Managers And The Legal Environment

Front 1

shareholder primacy

Back 1

maximization of shareholder value

Front 2

Teleological theory

Back 2

concerned with consequences. The ethical good of an action is to be judged by the effect of the action on others

Front 3

Deontological theory

Back 3

focuses more on the motivation and principle behind an action than on the consequences

Front 4

Utilitarianism

Back 4

a major teleological system that operates under the proposition that the ideal is to maximize the total benefit for everyone involved

Front 5

Rawlsian moral theory

Back 5

a deontological theory, aims to maximize the plight of the worst-off person in society by developing principles behind a “veil of ignorance.”

Front 6

Kantian theory

Back 6

another important deontological line of thought. In examining the ethical worth of an action, [blank's] categorical imperative looks to the form of the action rather than the intended result

Front 7

Universalizability

Back 7

asks whether one would want everyone to act in this manner

Front 8

reversibility

Back 8

looks to whether one would want such a rule applied to oneself

Front 9

Distributive justice

Back 9

focuses on how the burden and benefits of a particular system are distributed

Front 10

Compensatory justice

Back 10

aims at compensating people for the harm done by others

Front 11

Retributive justice

Back 11

also concerned with the harm people do to others, but here the focus is more on how to deter them from inflicting further harm

Front 12

fiduciary duty

Back 12

to act in the best interest of the other party

Front 13

Regulations

Back 13

provisions issued by federal and state administrative agencies and executive departments to interpret and implement statutes enacted by the legislature

Front 14

Common law

Back 14

case law—the legal rules made by judges when they decide a case where no constitution, statute, or regulation exists to resolve the dispute

Front 15

stare decisis

Back 15

“to abide by decided cases”

Front 16

split in the circuits

Back 16

When different courts of appeals disagree on a legal issue

Front 17

subject matter jurisdiction

Back 17

power to hear different kinds of cases

Front 18

federal question

Back 18

when the dispute concerns federal law—that is, a legal right arising under the U.S. Constitution, a federal statute, federal common law, a treaty of the United States, or an administrative regulation issued by a federal government agency

Front 19

Diversity jurisdiction

Back 19

when a lawsuit is between citizens of two different states, or between a citizen of a state and a citizen of a foreign country, and the amount in controversy, exclusive of interest and all costs, exceeds $75,000

Front 20

vacate

Back 20

nullify the previous court’s ruling

Front 21

remand

Back 21

send case back to the lower court for reconsideration in light of the appellate court’s opinion

Front 22

en banc hearing

Back 22

all the judges of a court of appeals will sit together to hear and decide a particularly important or close case

Front 23

discretionary review

Back 23

it decides which cases within its jurisdiction it will adjudicate

Front 24

writ of certiorari

Back 24

ordering the lower court to certify the record of proceedings and send it up to the Supreme Court

Front 25

de novo

Back 25

anew

Front 26

Standing

Back 26

the party seeking relief (1) is the proper party to advance the litigation, (2) has a personal interest in the outcome of the suit, and (3) will benefit from a favorable ruling

Front 27

Personal jurisdiction

Back 27

the court has legal authority over the parties to the lawsuit

Front 28

in personam jurisdiction

Back 28

Personal jurisdiction based on the residence or activities of the person being sued

Front 29

in rem jurisdiction

Back 29

Personal jurisdiction based on the location of the property at issue in the lawsuit

Front 30

long-arm statutes

Back 30

can subject an out-of-state defendant to jurisdiction in the state, as long as constitutional due process requirements are satisfied

Front 31

Service of process

Back 31

notifies the defendant of the filing of a lawsuit

Front 32

choice-of-forum clause

Back 32

Parties to a contract may specify in advance where any disputes will be litigated

Front 33

forum non conveniens

Back 33

If there is no applicable choice-of-forum clause and the plaintiff has sued in a place that is inconvenient for the defendant, then the defendant may file a motion for a change of venue, or location

Front 34

alternative dispute resolution (ADR)

Back 34

techniques, such as negotiation, mediation, and arbitration

Front 35

bench trial

Back 35

a judge, not a jury, decides all issues

Front 36

class action

Back 36

If the conduct of a defendant affected numerous persons in a common way

Front 37

Civil procedure

Back 37

methods, procedures, and practices that govern the processing of a civil lawsuit from start to finish

Front 38

Federal Rules of Civil Procedure (FRCP)

Back 38

control the trial practices in all U.S. district courts

Front 39

pleadings

Back 39

The plaintiff ’s complaint, the defendant’s answer (including any counterclaim), and any reply to the answer filed by the plaintiff

Front 40

complaint

Back 40

briefly states a grievance

Front 41

prayer

Back 41

request for relief

Front 42

summons

Back 42

officially notifies the defendant that the lawsuit is pending in a particular court and that the defendant must file a response to the complaint within a certain number of days

Front 43

answer

Back 43

may admit or deny the various allegations in the complaint

Front 44

affirmative defense

Back 44

admits that the defendant has acted in a certain way but claims either (1) that the defendant’s conduct was not the real or legal cause of harm to the plaintiff or (2) that the defendant’s conduct is excused for some reason

Front 45

counterclaim

Back 45

a legal claim by the defendant against the plaintiff

Front 46

motion to dismiss

Back 46

seeks to terminate the lawsuit on the ground that the plaintiff’s claim is technically inadequate

Front 47

dismissed with prejudice

Back 47

the plaintiff is precluded from asserting the same claims in another case

Front 48

motion for judgment on the pleadings

Back 48

A party may file a motion to dismiss immediately after the complaint and answer have been filed

Front 49

affidavits

Back 49

sworn statements

Front 50

summary judgment

Back 50

when (1) all of the written evidence before the court clearly establishes that there are no disputed issues of material fact and (2) a party is entitled to judgment as a matter of law

Front 51

settlement conference

Back 51

to give each side a candid assessment of the strengths and weaknesses of its case and the likely outcome if the case goes to trial

Front 52

voir dire

Back 52

questioning of potential jurors

Front 53

directed verdict

Back 53

The moving party asserts that the other side has not produced enough evidence to support the legal claim or defense alleged

Front 54

judgment notwithstanding the verdict

Back 54

reverses the jury verdict on the ground that the evidence of the prevailing party was so weak that no reasonable jury could have resolved the dispute in that party’s favor

Front 55

mediation

Back 55

the parties agree to try to reach a solution with the assistance of a neutral third party who helps them find a mutually satisfactory resolution

Front 56

Arbitration

Back 56

the resolution of a dispute by a neutral third party

Front 57

med-arb

Back 57

the parties to a dispute enter mediation with the commitment to submit to binding arbitration if mediation fails to resolve the conflict

Front 58

Arb-med

Back 58

The parties present their case to an arbitrator who makes an award but keeps it secret while the parties try to resolve the dispute through mediation

Front 59

summary jury trial

Back 59

parties to a dispute put their cases before a real jury, which renders a nonbinding decision

Front 60

Ombudsperson

Back 60

person who hears complaints, engages in fact-finding, and generally promotes dispute resolution through information methods such as counseling or mediation

Front 61

depositions

Back 61

during which anyone who may have helpful information about the facts of the case may be required to give oral testimony in response to questions

Front 62

interrogatories

Back 62

written questions the parties may be required to answer in writing

Front 63

spoliation inference

Back 63

jury assumes that documents not properly produced were damaging to the nonproducing party’s case

Front 64

litigation hold procedure

Back 64

suspends the usual disposal procedures (including the erasing of backup tapes) when there is reason to believe the documents are relevant to pending or even potential litigation

Front 65

appellate jurisdiction

Back 65

the power to hear appeals from a lower court’s decision

Front 66

bicameralism

Back 66

requires that laws be approved as a whole by both houses of Congress

Front 67

police power

Back 67

State governments have general powers not specified in the Constitution

Front 68

abrogate

Back 68

annul

Front 69

Commerce Clause

Back 69

Article I, Section 8 gives Congress the power to regulate commerce with other nations, with Indian tribes, and between states

Front 70

ex post facto laws

Back 70

laws that punish actions that were not illegal when performed

Front 71

bills of attainder

Back 71

laws to punish specific individuals

Front 72

Bill of Rights

Back 72

The first ten amendments of the Constitution

Front 73

double jeopardy

Back 73

trying a person twice for the same crime

Front 74

Due Process Clause

Back 74

no state shall “deprive any person of life, liberty, or property, without due process of law”

Front 75

Privileges and Immunities Clause

Back 75

“no State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States”

Front 76

substantially related test

Back 76

requires the government to prove that the regulations further a governmental interest that is “important” or “substantial” and that they prevent real, not conjectural, harm “in a direct and material way.”

Front 77

Prior restraints of speech

Back 77

such as prohibiting in advance a demonstration in a public area, are considered a more drastic infringement on free speech than permitting the speech to occur and then punishing it afterward

Front 78

Establishment Clause

Back 78

prohibits the establishment of a religion by the federal government

Front 79

Free Exercise Clause

Back 79

prohibits certain, but not all, restrictions on the practice of religion

Front 80

Procedural due process

Back 80

focuses on the fairness of the legal proceeding

Front 81

Substantive due process

Back 81

focuses on the fundamental rights protected by the Due Process Clauses

Front 82

penumbra

Back 82

peripheral rights that are implied by the specifically enumerated rights

Front 83

punitive or exemplary damages

Back 83

designed to punish and make an example of the defendant

Front 84

eminent domain

Back 84

the power to take property for public uses, such as building a school, park, or airport

Front 85

rational basis test

Back 85

a classification will be upheld if there is any conceivable basis on which the classification might relate to a legitimate governmental interest

Front 86

strict scrutiny test

Back 86

a classification will be held valid only if it is necessary to promote a compelling state interest and is narrowly tailored to achieve that interest

Front 87

regulatory negotiations

Back 87

agency convenes a committee representing all of the interests that will be significantly affected by the regulation to develop a proposed rule

Front 88

record

Back 88

oral and written evidence presented at the administrative hearing

Front 89

informal discretionary actions

Back 89

repetitive, frequent actions that are inappropriate to litigate in the courts

Front 90

arbitrary and capricious standard

Back 90

if the agency chooses from among several courses of action, the court will presume the validity of the chosen course unless it is shown to lack any rational basis

Front 91

substantial evidence standard

Back 91

courts determine whether the evidence in the record could reasonably support the agency’s conclusion

Front 92

construction

Back 92

interpretation

Front 93

Exhaustion of administrative remedies

Back 93

a court will not entertain an appeal to review the administrative process until the agency has had the chance to act and the party challenging the agency’s actions has pursued all possible avenues of relief before the agency

Front 94

issue exhaustion

Back 94

the need to raise all issues with the administrative agency

Front 95

ripeness doctrine

Back 95

helps ensure that courts are not forced to decide hypothetical questions

Front 96

Standing

Back 96

(1) the plaintiff must have suffered an injury in fact (2) the injury must be “fairly . . . trace[able] to the challenged action.” (3) it must be “ ‘likely,’ as opposed to merely ‘speculative,’” that the injury will be redressed, at least in part, by a favorable decision

Front 97

contract

Back 97

legally enforceable promise or set of promises

Front 98

injunction

Back 98

court order forcing the promisor to perform the promise

Front 99

offer

Back 99

manifestation of willingness to enter into a bargain that justifies another person in understanding that his or her assent will conclude the bargain

Front 100

Irrevocable offers

Back 100

arise (1) when an option contract has been created and (2) when an offeree has relied on an offer to his or her detriment

Front 101

option contract

Back 101

offeror agrees to hold an offer open for a certain amount of time in exchange for some consideration from the other party

Front 102

Acceptance

Back 102

response by the person receiving the offer that indicates willingness to enter into the agreement proposed in the offer

Front 103

mirror image rule

Back 103

what the offeree accepts must be exactly the same as what the offeror has offered

Front 104

intent to be bound

Back 104

intention, either orally or in writing, to enter into a contract

Front 105

consideration

Back 105

something of value

Front 106

bilateral contract

Back 106

promise given in exchange for another promise

Front 107

unilateral contract

Back 107

promise given in exchange for an act

Front 108

mutuality of obligation

Back 108

bilateral contract must limit the behavior of both parties in some fashion

Front 109

illusory promise

Back 109

promise that neither confers any benefit on the promisee nor subjects the promisor to any detriment

Front 110

requirements contract

Back 110

buyer agrees to buy all its requirements of a specified commodity from the seller, and the seller agrees to meet those requirements

Front 111

output contract

Back 111

buyer promises to buy all the output that the seller produces

Front 112

condition precedent

Back 112

event that must occur before performance under a contract is due

Front 113

condition concurrent

Back 113

when the mutual duties of performance are to take place simultaneously

Front 114

condition subsequent

Back 114

operates to terminate an existing contractual obligation if the condition occurs

Front 115

Capacity

Back 115

person’s ability to understand the nature and effect of an agreement

Front 116

ratify

Back 116

agree to be bound by

Front 117

usury statutes

Back 117

limit the interest rate on loans and usually provide that any loan agreement in violation of the statute is unenforceable

Front 118

covenant not to compete

Back 118

agreement, generally part of an employment contract or a contract to sell a business, in which one party agrees to refrain from competing with the other party for a specific period of time and within a particular area

Front 119

Promissory estoppel

Back 119

applies only if the injured party can prove there was (1) a promise and (2) justifiable reliance on the promise (3) that was foreseeable and (4) resulted in injustice

Front 120

precontractual liability

Back 120

liability imposed on a party for losses caused to the other party during negotiations that fail to ripen into a binding contract

Front 121

Oppression

Back 121

inequality of bargaining power that results in no real negotiation and an absence of meaningful choice for one party to the contract

Front 122

Surprise

Back 122

terms of the contract are hidden in a densely printed form drafted by the party seeking to enforce these terms

Front 123

general release

Back 123

purports to relieve the owner of the facility of any liability, including liability for negligence that results in injuries to a person using the facility

Front 124

Fraud in the factum

Back 124

occurs when, because of a misrepresentation, or untrue statement of material fact, one party does not understand that he or she is entering into a contract or does not understand one or more essential terms of the contract

Front 125

fraud in the inducement

Back 125

occurs when a party makes a false statement to persuade the other party to enter into an agreement

Front 126

Puffing

Back 126

occurs when a salesperson “gives voice to ‘the exaggerations reasonably to be expected of a seller as to the degree of quality of his product, the truth or falsity of which cannot be precisely determined.’”

Front 127

Promissory fraud

Back 127

occurs when one party makes a promise without any intention of carrying it out

Front 128

undue influence

Back 128

one party exercised improper persuasion on the other, making genuine assent impossible

Front 129

mistake of judgment

Back 129

occurs when the parties make an erroneous assessment about some aspect of what is bargained for

Front 130

statute of frauds

Back 130

requires certain types of contracts to be evidenced by some form of written communication

Front 131

equal dignities rule

Back 131

if an agent acts on behalf of another (the principal) in signing an agreement of the type that must, under the statute of frauds, be in writing, the authority of the agent to act on behalf of the principal must also be in writing

Front 132

power of attorney

Back 132

to authorize a person, called an attorney-in-fact (who need not be a lawyer), to sign documents on their behalf

Front 133

parol evidence rule

Back 133

when there is an unambiguous written contract that the parties intended would encompass their entire agreement, oral evidence of prior or contemporaneous statements is inadmissible in court and cannot be used to interpret, vary, or add to the terms of the written contract

Front 134

Frustration of purpose

Back 134

occurs when performance is possible, but changed circumstances have made the contract useless to one or both of the parties

Front 135

sovereign acts doctrine

Back 135

the government generally cannot be held liable for breach of contract due to legislative or executive acts

Front 136

novation

Back 136

new party is substituted for one of the original parties, and a new contract is written (with the consent of all original and new parties) to effect the desired change

Front 137

discharged

Back 137

contractual obligations have been satisfied or terminated

Front 138

anticipatory repudiation

Back 138

occurs when one party knows ahead of time (before performance is due) that the other party will breach the contract

Front 139

accord and satisfaction

Back 139

agreement to accept performance that is different from what is called for in the contract

Front 140

Expectation damages

Back 140

give the nonbreaching party the benefit of its bargain, putting the plaintiff in the cash position it would have been in if the contract had been fulfilled

Front 141

compensatory damages

Back 141

Damages that compensate for the economic loss caused by the breach of contract

Front 142

consequential damages

Back 142

compensation for losses that occurred as a foreseeable result of the breach

Front 143

Reliance damages

Back 143

compensate the nonbreaching party for any expenditures it made in reliance on the contract

Front 144

restitution

Back 144

looks at what the other party has gained from the transaction

Front 145

quantum meruit

Back 145

one party has received a benefit for which it has not paid the other party

Front 146

executory contract

Back 146

contract under which the parties have continuing obligations to perform

Front 147

liquidated damages clause

Back 147

parties to a contract may include a clause that specifies the amount of money to be paid if one of them should later breach the agreement

Front 148

cover

Back 148

procure substitute goods or services

Front 149

specific performance

Back 149

court orders the breaching party to complete the contract as promised

Front 150

merger agreement

Back 150

agreement between two companies to combine into a single entity

Front 151

representations and warranties

Back 151

statements about the entity being sold and the buyer

Front 152

covenants

Back 152

promises to do or refrain from doing something

Front 153

tort

Back 153

civil wrong resulting in injury to a person or property

Front 154

Assault

Back 154

intentional, nonconsensual act that gives rise to the apprehension (though not necessarily the fear) that a harmful or offensive contact is imminent

Front 155

intentional infliction of emotional distress

Back 155

protects the right to peace of mind

Front 156

Defamation

Back 156

communication (often termed publication) to a third party of an untrue statement, asserted as fact, that injures the plaintiff’s reputation by exposing him or her to “hatred, ridicule or contempt.”

Front 157

Libel

Back 157

written defamation

Front 158

slander

Back 158

spoken defamation

Front 159

self-publication

Back 159

to give an employee a claim for defamation when an employer, in firing an employee, makes a false assertion the employer could reasonably expect the employee would be required to repeat to a prospective employer

Front 160

Invasion of privacy

Back 160

violation of the right to keep personal matters to oneself

Front 161

Intrusion

Back 161

objectionable prying, such as eavesdropping or unauthorized rifling through files

Front 162

Nuisance

Back 162

nontrespassory interference with the use and enjoyment of real property

Front 163

Public nuisance

Back 163

unreasonable and substantial interference with the public health, safety, peace, comfort, convenience, or use of land

Front 164

Private nuisance

Back 164

interference with an individual’s use and enjoyment of his or her land

Front 165

Conversion

Back 165

exercise of dominion and control over the personal property, rather than the real property, of another

Front 166

trespass to personal property

Back 166

When personal property is interfered with but not converted—that is, not taken, destroyed, or substantially altered

Front 167

fraudulent misrepresentation

Back 167

protects economic interests and the right to be treated fairly and honestly

Front 168

Disparagement

Back 168

publication of statements derogatory to the quality of the plaintiff’s business, to the business in general, or even to the plaintiff’s personal affairs

Front 169

injurious falsehood

Back 169

Knowingly making false statements

Front 170

malicious prosecution

Back 170

prior proceeding was instituted against him or her maliciously and without probable cause or factual basis

Front 171

interference with contractual relations

Back 171

protects the right to enjoy the benefits of legally binding agreements

Front 172

interference with prospective business advantage

Back 172

defendant intentionally interfered with a relationship the plaintiff had sought to develop and that the interference caused the plaintiff’s loss

Front 173

Negligence

Back 173

“failure to use such care as a reasonably prudent and careful person would use under similar circumstances.”

Front 174

legal duty

Back 174

required to act reasonably under the circumstances to avoid harming the other person

Front 175

attractive nuisance

Back 175

imposes liability for physical injury to child trespassers caused by artificial conditions on the land

Front 176

licensee

Back 176

anyone who is on the land of another person with the possessor’s express or implied consent

Front 177

invitee

Back 177

someone who enters the premises for purposes of the possessor’s business

Front 178

reasonable care under the circumstances

Back 178

landowners required to act in a reasonable manner with respect to entrants on their land, with liability hinging on the foreseeability of harm

Front 179

negligence per se

Back 179

plaintiff shows that the defendant violated a statute and the violation caused the injury, the burden shifts to the defendant to prove he or she was not negligent

Front 180

res ipsa loquitur

Back 180

“the thing speaks for itself”—allows the plaintiff to prove breach of duty and causation indirectly

Front 181

actual cause

Back 181

plaintiff must prove that he or she would not have been harmed but for the defendant’s negligence

Front 182

proximate cause

Back 182

defendant had a duty to protect the particular plaintiff against the particular conduct that injured him or her

Front 183

contributory negligence

Back 183

plaintiff was also negligent in any manner, he or she cannot recover any damages from the defendant

Front 184

comparative negligence

Back 184

plaintiff may recover the proportion of his or her loss attributable to the defendant’s negligence

Front 185

assumption of risk

Back 185

plaintiff (1) knew the risk was present and understood its nature and (2) voluntarily chose to incur the risk

Front 186

economic loss rule

Back 186

bars a plaintiff who is in privity of contract with the defendant or who has entered into a commercial transaction involving the defendant from bringing a lawsuit for negligence based solely on economic losses

Front 187

negligent hiring

Back 187

proximate cause of the plaintiff’s injury is the employer’s own negligence in hiring the employee, rather than the employee’s wrongful act

Front 188

Strict liability

Back 188

liability without fault—that is, without either intent or negligence

Front 189

ultrahazardous

Back 189

(1) necessarily involves a risk of serious harm to persons or property that cannot be eliminated by the exercise of utmost care and (2) is not a matter of common usage

Front 190

respondeat superior

Back 190

“let the master answer”—a “master” or employer is vicariously liable for the torts of a “servant” or employee if the employee was acting within the scope of his or her employment

Front 191

Actual / compensatory damages

Back 191

measure the cost to repair or replace an item or the decrease in market value caused by the tortious conduct

Front 192

Punitive / exemplary damages

Back 192

may be awarded to punish the defendant and deter others from engaging in similar conduct

Front 193

joint and several liability

Back 193

multiple defendants are collectively liable and also individually liable

Front 194

Contribution

Back 194

distributes the loss among several defendants by requiring each to pay its proportionate share

Front 195

Indemnification

Back 195

allows a defendant to shift its individual loss to other defendants whose relative blame is greater

Front 196

Safeguards Rule

Back 196

requires financial services firms to (1) promulgate a written information security plan, (2) designate at least one employee to coordinate the plan, (3) identify and assess the risks to customer financial information, and (4) evaluate the safeguards for controlling these risks

Front 197

Identity theft

Back 197

illegal practice of gaining access to other people’s identifying information and then using that information to one’s own advantage

Front 198

Product liability

Back 198

legal liability manufacturers and sellers have for defective products that cause injury to purchasers, users, or bystanders, or their property

Front 199

express warranty

Back 199

affirmation made by the seller relating to the quality of the goods sold

Front 200

implied warranty

Back 200

created by law and guarantees the merchantability of the goods sold and, in some circumstances, their fitness for a particular purpose

Front 201

successor liability rule

Back 201

corporation purchasing or acquiring the assets of another is liable for the acquired company’s product liability and other debts only when (1) there is a consolidation or merger of the two corporations, (2) the acquirer expressly or impliedly agrees to assume such obligations, or (3) the transaction was wrongfully entered into to escape liability

Front 202

product-line theory

Back 202

successor that continues to manufacture the same product line as its predecessor, under the same name and with no outward indication of any change of ownership, may be held liable for product liability claims resulting from that product line, even if the particular item was manufactured and sold by the acquired firm prior to the acquisition

Front 203

continuity-of-enterprise approach

Back 203

constancy between the buyer and seller organizations to determine whether the successor company is essentially “a mere continuation or reincarnation of the predecessor entity.”

Front 204

market-share liability

Back 204

allocate liability on the basis of each defendant’s share of the market

Front 205

premises liability

Back 205

building owner may be found liable under a theory of negligence for violating its general duty to manage the premises and warn of asbestos dangers

Front 206

assumption of risk

Back 206

person voluntarily and unreasonably assumes the risk of a known danger, the manufacturer is not liable for any resulting injury

Front 207

comparative fault

Back 207

plaintiff’s damages may be reduced by the degree to which his or her own negligence contributed to the injury

Front 208

state-of-the-art defense

Back 208

shields a manufacturer from liability for a defective design if no safer product design is generally recognized as being possible

Front 209

preemption defense

Back 209

certain federal laws and regulations that set minimum safety standards are held to preempt state-law product liability claims

Front 210

statute of limitations

Back 210

time limit within which a lawsuit must be brought

Front 211

discovery-of-injury statutes

Back 211

provide that the statute of limitations for asbestos and certain other claims does not begin to run until the person discovers the injury from exposure to asbestos

Front 212

revival statutes

Back 212

permit plaintiffs to file lawsuits that had previously been barred by the running of the statute of limitations

Front 213

statute of repose

Back 213

cuts off the right to assert a cause of action after a specified period of time from the delivery of the product

Front 214

Useful life statutes

Back 214

similar to statutes of limitations and repose in that they provide manufacturers and sellers some protection from liability after a particular period of time has expired, but they differ in that they define that period as the length of time a product is expected to safely provide utility to the user

Front 215

Apparent authority

Back 215

occurs when a person leads another to believe that someone else is his or her agent and is thereafter estopped (prevented) from denying it

Front 216

agency by ratification

Back 216

If a principal approves or accepts the benefits of the actions of an otherwise unauthorized agent

Front 217

duty of loyalty

Back 217

An agent has a duty to act solely for the benefit of his or her principal in all matters directly connected with the agency undertaking

Front 218

duty of obedience

Back 218

An agent is also obligated to obey all reasonable orders of his or her principal

Front 219

actual authority

Back 219

principal may give consent for the agent to act for and bind the principal

Front 220

Electronic agents

Back 220

autonomous computer programs that can be dispatched by the user to execute certain tasks

Front 221

ratification

Back 221

affirmation

Front 222

Express ratification

Back 222

occurs when the principal, through words or behavior, manifests an intent to be bound by the agent’s act

Front 223

Implied ratification

Back 223

occurs when the principal, by silence or failure to repudiate the agent’s act, acquiesces in it

Front 224

aided-in-the-agency-relation theory

Back 224

employee was aided in accomplishing the tort by the existence of the agency relationship

Front 225

vicarious liability

Back 225

company can be held liable for violations of civil law by its employee even if a manager told the employee not to violate the law

Front 226

goods

Back 226

all things which are movable at the time of identification to the contract for sale

Front 227

Identification to the contract

Back 227

designation—by marking, setting aside, or other means—of the particular goods that are to be supplied under the contract

Front 228

fixtures

Back 228

items of personal property that are attached to real property and cannot be removed without substantial damage

Front 229

merchant

Back 229

person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction

Front 230

doctrine of first sale

Back 230

owner of a particular copy . . . lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy

Front 231

battle of the forms

Back 231

parties negotiate the essential terms of the contract but neglect to bargain over items that are less immediately important

Front 232

knockout rule

Back 232

strikes conflicting terms and, if necessary, replaces them with “suitable UCC gap-filler provisions.”

Front 233

shrink-wrap license

Back 233

places the license terms on the outside of the box containing the software

Front 234

click-wrap license

Back 234

presents the user with a notice on his or her computer screen that requires the user to agree to the terms of the license by clicking on an icon

Front 235

browse-wrap agreement

Back 235

online agreement that appears on a website but does not require the user to take any action to express his or her consent to the agreement

Front 236

firm offer

Back 236

signed offer by a merchant indicating that the offer will be kept open

Front 237

express warranty

Back 237

explicit guarantee by the seller that the goods will have certain qualities

Front 238

puffing

Back 238

expressing an opinion about the quality of the goods

Front 239

implied warranty of merchantability

Back 239

guarantees that the goods are reasonably fit for the general purpose for which they are sold and that they are properly packaged and labeled

Front 240

implied warranty of fitness for a particular purpose

Back 240

guarantees that the goods are fit for a particular purpose beyond the ordinary purposes for which the seller recommended them

Front 241

adhesion contracts

Back 241

when one party is induced to enter the contract without having a meaningful choice

Front 242

commercial impracticability

Back 242

failure to perform is not a breach if performance is made impractical by an event unforeseen by the contract

Front 243

direct damages

Back 243

difference between the market price at the time the buyer learned of the breach and the contract price

Front 244

specific performance

Back 244

If the promised goods are unique, then a court may order the seller to deliver them to the buyer

Front 245

crime

Back 245

offense against the public at large

Front 246

felony

Back 246

crime punishable by imprisonment for more than one year or by death

Front 247

misdemeanor

Back 247

crime punishable by a fine or a jail sentence of one year or less

Front 248

Model Penal Code

Back 248

set of criminal law statutes proposed by the National Conference of Commissioners on Uniform State Laws for adoption by the states

Front 249

actus reus

Back 249

guilty act or wrongful deed

Front 250

mens rea

Back 250

guilty mind

Front 251

Negligence

Back 251

failure to see the possible negative consequences of one’s actions that a reasonable person would have seen

Front 252

Recklessness

Back 252

conscious disregard of a substantial risk that one’s actions will result in the harm prohibited by the statute

Front 253

strict liability

Back 253

person can be guilty regardless of his or her state of mind or degree of fault

Front 254

booked

Back 254

charges against him or her are written in a register

Front 255

Bail

Back 255

money a defendant must post as a bond to guarantee his or her appearance at trial

Front 256

preliminary hearing

Back 256

at which the prosecutor must present evidence demonstrating probable cause that the defendant committed the felony

Front 257

nolo contendere

Back 257

he or she does not contest the charges

Front 258

Plea bargaining

Back 258

process whereby the prosecutor agrees to reduce the charges in exchange for a guilty plea from the accused

Front 259

Use immunity

Back 259

prohibits the testimony of the witness from being used against that witness in any way

Front 260

Transactional immunity

Back 260

prohibits any criminal prosecution of the witness that relates to any matter discussed in his or her testimony

Front 261

consent decree

Back 261

court order based on an agreement by the defendant corporation to take measures to remedy the problem that led to the criminal charges

Front 262

probable cause

Back 262

reasonable belief that the suspect has committed a crime or is about to commit a crime

Front 263

exclusionary rule

Back 263

prohibits the introduction in a criminal trial of evidence that was obtained by an illegal search or seizure in violation of the Fourth Amendment

Front 264

fruit of the poisonous tree

Back 264

evidence acquired directly or indirectly as a result of an illegal search, arrest, or interrogation

Front 265

collective entity doctrine

Back 265

custodian of records for a collective entity may not resist a subpoena for such records on the ground that the act of production will incriminate him or her

Front 266

Double Jeopardy Clause

Back 266

protects criminal defendants from multiple prosecutions for the same offense

Front 267

Vicarious liability

Back 267

imposition of liability on one party for wrongs committed by another

Front 268

impossibility defense

Back 268

To establish the [blank] the corporate officer must introduce evidence that he exercised extraordinary care, but was nevertheless unable to prevent violations of the Act

Front 269

White-collar crime

Back 269

violation of the law by a corporation or one of its managers

Front 270

larceny

Back 270

taking of property without the owner’s consent

Front 271

Embezzlement

Back 271

taking of money or property that is lawfully in the employee’s possession by reason of his or her employment

Front 272

Fraud

Back 272

deception intended to induce someone to part with property or money

Front 273

enterprise

Back 273

any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity

Front 274

Racketeering

Back 274

various state and federal offenses, specifically including mail and wire fraud and fraud in the sale of securities

Front 275

money laundering

Back 275

transfer of funds derived from unlawful activities with the intent of concealing or disguising the nature, location, source, ownership, or control of said funds

Front 276

qui tam plaintiffs

Back 276

can bring civil suits to recover treble damages and penalties from persons who submit false claims for government funds knowingly or with recklessness or deliberate ignorance of their truth or falsity

Front 277

Computer fraud

Back 277

use of a computer to steal company or government funds

Front 278

computer piracy

Back 278

theft or misuse of computer software

Front 279

national ambient air quality standards

Back 279

maximum levels of pollutants in the outdoor air

Front 280

Navigable waters

Back 280

waters of the United States, including the territorial seas

Front 281

National Pollutant Discharge Elimination System

Back 281

requires permits for the discharge of pollutants from any point source to navigable waters

Front 282

national effluent limitations

Back 282

impose increasingly stringent restrictions on pollutant discharges based on the availability of economically achievable treatment and recycling technologies

Front 283

brownfields

Back 283

contaminated sites that are eligible for cleaning and reclaiming with assistance from the Superfund

Front 284

Tenants in common

Back 284

each own an undivided fractional interest in a parcel of real property

Front 285

joint tenancy

Back 285

property is owned in equal shares by two or more individuals

Front 286

tenancy by the entirety

Back 286

English common law recognized a special type of co-ownership of real property between husband and wife

Front 287

community property

Back 287

each spouse owns an undivided one-half interest in the property

Front 288

Separate property

Back 288

belongs solely to the spouse who acquired it in one of the ways just mentioned, unless that spouse converts it to community property

Front 289

trust

Back 289

whereby the property is owned and controlled by one or more persons for the benefit of another, the beneficiary

Front 290

real estate investment trust

Back 290

can provide tax benefits for investors seeking to invest in a portfolio of real property

Front 291

conveyance

Back 291

Any document transferring an interest in real estate, such as a deed or a lease

Front 292

grantor

Back 292

person conveying the property

Front 293

grantee

Back 293

person to whom the property is conveyed

Front 294

fee simple interest

Back 294

absolute ownership of the property

Front 295

marketable title

Back 295

`an interest in the property free from defects

Front 296

quitclaim deed

Back 296

contains no warranties, and the grantor conveys only whatever right, title, and interest, if any, the grantor holds at the time of execution

Front 297

squatter’s rights

Back 297

person can acquire legal ownership of a piece of property by adverse possession

Front 298

implied warranty of habitability

Back 298

builders warrant that the house is in reasonable working order and is of reasonably sound construction

Front 299

Recording statutes

Back 299

establish an orderly process by which claims to interests in real property can be resolved

Front 300

encumbrance

Back 300

claim against the property

Front 301

dual agency

Back 301

When a broker acts for both the buyer and the seller, the relationship is characterized as a [blank]

Front 302

tax-deferred exchange

Back 302

whereby the seller exchanges its property for another piece of property

Front 303

right of first refusal

Back 303

the right, conferred by a written contract, to purchase the property on the same terms offered by or to a third party

Front 304

permanent loan

Back 304

long-term loan, repaid over five, ten, or sometimes up to twenty years

Front 305

take-out commitment

Back 305

agreement by a lender to replace the construction loan with a permanent loan, usually after certain conditions, such as the timely completion of the project, have been met

Front 306

Foreclosure

Back 306

legal process by which a mortgagee puts a piece of property up for sale to the public to raise cash to pay off a debt owed by the mortgagor to the mortgagee

Front 307

rights of redemption

Back 307

give the mortgagor and certain other categories of interested persons the right to reacquire the property within a statutory limited period

Front 308

Fair lending laws

Back 308

prohibit racial discrimination in lending practices

Front 309

lessor

Back 309

landlord

Front 310

lessee

Back 310

tenant

Front 311

triple net lease

Back 311

tenant pays all taxes, insurance, and operating maintenance expenses

Front 312

assignment

Back 312

permanent transfer of the lease to a third party

Front 313

sublease

Back 313

temporary transfer of the lease to a third party

Front 314

environmental assessment

Back 314

identifies any significant impact on the environment

Front 315

eminent domain

Back 315

Federal, state, and local governments have the power to acquire private property needed for a public purpose through [blank]

Front 316

regulatory taking

Back 316

Regulation that completely deprives an owner of all economically beneficial use of his or her property

Front 317

general plan

Back 317

long-range planning document that addresses the physical development and redevelopment of a city

Front 318

variance

Back 318

allows a landowner to construct a structure or to carry on an activity not otherwise permitted under the zoning regulations

Front 319

conditional-use permit

Back 319

allows uses that are not permitted as a matter of right under the zoning ordinance

Front 320

nonconforming use

Back 320

an existing use that was originally lawful but does not comply with a later-enacted zoning ordinance

Front 321

sole proprietorship

Back 321

one individual owns all of the assets of the business and is solely and personally liable for all of its debts, contract obligations, and tort liabilities

Front 322

general partnership

Back 322

created when two or more persons agree to place their money, efforts, labor, or skills in a business and to share the profits and losses

Front 323

joint venture

Back 323

one-time partnership of two or more parties for a specific purpose

Front 324

limited liability partnership

Back 324

designed primarily for groups of professionals

Front 325

General partners

Back 325

remain jointly and severally liable for partnership obligations and they are responsible for the management of the partnership

Front 326

limited partners

Back 326

assume no liability for partnership debts beyond the amount of capital they have contributed, and they have no right to participate in the management of the partnership

Front 327

master limited partnership

Back 327

business structure that is currently available to a select group of entities, primarily “mineral or natural resource companies.”

Front 328

corporation

Back 328

organization authorized by state law to act as a legal entity distinct from its owners

Front 329

C corporation

Back 329

Any corporation not meeting the requirements for an S corporation

Front 330

closely held corporation

Back 330

has a small number of shareholders, and it is characterized by the absence of a market for its stock

Front 331

limited liability company

Back 331

combines the tax advantages of a pass-through entity with the limited liability advantages of a corporation

Front 332

members

Back 332

owners of an LLC

Front 333

operating agreement

Back 333

In an LLC, the rights, obligations, and powers of the members, managers, and officers are set forth in [blank]

Front 334

benefit corporation

Back 334

for-profit corporation that uses the power of business to solve social and environmental problems

Front 335

Winding up

Back 335

involves settling the accounts and liquidating the assets of the partnership for the purpose of making distributions and terminating the concern

Front 336

Termination

Back 336

occurs when all the partnership affairs are wound up and the partners’ authority to act for the partnership is completely extinguished

Front 337

staggered board

Back 337

whereon directors serve for specified terms, usually three years, with only a fraction of them up for reelection at any one time

Front 338

de jure corporation

Back 338

When incorporation has been done correctly, a [blank] is formed

Front 339

de facto corporation

Back 339

If the incorporators cannot show substantial compliance, a court may treat the entity as a [blank]

Front 340

corporation by estoppel

Back 340

If a third party, in all of its transactions with the enterprise, acts as if it were doing business with a corporation, the third party is prevented from claiming that the enterprise is not a corporation

Front 341

pierce the corporate veil

Back 341

court holds the shareholders liable for claims against the corporation

Front 342

alter ego theory

Back 342

applies when the owners of a corporation have so mingled their own affairs with those of the corporation that the corporation does not exist as a distinct entity

Front 343

undercapitalization theory

Back 343

applies when the corporation is a separate entity, but its deliberate lack of adequate capital allows it to skirt potential liabilities

Front 344

reverse piercing

Back 344

whereby a corporation may be held liable for the debts of a shareholder

Front 345

inside director

Back 345

member of the board may also serve as an officer

Front 346

shareholders of record

Back 346

persons whose names appear on the corporation’s shareholder list on a specified date

Front 347

tender offer

Back 347

public offer to all the shareholders of a target corporation to buy their shares at a stated price

Front 348

leveraged buyout

Back 348

stock purchase financed by debt

Front 349

going private

Back 349

having fewer than three hundred shareholders and no longer being required to file public periodic reports under the Securities Exchange Act of 1934

Front 350

duty of care

Back 350

requires fiduciaries to make informed and reasonable decisions and to exercise reasonable supervision of the business

Front 351

duty of loyalty

Back 351

mandates that fiduciaries act in good faith and in what they believe to be the best interest of the corporation, subordinating their personal interests to the welfare of the corporation

Front 352

business judgment rule

Back 352

under the [blank], as long as certain standards are met, a court will presume that the directors have acted in good faith and in the honest belief that the action taken was in the best interest of the company

Front 353

shareholder derivative suit

Back 353

suit brought by a shareholder on behalf of the corporation

Front 354

clawback provision

Back 354

to pay back bonuses or other incentive compensation received during the year after an erroneous filing

Front 355

corporate opportunity doctrine

Back 355

officers and directors may not take personal advantage of a business opportunity that rightfully belongs to the corporation

Front 356

constructive trust

Back 356

force the officer to hold the profits for the benefit of the corporation and pay them over to the corporation on request

Front 357

Greenmail

Back 357

occurs when a raider acquires stock in a target company and then threatens to commence a hostile takeover unless the stock is repurchased by the target at a premium over the market price

Front 358

fiduciary out

Back 358

clause allowing the board of directors to negotiate with other bidders or to terminate a merger agreement

Front 359

no-shop agreements

Back 359

whereby the target agrees not to actively solicit other bidders but retains the right to negotiate with parties that submit unsolicited bids to the target

Front 360

bust-up takeover

Back 360

in which the acquired corporation is taken apart and its assets sold piecemeal

Front 361

poison pill

Back 361

plan that would make any takeover not approved by the directors prohibitively expensive

Front 362

self-tender

Back 362

company would agree to buy back the shareholders’ rights for a fair price

Front 363

entire fairness

Back 363

controlling shareholders have a responsibility to minority shareholders to control the corporation in a fair, just, and equitable manner

Front 364

freeze out

Back 364

force the minority shareholders to convert their shares into cash

Front 365

standstill agreement

Back 365

whereby the shareholder agrees not to commence a tender offer or proxy contest or to buy additional shares of the issuer for a period of time

Front 366

syndicated loan

Back 366

When two or more lenders, usually banks, make a loan to a borrower together

Front 367

participation loan

Back 367

original lender sells shares to other parties

Front 368

term sheet

Back 368

letter outlining the conditions on which the lender will lend

Front 369

affirmative covenants

Back 369

state the actions that the borrower must take

Front 370

Negative covenants

Back 370

state the actions that the borrower may not take

Front 371

lien

Back 371

claim on property that secures a debt owed by the owner of the property

Front 372

events of default

Back 372

events that will trigger the lender’s right to terminate the loan, accelerate the repayment obligations, and, if the loan is secured, take possession of the property securing the loan

Front 373

cross-default provision

Back 373

provides that any breach by the borrower under any other loan agreement constitutes an event of default

Front 374

commercial paper

Back 374

short-term corporate indebtedness

Front 375

right of setoff

Back 375

permits one party to automatically deduct amounts owed to it by the other party from the payments the first party makes to the second party

Front 376

fraudulent conveyance

Back 376

direct or indirect transfer of assets to a third party with the intent to put assets out of the reach of creditors who would otherwise have a rightful claim to them

Front 377

actual fraud

Back 377

occurs when the assets are transferred with intent to hinder, delay, or defraud creditors by putting the assets out of the creditors’ reach

Front 378

Constructive fraud

Back 378

occurs when an asset is transferred for less than reasonably equivalent value and other factors, such as the insolvency of the debtor, are present

Front 379

upstream guaranty

Back 379

subsidiaries pledge their assets as security for the parent company’s debt

Front 380

debt subordination

Back 380

agreement whereby one or more creditors of a common debtor agree to defer payment of their claims until another creditor of the same debtor is fully paid

Front 381

lien subordination

Back 381

agreement between two secured creditors whose respective security interests or mortgages attach to the same property

Front 382

equitable subordination

Back 382

doctrine developed in bankruptcy law to prevent one creditor, through fraud or other wrongful conduct, from increasing its recovery at the expense of other creditors of the same debtor

Front 383

economic duress

Back 383

If the lender pressures the borrower into doing something that the borrower is not required to do under the loan documents, a court may find the lender’s action constitutes [blank]

Front 384

D’Oench, Duhme doctrine

Back 384

bars many claims and defenses a borrower might otherwise have against a failed bank’s conservators and receivers

Front 385

insolvency

Back 385

excess of liabilities over the value of assets / inability to pay debts as they mature

Front 386

automatic stay

Back 386

instantly suspends most litigation and collection activities against the debtor, its property, or that of the bankruptcy estate, as well as setoffs of any debt owing to the debtor against any claim against the debtor

Front 387

workout

Back 387

out-of-court settlement that restructures the debtor’s financial affairs in much the same way that a confirmed plan would, but it binds only those who expressly consent

Front 388

executory contracts

Back 388

contracts that have not yet been fully performed

Front 389

avoiding powers

Back 389

trustees can use [blank] to invalidate or reverse certain prebankruptcy transactions that would unfairly benefit the debtor or certain creditors

Front 390

Preferences

Back 390

transfers to (or for the benefit of ) creditors in payment of antecedent (that is, preexisting) debts that are made from an insolvent debtor’s property

Front 391

insider

Back 391

someone in a position to control the debtor’s conduct, such as a relative, partner, director, officer, or substantial shareholder

Front 392

earmarking doctrine

Back 392

whereby a payment to a preexisting creditor may not be recoverable as a preference if the funds for the repayment were provided by some other creditor and not by the debtor

Front 393

best interests of creditors test

Back 393

whereby dissenters must be given a bundle of rights with a current value at least as great as the distribution they would receive through a Chapter 7 liquidation

Front 394

impaired claim

Back 394

If the plan does not provide for full cash payment on the effective date of a claim and it alters the creditor’s legal, equitable, or contractual rights in any way (except by curing defaults and reinstating the maturity of the claim), then the claim is deemed an [blank]

Front 395

cramdown

Back 395

confirmed over the objections of creditors

Front 396

prepackaged bankruptcy

Back 396

company solicits votes on its plan of reorganization before filing for bankruptcy

Front 397

prenegotiated bankruptcy

Back 397

debtor files its Chapter 11 petition as soon as it can after reaching agreement on the terms of the restructuring with its key creditors

Front 398

straight bankruptcy

Back 398

trustee liquidates the estate and distributes the proceeds, first to secured creditors

Front 399

reaffirmation agreement

Back 399

contract with a creditor whereby the debtor agrees to repay a debt even though the debt would otherwise be discharged in the debtor’s bankruptcy case

Front 400

composition plan

Back 400

creditors receive a percentage of the indebtedness, and the debtor is discharged of the remaining obligation

Front 401

extension plan

Back 401

creditors receive the entire indebtedness, but the period for payment is extended beyond the original due date