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Business Law Fundamentals
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Match each statement with the correct term.
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1. One who makes and executes a will.
2. The substitution - by agreement - of a new contract for an old one - with the rights under the old one being terminated. Typically - novation involves the substitution of a new person who is responsible for the contract and the removal of the origina
creditors' composition agreement
3. An approach to ethical reasoning that evaluates behavior in light of the consequences of that behavior for those who will be affected by it - rather than on the basis of any absolute ethical or moral values. In utilitarian reasoning - a 'good' decisi
prima facie case
4. Prepaid funds recorded on a computer or a card (such as a smart card or a stored-value card).
5. In partnership law - a doctrine under which a plaintiff may sue - and collect a judgment from - all of the partners together (jointly) or one or more of the partners separately (severally - or individually). This is true even if one of the partners s
joint and several liability
6. A doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiably relies. Such a promise is binding if justice will be better served by the enforcement of the promise.
delegation of duties
7. A provision in a contract stipulating that certain unforeseen events
force majeure clause
8. A method of settling disputes outside of court by using the services of a neutral third party - who acts as a communicating agent between the parties and assists them in negotiating a settlement.
9. A document by which title to property (usually real property) is passed.
motion for judgment n.o.v.
10. The act of presenting an instrument to the party liable on the instrument to collect payment. Presentment also occurs when a person presents an instrument to a drawee for a required acceptance.
11. A common law rule that requires that the terms of the offeree's acceptance adhere exactly to the terms of the offeror's offer for a valid contract to be formed.
mirror image rule
third party beneficiary
12. A business entity that has no tax liability. The entity's income is passed through to the owners - and the owners pay taxes on the income.
breach of contract
partially disclosed principal
13. The acquisition of control over a corporation through the purchase of a substantial number of the voting shares of the corporation.
14. A mark used by one or more persons - other than the owner - to certify the region - materials - mode of manufacture - quality - or other characteristic of specific goods or services.
mitigation of damages
15. Procedurally - a defendant's response to the plaintiff's complaint.
16. A rule of the Securities and Exchange Commission that makes it unlawful - in connection with the purchase or sale of any security - to make any untrue statement of a material fact or to omit a material fact if such omission causes the statement to be
SEC Rule 10b-5
17. A contract in which - for a stipulated consideration - one party agrees to compensate the other for loss on a specific subject by a specified peril.
covenant not to sue
18. A contractual clause that states that a certain amount of monetary damages will be paid in the event of a future default or breach of contract. The damages are a punishment for a default and not a measure of compensation for the contract's breach. Th
19. An employee's disclosure to government authorities - upper-level managers - or the press that the employer is engaged in unsafe or illegal activities.
20. A statement that - if filed within six months prior to the expiration date of the original financing statement - continues the perfection of the original security interest for another five years. The perfection of a security interest can be continued
implied warranty of fitness for a particular purpose
21. A government official who performs certain administrative tasks that a bankruptcy judge would otherwise have to perform.
22. An estate in realty held by a tenant under a lease. In every leasehold estate - the tenant has a qualified right to possess and/or use the land.
generally accepted auditing standards (GAAS)
23. The joint ownership of property by two or more co-owners in which each co-owner owns an undivided portion of the property. On the death of one of the joint tenants - his or her interest automatically passes to the surviving joint tenant(s).
I-551 Alien Registration Receipt
24. A method of settling disputes - used in many federal courts - in which a trial is held - but the jury's verdict is not binding. The verdict acts only as a guide to both sides in reaching an agreement during the mandatory negotiations that immediately
summary jury trial (SJT)
25. In most states - a rule stating that express authority given to an agent must be in writing if the contract to be made on behalf of the principal is required to be in writing.
equal dignity rule
26. In contract law - a voluntary act by the offeree that shows assent - or agreement - to the terms of an offer; may consist of words or conduct. In negotiable instruments law - the drawee's signed agreement to pay a draft when it is presented.
privity of contract
27. A guilty (prohibited) act. The commission of a prohibited act is one of the two essential elements required for criminal liability - the other element being the intent to commit a crime.
28. The wrongful taking and carrying away of another person's personal property with the intent to permanently deprive the owner of the property. Some states classify larceny as either grand or petit - depending on the property's value.
29. A person to whom an offer is made.
red herring prospectus
30. As a noun - one who has died without having created a valid will; as an adjective - the state of having died without a will.
motion to dismiss
31. A network of twelve district banks and related branches located around the country and headed by the Federal Reserve Board of Governors. Most banks in the United States have Federal Reserve accounts.
Federal Reserve System
mitigation of damages
32. A theory of sharing liability among all firms that manufactured and distributed a particular product during a certain period of time. This form of liability sharing is used only in some jurisdictions and only when the true source of the harmful produ
estate in property
33. The formal disbanding of a partnership or a corporation. It can take place by (1) acts of the partners or - in a corporation - acts of the shareholders and board of directors; (2) the subsequent illegality of the firm's business; (3) the expiration o
holder in due course (HDC)
34. In the employment context - the demanding of sexual favors in return for job promotions or other benefits - or language or conduct that is so sexually offensive that it creates a hostile working environment.
tenancy in common
35. A contract that has been completely performed by both parties.
36. In criminal law - a defense in which the defendant claims that he or she was induced by a public official
37. A possessory lien given to a person who has made improvements and added value to another person's personal property as security for payment for services performed.
38. A contract for the sale of goods under which the ownership of goods is transferred from a seller to a buyer for a price.
39. A doctrine under which a party to a contract is relieved of her or his duty to perform when performance becomes objectively impossible or totally impracticable (through no fault of either party).
generally accepted auditing standards (GAAS)
impossibility of performance
prima facie case
40. The legal avoidance - or setting aside - of a contractual obligation.
41. A deed in which the grantor assures (warrants to) the grantee that the grantor has title to the property conveyed in the deed - that there are no encumbrances on the property other than what the grantor has represented - and that the grantee will enj
42. A trust created to protect the beneficiary from spending all the funds to which she or he is entitled. Only a certain portion of the total amount is given to the beneficiary at any one time - and most states prohibit creditors from attaching assets o
43. A reasoning process in which an individual links his or her moral convictions or ethical standards to the particular situation at hand.
tenancy by the entirety
44. In insurance law - a contract between the insurer and the insured in which - for a stipulated consideration - the insurer agrees to compensate the insured for loss on a specific subject by a specified peril.
45. The process of transferring land out of one's possession (thus 'alienating' the land from oneself).
gift causa mortis
46. A court's order - issued prior to a trial to collect a debt - directing the sheriff or other public officer to seize nonexempt property of the debtor. If the creditor prevails at trial - the seized property can be sold to satisfy the judgment.
writ of attachment
47. A document prepared by a secured creditor and filed with the appropriate state or local official - to give notice to the public that the creditor has a security interest in collateral belonging to the debtor named in the statement. Financing statemen
48. A type of tenancy under which property is leased for a specified period of time - such as a month - a year - or a period of years; also called a tenancy for years.
tenancy in common
49. A motion by either party to a lawsuit at the close of the pleadings requesting the court to decide the issue solely on the pleadings without proceeding to trial. The motion will be granted only if no facts are in dispute.
motion for judgment on the pleadings
50. A group of persons protected by specific laws because of the group's defining characteristics. Under laws prohibiting employment discrimination - these characteristics include race - color - religion - national origin - gender - age - and disability.
writ of certiorari
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