FIN 26074 exam 2 Study Guide
FIN 26074 exam 2 Study Guide FIN - 26074 - 001
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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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