reasons, such as the plaintiff;s failure to state a claim for which relief can be granted, or because it has been settled out-of-court, or improper venue.

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Depositions

answer

Sworn testimony by a party to the lawsuit or any witness.

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Interrogatories

answer

Written questions and answers to these questions made by parties to the action with the aid of their attorneys.

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Various Requests

answer

For admission, documents, medical examination, and so on.

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Voir Dire

answer

Jury selection. "To see, to speak."

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Negotiation

answer

The parties come together, with or without attorneys to represent them, and try to reach a settlement without the involvement of a third party.

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Mediation

answer

The parties themselves reach an agreement with the help of a neutral third party, called a mediator, who proposes solutions. At the parties' request, a mediator may make a legally binding decision.

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Arbitration

answer

A more formal method of ADR in which the parties submit their dispute to a neutral third parts, the arbitrator, who renders a decision. The decision may or may not be legally binding, depending on the circumstances.

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Alternative Dispute Resolution

answer

ADR

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Summary Jury Trials

answer

SJTs.

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Quid Pro Quo

answer

"Something for something". To identify what each party to an agreement expects from the other, sometimes called mutual consideration.

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Federal Tort Claims Act

answer

1948. Removed the power of the federal government to claim immunity from a lawsuit for damages due to negligent or intentional injury by a federal employee in the scope of his/her work for the government.

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Administrative Procedure Act

answer

The federal act which established the rules and regulations for applications, claims, hearings and appeals involving governmental agencies.

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Employment-at-Will

answer

A provision found in many employment contracts which suggest the employee works at the will of the employer, and which the employers insert in order to avoid claims of termination in breach of contract, breach of the covenant of good faith and fair dealing, or discrimination.

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Revocation

answer

Mutual cancellation of a contract by the parties to it.

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Renunciation

answer

Giving up a right, such as a right of inheritance, a gift under a will or abandoning the right to collect a debt on a note.

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Agent

answer

A person who is authorized to act for another (the agent's principal) through employment, by contract or apparent authority.

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Bailor

answer

A person who leaves goods in the custody of another, usually under a "contract of bailment," in which the custodian ("bailee") is responsible for the safekeeping and return of the property.

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Bailment

answer

The act of placing property in the custody and control of another, usually by agreement in which the holder (bailee) is responsible for the safekeeping and return of the property.

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Bailee

answer

A person, also called a custodian, with whom some article is left, usually pursuant to a contract (called a "contract of bailment"), who is responsible for the safe return of the article to the owner when the contract is fulfilled.

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Bail

answer

The money or bond put up to secure the release of a person who has been charged with a crime.

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Truth in Lending Act

answer

TILA. Requires all terms to be clearly laid out.

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Equal Credit Opportunity Act

answer

ECOA. Supposed to prevent discrimination in lending.

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Free Credit Reporting Act

answer

FCRA.

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Fair Debt-Collection Practices

answer

Prevent collectors from harassing the debtor.

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Mechanic's Lein

answer

For work done on real property.

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Artisan's Lein

answer

For value added to personal property (possessory).

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Judicial Lein

answer

Issued by a court to ensure payment, allows seizure.

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Garnishment

answer

Usually extracted from paycheck

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Comity

answer

One nation deferring to the law and judgements of another nation out of respect.

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Act of State Doctrine

answer

One nation usually will not condemn another's actions.

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Doctrine of Sovereign Immunity

answer

Foreign national can be immune from US jurisdiction unless a) the foreign state has waived immunity or b) when the action is based upon a commercial activity in the US by the foreign state.

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Environmental Protection Agency

answer

EPA.

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Food and Drug Administration

answer

FDA.

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Nuclear Regulatory Board

answer

NRB.

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Clean Air Act

answer

Violations can cost up to $30,000 a day.

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Clean Water Act

answer

Violations can result in the company having to clean up.

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Noise Control Act

answer

Must be achievable and within reason.

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Resource Conservation and Recovery Act

answer

RCRA

question

Comprehensive Environmental Response Compensation and Liability Act

answer

CERCLA or Superfund. Prompted by gross negligence such as in the Hooker Chemical Co. Love Canal affair

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Securities Exchange Commission

answer

SEC. Regulates securities market

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Partnership

answer

Unlimited liability. Only taxed once. Usually share equally in gains and losses and each usually has equal voice in management.

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Corporation

answer

Liability limited to investment. Taxed twice. Shares of stocks can be transferred.

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Principal

answer

Employer

question

Performance, Notification, Loyalty, Obedience, Accounting

answer

Five duties of an agent.

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Actual Authority

answer

Should be in writing if agent will be doing written contracts. Power of Attorney. Authority granted to agent.

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Apparent Authority

answer

Occurs when the principal causes the third party to think someone is an agent. Any actions the implied agent takes will be treated as if he were an agent by courts.

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Fair Labor Standards Act

answer

1938. Established a federal minimum wage, mandated overtime pay, and banned child labor.

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Occupational Safety and Health Act

answer

1970. OSHA. Charged with keeping workplaces safe.

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Family Medical Leave Act

answer

Allows employees to take up to 12 weeks per year of unpaid leave in a company with 50+ employees.

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Consolidated Omnibus Budget Reconciliation Act

answer

COBRA. Allows employees to continue in a company's group insurance plan after termination if they pay the fees.

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Corporation

answer

Legally considered a person. Have rights to free speech. Solely liable for their debts. Profits taxed as individual income.

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Sherman Act

answer

1890. Prohibits monopolies.

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Clayton Act

answer

1914.

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Federal Trade Commission Act

answer

1914. FTCA. Charged with protecting the consumer from anti-competitive actions and deceptive business practices. Enforce antitrust law.

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Sherman Act Section 1

answer

Prohibits any conspiring of individuals or companies to constrain competition.

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Sherman Act Section 2

answer

Prohibits any attempt to gain or exercise monopoly power.

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Clayton Act Section 2

answer

Deals with price discrimination

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Clayton Act Section 3

answer

Prohibits tying agreements and exclusive dealing.

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Clayton Act Section 7

answer

Restricts horizontal, vertical, and conglomerate mergers when they would retain free competition.

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Clayton Act Section 8

answer

Disallows the same person to be director on the boards of competing firms if they meet certain size requirements (interlocking directorship).

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Department of Justice

answer

DOJ. Enforce all antitrust laws, with FTC.

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Civil Rights Act of 1964 Section VII

answer

Deals with employment discrimination.

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Equal Opportunity Commission

answer

Governs compliance with Title VII of Civil Rights Act of 1964.

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Disparate Treatment

answer

Employer treats the member of the protected class differently. Discrimination is intended.

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Disparate Impact

answer

Policies employer uses during hiring tend to have a discriminatory effect. Intent to discriminate is often not present in this case.

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Equal Pay Act of 1963

answer

Demands that equal work receive equal pay.

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Age Discrimination in Employment Act

answer

1967. Protects those over 40 from discrimination

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Americans with Disabilities Act

answer

1990. Protects those with disabilities so long as they can be reasonably accommodated and are qualified.

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University of California v. Bakke

answer

Affirmative Action. Said no to quota systems.

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Hopwood v. State of Texas

answer

Affirmative Action. Decided that affirmative action was in effect discrimination. Stands in the 5th district though not necessarily in others.

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Non Obstante Veredicto

answer

N.O.V. "Notwithstanding the verdict". Decision of a judge to reverse the jury's decision.

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Cross-Examination

answer

Opportunity for a lawyer to question a witness of the opposite party.

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Direct Examination

answer

A lawyer questioning his own witnesses.

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voir dire

answer

"to see to speak". The questioning of prospective jurors by a judge and attorneys in court.

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Probate

answer

The process of proving a will is valid and thereafter administering the estate of a dead person according to the terms of the will.

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Magistrate

answer

Any judge of a court.

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Venue

answer

The proper or most convenient location for trial of a case.

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Specific Performance

answer

Demanding a party to perform specific sections of a contract.

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Stare Decisis

answer

"To stand by a decision". A trial court is bound by appellate court decisions on a legal question which is raised in a lower court.

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Covenant

answer

To promise

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Contract

answer

An agreement with specific terms

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Life Estate

answer

The right to use or occupy real property for one's life.

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Fee Simple

answer

Absolute title to land, free of any other claims against the title, which one can sell or pass on to another by will or inheritance.

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Patent

answer

Exclusive right to the benefits of an invention or improvement.

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Tortious

answer

Referring to an act which is a civil wrong.

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Tortfeasor

answer

A person who commits a civil wrong, either intentionally or through negligence.

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Tort

answer

"wrong". A civil wrong or wrongful act, whether intentional or accidental, from which injury occurs to another.

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Adhesion Contract

answer

Really imbalanced. No one in their right mind would accept it.

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Bilateral Contract

answer

An agreement in which the parties exchange promises for each to do something in the future.

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Breach of Contract

answer

Failing to perform any term of a contract, written or oral, without a legitimate legal excuse.

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Express Contract

answer

A contract in which all elements are specifically stated.

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Implied Contract

answer

An agreement which is found to exist based on the circumstances when to deny a contract would be unfair and/or result in unjust enrichment to one of the parties.

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Oral Contract

answer

An agreement made with spoken words and either no writing or only partially written.

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Output Contract

answer

An agreement in which a producer agrees to sell its entire production to the buyer, who in turn agrees to purchase the entire output, whatever that is.

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Quasi Contract

answer

A situation in which there is an obligation as if there was a contract, although the technical requirements of a contract have not been fulfilled.

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Requirements Contract

answer

A contract between a supplier (or manufacturer) and a buyer, in which the supplier agrees to sell all the particular products that the buyer needs, and the buyer agrees to purchase the goods exclusively from the supplier.

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Severable Contract

answer

An agreement which is made up of several separate contracts between the same parties, such as series of sales, shipments or different pieces of equipment.

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Unilateral Contract

answer

An agreement to pay in exchange for performance, if the potential performer chooses to act.

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Promissory Estoppel

answer

A false statement treated as a promise by a court when the listener had relied on what was told to him/her to his/her disadvantage.

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Unconscionable

answer

Referring to a contract or bargain which is so unfair to a party that no reasonable or informed person would agree to it.

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Exculpatory

answer

Applied to evidence which may justify or excuse an accused defendant's actions and which will tend to show the defendant is not guilty or has no criminal intent.

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Pari Delicto

answer

Equal fault.

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Fraud

answer

The intentional use of deceit, a trick or some dishonest means to deprive another of his/her/its money, property or a legal right.

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Statute of Frauds

answer

Law in every state which requires that certain documents be in writing, such as real property titles and transfers (conveyances), leases for more than a year, wills and some types of contracts.

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Statute of Limitations

answer

A law which sets the maximum period which one can wait before filing a lawsuit, depending on the type of case or claim.

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Repudiation

answer

Denial of the existence of a contract and/or refusal to perform a contract obligation. Repudiation is an anticipatory breach of a contract.

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Anticipatory Breach

answer

When a party to a contract repudiates (reneges on) his/her obligations under that contract before fully performing those obligations.

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Rescission

answer

The cancellation of a contract by mutual agreement of the parties.

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Novation

answer

Agreement of parties to a contract to substitute a new contract for the old one.

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Election of Remedies

answer

An outmoded requirement that if a plaintiff (party filing suit) asks for two remedies based on legal theories which are inconsistent (a judge can grant only one or the other), the plaintiff must decide which one is the most provable and which one he/she really wants to pursue, usually just before the trial begins.

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Adequate Remedy

answer

A remedy (money or performance) awarded by a court or through private action (including compromise) which affords "complete" satisfaction, and is "practical, efficient and appropriate" in the circumstances.

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Provisional Remedy

answer

A generic term for any temporary order of a court to protect a party from irreparable damage while a lawsuit or petition is pending.

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Remedy

answer

The means to achieve justice in any matter in which legal rights are involved.

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Compensatory Damages

answer

Damages recovered in payment for actual injury or economic loss, which does not include punitive damages (as added damages due to malicious or grossly negligent action).

question

Consequential Damages

answer

Damages claimed and/or awarded in a lawsuit which were caused as a direct foreseeable result of wrongdoing.

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Damages

answer

The amount of money which a plaintiff may be awarded in a lawsuit.

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Exemplary Damages

answer

Often called punitive damages, these are damages requested and/or awarded in a lawsuit when the defendant's willful acts were malicious, violent, oppressive, fraudulent, wanton or grossly reckless.

question

General Damages

answer

Monetary recovery (money won) in a lawsuit for injuries suffered (such as pain, suffering, inability to perform certain functions) or breach of contract for which there is no exact dollar value which can be calculated.

question

Liquidated Damages

answer

An amount of money agreed upon by both parties to a contract which one will pay to the other upon breaching (breaking or backing out of) the agreement or if a lawsuit arises due to the breach.

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Mitigation of Damages

answer

The requirement that someone injured by another's negligence or breach of contract must take reasonable steps to reduce the damages, injury or cost, and to prevent them from getting worse.

question

Punitive Damages

answer

Damages awarded in a lawsuit as a punishment and example to others for malicious, evil or particularly fraudulent acts.

question

Speculative Damages

answer

Possible financial loss or expenses claimed by a plaintiff which are contingent upon a future occurrence, purely conjectural or highly improbable.

question

Treble Damages

answer

Tripling damages allowed by state statute in certain types of cases, such as not making good on a bad check or intentionally refusing to pay rent.

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Cash on Delivery

answer

A type of transaction in which payment for a good is made at the time of delivery. If the purchaser does not make payment when the good is delivered, then the good will be returned to the seller.

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Insurable Interest

answer

A right, benefit, or advantage arising out of property that is of such nature that it may properly be indemnified.

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Title

answer

Legal right of ownership. Passes when good are physically delivered.

question

Shipment Contract

answer

Delivery is made when the seller puts the goods in the hands of the shipper.

question

Destination Contract

answer

Goods are not delivered until they arrive at the location given by the buyer

question

Documents of Title

answer

Bill of Lading or Warehouse Receipt. When delivered, they are legally equivalent to delivering the goods themselves.

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Bill of Lading

answer

Receipt for goods signed by a carrier for transport.

question

Warehouse Receipt

answer

Receipt for goods stored in a warehouse.

question

Sale on Approval

answer

Trial basis. Sold when buyer approves of goods.

question

Uniform Commercial Code

answer

UCC.

question

UCC

answer

Created by the NCCUSL to encourage and accommodate commerce by creating a uniform legal environment.

question

National Conference of Commissioners on Uniform State Laws

answer

NCCUSL. Developed UCC.

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Merchant

answer

Someone who deals with a type of good and has some expertise with that particular good; someone who by occupation claims to have unique knowledge and skills in a particular area.

question

Article 2 of the UCC

answer

Sales.

question

Sale

answer

"A passing of a title from seller to buyer for a price."

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Goods

answer

Tangible items other than real estate (not stocks or bonds).

question

Article 2a of the UCC

answer

Leases.

question

"Hell or High Water"

answer

Pay no matter what, even if goods are defective.

question

Lease

answer

The use of goods for a fee.

question

Open Terms

answer

Allowed by the UCC. Can be worked out later. If not filled, they can be filled according to the UCC without consent of both parties.

question

Non-Merchant

answer

Added terms to offers are considered proposals.

question

Merchants

answer

Additional terms become part of the contract, except when specifically rejected or they materially alter the original offer.

question

Consideration

answer

The cause, motive, price, or impelling influence which induces a contracting party to enter into a contract.

question

Statute of Frauds

answer

No action shall be brought on certain contracts unless there be a note or memorandum thereof in writing, signed by the party to be charged or by his authorized agent.

question

Statute of Limitations

answer

A statute prescribing limitations to the right of action on certain described causes of action; no action after a certain time period.

question

Bankruptcy Code Chapters 1-7

answer

Ordinary bankruptcy.

question

Bankruptcy Code Chapter 7

answer

Total liquidation.

question

Bankruptcy Code Chapter 8

answer

Railroad reorganization.

question

Bankruptcy Code Chapter 9

answer

Compositions for taxing agencies.

question

Bankruptcy Code Chapter 10

answer

Corporate reorganization.

question

Bankruptcy Code Chapter 11

answer

Arrangements.

question

Bankruptcy Code Chapter 12

answer

Real property arrangements.

question

Bankruptcy Code Chapter 13

answer

Wage earners' plans.

question

Bankruptcy Code Chapter 14

answer

Maritime Commission leins.

question

Bankruptcy Code Chapter 15

answer

Railroad adjustments.

question

Bankruptcy Act of 1938

answer

Revised by the Chandler Act. 15 chapters

question

Fungible

answer

Being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.

question

Bona Fide

answer

"In good faith".

question

Warranty of Title

answer

Automatic and guarantees the title is legally owned by the seller, free of lien, and good in question is not an infringement on another's rights.

question

Express Warranties

answer

Goods fulfill statement made by seller.

question

Implied Warranties

answer

Goods are fit for standard use.

question

Disclaimers

answer

Can negate warranties.

question

"As Is" Disclaimer

answer

Voids warranties of merchantability.

question

Specific Use Disclaimer

answer

Voids implied warranties of fitness for a specific purpose.

question

Magnuson-Moss Warranty Act

answer

1975. Designed to prevent deception in warranties by making them easier to understand.

question

Full Warranty

answer

Free repair of replacement for a defective part. May not cover every aspect

question

Limited Warranty

answer

Has a time limit. Must be clearly stated that it is limited.

question

Strict Product Liability

answer

Defective when sold. Actual harm must have occurred; defect must be the cause of damage.

question

Manufacturing Defects

answer

When product doesn't conform to specs, even if care is exercised.

question

Design Defects

answer

The design incurs unreasonable risk of harm.

question

Warning Defects

answer

Sufficient warning of hazards incurred by use or reasonable misuse is not present.

question

Defenses to Liability

answer

Consumer assumes risk. Product is misused. Comparative negligence.

question

Click-On Agreement

answer

Agreement that arises when a buyer, engaging in a transaction on a computer, indicates his or her assent to be bound by the terms of an offer by clicking on a button that says, for example, "I agree".

question

Browse-Wrap Agreement

answer

Terms and conditions of use that are presented to an internet user at the time certain products, such as software, are being downloaded but that need not be agreed to before being able to install or sue the product.

question

Shrink-Wrap Agreement

answer

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

question

E-Contract

answer

A contract that is formed electronically

question

Digital Signature

answer

A private cryptographic key that, when matched with a corresponding public key, recognizes the signature.

question

Cybernotary

answer

Manages digital signatures.

question

Signature Dynamics

answer

Records the signature with a pad and stylus.

question

Uniform Electronic Transactions Act of 1999

answer

UETA. Defines e-signatures.

question

Partnering Agreements

answer

Provide ground rules for all subsequent online transactions between two parties.

question

Uniform Computer Information Transactions Act of 2000

answer

UCITA. Governs computer information sales and leases.

question

Agent

answer

Any employee who deals with third parties.

question

Principal

answer

Employer

question

Performance, Notification, Loyalty, Obedience, Accounting

answer

Five duties of an agent.

question

Actual Authority

answer

Should be in writing if agent will be doing written contracts.

question

Apparent Authority

answer

Occurs when the principal causes the third party to think someone is an agent. Any actions the implied agent takes will be treated as if he were an agent by courts.

question

Power of Attorney

answer

A written document, which is usually notarized, authorizing another to act as one's agent; can be special or general

question

Special Power of Attorney

answer

Written document allowing the agent to do specified acts only.

question

General Power of Attorney

answer

Written document allowing the agent to transact all business for the principal.

question

Contract Liability

answer

Principle is liable if he is disclosed or partially disclosed to the third party.

question

Disclosed Principal

answer

Principal's identity is known when contract is formed.

question

Partially Disclosed Principal

answer

Principal's identity is unknown, but the third person knows that agent is or may be acting for a principal when contract is formed.

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Undisclosed Principal

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Principal's identity is unknown, and third person does not know the agent is acting for someone else. Agent is liable.

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Respondeat Superior

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Principal is liable for agents' actions if they were "in the scope of employment".

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Renunciation

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Giving up a right, such as a right of inheritance, a gift under a will or abandoning the right to collect a debt on a note.

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Revocation

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Mutual cancellation of a contract by the parties to it.

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Fair Labor Standards Act of 1938

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Established a federal minimum wage, mandated overtime pay, and banned child labor.

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Occupational Safety and Health Act of 1970

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OSHA. Charged with keeping workplaces safe.

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Consolidated Omnibus Budget Reconciliation Act of 1986

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COBRA. Allows employees to continue in a company's group insurance plan after termination if they pay the fees.

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Family Medical Leave Act of 1993

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FMLA. Allows employees to take up to 12 weeks per year of unpaid leave in a company with 50+ employees.

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Sole Proprietorship

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The simplest form of business. Owner pays personal income tax on all profits and is personally liable for all business debts.

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Partnership

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Created by agreement of the parties. Partners have unlimited liability for partnership debts.

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Uniform Partnership Act of 1997

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Governs partnerships. UPA.

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Limited Partnership

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Limited partner contributes capital but has no right to participate in management. A general partner is responsible for management and is liable for all partnership debts.

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Certificate of Partnership

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Filing of it forms a limited partnership.

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Corporation

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Owned by shareholders. Liability is limited to investment. Profits taxed twice.

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Limited Liability Company

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LLC. Limited liability of corporations and tax benefits of partnerships. Profits taxed once.

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Limited Liability Partnership

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Partnership for professionals who normally do business as partners in a partnership.

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Joint Venture

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An organization created by two or more people for one transaction or a limited activity. Usually a set time and for a specific project.

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Syndicate

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An investment group to finance a particular project. Could be a corporation, or general or limited partnership.

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Joint Stock Company

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A hybrid. Similar to a corporation but otherwise resembling a partnership.

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Business Trust

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Formed by a written trust agreement. Investors transfer cash or property to trustees in exchange for certificates of investment shares.

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Cooperative

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An association, which may or may not be incorporated, that is organized to provide an economic service to its members.

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Distributorship

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A manufacturer (franchisor) licenses a dealer (franchisee) to sell its product. Often has an exclusive territory.

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Chain-Style Business Operation

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When a franchise operates under a franchisor's trade name.

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Manufacturing or Processing Plan Arrangement

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Exists when a franchisor transmits to the franchisee the essential ingredient or formula to make the product.

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Business Premises

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Who buys equipment and furnishings.

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Draft, Check, Promissory Note, Certificate of Deposit

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4 types of negotiable instruments.

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Uniform Commercial Code Article 3

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UCC. Governs negotiable instruments.

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Drafts and Checks

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Orders to pay.

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Promissory Notes and CDs

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Promises to pay.

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Drawer

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The person creating the draft.

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Drawee

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The person ordered to pay by the drawer.

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Payee

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The recipient of the funds.

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Time Drafts

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Payable at a certain date.

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Sight Drafts

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Payable on presentation.

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Trade Acceptance

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A draft in which the drawer is also the payee. The drawee is the buyer of the goods.

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Promissory Note

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Written promise by the Maker to pay the Payee.

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Holder in Due Course

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HDC. This person acquires additional rights to the instrument than the assignor had, which means most defenses against payment are revoked. Gave something of value for the instrument; took it in good faith.

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Primary Liability

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Incurred by the maker and acceptor (a drawee who agrees to pay).

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Secondary Liability

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Falls on the drawer and unqualified endorsers if the drawee dishonors the instrument.

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Transfer Warranty

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Transferor guarantees that the transferor is entitled to enforce the instrument and everything is good to go.

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Presentment Warranty

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The presenter has no knowledge of unauthorized signatures, alteration, or other defect.

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Insufficient Funds

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Overdraft. The bank can either dishonor it or pay it and charge the customer's account, creating an overdraft.

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Stale Checks

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Non-certified checks over 6 months old. Bank has option of whether or not to pay.

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Stop-Payment Order

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Often used when checks are stolen or when a breach of contract has occurred.

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Forged or Altered Checks

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Bank is liable, unless customer was negligent or the holder knew the signature was forged.

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E-Money

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Governed by regulation E. Includes ATM cards, Smart Cards, Stored-Value Cards, Credit card machines, Direct deposits, etc.

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Depository Bank

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Where a check is deposited.

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Payor Bank

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The bank on which a check is drawn.

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Collecting Bank

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Any bank except the payor bank that handles a check during the collection process.

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Intermediary Bank

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Any bank except the payor bank and the depository bank to which an item is transferred in the collection process.

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Chattel Paper

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Any writing evidencing a debt secured by personal property.

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Secured Party

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Creditor who holds a security interest in a debtors capital.

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Debtor

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One who owes payment to a creditor.

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Security Interest

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The interest in collateral should the debtor default on the loan.

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Collateral

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Subject of security interest.

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Financing Statement

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Publicly filed document giving notice of the secured party's interest in collateral.

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Perfection

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Secured party protecting his rights to collateral.

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Deficiency

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Unless otherwise agreed, or if the collateral was intangible, the debtor may be held liable for any remaining debt after disposition.

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Lien

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Claim against property to satisfy debt.

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Mechanic's Lien

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For work done on real property.

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Artisan's Lien

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For value added to personal property (possessory).

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Judicial Lien

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Issued by a court to ensure payment, allows seizure.

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Garnishment

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Usually extracted from paycheck.

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Homestead Exemption

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Allows the debtor to retain a certain amount as a homestead exemption when going bankrupt.

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Bankruptcy Code Chapter 7

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Liquidation.

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Bankruptcy Code Chapter 11

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Reorganization.

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Workouts

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An alternative to Bankruptcy Code Chapter 11. An out-of-court agreement of how parties can work out a payment plan.

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Bankruptcy Code Chapter 13

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Individual repayment plan.

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