Business Law and the Legal Environment 8e by Beatty, Samuelson, Abril

Business Law and the Legal Environment by Beatty, Samuelson, Abril (8th edition) is the 8th edition of the textbook authored by Jeffrey F. Beatty, Boston University, Susan S. Samuelson, Boston University, and Patricia Sánchez Abril, University of Miami, and published by Cengage Learning, Inc. in 2019.

• Absolute privilege. A witness testifying in a court or legislature may never be sued for defamation.
• Acceptance. Retention of the collateral by a secured party as full or partial satisfaction of a debt.
• Accept. To sign a draft.
• Accession. Occurs when one person uses labor, materials, or both to add value to personal property belonging to another person.
• Accommodated party. Someone who receives a benefit from an accommodation party.
• Accommodation party. Someone other than an issuer, acceptor, or indorser who adds her signature to an instrument for the purpose of being liable on it.
• Accord and satisfaction. A completed agreement to settle a debt for less than the sum claimed.
• Accredited investors. Institutions (such as banks and insurance companies) or financially qualified individuals.
• Act. Any action that a party was not legally required to take in the first place.
• Activist investor. A shareholder with a large block of stock whose goal is to influence management decisions and strategic direction.
• Additional terms. Proposed contract terms that raise issues not included in the offer.
• Adhesion contracts. Standard form contracts prepared by one party and presented to the other on a "take it or leave it" basis.
• Adjudicate. To hold a formal hearing about an issue and then decide it.
• Administrative law judge (ALJ). An agency employee who acts as an impartial decision maker.
• Adoption. When a corporation accepts legal responsibility for a contract.
• Affirm. To allow the decision to stand.
• Affirmative action programs. These programs remedy the effects of past discrimination.
• Affirmed. Permitted to stand.
• After-acquired property. Items that the debtor obtains after the parties have made their security agreement.
• Agent. In an agency relationship, the person who is acting on behalf of a principal.
• Agreement on Trade Related Aspects of Intellectual Property (TRIPs). A treaty on intellectual property.
• Alternative dispute resolution. Any other formal or informal process used to settle disputes without resorting to a trial.
• Ambiguity. When a provision in a contract is unclear by accident.
• Annual report. A document containing detailed financial information that public companies provide to their shareholders.
• Annuity. Provides payment to a beneficiary during his lifetime.
• Antitakeover devices or shark repellents. Defensive measures to protect against a hostile takeover.
• Appeals courts. Higher courts that review the trial record to see if the court made errors of law.
• Appellant. The party filing the appeal.
• Appellee. The party opposing the appeal.
• Appraisal rights. If a corporation decides to undertake a fundamental change, the company must buy back at fair value the stock of any shareholders who object.
• Arbitration. A binding process of resolving legal disputes by submitting them to a neutral third party.
• Arson. The malicious use of fire or explosives to damage or destroy real estate or personal property.
• Artisan's lien. A security interest in personal property.
• Assault. An act that makes a person reasonably fear an imminent battery.
• Assignment. Transferring contract rights.
• Assignment of rights. A transfer of benefits under a contract.
• Assisted suicide or physician-assisted death. When a doctor prescribes a lethal dose of medication for use by a terminal patient who is suffering intolerably.
• Attachment. A three-step process that creates an enforceable security interest.
• Authorized and issued. Stock has been authorized and sold; another word for it is outstanding.
• Authorized and unissued. Stock that has been authorized, but not yet sold.
• Automatic stay. Prohibits creditors from collecting debts that the bankrupt incurred before the petition was filed.
• BACT. Best available control technology.
• Bailee. A person who rightfully possesses goods belonging to another.
• Bailee. The one with temporary possession of another's goods.
• Bailment. Giving possession and control of personal property to another person.
• Bailment. The rightful possession of goods by one who is not the owner, usually by mutual agreement between the bailor and bailee.
• Bailor. One who creates a bailment by delivering goods to another.
• Bailor. The one who owns goods legally held by another.
• Bait-and-switch. A practice whereby sellers advertise products that are not generally available but are being used to draw interested parties in so that they will buy other products.
• Bankrupt. Someone who cannot pay his debts and files for protection under the Bankruptcy Code.
• Bankruptcy estate. The new legal entity created when a bankruptcy petition is filed. The debtor's existing assets pass into the estate.
• Bargained for. When something is sought by the promisor and given by the promise in exchange for their promises.
• Battery. An intentional touching of another person in a way that is harmful or offensive.
• Bearer paper. An instrument is bearer paper if it is made out to "bearer" or it is not made out to any specific person. It can be redeemed by any holder in due course.
• Bench trial. There is no jury; the judge reaches a verdict.
• Beneficiary. Someone who receives the financial proceeds of a trust.
• Best efforts underwriting. The underwriter does not buy the stock from the issuer but instead acts as the issuer's agent in selling the securities.
• Beyond a reasonable doubt. The government's burden of proof in a criminal prosecution.
• Beyond a reasonable doubt. The very high burden of proof in a criminal trial, demanding much more certainty than required in a civil trial.
• Bilateral contract. A promise made in exchange for another promise.
• Bill. A proposed statute, submitted to Congress or a state legislature.
• Binder. A short document acknowledging receipt of an application and premium for an insurance policy. It indicates that a policy is temporarily in effect.
• Blue sky laws. State securities statutes.
• Bona fide occupational qualification (BFOQ). An employer is permitted to establish discriminatory job requirements if they are essential to the position in question.
• Breach of the peace. Any action that disturbs public tranquility and order.
• Briefs. Written arguments on the case.
• But-for causation. The retaliatory action would not have occurred but for the defendant's discriminatory intent.
• Buyer in the ordinary course of business (BIOC). One who acts in good faith, without knowing that the sale violates the owner's rights.
• Buyer in ordinary course of business (BIOC). Someone who buys goods in good faith from a seller who routinely deals in such goods.
• Bylaws. A document that specifies the organizational rules of a corporation or other organization, such as the date of the annual meeting and the required number of directors.
• C corporation. A corporation that provides limited liability to its owners, but is a taxable entity.
• Cap and Trade. A market-based system for reducing emissions.
• Cashier's check. A check drawn on the bank itself. It is a promise that the bank will pay out of its own funds.
• Certificate of deposit. A note that is made by a bank (also known as a CD).
• Certified check. A check that the issuer's bank has signed, indicating its acceptance of the check.
• Challenges for cause. A claim that a juror has demonstrated probable bias.
• Charging order. A court order granting a third party the right to receive a share of partnership profits.
• Check. The most common form of a draft, it is an order telling a bank to pay money.
• Check cards. Another name for debit cards.
• Check kiting. Moving funds between bank accounts to take advantage of the float.
• Chicago School. A group of economists and lawyers at the University of Chicago who argued that the goal of antitrust enforcement should be efficiency.
• Children's Online Privacy Protection Act of 1998 (COPPA). Federal statute enforced by the FTC regulating children's privacy online.
• Choice of forum provisions. Determine the state in which any litigation would take place.
• Choice of law provisions. Determine which state's laws will be used to interpret the contract.
• Civil law. Civil law regulates the rights and duties between parties.
• Claim in recoupment. The issuer subtracts (i.e., "sets off") any other claims he has against the initial payee from the amount he owes on the instrument.
• Class action. One plaintiff represents the entire group of plaintiffs, including those who are unaware of the lawsuit or even unaware they were harmed.
• Classes and series. Categories of stock with different rights.
• Clean opinion. An unqualified opinion, the most favorable report an auditor can give.
• Close corporation. A corporation with a small number of shareholders whose stock is not publicly traded and whose shareholders play an active role in management. It is entitled to special treatment under some state laws.
• Codicil. An amendment to a will.
• Collective bargaining agreement (CBA). A contract between a union and a company.
• Comment letter. A letter from the SEC to an issuer with a list of changes that must be made to the registration statement.
• Commerce Clause. The part of Article I, section 8, that gives Congress the power to regulate commerce with foreign nations and among states.
• Commercial impracticability. The UCC may excuse contract performance when an unforeseen, external event disrupts the contract relationship.
• Commercial speech. Communication, such as advertisements, that has the dominant theme of proposing a business transaction.
• Common carrier. A company that transports goods and makes its services regularly available to the general public.
• Common law. Judge-made law.
• Communications Decency Act of 1996 (CDA). Provides ISPs immunity from liability when information was provided by an end user.
• Community property. System of ownership of marital property in which assets earned during the marriage are owned jointly by the spouses.
• Compensatory damages. Money intended to restore a plaintiff to the position he was in before the injury.
• Complaint. A short, plain statement of the facts alleged and the legal claims made.
• Compliance program. A plan to prevent and detect improper conduct at all levels of the company.
• Concerted action. Tactics taken by union members to gain bargaining advantage.
• Concurrent estates. Two or more people owning property at the same time.
• Condemnation. Occurs when the government seizes private property and compensates the owner.
• Condition. A promise or undertaking contained in a lease whose breach may result in eviction.
• Condition. An event that must occur before a party becomes obligated under a contract.
• Conditional promises. Promises that a party agrees to perform only if the other side also does what it promised.
• Conscious parallelism. When competitors who do not have an explicit agreement nonetheless all make the same competitive decisions.
• Consequential damages. Are those resulting from the unique circumstances of the injured party.
• Consequential damages. Contract damages resulting as an indirect consequence of the breach.
• Consideration. The inducement, price, or promise that causes a person to enter into a contract and forms the basis for the parties' exchange.
• Consumer credit contract. A contract in which a consumer borrows money from a lender to purchase goods and services from a seller who is affiliated with the lender.
• Consumer protection statute. Laws protecting consumers from fraud.
• Consumer report. Any communication about a consumer's creditworthiness, character, general reputation, or lifestyle that is considered as a factor in establishing credit.
• Consumer reporting agencies. Businesses that collect and sell personal information on consumers to third parties.
• Contract. A legally enforceable agreement.
• Contract carrier. A company that transports goods for particular customers.
• Control security. Stock held by any shareholder who owns more than 10 percent of a class of stock or by any officer or director of the company.
• Conversion. (1) Someone has stolen an instrument or (2) a bank has paid a check that has a forged indorsement.
• Conversion. Taking or using someone's personal property without consent.
• Corporate social responsibility. An organization's obligation to contribute positively to the world around it.
• Corporation by estoppel. If a party enters into a contract believing in good faith that the corporation exists, that party cannot later take advantage of the fact that it does not.
• Counterclaim. A second lawsuit by the defendant against the plaintiff.
• Counteroffer. A different proposal made in response to an original offer.
• Course of dealing. The conduct between the parties during previous transactions.
• Course of performance. The conduct between the parties to a particular transaction.
• Covenant. A promise in a contract.
• Covenant. A promise or undertaking contained in a lease whose breach does not result in eviction.
• Cover. To make a good faith purchase of goods similar to those in the contract.
• Cramdown. When a court approves a plan of reorganization over the opposition of some creditors.
• Credit score. A number that is supposed to predict your ability to pay your bills.
• Criminal law. Criminal law prohibits certain behavior for the benefit of society.
• Criminal law. Prohibits and punishes conduct that threatens public safety and welfare.
• Criminal procedure. The process by which criminals are investigated, accused, tried, and sentenced.
• Cross-elasticity of demand. How high can your prices rise before buyers switch to a different product?
• Cross-examine. To ask questions of an opposing witness.
• Customary international law. International rules that have become binding through a pattern of consistent, longstanding behavior.
• De facto. A Latin phrase meaning "in fact."
• De facto corporation. The promoter has made a good faith effort to incorporate and has actually used the corporation to conduct business.
• De jure. A Latin phrase meaning "by law."
• De jure corporation. A promoter has substantially complied with the requirements for incorporation but has made some minor error.
• Debtor. Another term for bankrupt.
• Debtor in possession. The debtor acts as trustee in a Chapter 11 bankruptcy.
• Default judgment. A decision that the plaintiff wins without trial because the defendant failed to answer in time.
• Default rules. Rules that govern a partnership unless the partners agree otherwise.
• Defendant. The party being sued.
• Deferred annuity contract. The owner makes a lump-sum payment now but receives no income until a later date.
• Deficiency. Having insufficient funds to pay off a debt.
• Delegation. Transferring contract duties.
• Delegation of duties. A transfer of obligations under a contract.
• Deontological. From the Greek word for obligation; the duty to do the right thing, regardless of the result.
• Deponent. The person being questioned in a deposition.
• Difference principle. Rawls's suggestion that society should reward behavior that provides the most benefit to the community as a whole.
• Direct damages. Are the natural result of the breach.
• Direct public offering (DPO). A method by which a company sells stock to the public itself, without an investment bank.
• Directed verdict. A ruling that the plaintiff has entirely failed to prove some aspect of her case.
• Disability insurance. Replaces the insured's income if he becomes unable to work because of illness or injury.
• Disaffirm. To give notice of refusal to be bound by an agreement.
• Discharge. A party is discharged when she has no more duties under the contract.
• Discharge. Liability on an instrument terminates.
• Discharged. The debtor no longer has an obligation to pay a debt.
• Disclaimer. A statement that a particular warranty does not apply.
• Disclosure statement. Provides creditors and shareholders with enough information to make an informed judgment about a proposed plan of reorganization.
• Dishonor. An obligor refuses to pay an instrument that is due.
• Dissociation. When a partner leaves the partnership.
• Diversity jurisdiction. Applies when (1) the plaintiff and defendant are citizens of different states and (2) the amount in dispute exceeds $75,000.
• Domestic asset protection trusts (DAPTs). Creditors cannot reach the assets that a donor has placed in a DAPT.
• Domestic corporation. A corporation operating in the state in which it was incorporated.
• Donee. A person who receives a gift of property.
• Donor. A person who gives property away.
• Double jeopardy. A criminal defendant may be prosecuted only once for a particular criminal offense.
• Draft. An instrument ordering someone else to pay money.
• Draft. The drawer of this instrument orders someone else to pay money.
• Drawee. The bank on which a check is drawn.
• Drawee. The one ordered by the drawer to pay money to the payee.
• Drawer. The issuer of a draft.
• Drawer. The person who issues a draft.
• Due diligence. A reasonable investigation of a registration statement.
• Due diligence. An investigation of the registration statement by someone who signs it.
• Due process. Requires fundamental fairness at all stages of the case.
• Duress. An improper threat made to force another party to enter into a contract.
• Dynasty or perpetual trusts. Trusts that last forever.
• Easement. The right to cross or use someone else's land for a particular purpose.
• Easement by grant. Occurs when one party expressly transfers an easement to another party.
• Easement by implication. Results from surrounding circumstances that indicate that the parties must have intended an easement.
• Easement by reservation. Occurs when a party reserves the right to retain an easement in a transferred property.
• Economic strike. One intended to gain wages or benefits.
• Electronic Communications Privacy Act of 1986 (ECPA). A federal statute prohibiting unauthorized interception of, access to, or disclosure of wire and electronic communications.
• Embezzlement. The fraudulent conversion of property already in the defendant's possession.
• Eminent domain. The power of the government to take private property for public use.
• Eminent domain. The government's right to take private property for public use upon just compensation to the owner.
• Engagement letter. A written contract by which a client hires an accountant.
• Equal dignities rule. If an agent is empowered to enter into a contract that must be in writing, then the appointment of the agent must also be written.
• Equal Protection Clause. A clause in the Fourteenth Amendment that generally requires the government to treat people equally.
• Error of law. Because of this, the appeals court may require a new trial.
• Escalator clause. A lease clause allowing the landlord to raise the rent for specified reasons.
• Estates and interests. Types of rights in land.
• Ethics. How people should behave.
• Ethics decision. Any choice about how a person should behave that is based on a sense of right and wrong.
• EU General Data Protection Regulation (GDPR). Sets out the data privacy rights of all Europeans.
• Eviction. An act that forces a tenant to abandon the property.
• Exclusionary rule. Evidence obtained illegally may not be used at trial.
• Exclusive dealing contract. A contract in which a distributor or retailer agrees with a supplier not to carry the products of any other supplier.
• Exculpatory clause. A contract provision that attempts to release one party from liability in the event the other is injured.
• Exculpatory clause. A contract clause that attempts to relieve one of the parties from future liability.
• Exculpatory clause. A lease clause that relieves a landlord of liability for injuries.
• Exculpatory clause. A provision that protects directors from personal liability to the corporation and its shareholders.
• Executed contract. An agreement in which all parties have fulfilled their obligations.
• Executory contract. An agreement in which one or more parties has not yet fulfilled its obligations.
• Expectation damages. The money required to put one party in the position she would have been in had the other side performed the contract.
• Express contract. An agreement with all the important terms explicitly stated.
• Express warranty. One that the seller creates with his words or actions.
• Externality. When people do not bear the full cost of their decisions.
• Extraterritoriality. The power of one country's laws to reach activities outside of its borders.
• Fair use doctrine. Permits limited use of copyrighted material without permission of the author for purposes such as criticism, comment, news reporting, scholarship, or research.
• False imprisonment. The intentional restraint of another person without reasonable cause and without consent.
• Federal question. A case in which the claim is based on the U.S. Constitution, a federal statute, or a federal treaty.
• Federal Sentencing Guidelines. The detailed rules that judges must follow when sentencing defendants convicted of crimes in federal court.
• Fee simple absolute. Full ownership privileges in a property.
• Felony. A serious crime, for which a defendant can be sentenced to one year or more in prison.
• Fiduciary relationship. One party has an obligation (1) to act in a trustworthy fashion for the benefit of the other person and (2) to put that person's interests first.
• Fiduciary relationship. The trustee must act in the best interests of the beneficiary.
• Financing statement. A statement that gives the names of all parties, describes the collateral, and outlines the security interest.
• Finding statutes. Laws that govern found property, also known as estray statutes.
• Firm commitment underwriting. The underwriter buys stock from the issuer and resells it to the public.
• Flow-through tax entity. An organization that does not pay income tax on its profits but instead passes them through to its owners who pay personal income tax on all business profits.
• Forbearance. Refraining from doing something that one has a legal right to do.
• Force majeure event. A disruptive, unexpected occurrence for which neither party is to blame that prevents one or both parties from complying with a contract.
• Forced share or statutory share. The percentage of a decedent's estate that a spouse is entitled to claim, regardless of the will's content.
• Foreign corporation. A corporation operating in a state in which it was not incorporated.
• Foreign enforcement. Means that the court system of a country will assist in enforcing or collecting on the verdict awarded by a foreign court.
• Foreign Intelligence Surveillance Act (FISA). Federal statute governing the government's collection of foreign intelligence in the United States.
• Foreign recognition. Means that a foreign judgment has legal validity in another country.
• Foreign Sovereign Immunities Act (FSIA). A U.S. statute that provides that American courts generally cannot entertain suits against foreign governments.
• Franchise Disclosure Document (FDD). A disclosure document that a franchisor must deliver to a potential purchaser.
• Fraud. Deception for the purpose of obtaining money or property.
• Fraud. Injuring another person by deliberate deception.
• Fraudulent transfer. A transfer is fraudulent if it is made within the year before a petition is filed and its purpose is to hinder, delay, or defraud creditors.
• Freehold estate. The right to possess land for an undefined length of time.
• Fresh start. After the termination of a bankruptcy case, creditors cannot make a claim against the debtor for money owed before the initial bankruptcy petition was filed.
• Fundamental rights. Rights so basic that any governmental interference with them is suspect and likely to be unconstitutional.
• GAAP. Generally accepted accounting principles, the rules for preparing financial statements.
• GAAS. Generally accepted auditing standards, the rules for conducting audits.
• Gap period. The period between the time that a creditor files an involuntary petition and the court issues the order for relief.
• Gap-filler provisions. UCC rules for supplying missing terms.
• General Agreement on Trade in Services (GATS). A treaty on transnational services.
• General partner. One of the owners of a general partnership.
• Geographic market. Areas where the same purchase can be made.
• Gharar. The Islamic prohibition on risk and deception.
• Gift. A voluntary transfer of property from one person to another, without consideration.
• Gift causa mortis. A gift made in contemplation of approaching death.
• Go effective. The SEC authorizes a company to begin the public sale of its stock.
• Going dark. When a company deregisters under the 1934 Act.
• Good faith. An honest effort to meet both the spirit and letter of the contract.
• Good faith. The UCC requires that contracting parties perform and enforce their deals honestly.
• Goods. Are things that are movable, other than money and investment securities.
• Grand jury. A group of ordinary citizens that decides whether there is probable cause the defendant committed the crime with which she is charged.
• Grantor. Someone who creates and funds a trust, also called a settlor or donor.
• Gratuitous agent. Someone not paid for performing duties.
• Gratuitous assignment. One made as a gift, for no consideration.
• Greenhouse gases or GHGs. Gases that trap heat in the Earth's atmosphere, thereby causing global warming.
• Guilty. A judge or jury's finding that a defendant has committed a crime.
• Hacking. Gaining unauthorized access to a computer system.
• Harmless error. A mistake by the trial judge that was too minor to affect the outcome.
• Healthcare proxy. Someone who is appointed to make healthcare decisions on behalf of a person who is not competent to do so.
• Health maintenance organization (HMO). Generally, patients can only be treated by doctors who are employees of the organization.
• Holder. For order paper, the holder is anyone in possession of the instrument if it is payable to or indorsed to her. For bearer paper, the holder is anyone in possession.
• Holder in due course. Someone who has given value for an instrument, in good faith, without notice of outstanding claims or other defenses.
• Holographic will. A will that is handwritten and signed by the testator, but not witnessed.
• Horizontal agreement. An agreement among competitors.
• Hostile takeovers. An attempt by an outsider to acquire a company in the face of opposition from the target corporation's board of directors.
• IFRS. International financial reporting standards, an international alternative to GAAP.
• Incidental beneficiary. Someone who might have benefited from a contract between two others but has no right to enforce that agreement.
• Incidental damages. Relatively minor costs that the injured party suffers when responding to the breach.
• Incorporator. The person who signs the charter and files it with the secretary of state.
• Incoterms rules. A series of three-letter codes used in international contracts for the sale of goods.
• Indemnification provision. A company pays the legal fees of directors who are sued for actions taken on behalf of the company.
• Independent directors. Members of the board of directors who are not employees of the company and do not have close ties to the CEO. Also known as outside directors.
• Indictment. The government's formal charge that the defendant has committed a crime and must stand trial.
• Indorsement. The signature of a payee.
• Indorser. Anyone, other than an issuer or acceptor, who signs an instrument.
• Injunction. A court order that requires someone to do something or refrain from doing something.
• Inside directors. Members of the board of directors who are also employees of the corporation.
• Insiders. Family members of an individual debtor, officers and directors of a corporation, or partners of a partnership that has filed for bankruptcy.
• Installment contract. Agreement in which performance is to be made in a series of separate payments or deliveries.
• Integrated contract. A writing that the parties intend as the final, complete expression of their agreement.
• Intended beneficiary. Someone who may enforce a contract made between two other parties.
• Intentional infliction of emotional distress. An intentional tort in which the harm results from extreme and outrageous conduct that causes serious emotional harm.
• Intentional torts. Harm caused by a deliberate action.
• Inter vivos gift. A gift made during the donor's life, with no fear of impending death.
• Inter vivos trust or living trust. Established while the grantor is alive.
• Interest. A legal right in something.
• Intermediary agent. Someone who hires subagents for the principal.
• International Court of Arbitration (ICA). A forum for international dispute resolution, run by the ICC.
• International Court of Justice (ICJ). The judicial branch of the United Nations.
• Internet service providers (ISPs). Companies that connect users to the internet.
• Inventory. Goods that a seller is holding for sale or lease in the ordinary course of its business.
• Investigative reports. Discuss character, reputation, or lifestyle. They become obsolete in three months.
• Invitee. A person who has a right to enter another's property because it is a public place or a business open to the public.
• Involuntary bailment. A bailment that occurs without an agreement between the bailor and bailee.
• Involuntary petition. Filed by creditors to initiate a bankruptcy case.
• Issuer. A company that sells its own stock.
• Issuer. The maker of a promissory note or the drawer of a draft.
• Joint and several. All members of a group are liable. They can be sued as a group, or any of them can be sued individually for the full amount owing. But the plaintiff may not recover more than 100 percent of her damages.
• Joint and several liability. The partnership and the partners are all individually liable for the full amount of the debt, but the creditor cannot collect more than the total amount he is owed.
• Joint tenancy. Two or more people holding equal interest in a property, with the right of survivorship.
• Joint venture. A partnership for a limited purpose.
• Jointly and severally liable. All members of a group are liable. They can be sued as a group, or any one of them can be sued individually for the full amount owed. But the plaintiff cannot recover more than the total she is owed.
• Judgment non obstante veredicto (JNOV). A judgment notwithstanding the jury's verdict.
• Judgment rate. The interest rate that courts use on courtordered judgments.
• Judicial activism. A court's willingness to decide issues on constitutional grounds.
• Judicial restraint. A court's attitude that it should leave lawmaking to legislators.
• Jurisdiction. A court's power to hear a case.
• Jurisprudence. The philosophy of law.
• Jus cogens. When rule of customary international law becomes a fundamental legal principle across all nations, it cannot be changed by custom or practice.
• Kant's categorical imperative. An act is only ethical if it would be acceptable for everyone to do the same thing.
• Kantian Evasion or palter. A truthful statement that is nonetheless misleading.
• Key person life insurance. Companies buy insurance on their officers to help the company to recover if they were to die.
• Landlord. The owner of a freehold estate who allows another person temporarily to live on his property.
• Larceny. The trespassory taking of personal property with the intent to steal it.
• Lease. An agreement in which an owner gives a tenant the right to use property.
• Leasehold interest. One party has the right to occupy the property for a given length of time.
• Letter of intent. A letter that summarizes negotiating progress.
• Liability insurance. Reimburses the insured for any liability she incurs by accidentally harming someone else.
• Libel. Written defamation.
• Libel per se. When written statements relate to criminal or sexual conduct, contagious diseases, or professional abilities, they are assumed to be harmful to the subject's reputation.
• License. The right to temporarily enter land belonging to another.
• Licensee. A person on another's land for her own purposes but with the owner's permission.
• Lien. An encumbrance on a property to secure a debt.
• Lien. A security interest created by law, rather than by agreement.
• Life estate. Ownership of property for the lifetime of a particular person.
• Life insurance. Provides for payments to a beneficiary upon the death of the insured.
• Life Principles. The rules by which you live your life.
• Life prospects. The circumstances into which we are born.
• Limitation of remedy clause. Contract clause allowing parties to limit or exclude applicable UCC remedies.
• Liquidated damages clause. A clause stating in advance how much a party must pay if it breaches.
• Liquidated debt. A debt in which there is no dispute about the amount owed.
• Litigation. The process of filing claims in court and ultimately going to trial.
• Lockout. Management prohibits workers from entering the premises.
• Long-arm statute. A statute that gives a court jurisdiction over someone who commits a tort, signs a contract, or conducts "regular business activities" in the state.
• MACT. Maximum achievable control technology.
• Mailbox rule. Acceptance is generally effective upon dispatch. Terminations are effective when received.
• Majority voting. Directors must resign if more than half of the shares that vote in an uncontested election withhold their vote from them.
• Maker. The issuer of a note.
• Maker. The issuer of a promissory note.
• Making demand. When shareholders ask the board of directors to authorize litigation on behalf of the corporation.
• Managed care plans. Health insurance plans that limit treatment choices to reduce costs.
• Material. Important enough to affect an investor's decision.
• Material. Important to the insurer's decision to issue a policy or set a premium amount.
• Material breach. A violation of a contract that defeats an essential purpose of the agreement.
• Mechanic's lien. A security created when a worker improves real property.
• Merchant. Generally, someone who routinely deals in the particular goods involved.
• Merchantable. The goods are fit for the ordinary purpose for which they are used.
• Minute book. A book that contains a record of a corporation's official actions.
• Mirror image rule. Requires that acceptance be on precisely the same terms as the offer.
• Misdemeanor. A less serious crime, often punishable by less than a year in a county jail.
• Mitigate. To keep damages as low as reasonable.
• Modify. To affirm the outcome but with changes.
• Money laundering. Using the proceeds of criminal acts either to promote crime or conceal the source of the money.
• Moral licensing. After doing something ethical, many people then have a tendency to act unethically.
• Moral relativism. A belief that a decision may be right even if it is not in keeping with one's own ethics standards.
• Moral universalism. A belief that some acts are always right or always wrong.
• Mortgage. A security interest in real property.
• Mortgagee. The party acquiring a security interest in property.
• Mortgagor. An owner who gives a security interest in property in order to obtain a loan.
• Most favored nation. WTO/GATT requires that favors offered to one country must be given to all member nations.
• Motion. A formal request to the court that it take some step or issue some order.
• Motion for a protective order. Request that the court limit discovery.
• Motion to dismiss. A request that the court terminate a case because the law does not offer a legal remedy for the plaintiff's problem.
• NAAQS. National ambient air quality standards.
• National treatment. The principle of nondiscrimination between foreigners and locals.
• Negotiated. An instrument has been transferred to the holder by someone other than the issuer.
• NESHAPS. National Emission Standards for Hazardous Air Pollutants.
• Net neutrality. The principle that all information flows on the internet must receive equal treatment.
• Net returns on invested capital. The company's return on its capital investments, such as plants and equipment, less the opportunity cost of those investments.
• New York Convention. Widely accepted treaty on the court enforcement of arbitral awards.
• Nominal damages. A token sum, such as one dollar, given to a plaintiff who demonstrates a breach but no serious injury.
• Noncompetition agreement. A contract in which one party agrees not to compete with another.
• Nonconforming goods. Merchandise that differs from what is specified in the contract.
• Nonphysical tort. One that harms only reputation, feelings, or wallet.
• Nonpoint source. Pollutants that have no single source, such as water runoff from city streets.
• North American Free Trade Agreement (NAFTA). A treaty that reduced trade barriers among Canada, the United States, and Mexico.
• No-strike clause. A clause in a CBA that prohibits the union from striking while the CBA is in force.
• Notice to quit. A landlord's notice terminating a tenancy.
• Novation. A new contract.
• Novation. A three-way agreement in which the obligor transfers all rights and duties to a third party.
• Nuncupative will. An oral will.
• Obligor. The party obligated to do something.
• Offer. An act or statement that proposes definite terms and permits the other party to create a contract by accepting those terms.
• Offeree. The person to whom an offer is made.
• Offeror. The person who makes an offer.
• Optimism bias. A belief that the outcome of an event will be more positive than the evidence warrants.
• Order for relief. An official acknowledgment that a debtor is under the jurisdiction of the bankruptcy court.
• Order paper. An instrument that includes the words "pay to the order of" or their equivalent.
• Output contract. Obligates the seller to sell all of his output to the buyer, who agrees to accept it.
• Output contract. Contract in which the seller guarantees to sell all of its output to one buyer, and the buyer agrees to accept the entire quantity.
• Paris Accord. An agreement to prevent climate change by reducing GHGs.
• Partition by kind. A form of partition in which a property is divided among co-owners.
• Partnership. An unincorporated association of two or more co-owners who operate a business for profit.
• Partnership at will. A partnership with no fixed duration. Any of the partners may leave at any time, for any reason.
• Partnership by estoppel. Two parties incur the liability of a partnership without actually being partners.
• Patent. A patent gives inventors the right to prevent others from making, using, or selling their invention for a limited time.
• Payable on demand. The maker must pay whenever he is asked.
• Payday loans. Small loans with high interest rates made to people who need money to make it to the next paycheck.
• Payee. Someone who is owed money under the terms of an instrument.
• Pay for service plans. The insurer pays for whatever treatments a doctor orders.
• Per capita. Each heir receives the same amount.
• Per se violation. An automatic breach of antitrust laws.
• Per stirpes. Each branch of the family receives an equal share.
• Peremptory challenges. The right to excuse a juror for virtually any reason.
• Perfect Tender Rule. Under the UCC, tendered goods must be exactly as described in the contract.
• Periodic tenancy. A lease for a fixed period, automatically renewable unless terminated.
• Perpetual or dynasty trusts. Trusts that last forever.
• Personal jurisdiction. A court's authority to bind the defendant to its decisions.
• Personal property. All tangible property other than real property.
• Personal satisfaction contract. Permits the promisee to make subjective evaluations of the promisor's performance.
• Phishing. A fraudster sends a message directing the recipient to enter personal information on a website that is an illegal imitation of a legitimate site.
• Physician-assisted death or assisted suicide. When a doctor prescribes a lethal dose of medication for use by a terminal patient who is suffering intolerably.
• Pierce the corporate veil. A court holds shareholders personally liable for the debts of the corporation.
• Piercing the company veil. A court holds members of an LLC personally liable for the debts of the organization.
• Plaintiff. The party who is suing.
• Plea bargain. An agreement in which the defendant pleads guilty to a reduced charge, and the prosecution recommends to the judge a relatively lenient sentence.
• Pleadings. The documents that begin a lawsuit, consisting of the complaint, the answer, and sometimes a reply.
• Pledge. A secured transaction in which a debtor gives collateral to the secured party.
• Plurality voting. To be elected, a candidate only needs to receive more votes than his opponent, not a majority of the votes cast.
• Point source. Discharges from a single producer.
• Preauthorized transfer. An electronic fund transfer authorized in advance to recur at regular intervals.
• Precedent. An earlier case that decided the issue.
• Precedent. Earlier decisions by the state appellate courts on similar or identical issues.
• Precedent. The tendency to decide current cases based on previous rulings.
• Preferences. When a debtor unfairly pays creditors immediately before filing a bankruptcy petition.
• Preferred stock. The owners of preferred stock have preference on dividends and also, typically, in liquidation.
• Preponderance of the evidence. The plaintiff's burden of proof in a civil lawsuit.
• Presentment. A holder of an instrument demands payment from someone who is obligated to pay it.
• Pretermitted child. A child who is left nothing under the parent's will.
• Prima facie. From the Latin, meaning "from its first appearance," something that appears to be true upon a first look.
• Principal. In an agency relationship, the person for whom an agent is acting.
• Private international law. International rules and standards applying to cross-border commerce.
• Private offering. A sale of securities in which the issuer provides less disclosure in return for selling less stock to fewer investors than in a public offering.
• Probable cause. It is likely that evidence of a crime will be found in the place to be searched.
• Procedural due process. The doctrine that ensures that before the government takes liberty or property, the affected person has a fair chance to oppose the action.
• Procedural unconscionability. One party uses its superior power to force a contract on the weaker party.
• Product market. Items that compete against each other for purchase.
• Profit. The right to enter land belonging to another and take something from it.
• Promisee. The contract party to whom a promise is made.
• Promisor. Makes the promise that a third party seeks to enforce.
• Promissory estoppel. A possible remedy for an injured plaintiff in a case with no valid contract, when the plaintiff can show a promise, reasonable reliance, and injustice.
• Promissory note. A written promise to pay money.
• Proof of claim. A form stating the name of an unsecured creditor and the amount of the claim against the debtor.
• Proper purpose. One that aids a shareholder in managing and protecting her investment.
• Prospectus. A document that provides potential investors with information about a security.
• Protected categories. Race, color, religion, sex, or national origin.
• Proxy. The person whom a shareholder appoints to vote for her at a meeting of the corporation; also, the document a shareholder signs appointing this substitute voter.
• Proxy advisory firms. Companies that advise shareholders on how to vote in corporate elections.
• Proxy statement. Information a company provides to shareholders in preparation for the annual meeting.
• Public Company Accounting Oversight Board (PCAOB). The PCAOB regulates public accounting firms.
• Public disclosure of private facts. A tort providing redress to victims of unauthorized and embarrassing disclosures.
• Public international law. Rules and norms governing relationships among states and international organizations.
• Punitive damages. Damages that are intended to punish the defendant for conduct that is extreme and outrageous.
• Purchase money security interest (PMSI). An interest taken by the person who sells the collateral or advances money so the debtor can buy it.
• Purchaser representative. Has enough knowledge and experience to evaluate stock purchases.
• Qualified mortgage (QM). A mortgage that, according to the CFPB, complies with TILA.
• Qualified privilege. Employers who give references are liable only for false statements that they know to be false or that are primarily motivated by ill will.
• Qualify to do business. Registering as a foreign corporation in any state in which a business operates but was not incorporated.
• Quantum meruit. As much as he deserves—the damages awarded in a quasi-contract case.
• Quasi-contract. A possible remedy for an injured plaintiff in a case with no valid contract, when the plaintiff can show benefit to the defendant, reasonable expectation of payment, and unjust enrichment.
• Quorum. A certain percentage of the company's shares are represented, either in person or by proxy, at a meeting.
• Quorum. How many people or shares must be present for a meeting to count.
• Racketeer Influenced and Corrupt Organizations Act (RICO). A powerful federal statute, originally aimed at organized crime, now used against many ordinary businesses.
• Racketeering acts. Any of a long list of specified crimes, such as embezzlement, arson, mail fraud, wire fraud, and so forth.
• Ratification. Words or actions indicating an intention to be bound by a contract.
• Reaffirm. To promise to pay a debt even after it is discharged.
• Reasonable expectation of privacy. The test to analyze whether privacy should be protected.
• Reasonably. Ordinary or usual under the circumstances.
• Reciprocal promises. Promises that are each enforceable independently.
• Record date. Everyone who owns stock on this date is entitled to vote at the shareholders meeting.
• Redeem. To pay the full value of a debt to get the collateral back.
• Reformation. A court may partially rewrite a contract to fix a mistake or cure an unenforceable provision.
• Regional trade agreements (RTAs). Treaties that reduce trade restrictions and promote common policies among member nations.
• Registration statement. The document that an issuer files with the SEC to initiate a public offering of securities.
• Reliance interest. Puts the injured party in the position he would have been in had the parties never entered into a contract.
• Remainder. The right of a third person to property upon the death of a life tenant.
• Remedy. A court's compensation to the injured party.
• Rent. Compensation paid by a tenant to a landlord.
• Rent abatement. A reduction in the rent owed.
• Reply. An answer to a counterclaim.
• Reporting companies. Companies registered under the 1934 Act.
• Representations and warranties. Statements of fact about the past or present.
• Requirements contract. Contract in which a buyer agrees to purchase all of her goods from one seller.
• Requirements contract. Obligates a buyer to obtain all of his needed goods from the seller.
• Res ipsa loquitur. The facts imply that the defendant's negligence caused the accident.
• Resale price maintenance (RPM). A manufacturer sets minimum prices that retailers may charge.
• Rescind. To cancel.
• Rescind. To cancel a contract.
• Rescind. To terminate a contract by mutual agreement.
• Rescission. To "undo" a contract and put the parties where they were before they made the agreement.
• Respondeat superior. A principal is liable for certain torts committed by an agent.
• Restitution. A court order that a guilty defendant reimburse the victim for the harm suffered.
• Restitution. Restoring an injured party to its original position.
• Restitution interest. Designed to return to the injured party a benefit he has conferred on the other party.
• Restricted security. Stock purchased in a private offering.
• Restricted stock. Securities purchased strictly for investment purposes.
• Reverse and remand. To nullify the lower decision and return the case for reconsideration or retrial.
• Reverse discrimination. Making an employment decision that harms a white person or a man because of his gender, color, or race.
• Reversed. Nullified.
• Reversion. The right of an owner (or her heirs) to property upon the death of a life tenant.
• Reversionary interest. The landlord's right to occupy the property at the end of the lease.
• Revocable. A trust that can be terminated or changed at any time.
• Rider. An amendment or addition to a contract.
• Right to cure. The UCC gives the seller the opportunity to fix the problem of non-conforming goods.
• Road show. As part of the sales process, company executives and investment bankers make presentations to potential investors.
• Rule against perpetuities. A trust must end within 21 years of the death of some named person who was alive when the trust was created.
• Rule of reason violation. An action that breaches antitrust laws only if it has an anticompetitive impact.
• S corporation. A corporation that provides limited liability to its owners and the tax status of a flow-through entity.
• Scienter. Acting with the intent to deceive or with deliberate recklessness.
• Scienter. An action is done knowingly or recklessly with an intent to deceive, manipulate, or defraud.
• Scrivener's error. A typo.
• Secondary boycott. A picket line established not at the employer's premises but at a different workplace.
• Secondary offering. Any public sale of securities by an issuer after the initial public offering.
• Securities Act of 1933. Also referred to as the 1933 Act, this statute regulates the issuance of new securities.
• Securities Exchange Act of 1934. Also referred to as the 1934 Act, this statute regulates companies with publicly traded securities.
• Security. Any transaction in which the buyer invests money in a common enterprise and expects to earn a profit predominantly from the efforts of others.
• Security interests. Rights in personal property that assure payment or the performance of some obligation.
• Sight draft. Payable on demand.
• Signature liability. The liability of someone who signs an instrument.
• Single recovery principle. Requires a court to settle the matter once and for all by awarding a lump sum for past and future expenses.
• Sit-down strike. Members stop working but remain at their job posts, blocking replacement workers.
• Slander. Oral defamation.
• Slander per se. When oral statements relate to criminal or sexual conduct, contagious diseases, or professional abilities, they are assumed to be harmful to the subject's reputation.
• SLAPP. A SLAPP, or strategic lawsuit against public participation, is a defamation lawsuit whose main objective is to silence speech through intimidation, rather than win a defamation case on the merits.
• Social enterprises. These organizations pledge to behave in a socially responsible manner even as they pursue profits.
• Sole discretion. The absolute right to make any decision on an issue.
• Sole proprietorship. An unincorporated business owned by one person.
• Sophisticated investors. People who can assess the risks of an offering.
• Sovereign. The recognized political power, whom citizens obey.
• Spam. Unsolicited commercial email.
• Spear phishing. Involves personalized messages that look as if they have been sent by someone the victim knows.
• Special committee. Independent board members form a committee to review a transaction that violates the business judgment rule.
• Specific performance. A court order requiring the seller to perform as promised.
• Specific performance. Forces both parties to complete the deal.
• Stakeholder. Anyone who is affected by the activities of a corporation, such as employees, customers, creditors, suppliers, shareholders, and the communities in which they operate.
• Stare decisis. Let the decision stand, that is, the ruling from a previous case.
• Stare decisis. The principle that legal conclusions must be reached after an analysis of past judgments.
• Stationary source. Any building or facility that emits a certain level of pollution.
• Statute. A law created by a legislature.
• Statute of limitations. A statutory time limit within which an injured party must file suit.
• Stored Communications Act. The section of the ECPA that prohibits the unlawful access to stored communications, such as email.
• Straight bankruptcy. Also known as liquidation, this form of bankruptcy mandates that the bankrupt's assets be distributed to creditors, but the debtor has no obligation to share future earnings.
• Strict liability. A branch of tort law that imposes a much higher level of liability when harm results from ultrahazardous acts or defective products.
• Strict performance. Requires one party to perform its obligations precisely, with no deviation from the contract terms.
• Subagent. Someone appointed by an agent to perform the agent's duties.
• Subject matter jurisdiction. A court's authority to hear a particular type of case.
• Subpoena. An order to appear at a particular place and time. A subpoena duces tecum requires the person to produce certain documents or things.
• Substantial performance. Occurs when one party fulfills enough of its contract obligations to warrant payment.
• Substantive due process. A form of due process that holds that certain rights are so fundamental that the government may not eliminate them.
• Substantive unconscionability. A contract with extremely one-sided and unfair terms.
• Summary judgment. A ruling by the court that no trial is necessary because there are no essential facts in dispute.
• Summons. The court's written notice that a lawsuit has been filed against the defendant.
• Superfund. Another name for the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
• Supervisor. Anyone with the authority to make independent decisions on hiring, firing, disciplining, or promoting other workers.
• The Supremacy Clause. Makes the Constitution, and federal statutes and treaties, the supreme law of the land.
• Surplus. A sum of money greater than the debt incurred.
• Takings Clause. A clause in the Fifth Amendment that ensures that when any governmental unit takes private property for public use, it must compensate the owner.
• Tenancy at sufferance. A tenancy that exists without the permission of the landlord, after the expiration of a true tenancy.
• Tenancy at will. A tenancy with no fixed duration, which may be terminated by either party at any time.
• Tenancy by the entirety. A system of ownership of marital property in which each spouse owns the entire estate.
• Tenancy for years. A lease for a stated, fixed period.
• Tenancy in common. Two or more people holding equal interest in a property, but with no right of survivorship.
• Tenant. A person given temporary possession of the landlord's property.
• Tender offer. A public offer to buy a block of stock directly from shareholders.
• Term partnership. A partnership in which the partners agree in advance how long it will last.
• Termination statement. A document indicating that a secured party no longer claims a security interest in the collateral.
• Testamentary trust. A trust that goes into effect when a grantor dies.
• Tied product. In a tying arrangement, the product that a buyer must purchase as the condition for being allowed to buy another product.
• Time draft. Payable in the future.
• Time is of the essence clause. Generally make contract dates strictly enforceable.
• TMDLs. Total maximum daily loads of permitted pollution.
• Tort. A violation of a duty imposed by the civil law.
• Tortious interference with a contract. An intentional tort in which the defendant improperly induced a third party to breach a contract with the plaintiff.
• Tortious interference with a prospective advantage. Malicious interference with a developing economic relationship.
• Total shareholder return. The percentage increase in stock price appreciation and dividends.
• Toxic succession. Anyone who has ever owned a polluted property is liable for its clean-up.
• Tracing. An auditor takes an item of original data and tracks it forward to ensure that it has been properly recorded throughout the bookkeeping process.
• Trade acceptance. A draft drawn by a seller of goods on the buyer and payable to the seller or some third party.
• Trade secret. A formula, device, process, method, or compilation of information that, when used in business, gives the owner an advantage over competitors.
• Trademark. Any combination of words and symbols that a business uses to identify its products or services and distinguish them from others.
• Treasury stock. Stock that a company has sold, but later bought back.
• Treaty. An agreement between two or more states that is governed by international law.
• Trespass. Intentionally entering land that belongs to someone else or remaining on the land after being asked to leave.
• Trespasser. A person on another's property without consent.
• Trial courts. Determine the facts of a particular dispute and apply to those facts the law given by earlier appellate court decisions.
• Trust. An entity that separates the legal and beneficial ownership of assets.
• Trustee. Someone who manages the assets of a trust.
• Tying arrangement. An agreement to sell a product on the condition that a buyer also purchases another, usually less desirable, product.
• Tying product. In a tying arrangement, the product offered for sale on the condition that another product be purchased as well.
• U.S. Trustee. Oversees the administration of bankruptcy law in a region.
• Ultra vires doctrine. A corporation cannot undertake any transaction unless its charter permits it.
• Unconscionable. A contract that is shockingly one-sided and fundamentally unfair.
• Unilateral mistake. Occurs when only one party enters a contract under a mistaken assumption.
• Unliquidated. A debt that is disputed because the parties disagree over its existence or amount.
• Usage of trade. A practice or way of dealing that is expected in an industry.
• User-generated content. Any content created and made publicly available by end users.
• Utter. To pass on an instrument that one knows to be forged.
• Vagueness. The parties to a contract deliberately include a provision that is unclear.
• Value. The holder has already done something in exchange for the instrument.
• Value-based care. Payment to medical providers is based on patient outcomes, not quantity and complexity of services performed.
• Variance. A variation from the applicable zoning law.
• Veil of ignorance. The rules for society that we would propose if we did not know how lucky we would be in life's lottery.
• Vertical agreement. An agreement among participants operating at different stages of the production process.
• Veto. The power of the president to reject legislation passed by Congress.
• Void agreement. A contract that neither party can enforce, because the bargain is illegal or one of the parties had no legal authority to make it.
• Voidable contract. An agreement that may be terminated by one of the parties.
• Voidable contract. When a contract is voidable, the injured party may choose to terminate it.
• Voidable title. Limited rights in goods, inferior to those of the owner.
• Voir dire. The process of selecting a jury.
• Voluntary petition. Filed by a debtor to initiate a bankruptcy case.
• Vouching. An auditor chooses a transaction listed in a company's books and checks backward for original data to support it.
• Warrant. Written permission from a neutral officer to conduct a search.
• Warranty. A contractual assurance that goods will meet certain standards.
• Warranty liability. The liability of someone who receives payment on an instrument.
• Whistleblower. Someone who discloses wrongdoing.
• Will. A legal document that disposes of the testator's property after death.
• Wiretap Act. The section of the ECPA that prohibits the interception of face-to-face oral communications and telephone calls.
• World Trade Organization (WTO). An international organization whose mandate is to lower trade barriers.
• Writ of Certiorari. A petition asking the Supreme Court to hear a case.
• Written consent. A signed document that takes the place of a shareholders' or directors' meeting.
• Wrongful discharge. An employer may not fire a worker for a reason that violates basic social rights, duties, or responsibilities.
• Zombie directors. Directors who serve on a board with less than majority support from shareholders.