Business Law 17e by Langvardt, Barnes, Prenkert, McCrory, Perry

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Business Law 17e by Langvardt, Barnes, Prenkert, McCrory, Perry is the 17th edition of the Business Law: The Ethical, Global, and E-Commerce Environment textbook authored by Arlen W. Langvardt, A. James Barnes, Jamie Darin Prenkert, Martin A. McCrory, Joshua E. Perry, all of Indiana University, and published by McGraw-Hill Education, New York, NY in 2019.

  • Abstract of title. A summary of the conveyances, transfers, and other facts relied on as evidence of title, together with all such facts appearing of record that may impair its validity.
  • Abuse of process. An intentional tort designed to protect against the initiation of legal proceedings for a primary purpose other than the one for which such proceedings were designed.
  • Acceptance. The actual or implied receipt and retention of that which is tendered or offered.
  • Accession. The acquisition of property by its incorporation or union with other property.
  • Accommodation party. A person who signs a negotiable instrument for the purpose of adding his name and liability to another party to the instrument.
  • Accord and satisfaction. A legally binding agreement to settle a disputed claim for a definite amount.
  • Actual authority. An agent's ability to affect the principal's legal relations. Consent must be communicated to the agent.
  • Actual damages. Reputional injury and other harm such as emotional distress.
  • Actual notification. For third parties who have previously dealt with the agent or who have begun to deal with the agent. This can be accomplished by (1) a direct personal statement to the third party or (2) a writing delivered to the third party personally, to his place of business, or to some other place reasonably believed to be appropriate.
  • Adjudicate. To adjudge; to settle by judicial decree.
  • Administrator. The personal representative appointed by a probate court to settle the estate of a deceased person who died intestate (without leaving a valid will).
  • Adoption. In corporation law, a corporation's acceptance of a preincorporation contract by action of its board of directors, by which the corporation becomes liable on the contract.
  • Advance directive. A written document such as a living will or durable power of attorney that directs others how future health care decisions should be made in the event that the individual becomes incapacitated.
  • Adverse possession. Open and notorious possession of real property over a given length of time that denies ownership in any other claimant.
  • Advised letter of credit. The seller's bank acts as the seller's agent to collect against the letter of credit issued by the buyer's bank.
  • After-acquired property. Property of the debtor that is obtained after a security interest in the debtor's property has been created.
  • Agency. A legal relationship in which an agent acts under the direction of a principal for the principal's benefit. Also used to refer to government regulatory bodies of all kinds.
  • Agent. One who acts under the direction of a principal for the principal's benefit in a legal relationship known as agency. See also principal.
  • Alien corporation. A corporation incorporated in one country that is doing business in another country. See also foreign corporation.
  • Alternative dispute resolution (ADR). A general name applied to the many nonjudicial means of settling private disputes.
  • American legal realism. A school of jurisprudence and philosophy of law dating from the early twentieth century, which defines law with reference to the actual practice of legal authorities (judges, law enforcement officers, etc.) rather than what they say they are doing or the language of the legal enactments upon which they purportedly rely.
  • Ancillary covenant not to compete. A promise that is ancillary to (part of) a valid contract whereby one party to a contract agrees not to compete with the other party for a specified time and within a specified location. Also called noncompetition clause.
  • Answer. The pleading of a defendant in which he or she may deny any or all the facts set out in the plaintiff's declaration or complaint.
  • Anticipatory breach. A contracting party's indication before the time for performance that he cannot or will not perform the contract.
  • Apparent authority. An agent's ability to affect the principal's legal relations. Consent must be communicated to the third party.
  • Articles of incorporation. A document that must be filed with a secretary of state to create a corporation. Usually, it includes the basic rights and responsibilities of the corporation and the shareholders.
  • Artisan's lien. A common law possessory security interest arising out of the improvement of property by one skilled in some mechanical art or craft; the lien entitles the improver of the property to retain possession in order to secure the agreed-on price or the value of the work performed.
  • Assault. An intentional tort that prohibits any attempt or offer to cause harmful or offensive contact with another if it results in a well-grounded apprehension of imminent battery in the mind of the threatened person.
  • Assignee. A person to whom an assignment is made.
  • Assignment. A transfer of property or some right or interest.
  • Assignor. The maker of an assignment.
  • Assumption of risk. A traditional defense to negligence liability based on the argument that the plaintiff voluntarily exposed himself to a known danger created by the defendant's negligence.
  • Assurance. To provide confidence or to inform positively.
  • Attachment. In general, the process of taking a person's property under an appropriate judicial order by an appropriate officer of the court. Used for a variety of purposes, including the acquisition of jurisdiction over the property seized and the securing of property that may be used to satisfy a debt.
  • Attorney-in-fact. An agent who is given express, written authorization by his principal to do a particular act or series of acts on behalf of the principal.
  • Audit committee. In corporation law, a committee of the board that recommends and supervises the public accountant who audits the corporation's financial records.
  • Authority. In agency law, an agent's ability to affect his principal's legal relations with third parties. Also used to refer to an actor's legal power or ability to do something. In addition, sometimes used to refer to a statute, case, or other legal source that justifies a particular result.
  • Authorized shares. Shares that a corporation is empowered to issue by its articles of incorporation.
  • Automatic novation clause. A contractual clause wherein all parties agree to automatically substitute a new contract or contractual obligation for an old one.
  • Automatic stay. Under the Bankruptcy Act, the suspension of all litigation against the debtor and his property, which is triggered by the filing of a bankruptcy petition.
  • Bailee. The person to whom a bailment is made.
  • Bailment. The transfer of personal property by its owner to another person with the understanding that the property will be returned to the owner in the future.
  • Bailor. The owner of bailed property; the one who delivers personal property to another to be held in bailment.
  • Bankruptcy. The state of a person who is unable to pay his or her debts without respect to time; one whose liabilities exceed his or her assets.
  • Battery. An intentional tort that prohibits the harmful or offensive touching of another without his consent.
  • Beneficiary. The person for whose benefit an insurance policy, trust, will, or contract is established. In the case of a contract, the beneficiary is called a third-party beneficiary.
  • Bequest. In a will, a gift of personal property or money. Also called a legacy.
  • Best available technology. The Clean Air Act requires that new stationary sources such as factories and power plants install the best available technology for reducing air pollution. Two major policy objectives underlie this requirement: (1) to provide a level playing field for new industry irrespective of where it locates and (2) to gradually improve air quality by requiring state of the art controls whenever a new facility is built.
  • Bicameral legislature. A legislative body made up of two branches or chambers, like the House of Representatives and the Senate in the U.S. Congress.
  • Bilateral contract. A contract in which the promise of one of the parties forms the consideration for the promise of the other.
  • Bill of lading. A written acknowledgment of the receipt of goods to be transported to a designated place and delivery to a named person or to his or her order.
  • Biotechnology. The development of techniques to genetically manipulate organisms.
  • Bona fide purchaser. An innocent buyer for valuable consideration who purchases goods without notice of any defects in the title of the goods acquired.
  • Bond. A long-term debt security that is secured by collateral.
  • Business judgment rule. A rule protecting business managers from liability for making bad decisions when they have acted prudently and in good faith.
  • Buy-and-sell agreement. A share transfer restriction compelling a shareholder to sell his shares to the other shareholders or the corporation and obligating the other shareholders or the corporation to buy the shareholder's shares.
  • Buyer in ordinary course of business. A person who, in good faith and without knowledge that the sale to him is in violation of a third party's ownership rights or security interest in the goods, buys in ordinary course from a person who is in the business of selling goods of that kind.
  • Call. A type of option permitting a person to buy a fixed number of securities at a fixed price at a specified time. See also redemption.
  • Cancellation. The act of crossing out a writing. The operation of destroying a written instrument.
  • Capacity. The ability to incur legal obligations and acquire legal rights.
  • Capital surplus. A balance sheet account; the portion of shareholders' contributions exceeding the par or stated value of shares. Also called additional paid in capital.
  • Cashier's check. A draft (including a check) drawn by a bank on itself and accepted by the act of issuance.
  • Caveat emptor. Let the buyer beware.
  • Certificate of deposit. An acknowledgment by a bank of the receipt of money with an engagement to pay it back.
  • Certificate of limited partnership. A document that must be filed with a secretary of state to create a limited partnership.
  • Certificate of organization. A document filed with the secretary of state (in some states) to form a limited liability company (LLC).
  • Charging order. A court's order granting rights in a partner's transferable interest to a personal creditor of the partner; a creditor with a charging order is entitled to the partner's share of partnership distributions.
  • Check. A written order on a bank or banker payable on demand to the person named or his order or bearer and drawn by virtue of credits due the drawer from the bank created by money deposited with the bank.
  • Checks and balances. A fundamental principle of American government, guaranteed by the Constitution, whereby each branch of the government (executive, judicial, and legislative) has some measure of influence over the other branches and may choose to block procedures of the other branches.
  • Civil law. The body of law applicable to lawsuits involving two private parties.
  • Class action. An action brought on behalf of the plaintiff and others similarly situated.
  • Close corporation. A corporation with few shareholders generally having a close personal relationship to each other and participating in the management of the business.
  • Codicil. Some addition to or qualification of one's last will and testament.
  • Commercial impracticability. The standards used by the UCC, replacing the common law doctrine of impossibility, to define when a party is relieved of his or her contract obligations because of the occurrence of unforeseeable, external events beyond his or her control.
  • Commercial paper. Negotiable paper such as promissory notes, drafts, and checks that provides for the payment of money and can readily be transferred to other parties.
  • Commercial speech. Speech communicated by or on behalf of a company or individual for the purpose of promoting a product, service, or business. It is economic in nature and usually has the intent of convincing the audience to partake in a particular action, such as purchasing a specific product.
  • Commercial unit. Under the UCC, any unit of goods that is treated by commercial usage as a single whole. It may, for example, be a single article or a set of articles such as a dozen, bale, gross, or carload.
  • Common law. The law that is made and applied by judges.
  • Common shareholders. Shareholders who claim the residual profits and assets of a corporation, and usually have the exclusive power and right to elect the directors of the corporation.
  • Comparative fault. Often used synonymously with comparative negligence. But also sometimes used to refer to a defense that operates like comparative negligence but considers the plaintiff's and the defendant's overall fault rather than either's negligence alone.
  • Comparative negligence. The contemporary replacement for the traditional doctrine of contributory negligence. The basic idea is that damages are apportioned between the parties to a negligence action in proportion to their relative fault. The details vary from state to state.
  • Compensatory damages. Damages that will compensate a part for direct losses due to an injury suffered.
  • Complaint. The pleading in a civil case in which the plaintiff states his claim and requests relief.
  • Concealment. In contract law, taking active steps to prevent another from learning the truth.
  • Concurrent. Running with; simultaneously with.
  • Condition. In contract law, a future, uncertain event that creates or extinguishes a duty of performance; a provision or clause in a contract that operates to suspend or rescind a party's duty to perform.
  • Condition precedent. A condition that operates to give rise to a contracting party's duty to perform.
  • Condition subsequent. A condition that operates to relieve or discharge one from his obligation under a contract.
  • Confirmed letter of credit. The seller's bank agrees to assume liability on the letter of credit issued by the buyer's bank.
  • Confusion. The inseparable intermixture of property belonging to different owners.
  • Consent decree or consent order. Used to refer to the order courts or administrative agencies issue when approving the settlement of a lawsuit or administrative action against some party.
  • Consent restraint. A security transfer restriction requiring a shareholder to obtain the consent of the corporation or its shareholders prior to the shareholder's sale of her shares.
  • Consequential damages. Damages that do not flow directly and immediately from an act but rather flow from the results of the act; damages that are indirect consequences of a breach of contract or certain other legal wrongs. Examples include personal injury, damage to property, and lost profits.
  • Consideration. In contract law, a basic requirement for an enforceable agreement under traditional contract principles, defined in this text as legal value, bargained for and given in exchange for an act or promise. In corporation law, cash or property contributed to a corporation in exchange for shares, or a promise to contribute such cash or property.
  • Constructive eviction. In landlord–tenant law, a breach of duty by the landlord that makes the premises uninhabitable or otherwise deprives the tenant of the benefit of the lease and gives rise to the tenant's right to vacate the property and terminate the lease.
  • Constructive notification. For third parties who have previously dealt with the agent or who have begun to deal with the agent. This is accomplished by advertising the agency's termination in a newspaper of general circulation in the place where the agency business regularly was carried on.
  • Continuation statement. A document, usually a multicopy form, filed in a public office to indicate the continuing viability of a financing statement. See also financing statement.
  • Contract. A legally enforceable promise or set of promises.
  • Contract of adhesion. A contract in which a stronger party is able to dictate terms to a weaker party, leaving the weaker party no practical choice but to adhere to the terms. If the stronger party has exploited its bargaining power to achieve unfair terms, the contract is against public policy.
  • Contribution. In business organization law, the cash or property contributed to a business by its owners.
  • Contributory negligence. A traditional defense to negligence liability based on the plaintiff's failure to exercise reasonable care for his own safety.
  • Conversion. Any distinct act of dominion wrongfully exerted over another's personal property in denial of or inconsistent with his rights therein. That tort committed by a person who deals with chattels not belonging to him in a manner that is inconsistent with the ownership of the lawful owner.
  • Convertible. Securities giving their holders the power to exchange those securities for other securities without paying any additional consideration.
  • Corporate constituency statutes. A statute that expands the traditional view that directors and officers of a corporation have a duty to make business decisions primarily or exclusively to maximize shareholders' interests by explicitly permitting the consideration of non-shareholder interests. Those interests may vary but often include the environment, corporate employees, customers, creditors, suppliers, and local community.
  • Corporation. A form of business organization that is owned by owners, called shareholders, who have no inherent right to manage the business, and is managed by a board of directors that is elected by the shareholders.
  • Corporation by estoppel. A doctrine that prevents persons from denying that a corporation exists when the persons hold themselves out as representing a corporation or believe themselves to be dealing with a corporation.
  • Counterclaim. A legal claim made in response to the plaintiff's initial claim in a civil suit. Unlike a defense, the counterclaim is the defendant's affirmative attempt to obtain legal relief; in effect, it states a cause of action entitling the defendant to such relief. Often, the counterclaim must arise out of the occurrence that forms the basis for the plaintiff's claim.
  • Cover. To obtain substitute or equivalent goods.
  • Cram down. When the court forces dissenting creditors whose claims would be impaired by a proposed plan to accept the plan when the court can find that it is fair and equitable to the class of creditors whose claims are impaired.
  • Creditor. A person to whom a debt or legal obligation is owed and who has the right to enforce payment of that debt or obligation.
  • Crime. An act prohibited by the state; a public wrong.
  • Criminal law. The body of law setting out public wrongs that the government attempts to correct by prosecuting wrongdoers.
  • Cumulative voting. A procedure for voting for a corporation's directors that permits a shareholder to multiply the number of shares he or she owns by the number of directors to be elected and to cast the resulting total of votes for one or more directors. See also straight voting.
  • Curtesy. At common law, a husband's right in property owned by his wife during her life.
  • Cy pres. As near as possible. In the law of trusts, a doctrine applied to prevent a charitable trust from failing when the application of trust property to the charitable beneficiary designated by the settlor becomes illegal or impossible to carry out; in such a case, cy pres allows the court to redirect the distribution of trust property for some purpose that is as near as possible to the settlor's general charitable intent.
  • De novo review. Anew; over again; a second time. A trial de novo, for example, is a new trial in which the entire case is retried.
  • Debenture. A long-term, unsecured debt security.
  • Deceit. A tort involving intentional misrepresentation or cheating by means of some device.
  • Declaratory judgment. One that expresses the opinion of a court on a question of law without ordering anything to be done.
  • Deed. A writing, sealed and delivered by the parties; an instrument conveying real property.
  • Deed of trust. A three-party instrument used to create a security interest in real property in which the legal title to the real property is placed in one or more trustees to secure the repayment of a sum of money or the performance of other conditions.
  • Delegation. In constitutional law and administrative law, a process whereby a legislature effectively hands over some of its legislative power to an administrative agency that it has created, thus giving the agency power to make law within the limits set by the legislature. In contract law, a transaction whereby a person who owes a legal duty to perform under a contract appoints someone else to carry out his performance.
  • Demand. A claim; a legal obligation; a request to perform an alleged obligation; a written statement of a claim. In corporation law, a request that the board of directors sue a person who has harmed the corporation; a prerequisite to a shareholder derivative suit.
  • Demurrer. A civil motion that attacks the plaintiff's complaint by assuming the truth of the facts stated in the complaint for purposes of the motion, and by arguing that even if these facts are true, there is no rule of law entitling the plaintiff to recovery. Roughly similar to the motion to dismiss for failure to state a claim on which relief can be granted.
  • Derivative suit. A suit to enforce a corporate right of action brought on behalf of a corporation by one or more of its shareholders. Also called derivative action.
  • Devise. In a will, a gift of real property.
  • Directed verdict. A verdict issued by a judge who has, in effect, taken the case away from the jury by directing a verdict for one party. Usually, the motion for a directed verdict is made at trial by one party after the other party has finished presenting his evidence.
  • Disaffirmance. The right for minors to avoid contracts as a means of protecting against their own improvidence and against overreaching by adults.
  • Discharge. Release from liability.
  • Disclaimer. A term in a contract whereby a party attempts to relieve itself of some potential liability associated with the contract. The most common example is the seller's attempt to disclaim liability for defects in goods that it sells.
  • Discount shares. Shares issued for less than their par value or stated value. Also called discount stock. See also bonus shares and watered shares.
  • Discovery. A process of information gathering that takes place before a civil trial.
  • Dishonor. The failure to pay or accept a negotiable instrument that has been properly presented.
  • Dissenter's rights. A shareholder's right to receive the fair value of his or her shares from his or her corporation when he or she objects to a corporate transaction that significantly alters his or her rights in the corporation.
  • Dissociation. In partnership law, the change in the relation of the partners caused by any partner ceasing to be associated with the carrying on of the business.
  • Dissolution. In partnership law, the commencement of the winding up process.
  • Domestic corporation. A corporation is deemed a domestic corporation in the state that has granted its charter. If the corporation does business in other states, it is considered a foreign corporation in the other states.
  • Domicile. A place where a person lives or has his home; in a strict legal sense, the place where he has his true, fixed, permanent home and principal establishment, and to which place he has, whenever he is absent, the intention of returning.
  • Donee. A person to whom a gift is made.
  • Donor. A person who makes a gift.
  • Dower. The legal right or interest that a wife has in her husband's real estate by virtue of their marriage.
  • Draft. A written order drawn on one person by another, requesting him to pay money to a designated third person.
  • Drawee. A person on whom a draft is drawn by the drawer.
  • Drawer. The maker of a draft.
  • Due process. The principle that an individual cannot be deprived of life, liberty, or property without appropriate legal procedures and safeguards.
  • Durable power of attorney. A power of attorney that is not affected by the principal's incapacity. See also attorney-in-fact.
  • Durable power of attorney for health care. A durable power of attorney in which the principal specifically gives the attorneyin-fact the authority to make health care decisions for her in the event that the principal should become incompetent. Also called health care representative.
  • Duty of loyalty. An agent must subordinate his personal concerns by (1) avoiding conflicts of interest with the principal and (2) not disclosing confidential information received from the principal.
  • Easement. The right to make certain uses of another person's property or to prevent another person from making certain uses of his own property.
  • Emancipation. The termination of a parent's right to control a child and receive services and wages from him or her.
  • Eminent domain. A governmental power whereby the government can take or condemn private property for a public purpose on the payment of just compensation.
  • Employee. Someone who is classified as a paid worker for a principal.
  • Enabling legislation. The statute by which a legislative body creates an administrative agency.
  • Enumerated powers. Specific powers granted to Congress as outlined in Article 1, Section 8 of the U.S. Constitution.
  • Environmental impact statement. A document that the National Environmental Policy Act requires federal agencies to prepare in connection with any legislative proposals or proposed actions that will significantly affect the environment.
  • Equity. A system of justice that developed in England separate from the common law courts. Few states in the United States still maintain separate equity courts, though most apply equity principles and procedures when remedies derived from the equity courts are sought. A broader meaning denotes fairness and justice. In business organization law, the capital contributions of owners plus profits that have not been distributed to the owners; stated capital plus capital surplus plus earned surplus.
  • Equity of redemption. The right of a mortgagee to discharge the mortgage when due and to have title to the mortgaged property free and clear of the mortgage debt.
  • Escheat. The reversion of land to the state in the event that a decedent dies leaving no heirs.
  • Estate. An interest in land. Property owned by a decedent at the time of his death.
  • Estoppel. That state of affairs that arises when one is forbidden by law from alleging or denying a fact because of his previous action or inaction.
  • Eviction. Depriving the tenant of the possession of leased premises.
  • Exculpatory clause. A clause in a contract or trust instrument that excuses a party from some duty.
  • Executive order. A legal rule issued by a chief executive (e.g., the president or a state governor), usually pursuant to a delegation of power from the legislature.
  • Executor. The personal representative appointed to administer the estate of a person who died leaving a valid will.
  • Executory. Not yet executed; not yet fully performed, completed, fulfilled, or carried out; to be performed wholly or in part.
  • Exemption. A release from some burden, duty, or obligation; a grace; a favor; an immunity; taken out from under the general rule, not to be like others who are not exempt.
  • Express authority. Actual authority that the principal has manifested to the agent in very specific or detailed language.
  • Express warranty. A warranty made in words, either oral or written.
  • False imprisonment. An intentional tort that prohibits the unlawful confinement of another for an appreciable time without his consent.
  • FAS. An abbreviation for the expression free alongside ship.
  • Federal supremacy. The ability of federal laws to defeat inconsistent state laws in case they conflict.
  • Federalism. Government marked by mixed or compound levels, including a central of federal level and one or more regional levels, in a single system.
  • Fee simple absolute. The highest form of land ownership, which gives the owner the right to possess and use the land for an unlimited period of time, subject only to governmental or private restrictions, and unconditional power to dispose of the property during his lifetime or upon his death.
  • Felony. As a general rule, all crimes punishable by death or by imprisonment in a state prison.
  • Fiduciary duty. Someone who is required to act for the benefit of another person on all matters within the scope of their relationship; one who owes to another the duties of good faith, loyalty, due care, and disclosure.
  • Field warehousing. A method of protecting a security interest in the inventory of a debtor whereby the creditor or his agent retains the physical custody of the debtor's inventory, which is released to the debtor as he complies with the underlying security agreement.
  • Financing statement. A document, usually a multicopy form, filed in a public office serving as constructive notice to the world that a creditor claims a security interest in collateral that belongs to a certain named debtor.
  • Firm offer. Under the Uniform Commercial Code, a signed, written offer by a merchant containing assurances that it will be held open, and which is not revocable for the time stated in the offer, or for a reasonable time if no such time is stated.
  • Fixture. A thing that was originally personal property and that has been actually or constructively affixed to the soil itself or to some structure legally a part of the land.
  • FOB. An abbreviation of free on board.
  • Foreign corporation. A corporation incorporated in one state doing business in another state. See also alien corporation.
  • Freeze-out. In corporation law, a type of oppression by which only minority shareholders are forced to sell their shares.
  • Fundamental rights. A group of rights that have been recognized by the Supreme Court as requiring a high degree of protection from government encroachment. These rights are specifically identified in the Constitution, especially in the Bill of Rights, or have been found under due process.
  • Future advances. Money or other value provided to a debtor by a creditor subsequent to the time a security interest in the debtor's collateral is taken by that creditor.
  • General agent. An agent that is continuously employed to conduct a series of transactions.
  • General partnership. See partnership.
  • Gift. A voluntary transfer of property for which the donor receives no consideration in return.
  • Good faith. Honesty in fact; an honest intention to abstain from taking an unfair advantage of another.
  • Good-faith purchaser. One who has in good faith—that is, consistent with reasonable commercial standards of fair dealing in the trade—paid valuable consideration without any notice of another's claim or any defects in the seller's ability to sell.
  • Gratuitous agent. An agent who receives no compensation for his or her services.
  • Gray market goods. Goods lawfully bearing trademarks or using patented or copyrighted material, but imported into a foreign market without the authorization of the owner of the trademark, patent, or copyright.
  • Hazardous air pollutants. The 1970 Clean Air Act, enacted by the Environmental Protection Agency (EPA), initially required set standards only for asbestos, beryllium, mercury, vinyl chloride, benzene, and radionuclides.
  • Holder. A person in possession of a document of title or an instrument payable or indorsed to him, his order, or to bearer.
  • Holder in due course. A person who is a holder of a negotiable instrument who took the instrument for value, in good faith, without notice that it is overdue or has been dishonored or that there is any uncured default with respect to payment of another instrument issued as part of the same series, without notice that the instrument contains an unauthorized signature or has been altered, without notice of any claim of a property or possessory interest in it, and without notice that any party has any defense against it or claim in recoupment to it.
  • Holographic will. A will written in the handwriting of the testator.
  • Implied authority. Actual authority given to an agent to bind his or her principals and to act in a way that the agent reasonably believes is necessary to perform his or her duties.
  • Implied warranty. A warranty created by operation of law.
  • Implied warranty of habitability. Implied warranty arising in lease or sale of residential real estate that the property will be fit for human habitation.
  • Impossibility. A doctrine under which a party to a contract is relieved of his or her duty to perform when that performance has become impossible because of the occurrence of an event unforeseen at the time of contracting.
  • In personam. Against a person. For example, in personam jurisdiction.
  • In rem. Against a thing and not against a person; concerning the condition or status of a thing; for example, in rem jurisdiction.
  • Incidental damages. Collateral damages that result from a breach of contract, including all reasonable expenses that are incurred because of the breach; damages that compensate a person injured by a breach of contract for reasonable costs he incurs in an attempt to avoid further loss.
  • Indemnify. To reimburse or promise to reimburse another from loss. To act as security or protection against a loss.
  • Indenture. A contract between a corporation and the holders of bonds or debentures issued by the corporation stating the rights of the holders and duties of the corporation.
  • Independent checks. Limits put in place by the Constitution limiting both state and federal power. They establish that even if Congress has an enumerated power to legislate on a particular matter or a state constitution authorizes a state to take certain actions, there are still certain protected spheres into which neither the federal government nor the state government may reach.
  • Indorsement. Writing on the back of an instrument; the contract whereby the holder of an instrument (such as a draft, check, or note) or a document (such as a warehouse receipt or bill of lading) transfers to another person his right to such instrument and incurs the liabilities incident to the transfer.
  • Information. A written accusation of crime brought by a public prosecuting officer to a court without the intervention of a grand jury.
  • Injunction. An equitable remedy whereby the defendant is ordered to perform certain acts or to desist from certain acts.
  • Inside information. Confidential information possessed by a person due to his or her relationship with a business.
  • Insurable interest. Any interest in property such that the owner would experience a benefit from the continued existence of the property or a loss from its destruction.
  • Inter vivos. A transaction between living persons.
  • Intestate. Having died without leaving a valid will.
  • Intrastate. Within a particular state.
  • Investment contract. In securities law, a type of security encompassing any contract by which an investor invests in a common enterprise with an expectation of profits solely from the efforts of persons other than the investor.
  • Irrevocable letter of credit. The issuing bank may not revoke the letter of credit issued by the buyer's bank.
  • Issue. Lineal descendants such as children and grandchildren. This category of persons includes adopted children.
  • Issued shares. A corporation's shares that a corporation has sold to its shareholders. Includes shares repurchased by the corporation and retained as treasury shares, but not shares canceled or returned to unissued status.
  • Joint tenancy. An estate held by two or more jointly, with an equal right in all to share in the enjoyments of the land during their lives. An incident of joint tenancy is the right of survivorship.
  • Joint venture. A form of business organization identical to a partnership, except that it is engaged in a single project, not carrying on a business.
  • Judgment notwithstanding the verdict. A judgment made by a judge contrary to a prior jury verdict whereby the judge effectively overrules the jury's verdict. Also called the j.n.o.v. or the judgment non obstante veredicto. Similar to the directed verdict, except that it occurs after the jury has issued its verdict.
  • Judicial review. The courts' power to declare the actions of the other branches of government unconstitutional.
  • Jurisdiction. The power of a court to hear and decide a case.
  • Jurisprudence. The philosophy of law. Also sometimes used to refer to the collected positive law of some jurisdiction.
  • Land contract. A conditional agreement for the sale and purchase of real estate in which the legal title to the property is retained by the seller until the purchaser has fulfilled the agreement, usually by completing the payment of the agreed-on purchase price.
  • Lease. A contract for the possession and use of land or other property, including goods, on one side, and a recompense of rent or other income on the other; a conveyance to a person for life, or years, or at will in consideration of a return of rent or other recompense.
  • Legacy. A bequest; a testamentary gift of personal property. Sometimes incorrectly applied to a testamentary gift of real property.
  • Legal. According to the principles of law; according to the method required by statute; by means of judicial proceedings; not equitable.
  • Legal positivism. A school of jurisprudential thought and philosophy of law that defines law by reference to positive norms as determined by the commands of a recognized political authority.
  • Legally nonexistent. An agent who purports to act for a principal, such as an unincorporated association, is personally liable when the agent knows or has reason to know the principal does not exist.
  • Libel. The defamation action appropriate to printed or written defamations, or to those that have a physical form.
  • License. A personal privilege to do some act or series of acts on the land of another, without possessing any ownership interest in the land. A permit or authorization to do something that, without a license, would be unlawful.
  • Lien. In its most extensive meaning, it is a charge on property for the payment or discharge of a debt or duty; a qualified right; a proprietary interest that, in a given case, may be exercised over the property of another.
  • Life estate. A property interest that gives a person the right to possess and use property for a time that is measured by his lifetime or that of another person.
  • Limited liability company (LLC). A business form intended to combine the nontax advantages of corporations with the favorable tax treatment of partnerships. An LLC is owned by members, who may manage the LLC themselves or elect the manager or managers who will operate the business. Members have limited liability for the obligations of the LLC.
  • Limited liability limited partnership (LLLP). A limited partnership that has elected to obtain limited liability status for all of its partners, including general partners, by filing with the secretary of state.
  • Limited liability partnership (LLP). A partnership that has elected to obtain limited liability for its partners by filing with the secretary of state.
  • Limited partner. An owner of a limited partnership who has no right to manage the business but who possesses liability limited to his capital contribution to the business.
  • Limited partnership. A form of business organization that has one or more general partners who manage the business and have unlimited liability for the obligations of the business and one or more limited partners who do not manage and have limited liability.
  • Liquidated damages. The stipulation by the parties to a contract of the sum of money to be recovered by the aggrieved party in the event of a breach of the contract by the other party.
  • Liquidated debt. A debt that is due and certain. That is, one that is not the subject of a bona fide dispute either as to its existence or the amount that is owed.
  • Living will. A document executed with specific legal formalities stating a person's preference that heroic life support measures should not be used if there is no hope of the person's recovery.
  • Long-arm statute. A state statute that grants to a state's courts broad authority to exercise jurisdiction over out-of-state persons who have contacts with the state.
  • Looting. In corporation law, the transfer of a corporation's assets to its managers or controlling shareholders at less than fair value.
  • Magnetic Ink Character Recognition (MICR). A technology used to verify the legitimacy or originality of paper documents using special ink, which is sensitive to magnetic fields to print the characters.
  • Maker. A person who makes or executes an instrument. The signer of an instrument.
  • Malicious prosecution. An intentional tort designed to protect against the wrongful initiation of criminal proceedings.
  • Material Important.. In securities law, a fact is material if a reasonable person would consider it important in his decision to purchase shares or to vote shares.
  • Maximum available control technology. In 1990, Congress specified a list of 189 chemicals for which EPA is required to issue regulations requiring the installation of maximum available control technology. The regulations are to be developed and the control technology installed by industry in phases.
  • Means-end test. A judicially created test developed by the Supreme Court. These tests were created because no constitutional right is absolute and because judges, therefore, must weigh individual rights against the social purposes served by laws that restrict those rights.
  • Merchant. Under the Uniform Commercial Code, one who regularly deals in goods of the kind sold in the contract at issue, or holds himself out as having special knowledge or skill relevant to such goods, or who makes the sale through an agent who regularly deals in such goods or claims such knowledge or skill.
  • Merger. In corporation law, traditionally, a transaction by which one corporation acquires another corporation, with the acquiring corporation being owned by the shareholders of both corporations and the acquired corporation going out of existence. Today, loosely applied to any negotiated acquisition of one corporation by another.
  • Merger clause. A contract clause providing that the written contract is the complete expression of the parties' agreement. Also called integration clause.
  • Misdemeanor. Any crime that is punishable neither by death nor by imprisonment in a state prison.
  • Misrepresentation. The assertion of a fact that is not in accord with the truth. A contract can be rescinded on the ground of misrepresentation when the assertion relates to a material fact or is made fraudulently and the other party actually and justifiably relies on the assertion.
  • Mortgage. A conveyance of property to secure the performance of some obligation, the conveyance to be void on the due performance thereof.
  • Mortgagee. The creditor to whom property has been mortgaged to secure the performance of an obligation.
  • Mortgagor. The owner of the property that has been mortgaged or pledged as security for a debt.
  • Motion to dismiss. A motion made by the defendant in a civil case to defeat the plaintiff's case, usually after the complaint or all the pleadings have been completed. The most common form of motion to dismiss is the motion to dismiss for failure to state a claim on which relief can be granted, which attacks the legal sufficiency of the plaintiff's complaint. See also demurrer.
  • National ambient air quality standards. Federally established air pollution standards designed to protect the public health and welfare.
  • Natural law. A body of allegedly existing ethical rules or principles that is morally superior to positive law and that prevails over positive law in case of a clash between it and the natural law.
  • Necessaries. That which is reasonably necessary for a minor's proper and suitable maintenance, in view of the income level and social position of the minor's family.
  • Negligence. The omission to do something that a reasonable person, guided by those considerations that ordinarily regulate human affairs, would do, or doing something that a prudent and reasonable person would not do.
  • Negligence per se. The doctrine that provides that a conclusive presumption of breach of duty arises when a defendant has violated a statute and thereby caused a harm the statute was designed to prevent to a person the statute was designed to protect.
  • Negotiation. The transfer of an instrument in such form that the transferee becomes a holder.
  • Nominal damages. Damages that are recoverable when a legal right is to be vindicated against an invasion that has produced no actual present loss.
  • Nonemployee agent. A nonemployee agent typically contracts with the principal to produce a result and determines for himself or herself how that result will be accomplished. Also called an independent contractor.
  • Novation. A mutual agreement, between all parties concerned, for the discharge of a valid existing obligation by the substitution of a new valid obligation on the part of the debtor or another, or a like agreement for the discharge of a debtor to his creditor by the substitution of a new creditor.
  • Nuisance. That which endangers life or health, gives offense to the senses, violates the laws of decency, or obstructs the reasonable and comfortable use of property.
  • Obligee. A person to whom another is bound by a promise or other obligation; a promisee.
  • Obligor. A person who is bound by a promise or other obligation; a promisor.
  • Offer. A proposal by one person to another that is intended to create legal relations on acceptance by the person to whom it is made.
  • Opinion letter. A document issued by an auditor after the completion of auditing financial statements. This letter expresses whether the audit has been performed in compliance with GAAS and whether, in the auditor's opinion, the financial statements fairly present the client's financial position and results of operations in conformity with GAAP.
  • Oppression. The officers, directors, or controlling shareholder's isolation of one group of shareholders for disadvantageous treatment to the benefit of another group of shareholders.
  • Option. A separate contract in which an offeror agrees not to revoke her offer for a stated period of time in exchange for some valuable consideration.
  • Option agreement. A share transfer restriction granting a corporation or its shareholders an option to buy a selling shareholder's shares at a price determined by the agreement.
  • Ordinance. A legislative enactment of a county or an incorporated city or town.
  • Original jurisdiction. The power to decide a case as a trial court.
  • Outstanding shares. A corporation's shares currently held by shareholders.
  • Overdue. When an instrument is not paid when due or at maturity.
  • Parent corporation. A corporation that owns a controlling interest of another corporation, called a subsidiary corporation.
  • Parol evidence. Where a written contract exists, evidence about promises or statements made prior to or during the execution of the writing that are not contained in the written contract.
  • Partner's transferable interest. In partnership law, a partner's share of the partnership's profits and losses and right to receive partnership distributions.
  • Partners. The owners of a partnership.
  • Partnership capital. When a partnership or limited liability partnership is formed, partners contribute cash or other property to the partnership.
  • Partnership. A form of business organization; specifically, an association of two or more persons to carry on a business as coowners for profit.
  • Partnership interest. A partner's ownership interest in a partnership which embodies the partner's transferable interest and the partner's management and other rights.
  • Patentee. The holder of a patent.
  • Payee. A person to whom a payment is made or is made payable.
  • Per capita. A distribution of property in which each member of a group shares equally.
  • Per stirpes. A distribution in which each surviving descendant divides the share that his or her parent would have taken if the parent had survived. Also called by right of representation.
  • Perfection. The process or method by which a secured party obtains a priority in certain collateral belonging to a debtor against creditors or claimants of a debtor; it usually entails giving notice of the security interest, such as by taking possession or filing a financial statement.
  • Periodic tenancy. The tenancy that exists when the landlord and tenant agree that rent will be paid in regular successive intervals until notice to terminate is given but do not agree on a
  • Personal property. All objects and rights, other than real property, that can be owned. See also real property.
  • Piercing the corporate veil. Holding a shareholder responsible for acts of a corporation due to a shareholder's domination and improper use of the corporation.
  • Pleadings. The documents the parties file with the court when they state their claims and counterarguments early in a civil case. Examples include the complaint and the answer.
  • Police power. The states' power to regulate to promote the public health, safety, morals, and welfare.
  • Power of sale. A secured loan agreement authorizing a lender (the agent) to sell property used as security if the borrower (the principal) defaults.
  • Precedent. A past judicial decision relied on as authority in a present case.
  • Preemptive right. A shareholder's option to purchase new issuances of shares in proportion to the shareholder's current ownership of the corporation.
  • Preferred shareholders. Shareholders who have dividend and liquidation preferences over other classes of shareholders, usually common shareholders.
  • Pretermitted. In the law of wills, an heir born after the execution of the testator's will.
  • Principal. In agency law, one under whose direction an agent acts and for whose benefit that agent acts.
  • Privity of contract. The existence of a direct contractual relation between two parties.
  • Procedural due process. A principle required by the Constitution that when the state or federal government acts in such a way that denies a citizen of a life, liberty, or property interest, the person must first be given notice and the opportunity to be heard.
  • Procedural law. The body of law controlling public bodies such as courts, as they create and enforce rules of substantive law. See also substantive law.
  • Proceeds. Whatever is received on the sale, exchange, collection, or other disposition of collateral.
  • Professional corporation. Identical to a business corporation in most respects. A professional corporation is formed by filing with the secretary of state, and it is managed by a board of directors, unless a statute permits it to be managed like a partnership. The rigid management structure makes the professional corporation inappropriate for some smaller professional practices.
  • Profit. An interest in land giving a person the right to enter land owned by another and remove natural resources (e.g., timber) from the land. Also called profit à prendre.
  • Promissory estoppel. An equitable doctrine that protects those who foreseeably and reasonably rely on the promises of others by enforcing such promises when enforcement is necessary to avoid injustice, even though one or more of the elements normally required for an enforceable agreement is absent.
  • Promissory note. Commercial paper or instrument in which the maker promises to pay a specific sum of money to another person, to his order, or to bearer.
  • Promoter. A person who incorporates a business, organizes its initial management, and raises its initial capital.
  • Property. Something that is capable of being owned. A right or interest associated with something that gives the owner the ability to exercise dominion over it.
  • Prospectus. In securities law, a document given to prospective purchasers of a security that contains information about an issuer of securities and the securities being issued.
  • Proxy. A person who is authorized to vote the shares of another person. Also, the written authorization empowering a person to vote the shares of another person.
  • Public accommodation. Business and nonbusiness enterprises, buildings, and other places and organizations that are generally open to the public, which are subject to regulation, including nondiscrimination requirements on various bases, by federal, state, and local laws. Definitions vary somewhat under each specific law, but generally exclude private clubs and religious organizations.
  • Punitive damages. Damages designed to punish flagrant wrongdoers and to deter them and others from engaging in similar conduct in the future.
  • Purchase money security interest. A security interest that is (1) taken or retained by the seller of collateral to secure all or part of its purchase price or (2) taken by a debtor to acquire rights in or the use of the collateral if the value is so used.
  • Purported partnership. The appearance of partnership when there is no partnership; it arises when a person misleads a second person into believing that the first person is a partner of a third person; a theory that allows the second person to recover from the first person all reasonable damages the second person has suffered due to his reliance on the appearance of partnership.
  • Quasi-contract. The doctrine by which courts imply, as a matter of law, a promise to pay the reasonable value of goods or services when the party receiving such goods or services has knowingly done so under circumstances that make it unfair to retain them without paying for them.
  • Quitclaim deed. A deed conveying only the right, title, and interest of the grantor in the property described, as distinguished from a deed conveying the property itself.
  • Quorum. That number of persons, shares represented, or officers who may lawfully transact the business of a meeting called for that purpose.
  • Ratification. The adoption or affirmance by a person of a prior act that did not bind him. specific duration of the lease. A typical periodic tenancy is a tenancy from month to month.
  • Real property. The earth's crust and all things firmly attached to it.
  • Redemption. The buying back of one's property after it has been sold. The right to redeem property sold under an order or decree of court is purely a privilege conferred by, and does not exist independently of, statute.
  • Reformation. An equitable remedy in which a court effectively rewrites the terms of a contract.
  • Rejection. In contract law, an express or implied manifestation of an offeree's unwillingness to contract on the terms of an offer. In sales law, a buyer's refusal to accept goods because they are defective or nonconforming.
  • Remainderman. One who is entitled to the remainder of the estate after a particular estate carved out of it has expired.
  • Renunciation. Occurs when either party manifests to the other that he does not wish the agency to continue. This is done by the agent.
  • Res ipsa loquitur. Literally, the thing speaks for itself. A doctrine that, in some circumstances, gives rise to an inference that a defendant was negligent and that his negligence was the cause of the plaintiff's injury.
  • Res. The thing; the subject matter of a suit; the property involved in the litigation; a matter; property; the business; the affair; the transaction.
  • Rescind. As the word is applied to contracts, to terminate the contract as to future transactions or to annul the contract from the beginning.
  • Rescission. The rescinding or cancellation of a contract or transaction. In general, its effect is to restore the parties to their original precontractual position.
  • Residue. Residuary; all that portion of the estate of a testator of which no effectual disposition has been made by his will otherwise than in the residuary clause.
  • Respondeat superior. A legal doctrine making an employer (or master) liable for the torts of an employee (servant) that are committed within the scope of the employee's employment.
  • Restitution. A remedy whereby one is able to obtain the return of that which he has given the other party, or an amount of money equivalent to that which he has given the other party.
  • Restrictive covenant. An agreement restricting the use of real property.
  • Revocation. In general, the recalling or voiding of a prior action. In contract law, the withdrawal of an offer by the offeror prior to effective acceptance by the offeree.
  • Right. An interest given and protected by law. In corporation law, an option to purchase shares given to existing shareholders, permitting them to buy quantities of newly issued securities in proportion to their current ownership.
  • Right of appraisal. See dissenter's rights.
  • Right of exoneration. The right of the surety or guarantor to require the debtor to make good on his commitment to the creditor when he (1) is able to do so and (2) does not have a valid defense against payment.
  • Right of first refusal. In corporation law, a share transfer restriction granting a corporation or its shareholders an option to match the offer that a selling shareholder receives for her shares. See also option agreement.
  • Right of subrogation. When a surety has to perform or pay the principal's obligation, the surety then acquires all of the rights that the creditor had against the principal.
  • Right of survivorship. A feature of some types of co-ownership of property causing a co-owner's interest in property to be transferred on his death immediately and by operation of law to his surviving co-owner(s). See also tenancy by the entirety and joint tenancy.
  • Right to contribution. When several people act as cosureties for another and pay the entire obligation on behalf of another. The payor is entitled to collect one-third from all parties since they paid more than their prorated share.
  • Right to reimbursement. When the surety performs or pays the principal's obligation, they are entitled to recover their costs from the principal.
  • S corporation. A close corporation whose shareholders have elected to be taxed essentially like partners are taxed under federal income tax law. Also called subchapter S corporation.
  • Sale of goods. The transfer of ownership to tangible personal property in exchange for money, other goods, or the performance of service.
  • Sale on approval. A conditional sale that is to become final only in case the buyer, after a trial, approves or is satisfied with the article sold.
  • Sale or return. A contract in which the seller delivers a quantity of goods to the buyer on the understanding that if the buyer desires to retain, use, or sell any portion of the goods, he will consider such part as having been sold to him, and that he will return the balance or hold it as bailee for the seller.
  • Scienter. In cases of fraud and deceit, the word means knowledge on the part of the person making the representations, at the time when they are made, that they are false. In an action for deceit, scienter must be proved.
  • Securities Act of 1933. The first major federal legislation to regulate the offer and sale of securities. Prior to this act, regulation of securities was chiefly governed by state laws, commonly referred to as blue sky laws. When Congress enacted this act, it left existing state securities laws ("blue sky laws") in place. Securities Exchange Act of 1934 The Securities Exchange Act of 1934 was created to govern securities transactions on the secondary market, after issue, ensuring greater financial transparency and accuracy and less fraud or manipulation. This act authorized the formation of the Securities Exchange Commission (SEC), the regulatory arm of the Securities Exchange Act (SEA). The SEC has the power to oversee securities, such as stocks, bonds and over-the-counter securities, markets, and the
  • Security. An instrument commonly dealt with in the securities markets or commonly recognized as a medium of investment and evidencing an obligation of an issuer or a share, participation, or other interest in an enterprise.
  • Security interest. A lien given by a debtor to his creditor to secure payment or performance of a debt or obligation.
  • Separation of powers. A characteristic of government that vests the executive, legislative, and judicial powers in separate bodies.
  • Settlor. A person who creates a trust. Also called trustor.
  • Share dividend. See share.
  • Share split. Traditionally, a corporation's dividing existing shares into two or more shares, thereby increasing the number of authorized, issued, and outstanding shares and reducing their par value. In modern corporation law, treated like a share dividend. Also called stock split.
  • Share subscription. A promise by a person to purchase a specified number of shares at a specified price.
  • Share. An equity security, representing a shareholder's ownership of a corporation.
  • Shareholder. An owner of a corporation, who has no inherent right to manage the corporation but has liability limited to his capital contribution. Also called stockholder.
  • Slander. The defamation action appropriate to oral defamation.
  • Sociological jurisprudence. A philosophical approach to law that focuses on the social effects of legal institutions, doctrines, and practices, by examining how the law influences society and how social phenomena impact the law.
  • Sole proprietor. The owner of a sole proprietorship.
  • Sole proprietorship. A form of business under which one person owns and controls the business.
  • Special agent. An agent that is employed to conduct a single transaction or a small, simple group of transactions.
  • Special damages. Actual damages that would not necessarily but because of special circumstances do in fact flow from an injury.
  • Specific performance. A contract remedy whereby the defendant is ordered to perform according to the terms of his contract.
  • Stale check. A check that is more than 90 days past the date on its face; banks do not owe a duty to their customers to pay any such checks more than six months past the dates on their face.
  • Standing. The legal requirement that anyone seeking to challenge a particular action in court must demonstrate that such action substantially affects his or her legitimate interests before he or she will be entitled to bring suit.
  • State implementation plan. A document prepared by states in which the emissions to the air from individual sources are limited legally so that the area will meet the national ambient air quality standards.
  • Stated capital. A balance sheet account; shareholders' capital contributions representing the par value of par shares or stated value of no-par shares. Also called capital stock.
  • Statute of limitations. A statute that requires that certain classes of lawsuits must be brought within defined limits of time after the right to begin them accrued or the right to bring the lawsuit is lost.
  • Straight voting. A form of voting for directors that ordinarily permits a shareholder to cast a number of votes equal to the number of shares he or she owns for as many nominees as there are directors to be elected. See also cumulative voting.
  • Strict liability. Legal responsibility placed on an individual for the results of his actions irrespective of whether he was culpable or at fault.
  • Strike suit. In corporation law, a derivative suit motivated primarily by an intent to gain an out-of-court settlement for the suing shareholder personally or to earn large attorney's fees for lawyers, rather than to obtain a recovery for the corporation.
  • Subagent. An agent of an agent, or a person who is appointed by an agent to perform tasks that the agent has undertaken to perform for the principal.
  • Sublease. A transfer of some but not all of a tenant's remaining right to possess property under a lease.
  • Subsidiary corporation. A corporation owned and controlled by another corporation, called a parent corporation.
  • Substantive due process. A principle allowing courts to protect certain rights deemed fundamental from government interference, even where procedural protections are present or where those rights are not specifically mentioned elsewhere in the Constitution.
  • Substantive law. The body of law setting out rights and duties that affect how people behave in organized social life. See also procedural law.
  • Summary judgment. A method of reaching a judgment in a civil case before trial. The standard for granting a motion for summary judgment is that there be no significant issue of material fact and that the moving party be entitled to judgment as a matter of law.
  • Summons. A writ or process issued and served on a defendant in a civil action for the purpose of securing his appearance in the action.
  • Supermajority voting. The board needs more than a simple majority of directors to vote in favor of an action before the action is possible; for example, it may require a 2/3 or unanimous vote prior to action.
  • Surety. A person who promises to perform the same obligation as another person (the principal) and who is jointly liable along with the principal for that obligation's performance.
  • Suspect classes. A class of individuals that have been historically subject to discrimination. Any statute that makes a distinction between individuals based on any of the suspect classifications (i.e., alienage, race) will be subject to a strict scrutiny standard of review before the Supreme Court. conduct of financial professionals including brokers, dealers, and investment advisors, and monitor the financial reports that publicly traded companies are required to disclose.
  • Takings Clause. The Fifth Amendment states that "private property [shall not] be taken for public use, without just compensation." This clause has been incorporated within the Fourteenth Amendment due process, so it also applies to the states.
  • Tenancy. General term indicating a possessory interest in property. In landlord–tenant law, a property owner's conveyance to another person of the right to possess the property exclusively for a period of time.
  • Tenancy at sufferance. The leasehold interest that occurs when a tenant remains in possession of property after the expiration of a lease.
  • Tenancy at will. A leasehold interest that occurs when property is leased for an indefinite period of time and is terminable at the will of either landlord or tenant.
  • Tenancy by the entirety. A form of co-ownership of property by a married couple that gives the owners a right of survivorship and cannot be severed during life by the act of only one of the parties.
  • Tenancy for a term. A leasehold interest that results when the landlord and tenant agree on a specific duration for a lease and fix the date on which the tenancy will terminate.
  • Tenancy in common. A form of co-ownership of property that is freely disposable both during life and at death, and in which the co-owners have undivided interests in the property and equal rights to possess the property.
  • Tenancy in partnership. A form of co-ownership created when a partnership takes title to a property in the partnership's name.
  • Tender offer. A public offer by a bidder to purchase a subject company's shares directly from its shareholders at a specified price for a fixed period of time.
  • Testator. A deceased person who died leaving a will.
  • Thin capitalization. In corporation law, a ground for piercing the corporate veil due to the shareholders' contributing too little capital to the corporation in relation to its needs.
  • Third-party beneficiary. A person who is not a party to a contract but who has the right to enforce it because the parties to the contract made the contract with the intent to benefit him.
  • Tombstone advertisement. A brief newspaper advertisement alerting prospective shareholders that an issuer is offering to sell the securities described in the advertisement.
  • Tort. A private (civil) wrong against a person or his property.
  • Trade fixtures. Articles of personal property that have been annexed to real property leased by a tenant during the term of the lease and that are necessary to the carrying on of a trade.
  • Trade secret. A secret formula, pattern, process, program, device, method, technique, or compilation of information that is used in its owner's business and affords that owner a competitive advantage. Trade secrets are protected by state law.
  • Trademark. A distinctive word, name, symbol, device, or combination thereof, which enables consumers to identify favored products or services and which may find protection under state or federal law.
  • Treasury shares. Previously outstanding shares repurchased by a corporation that are not canceled or restored to unissued status.
  • Treaty. A formally negotiated and ratified agreement between or among countries.
  • Trespass. An unauthorized entry on another's property.
  • Trust. A legal relationship in which a person who has legal title to property has the duty to hold it for the use or benefit of another person. The term is also used in a general sense to mean confidence reposed in one person by another.
  • Trustee. A person in whom property is vested in trust for another.
  • Unconscionable. In contract law, a contract that is grossly unfair or one-sided; one that "shocks the conscience of the court."
  • Undisclosed principal. In agency law, a principal whom a third party lacks knowledge or the reason to know the principal's existence and identity.
  • Unidentified principal. In agency law, a principal whom a third party knows or has reason to know exists but who lacks knowledge or reason to know the principal's identity.
  • Uniform acts. Model statutes drafted by private bodies of lawyers and scholars.
  • Unilateral contract. A contract formed by an offer or a promise on one side for an act to be done on the other, and a doing of the act by the other by way of acceptance of the offer or promise; that is, a contract wherein the only acceptance of the offer that is necessary is the performance of the act.
  • Value. Under the Code (except for negotiable instruments and bank collections), generally any consideration sufficient to support a simple contract.
  • Venue. A requirement distinct from jurisdiction that the court be geographically situated so that it is the most appropriate and convenient court to try the case.
  • Verdict. Usually, the decision made by a jury and reported to the judge on the matters or questions submitted to it at trial. In some situations, however, the judge may be the party issuing a verdict, as, for example, in the motion for a directed verdict. See also directed verdict.
  • Void. That which is entirely null. A void act is one that is not binding on either party and that is not susceptible of ratification.
  • Voidable title. A title that is capable of, or subject to, being judged invalid or void.
  • Voidable. Capable of being made void; not utterly null, but annullable, and hence that may be either voided or confirmed. See also void.
  • Voting trust. A type of shareholder voting arrangement by which shareholders transfer their voting rights to a voting trustee.
  • Waiver. The intentional relinquishment of a known right. It is a voluntary act and implies an election by the party to dispense with something of value, or to forgo some advantage that he or she might have demanded and insisted on.
  • Warrant. An order authorizing a payment of money by another person to a third person. Also, an option to purchase a security. As a verb, the word means to defend; to guarantee; to enter into an obligation of warranty.
  • Warranty. An undertaking relating to characteristics of a thing being sold; a guaranty.
  • Warranty deed. A deed that guarantees a clear title to the purchaser of real property.
  • Waste. The material alteration, abuse, or destructive use of property by one in rightful possession of it that results in injury to one having an underlying interest in it.
  • Watered shares. Shares issued in exchange for property that has been overvalued. Also called watered stock. See also discount shares.
  • Will. A document executed with specific legal formalities that contains a person's instructions about the disposition of his property at his death.
  • Winding up. In partnership and corporation law, the orderly liquidation of the business's assets.
  • Wrongful use of civil proceedings. An intentional tort designed to protect against the wrongful initiation of civil proceedings.
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