Glossary
A
Accepted checkA check that the drawee bank
has signed. This signature is a promise that the bank will pay the check out of its own funds. (Chapter 24)
AccessionThe use of labor and/or materials to add value to the personal property of another. (Chapter 46)
Accommodation partySomeone who does not benefit from an instrument but agrees to guarantee its payment. (Chapter 24)
Accord and satisfactionAn agreement to settle a debt for less than the sum claimed. (Chapter 12)
AccountsAny right to receive payment for goods sold or leased, other than rights covered by chattel paper or instruments. (Chapter 26)
Accredited investorUnder the Securities Act of 1933, an accredited investor is an institution (such as a bank or insurance company) or any individual with a net worth of more than $1 million or an annual income of more than $200,000. (Chapter 37)
AcquitTo find the defendant not guilty of the crime for which he was tried. (Chapter 8)
Act of State doctrineA rule requiring American courts to abstain from cases if a court order would interfere with the ability of the President or Congress to conduct foreign policy. (Chapter 9)
Actus reusThe guilty act. The prosecution must show that a criminal defendant committed some proscribed act. In a murder prosecution, taking another person’s life is the actus reus. (Chapter 8)
Adhesion contractA standard form contract prepared by one party and presented to the other on a “take it or leave it” basis. (Chapter 13)
AdjudicateTo hold a formal hearing in a disputed matter and issue an official decision. (Chapter 4)
Administrative lawConcerns all agencies, boards, commissions, and other entities created by a federal or state legislature and charged with investigating, regulating, and adjudicating a particular industry or issue. (Chapter 1)
AdministratorA person appointed by the court to oversee the probate process for someone who has died intestate (that is, without a will). (Chapter 47)
AdministratrixA female administrator. (Chapter 47)
Adverse possessionA means of gaining ownership of land belonging to another by entering upon the property, openly and notoriously, and claiming exclusive use of it for a period of years. (Chapter 44)
AffidavitA written statement signed under oath. (Chapter 8)
AffirmA decision by an appellate court to uphold the judgment of a lower court. (Chapter 1)
Affirmative actionA plan introduced in a workplace for the purpose of either remedying the effects of past discrimination or achieving equitable representation of minorities and women. (Chapter 30)
After-acquired propertyItems that a debtor obtains after making a security agreement with the secured party. (Chapter 26)
AgentA person who acts for a principal. (Chapter 8)
Alternative dispute resolutionAny method of resolving a legal conflict other than litigation, such as: negotiation, arbitration, mediation, mini-trials, and summary jury trials. (Chapter 3)
AmendmentAny addition to a legal document. The constitutional amendments, the first ten of which are known collectively as the Bill of Rights, secure numerous liberties and protections directly for the people. (Chapter 1)
Annual reportEach year, public companies must send their shareholders an annual report that contains detailed financial data. (Chapter 36)
AnswerThe pleading, filed by the defendant in court and served on the plaintiff, which responds to each allegation in the plaintiff’s complaint. (Chapter 3)
Apparent authorityA situation in which conduct of a principal causes a third party to believe that the principal consents to have an act done on his behalf by a person purporting to act for him when, in fact, that person is not acting for the principal. (Chapter 29)
AppellantThe party who appeals a lower court decision to a higher court. (Chapter 3)
Appellate courtAny court in a state or federal system that reviews cases that have already been tried. (Chapter 3)
AppelleeThe party opposing an appeal from a lower court to a higher court. (Chapter 3)
ArbitrationA form of alternative dispute resolution in which the parties hire a neutral third party to hear their respective arguments, receive evidence, and then make a binding decision. (Chapter 3)
ArsonMalicious use of fire or explosives to damage or destroy real estate or personal property. (Chapter 8)
AssaultAn intentional act that causes the plaintiff to fear an imminent battery. (Chapter 6)
AssigneeThe party who receives an assignment of contract rights from a party to the contract. (Chapter 16)
AssignmentThe act by which a party transfers contract rights to a third person. (Chapter 16)
AssignorThe party who assigns contract rights to a third person. (Chapter 16)
AttachmentA court order seizing property of a party to a civil action, so that there will be sufficient assets available to pay the judgment. (Chapter 5)
Authorized and unissued stockStock that has been approved by the corporation’s charter, but has not yet been sold. (Chapter 34)
Authorized and issued stockStock that has been approved by the corporation’s charter and subsequently sold. (Chapter 34)
B
BaileeA person who rightfully possesses goods belonging to another. (Chapter 13)
BailmentGiving possession and control of personal property to another person. (Chapter 13)
BailorOne who creates a bailment by delivering goods to another. (Chapter 13)
BatteryThe intentional touching of another person in a way that is unwanted or offensive. (Chapter 6)
Bearer paperAn instrument payable “to bearer.” Any holder in due course can demand payment. (Chapter 23)
Bilateral contractA binding agreement in which each party has made a promise to the other. (Chapter 10)
Bill of ladingA receipt for goods, given by a carrier such as a ship, that minutely describes the merchandise being shipped. A negotiable bill of lading may be transferred to other parties, and entitles any holder to collect the goods. (Chapter 9)
Bill of RightsThe first ten amendments to the Constitution. (Chapter 5)
BillA proposed statute that has been submitted for consideration to Congress or a state legislature. (Chapter 4)
Blue sky lawsState securities laws. (Chapter 37)
Bona fide occupational qualificationA job requirement that would otherwise be discriminatory is permitted in situations in which it is essential to the position in question. (Chapter 30)
Bona fide purchaserSomeone who buys goods in good faith, for value, typically from a seller who has merely voidable title. (Chapter 20)
BondsLong-term debt secured by some of the issuing company’s assets. (Chapter 34)
BriefThe written legal argument that an attorney files with an appeal court. (Chapter 3)
Bulk saleA transfer of most or all of a merchant’s assets. (Chapter 20)
Burden of proofThe allocation of which party must prove its case. In a civil case, the plaintiff has the burden of proof to persuade the factfinder of every element of her case. In a criminal case, the government has the burden of proof. (Chapter 3)
Business judgment ruleA common law rule that protects managers from liability if they are acting without a conflict of interest, and make informed decisions that have a rational business purpose. (Chapter 35)
Buyer in ordinary course of businessSomeone who buys goods in good faith from a seller who routinely deals in such goods. (Chapter 26)
BylawsA 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. (Chapter 34)
C
CapacityThe legal ability to enter into a contract. (Chapter 10)
Certificate of depositAn instrument issued by a bank which promises to repay a deposit, with interest, on a specified date. (Chapter 23)
Certified checkA check that the drawee bank
has signed. This signature is a promise that the bank will pay the check out of its own funds. (Chapter 24)
Certiorari, writ ofFormal notice from the United States Supreme Court that it will accept a case for review. (Chapter 3)
Challenge for causeAn attorney’s request, during voir dire, to excuse a prospective juror because of apparent bias. (Chapter 3)
Chancery, court ofIn medieval England, the court originally operated by the Chancellor. (Chapter 1)
Charging orderA court order granting the creditor of a partner the right to receive that partner’s share of partnership profits. (Chapter 33)
Chattel paperAny writing that indicates two things: (1) a debtor owes money and (2) a secured party has a security interest in specific goods. The most common chattel paper is a document indicating a consumer sale on credit. (Chapter 26)
CheckAn instrument in which the drawer orders the drawee bank to pay money to the payee. (Chapter 23)
Chicago SchoolA theory of antitrust law first developed at the University of Chicago. Adherents to this theory believe that antitrust enforcement should focus on promoting efficiency and should not generally be concerned about the size or number of competitors in any market. (Chapter 39)
CISGSee Convention on Contracts for the International Sale of Goods. (Chapter 9)
Civil lawThe large body of law concerning the rights and duties between parties. It is distinguished from criminal law, which concerns behavior outlawed by a government. (Chapter 1)
Class actionA method of litigating a civil lawsuit in which one or more plaintiffs (or occasionally defendants) seek to represent an entire group of people with similar claims against a common opponent. (Chapter 3)
ClassificationThe process by which the Customs Service decides what label to attach to imported merchandise, and therefore what level of tariff to impose. (Chapter 9)
Close corporationA corporation with a small number of shareholders. Its stock is not publicly traded. (Chapter 32)
CodicilAn amendment to a will. (Chapter 47)
CollateralThe property subject to a security interest. (Chapter 26)
Collateral promisesA promise to pay the debt of another person, as a favor to the debtor. (Chapter 15)
Collective bargainingContract negotiations between an employer and a union. (Chapter 31)
Collective bargaining unitThe precisely defined group of employees who are represented by a particular union. (Chapter 31)
ComityA doctrine that requires a court to abstain from hearing a case out of respect for another court that also has jurisdiction. International comity demands that an American court refuse to hear a case in which a foreign court shares jurisdiction if there is a conflict between the laws and if it is more logical for the foreign court to take the case. (Chapter 9)
Commerce clauseOne of the powers granted by Article I, §8 of the Constitution, it gives Congress exclusive power to regulate international commerce and concurrent power with the states to regulate domestic commerce. (Chapter 5)
Commercial impracticabilityAfter the creation of a contract, an entirely unforeseen event occurs which makes enforcement of the contract extraordinarily unfair. (Chapter 17)
Commercial paperInstruments such as checks and promissory notes that contain a promise to pay money. Commercial paper includes both negotiable and non-negotiable instruments. (Chapter 23)
Commercial speechCommunication, such as television advertisements, that has the dominant theme of proposing a commercial transaction. (Chapter 5)
Common carrierA transportation company that makes its services available on a regular basis to the general public. (Chapter 46)
Common lawJudge-made law, that is, the body of all decisions made by appellate courts over the years. (Chapter 1)
Common stockCertificates that reflect ownership in a corporation. Owners of this equity security are last in line for corporate pay-outs such as dividends and liquidation proceeds. (Chapter 34)
Comparative negligenceA rule of tort law that permits a plaintiff to recover even when the defendant can show that the plaintiff’s own conduct contributed in some way to her harm. (Chapter 7)
Compensatory damagesThose that flow directly from the contract. (Chapter 18)
ComplaintA pleading, filed by the plaintiff, providing a short statement of the claim. (Chapter 3)
Concerted actionTactics, such as a strike, used by a union to gain a bargaining advantage. (Chapter 31)
ConditionA condition is an event that must occur in order for a party to be obligated under a contract. (Chapter 17)
Condition precedentA condition that must
occur before a particular contract duty arises. (Chapter 17)
Condition subsequentA condition that must occur after a particular contract duty arises, or the duty will be discharged. (Chapter 17)
ConfiscationExpropriation without adequate compensation of property owned by foreigners. (Chapter 9)
Conforming goodsItems that satisfy the contract terms. If a contract calls for blue sailboats, then green sailboats are non-conforming. (Chapter 22)
Consent orderAn agreement entered into by a wrongdoer and an administrative agency (such as the Securities and Exchange Commission or the Federal Trade Commission) in which the wrongdoer agrees not to violate the law in the future. (Chapter 40)
Consequential damagesThose resulting from the unique circumstances of this injured party. (Chapter 18)
ConsiderationIn contract law, something of legal value that has been bargained for and given in exchange by the parties. (Chapter 12)
ConstitutionThe supreme law of a political entity. The United States Constitution is the highest law in the country. (Chapter 1)
ContractA legally enforceable promise or set of promises. (Chapter 10)
Contract carrierA transportation company that does not make its services available to the general public but engages in continuing agreements with particular customers. (Chapter 46)
Contributory negligenceA rule of tort law that permits a negligent defendant to escape liability if she can demonstrate that the plaintiff’s own conduct contributed in any way to the plaintiff’s harm. (Chapter 7)
Control securityStock owned by any officer or director of the issuer, or by any shareholder who holds more than 10 percent of a class of stock of the issuer. (Chapter 37)
Convention on Contracts for the International Sale of GoodsA United Nations sponsored agreement that creates a neutral body of law for sale of goods contracts between companies from different countries. (Chapter 9)
ConversionA tort committed by taking or using someone else’s personal property without his permission. (Chapter 6)
CookieA small computer file that identifies the user of a computer. Internet sites typically place cookies on a computer’s hard drive to track visitors to their site. (Chapter 42)
CopyrightUnder federal law, the holder of a copyright owns a particular expression of an idea, but not the idea itself. This ownership right applies to creative activities such as literature, music, drama, and software. (Chapter 43)
Corporation by estoppelEven if a corporation has not actually been formed, courts will sometimes enforce contracts entered into in the belief that the corporation did indeed exist. (Chapter 34)
Counter-claimA claim made by the defendant against the plaintiff. (Chapter 3)
CoverThe buyer’s right to obtain substitute goods when a seller has breached a contract. (Chapter 18)
Creditor beneficiaryWhen one party to a contract intends to benefit a third party to whom he owes a debt, that third party is referred to as a creditor beneficiary. (Chapter 16)
Criminal lawRules that permit a government to punish certain behavior by fine or imprisonment. (Chapter 1)
Cross-examinationDuring a hearing, for a lawyer to question an opposing witness. (Chapter 3)
CureThe seller’s right to respond to a buyer’s rejection of non-conforming goods; the seller accomplishes this by delivering conforming goods before the contract deadline. (Chapter 22)
D
Damages(1) The harm that a plaintiff complains of at trial, such as an injury to her person, or money lost because of a contract breach. (2) Money awarded by a trial court for injury suffered. (Chapter 6)
De facto corporationOccurs when a promoter makes a good faith effort to incorporate (although fails to complete the process entirely) and uses the corporation to conduct business. The state can challenge the validity of the corporation, but a third party cannot. (Chapter 34)
De jure corporationThe promoter of the corporation has substantially complied with the requirements for incorporation, but has made some minor error. No one has the right to challenge the validity of the corporation. (Chapter 34)
De novoThe power of an appellate court or appellate agency to make a new decision in a matter under appeal, entirely ignoring the findings and conclusions of the lower court or agency official. (Chapter 4)
DebenturesLong-term, unsecured debt, typically issued by a corporation. (Chapter 34)
DebtorA person who owes money or some other obligation to another party. (Chapter 26)
DecedentA person who has died. (Chapter 47)
DefamationThe act of injuring someone’s reputation by stating something false about her to a third person. Libel is defamation done either in writing or by broadcast. Slander is defamation done orally. (Chapter 6)
DefaultThe failure to perform an obligation, such as the failure to pay money when due. (Chapter 26)
Default judgmentCourt order awarding one party everything it requested because the opposing party failed to respond in time. (Chapter 3)
Default rulesUnder the Uniform Partnership Act, these rules govern the relationship among the partners unless the partners explicitly make a different agreement. (Chapter 33)
DefinitenessA doctrine holding that a contract will only be enforced if its terms are sufficiently precise that a court can determine what the parties meant. (Chapter 11)
DelegationThe act by which a party to a contract transfers duties to a third person who is not a party to the contract. (Chapter 16)
DeponentThe person being questioned in a deposition. (Chapter 3)
DepositionA form of discovery in which a party’s attorney has the right to ask oral questions of the other party or of a witness. Answers are given under oath. (Chapter 3)
Derivative actionA lawsuit brought by shareholders in the name of the corporation to enforce a right of the corporation. (Chapter 36)
DeterrenceUsing punishment, such as imprisonment, to discourage criminal behavior. (Chapter 8)
DeviseeSomeone who inherits under a will. (Chapter 47)
Direct examinationDuring a hearing, for a lawyer to question his own witness. (Chapter 3)
Directed verdictThe decision by a court to instruct a jury that it must find in favor of a particular party because, in the judge’s opinion, no reasonable person could disagree on the outcome. (Chapter 3)
DisaffirmanceThe act of notifying the other party to a contract that the party giving the notice refuses to be bound by the agreement. (Chapter 14)
Discharge(1) A party to a contract has no more duties. (2) A party to an instrument is released from liability. (Chapter 17)
DisclaimerA statement that a particular warranty does not apply. (Chapter 21)
DiscoveryA stage in litigation, after all pleadings have been served, in which each party seeks as much relevant information as possible about the opposing party’s case. (Chapter 3)
DishonorAn obligor refuses to pay an instrument that is due. (Chapter 24)