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Business Law Fundamentals
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Match each statement with the correct term.
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1. A deed in which the grantor warrants only that the grantor or seller held good title during his or her ownership of the property and does not warrant that there were no defects of title when the property was held by previous owners.
special warranty deed
2. The term used to designate a person who has an ownership interest in a limited liability company.
shareholder's derivative suit
3. A distinctive mark - motto - device - or emblem that a manufacturer stamps - prints - or otherwise affixes to the goods it produces so that they may be identified on the market and their origins made known. Once a trademark is established (under the
4. A set of governing rules adopted by a corporation or other association.
5. One licensing another (the franchisee) to use the owner's trademark - trade name - or copyright in the selling of goods or services.
6. A firm that requires all workers - once employed - to become union members within a specified period of time as a condition of their continued employment.
7. Under a mortgage agreement - the creditor who takes a security interest in the debtor's property.
debtor in possession (DIP)
8. A contract formed in whole or in part from the conduct of the parties (as opposed to an express contract).
9. A mark used in the sale or the advertising of services to distinguish the services of one person from those of others. Titles - character names - and other distinctive features of radio and television programs may be registered as service marks.
10. A question that pertains to the U.S. Constitution - acts of Congress - or treaties. A federal question provides a basis for federal jurisdiction.
question of law
11. Occurs when an individual adds value to personal property by the use of either labor or materials. In some situations - a person may acquire ownership rights in another's property through accession.
act of state doctrine
12. A certificate that grants the owner the option to buy a given number of shares of stock - usually within a set time period.
workers' compensation laws
13. A clause in a contract that provides that - in the event of a dispute - the parties will submit the dispute to arbitration rather than litigate the dispute in court.
14. A 'standard-form' contract - such as that between a large retailer and a consumer - in which the stronger party dictates the terms.
unconscionable contract or clause
15. Any arrangement in which the owner of a trademark - trade name - or copyright licenses another to use that trademark - trade name - or copyright in the selling of goods or services.
16. An agreement between a seller and a buyer who frequently do business with each other concerning the terms and conditions that will apply to all subsequently formed electronic contracts.
tenancy at will
17. A draft drawn by a drawer ordering the drawee bank or financial institution to pay a certain amount of money to the holder on demand.
18. Any membership group that operates across national borders. These organizations can be governmental organizations - such as the United Nations - or nongovernmental organizations (NGOs) - such as the Red Cross.
right of contribution
19. Damages awarded to compensate for reasonable expenses that are directly incurred because of a breach of contract
gift causa mortis
20. A situation in which the personal property of one person (a bailor) is entrusted to another (a bailee) - who is obligated to return the bailed property to the bailor or dispose of it as directed.
21. Property resulting from intellectual - creative processes.
22. All employers must verify the employment eligibility and identity of any worker hired in the United States. To comply with the law - employers must complete an I-9 Employment Eligibility Verification Form for all new hires within three business days.
23. A contract for the sale of goods in which the seller is required or authorized to ship the goods by carrier. The seller assumes liability for any losses or damage to the goods until they are delivered to the carrier.
24. The process by which a court decides on the constitutionality of legislative enactments and actions of the executive branch.
25. The joint ownership of property by a husband and wife. Neither party can transfer her or his interest in the property without the consent of the other.
tenancy by the entirety
certificate of deposit (CD)
26. Prepaid funds recorded on a computer or a card (such as a smart card or a stored-value card).
piercing the corporate veil
27. Co-ownership of property in which each party owns an undivided interest that passes to her or his heirs at death.
tenancy in common
28. A state court of limited jurisdiction that conducts proceedings relating to the settlement of a deceased person's estate.
SEC Rule 10b-5
29. A theory under which the intent to form a contract will be judged by outward - objective facts (what the party said when entering into the contract - how the party acted or appeared - and the circumstances surrounding the transaction) as interpreted
document of title
objective theory of contracts
30. A written instrument - usually issued by a bank on behalf of a customer or other person - in which the issuer promises to honor drafts or other demands for payment by third persons in accordance with the terms of the instrument.
letter of credit
31. A contract that may be legally avoided (canceled - or annulled) at the option of one or both of the parties.
32. A doctrine providing that the judicial branch of one country will not examine the validity of public acts committed by a recognized foreign government within its own territory.
act of state doctrine
33. 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.
34. The minimum degree of ethical behavior expected of a business firm - which is usually defined as compliance with the law.
35. An implied promise by a landlord that rented residential premises are fit for human habitation
implied warranty of habitability
purchase-money security interest (PMSI)
36. In a given state - a corporation that does business in the state without being incorporated therein.
37. A process in which parties attempt to settle their dispute informally - with or without attorneys to represent them. In the context of negotiable instruments - the transfer of an instrument in such form that the transferee (the person to whom the ins
family limited liability partnership (FLLP)
objective theory of contracts
38. 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.
objective theory of contracts
motion for summary judgment
39. A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made; may be effected through the mutual consent of the parties - by the parties' conduct - or by court decree.
40. A written document - required by securities laws - that describes the security being sold - the financial operations of the issuing corporation - and the investment or risk attaching to the security. It is designed to provide sufficient information t
41. A court-created doctrine under which a party to a contract will be relieved of her or his duty to perform when the objective purpose for performance no longer exists (due to reasons beyond that party's control).
frustration of purpose
42. Embezzlement; the misappropriation of funds by a party - such as a corporate officer or public official - in a fiduciary relationship with another.
question of law
force majeure clause
43. Joint ownership.
44. One who owes an obligation to another.
question of fact
45. A party to whom contractual obligations are transferred - or delegated.
46. Unlawful pressure brought to bear on a person - causing the person to perform an act that she or he would not otherwise perform.
47. One to whom goods are entrusted by a bailor.
48. The second of two stages in the termination of a partnership or corporation. Once the firm is dissolved - it continues to exist legally until the process of winding up all business affairs (collecting and distributing the firm's assets) is complete.
49. 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).
unreasonably dangerous product
third party beneficiary
50. In a limited liability company - an agreement in which the members set forth the details of how the business will be managed and operated. State statutes typically give the members wide latitude in deciding for themselves the rules that will govern t
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