93 terms

Business Law Exam 1

Chapters 2, 4, 11, and more
Judical Review
the process by which a court decides on the constitutionality of legislative enactments and actions of the executive branch
the authority of a court to hear and decide a specific case
REM Jurisdiction
jurisdiction over property located within its boundaries
General Jurisdiction
state court or a federal district court
Limited Jurisdiction
probate court or a bankruptcy court
Legislative branch
makes the laws (Congress)
Executive branch
enforces the laws (President)
Judicial branch
interprets the law (Supreme Court)
Checks and Balances
a system which allows each branch to limit the action of the other 2 branches
Minimal Contact for Jurisdiction of Federal Courts
1. federal question: cause of action based on US Constitution, federal laws, or treaty
2. diversity of citizenship: 1. plaintiff or defendant must be residents of different states and 2. the dollar amount must exceed $20
Concurrent Jurisdiction
when both federal and state courts have the power to hear a case
Exclusive Jurisdiction
when cases can be tried only in federal court or only in state courts
Trial Court
1. testimonies by witnesses
2. evidence is presented
3. dispute is decided by court
Appellate Court
any courts that have the power to appeal, the cases are not retried, no witnesses, no jury, rather a panel of "justices" decide based on questions of law, NOT questions of fact. each attorney gives a brief.
Federal Court System
lowest: US District Courts (trial courts)
middle: US Courts of Appeal
highest: US Supreme Court
In order to bring a case before the USSC a party requests that the Court issue a
writ of certiorari (4/9)
document used to force defendant to court
require any person to appear or testify
process of working a lawsuit through the court system
the pleadings inform each party's of the others claims and specify the issues involved in the case
the plaintiffs complaint
pleading made by the plaintiff alleging wrongdoing on the part of the defendant; the document that when filed with a court, initiates a lawsuit
defendant judgment
a judgment entered by a court against a defendant who has failed to appear in court to answer or defend against the plaintiff's claim
the defendant's answer
response to plaintiff's complaint (either admits or denies)
a claim made by a defendant in a civil lawsuit against the plaintiff
procedurally, a plaintiff's response to a defendant's answer
affirmative defense
admit to the truth but raise new facts that may result in dismissal of trial
motion of dismiss
requests court to dismiss the case for stated reasons
includes gaining access to witnesses, documents, records, and other types of evidence
sworn testimony by a party to the lawsuit or any witness taken under oath before trial
series of written questions for which written answers are prepared and then signed under oath before a trial
requests for other information
-documents -physical exams/mental exams, admit to other things such as "well, you were driving 45 mph"
Voir Dire
the phrase refers to court proceedings where a jury is asked questions
plaintiff's case
1. direct examination
2. cross examination
defendant's case
1.refute plaintiff's case
2. establish a defense
3. assert a counterclaim
end of trial
1. closing agruments
2. judge provides instruction
3. verdict
4. judge issues a judgment
decision made by jury
the simplest form of ADR, a process in which the parties attempt to settle the dispute informally, with or without attorneys
a neutral 3rd party acts as a mediator ex:divorce
the settling of a dispute by submitting to a disinterested 3rd party (other than a court) who renders a decision that is most often legally binding
arbitration clause
a contract that provides that any dispute that arises will be resolved through arbitration rather than the court system
The Commerce Clause
USCON gives Congress the power to regulate interstate commerce
Police Powers
reserves to the states all powers not delegated to the national gov't
The Doormat Clause
the states do not have the power to regulate interstate commerce
The Supremacy Clause
provides that the CONST, laws, and treaties of US are "supreme law of the land"
Due Process
... "no person shall be deprived of life, liberty, or property without due process of law"
Procedural Due Process
1. reasonable notice
2. opportunity to be heard
3. a fair hearing/trial
Substantive Due Process
limits what the gov't may do in its legislative and executive capacities
Eminent Domain Clause
requires the gov't to give just confiscation when they take a person's property
Equal Protection Clause
state cannot deprive a person of unreasonable discrimination
an agreement that can be enforced in court; formed by 2 or more competent parties who agree for consideration, to perform or to refrain from performing some legal act now or in the future.
requirements of a valid contract
1. agreement
2. consideration
3. contractual capacity
4. legality
voidable contract
is a valid contract but can be avoided at the option of one or both of the parties (minors, under fraudulent conditions, under the influence)
unenforceable contracts
contract that cannot be enforced
void contracts
no contract at all
even if all the elements of a valid contract are present, a contract may be unenforceable if the following are not met
1. genuineness of assent or voluntary consent 2.form-that is, the contract must be in whatever form the law requires
an essential element for contract formation
"meeting of the minds"
usually broken down into 2 events: an offer and an acceptance
a promise or commitment to do or refrain from doing some specified act in the future
what a reasonable person interprets as a proposal
3 elements are necessary for an offer to be effective
1. serious intention
2. the terms of the offer must be reasonably certain, or definite
3. resulting in the offeree's knowledge of the offer
revocation, counteroffer, rejection
the offeror's act of withdrawing an offer as long as its not accepted
occurs when offeree rejects the original offer and simultaneously makes a new offer
mirror image rule
any variation of offer is treated as a counteroffer.
mailbox rule
under this rule, if the authorized mode of communication is the mail, then an acceptance becomes valid when it is dispatched (placed in the control of the US Postal Service) not when it is received by the offeror
voluntary act by offeree that shows assent (agreement) to the terms of an offer
preexisting duty role
promise to do something you're legally obligated to do; is not a contract
legal value given in bargain for legal exchange for performance or promise of exchange
contractual capacity
legal ability required for facing a contract
confirmation of prior agreement that was not legally binding
sole proprietorship
1.not incorporated
2.owned by 1 person
3. no legal requirements
4. license required when a person is engaging in dangerous activity
5. unlimited liability
6. no tax-income and expenses
1. 2 or more persons
2. common ownership in business
3. sharing of profits and losses
4. right to manage business
entity concept
partnership[p treated as a separate entity
limited partnership
1.allows each partner to restrict their personal liability to amount of their business investment
2. @ least 1 participant must accept general partnership status
3. does not participate in management decisions
limited partnership RQ
name, purpose, profit sharing, duration, have to have limited partnership in name
general partnership
1. 2 or more carrying out business purpose
2. equal rights and responsibility in management
3. not taxed; pass through to partners, who include gain and individual tax returns at a lower rate
limited liability partnerships
1. corporation or indiviual tax
2. not responsible for wrongdoings of other partners or for debt/obligations
1. legal entity
2. limited liability
3. perpetual existence
4. ease of transfer of ownership
common stock
true ownership
common shareholders
right to the remaining profit after debts and dividends
equity security
corporation has to pay ______ on bonds?
bond indenture
bond has no specific asset at security
secured bond
specific property as calateral
board of directors
1. declare dividends
2. hire, fire, and pay officers
3. set corp. policy
4. set financial structure
5. indicate fundamental changes
business judgment rule
1. person exercise reasonable care
2. act in good faith
3. act in best interest of corporation
common shareholders rights
1. right to vote
2. preemptive right
3. dividends
4. right to transfer shares
preemptive right
allows shareholders to remain a percentage of corporation
c corporation
corporation that pays tax on income it makes during the year
s corporation
does not pay income tax flows through to shareholders
requirements to be an s corporation
1. no more than 75 shares
2. no more than 25% passive income
3. 1 class of stock
watered stock
stock issued for overvalued property or services of less than par value
piercing the corporate veil
1. inadequately capitalized
2. not following corporate formalities
3. corporation used for wrongful conduct
owners of a corporation