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FIN 26074 exam 2 Study Guide

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by: Olivia Zemanek

FIN 26074 exam 2 Study Guide FIN - 26074 - 001

Marketplace > Kent State University > Finance > FIN - 26074 - 001 > FIN 26074 exam 2 Study Guide
Olivia Zemanek
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In this study guide I listed definitions of the material, I created a fill in the blank outline, and I created a crossword puzzle as well. The test is over contracts and torts. Good luck!
Timothy D Ludick (P)
Study Guide
study guide exam 2, Exam 2, Study Guide, Ludick, FIN 26074, Legal Environment of business, Kent State University
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This 9 page Study Guide was uploaded by Olivia Zemanek on Monday November 2, 2015. The Study Guide belongs to FIN - 26074 - 001 at Kent State University taught by Timothy D Ludick (P) in Summer 2015. Since its upload, it has received 213 views. For similar materials see LEGAL ENVIRONMENT OF BUSINESS in Finance at Kent State University.


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Date Created: 11/02/15
FIN 260740 Study guide for EXAM 2 DEFINITIONS Promise­what every contract begins with Contract­ voluntary agreement where one party (offerer) agrees to do something or refrains  from doing something for consideration from the other party (offeree)  Legality­ 1 of the 5 essential elements of a contract; requirement that purpose and consideration  of contracts is lawful.  Agreement­ 1 of 5 essential elements to a contract; usually the most important for a contract;  contains the offer and acceptance Consideration­ 1 of the 5 essential elements of a contract; what each party is voluntarily going  to give up Bilateral contract­ requires 2 promises. A promise for a promise Unilateral contract­ only 1 promise. Usually the party in control is bargaining for performance.  "Build me a house and I will pay you this amount" Express contract­ when there is ACTUAL communication between parties Implied in fact contract­parties have not orally, written, or electronically communicated with  each other, but they used some other conduct other than word. Valid contract­ a contract that has all 5 essential elements and each party in entitled to their  promises that they made Void contract­ a contract in which one or more of the 5 essential elements is missing. The  contract is not enforceable of the promises made in it. Avoidable contract­ A contract in which one of the parties has a disability and can avoid the  promises.  Executed contract­ a contract that is fully performed Duress situation­ When someone accepted an offer and entered into a contract because they  were threatened with either physical or direct contact. Blackmail. Exculpatory clause­ a statement that anticipates a future loss or event. It will state that if this  loss or event happens that party is not reliable for it. Statute of fraud­ a requirement of writing for a contract. Required in instances such as a pre­ nuptial, a contract to answer debt of a decedent, a promise to pay for someone else's debts (like a  cosigner for a student loan), and contracts for sale of any matters in real estate. Creditor beneficiary­ when there is an existing debt and a contract is entered into, the creditor  of that debt has a right in the contract Concurrent conditions­ presumes that when one party performs there is an obligation for the  other party to perform, too. Condition precedent­ It initiates the obligation to perform. A contract contemplates a future  event. And when and only when that event occurs is there an obligation to perform. Condition subsequent­ this STOPS the obligation to perform.  Tort­ a wrongdoing, or a wrongful act Tort law­ these laws are about civil wrongs that result in damages to someone's property and/or  physical injury and results from the civil wrong that was performed.  Intentional torts­ 1 of 5 theories of torts; this is the INTENT to cause damage or harm to them  or property  ­ Intentional tort of assault­ an intentional act to cause someone else have fear that they or an  immediate family member will be harmed. if any fear apprehension is caused then it is  considered this Battery­Any physical contact that is not permitted and causes injury or discomfort Abusive process­ a party files a civil lawsuit that has no merit. Trespass­ an intentional tort; the intentional entering or remaining on a person's real estate,  being on someone else's property without permission. Conversion­ An intentional tort; retaining some's personal property without permission. Stealing or even keeping too long. Slander­ oral defamation Libel­ written or electronic defamation Trademark infringement­ when a company has a name or logo that they don't want to be used  by anyone else, they must register it. It a name or logo to be protected so no one else can use it Patent infringements­ protects the owner or inventor of product. Protects the invention of the  inventor for 20 years.  Copyright infringement­ protects the authors/media creators/artists/etc. Protects their unique  creations for their entire life + 70 years after their death stand your ground castle defense­ Gives you the right to use physical force if someone intrudes or trespasses your home (or automobile) and you feel that you or your family is going to be  harmed or at risk for death. Doesn’t apply to your property though, like your front yard Strict liability torts­ another tort theory; intent does NOT matter, focuses on ultra­hazardous  conduct which triggers automatic liability. In Ohio, this includes, use of explosives (like  fireworks), nuclear chemicals, wild animals, etc.  Dram shop law­ if a liquor establishment sells liquor to someone who is already intoxicated and  then that person harms themselves or others then the establishment would be responsible. Don't  serve a drunk! Negligence law­ tort theory; this theory applies to careless or negligence behavior that causes  harm to someone else or property. Happens accidentally, most common is a car accident.  Strict product liability­ tort theory; dealing with people in the business of buying making and  selling in the market place. When there is a defect that causes harm, the liability lays in the  company that creates the product.  No fault theory­ tort theory; this doesn't require a fault. It kind of acts as an insurance like  system. In Ohio we have unemployment, workers compensation, disability. Investing money so  when there is a loss in the future they can pay up CONTRACTS  Every contract begins with a ___________________.  There are 5 essential elements in a contract  1. _________________________  Two parts  The offer­ must be definite   The acceptance­ must be accepted EXACTLY as it was made (the  ____________ image rule). Silence is NOT acceptance.   2. _________________________  Each party has to voluntarily give something up.  Typically, one party will provide _______________ while the other party  will give _______________________  3. __________________________  Recognition that some people are protected from business contracts  Minors­only have to return consideration  Mentally incompetent­any agreement this type of person makes  becomes VOID. They are not enforceable agreements.  Individuals incompetent from intoxication by alcohol or drugs­ the  level of intoxication has to be ________________.   4. Voluntary consent  Courts recognize certain circumstances  When there is _____________  Mistakes. Not all treated the same. One party or both can make  mistakes.  o Mistakes as to___________  We are all presumed to know what the law is.   If you do something not knowing that it is  illegal, it is not excused, you are responsible  to know.  o Mistakes of ________________  For example; when selling a car, you could have a  blue one and red one. The person you are selling to  could have thought you were selling the blue, but  you were selling the red.  o Mistakes of __________________  How much something is actually worth. Selling  something at a garage sale for $1, but the person  who bought it ends up selling it for much more.  o Mistaken offer made and other party accepted  When writing an amount for 10,000,000, they could forget a 0 and could have been written as 1,000,000  ____________situations o Threat to physical or direct violence to that person or to  immediate family. They had accepted the offer because of  the threat of violence. Blackmail.  Undue influence o Person under psychological domination by another part  enters a contract that a reasonable person would not enter.  Unconscionable o The agreement is unfair or one sided. Provisions are  shocking to the conscience or harsh  5. Legality­ requirement that purpose and consideration of the contracts is lawful  Agreement agreeing to commit a ______________  ____________ laws  Puts a limit on the amount of interest that can be charged.  Contracts that interfere with ________________  Contracts that have a _______________ of interest  Individual has an economic interest in both sides  Something illegal is in the contract  Contracts that restrict ________________  Resale price agreements  Covenance not __________________  ___________________________ clauses  A statement in a contract that anticipates a future loss or event.   Lack of required _________________ th  Sometimesthhere is a 6  element to a contract  6  element is­ Statute of frauds. There is a requirement of __________________  this is only required in certain instances.   Contract to answer for the __________________ of a decedent.  Promise to pay for someone’s debts  (cosigner for loans)  Anti­nuptial agreement or a ____________________ agreement  Contracts for sale of any matters in real estate.  Promissory estoppel if: o Non­owner is in actual possession of real estate o If they paid some amount o If they made improvements to property  Contracts for sale of _____________ that are more than _____________  of personal property.  Parole evidence rule­ when there is a writing, that writing cannot be ________________  by a party with an oral testimony. Third parties  General rule: all contracts can be ______________ or a party can designate someone else to take their place. Assigner remains _______________ and responsible.   Third party beneficiary­ 3 types o _________________ beneficiary­ when there is an EXISTING debt and a  contract is entered into. Creditor of that existing debt has a right in the contract. o __________________­ NO preexisting debt. A desire to confirm a gift. The donor enters to FACILITATE THE FUTURE GIFT.  o ___________________ beneficiary­ no rights in the contract. No intent for  benefit upon them.  TORTS  5 tort theories 1. __________________ 2. ____________________ 3. ____________________ 4. _______________________ 5. _______________________ Crossword clues Down 1. ________________ infringement­ a business intentional tort. Dealing with a  company’s name or logo 2. This refers to any physical contact that is not permitted and makes the person feel  discomfort or injures them; under intentional torts 3. _____________ contract­ a contract that is also referred to as an implied­in­law  contract. This type of contract is NOT true. In this case only one party may have received the  benefits. Used to prevent unjust enrichment. 4. This law says that if an establishment serves alcohol to an already intoxicated person,  and then that intoxicated person ends up hurting themselves or someone else while intoxicated,  the establishment is liable.  5. The statement in a contract that anticipates a future loss or event and if it occurs the  company is not liable. Example: When you receive a ticket so that you can park in a parking lot  and it says that the parking garage is not liable for any loss or damages.  6. This contract has all 5 essential elements in it and each party will be entitled to their  promises.  7. This element of a contract recognizes that some people such as minors, mentally  incompetent, or individuals who are incompetent from intoxication, are protected from business  contracts.  8. A wrongdoing 9. Oral defamation 10. Condition ____________________­ Initiates the obligation to perform.  Across 1. A __________ protects the owner or inventor. This will protect the invention for 20  years.  2. Intentional tort of _______________­ the intentional act to cause someone fear that  they or an immediate family member will be harmed. Fear apprehension is caused.  4. A situation when someone is forced into a contract because of a threat of physical or  direct violence to them or a family member. Blackmail. 5. A _____________________ contract is one that is fully performed. 7. A voluntary agreement where one party, the offerer, agrees to do something or refrains  from doing something for consideration from the other party, the offeree. 5 essential elements to  it. 8. A contract that only involves ONE promise.  9. Protects the authors, artists, media creators, etc. Protects their creation for their entire  life plus 70 years. 10. Written or electronic defamation  11. Mistake of ___________­ when someone thought they made a contract to get the blue car, but the other party thought it was the red car 12. When a person is under psychological domination by another party such that a  contract is developed that a reasonable person would not enter.  13. Stand your ground ________________ defense­ If someone intrudes your home(or  automobile) and you feel that you and/ or your family is in harm’s way or at risk for death, you  have a right to use physical force against the intruder. Does not apply if the trespasser is not in  your home, like if they are in your front yard.  14. An essential element of a contract containing the offer and acceptance. Usually the  most important element.  1 1 7 2 2 3 5 4 5 6 14 8 10 9 12 9 13 10 11


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