USF BUL3320 Exam 3 Study
Fair Labor Standards Act
(FLSA)
Wrongful dishonor
When a payer bank does not a honor a check and there are sufficient funds, it is held liable for all damages proximately caused by the wrongful dishonor, as well as all consequential damages
Agent exceeding the scope of authority
When an agent enters into a contract on behalf of a principal, there is an implied warranty of authority. If the agent exceeds the scope of their authority, the principal will not be bound unless it is ratified. Instead, the agent remains liable
Employer lockout
When an employer reasonably anticipates a strike, he may prevent those employees from entering the premises
Undisclosed agency
When the third party is unaware of both the existence of the agency or of the principal. Both the principal and the agent are liable on the contract
Exclusive remedy
Worker's comp is an exclusive remedy and the employee may not sue the employer for damages unless the employer intentionally causes the injuries
Overtime pay
Workers cannot be required to work more than 40 hours in a week unless they are paid time and a half
To form a sole proprietorship, ________ is required.
a local business license
Occupational safety and health act (OSHA)
established in 1970
The voluntary association of two or more persons for carrying on a business as co-owners, for profit, is called a ________.
general partnership
Which form of business organization has been recognized since ancient times?
general partnership
Although union employees have the right to strike in a labor conflict, the employer has the right to ________ leading to a potential lose-lose resolution as the striking laborers ________ and the employer has a less experienced workforce.
hire temporary labor; do not get paid
In collective bargaining, discrimination is categorized as an..
illegal subject
The amount of money that a worker's compensation claimant can recover is ________.
preset as established by statute or regulations
Disparate-treatment
the situation in which an employer treats a specific individual less favorable based on their race, color, national origin, sex, or religion.
Which of the following statements is NOT true about entrepreneurs?
their endeavors start out as a sole proprietorship
A sole proprietor has ________ liability.
unlimited personal
Usurping an opportunity
A third party offer to an agent must be conveyed to the principal. Agent cannot appropriate the opportunity for themselves unless the principal rejects it after due consideration
Transfer of a nonnegotiable contract by assignment
A transferor/assignor transers/assigns their rights to a transferee/assignee, who acquires the same rights that the assignor possessed. If the transfer of a negotiable item fails to qualify as a negotiation, it becomes an assignment, and the transferee becomes an assignee instead of a holder
Mental incompetence
Adjudication of incompetence is required
Agent's duty of loyalty
Agent owes the principal a duty of loyalty and fiduciary duty
Self dealing
Agents are generally prohibited from undisclosed self-dealing with the principal
Competing with the principal
Agents are prohibited from competing with the principal during the course of an agency unless the principal agrees
Agent's signature
Agents may be empowered to sign as a representative of a principal, binding the principle under general agency law
Frolic and detour
Agents sometimes do things during the course of their employment that furthers their personal interests, such as running personal errands. This is referred to as frolic and detour. Negligence actions stemming from this are examined on a case by case basis.
Deferred posting
Allows banks to establish a cutoff time so that any checks received after that hour are treated as having been received on the next banking day
Formation of an agency
An agency can arise as an express agency, an implied agency, an apparent agency, and an agency by ratification
Who can initiate an agency relationship?
Any person who has contractual capacity. Court may appoint a legal guardian to handle affair for anyone that lack capacity. Agency contracts can only be created for lawful purposes
Independent contractor
Are not employees, they are hired to perform certain tasks on their behalf
Negotiating bearer paper
Bearer papers have no specific payee or indorsees named and are negotiated by delivery
Tort liability of principals and agents to third parties
Both principal and agent are liable for their own tortious conduct.
Functions of a negotiable instruments
Certain forms of negotiable instruments serve as a substitute for cash, such as checks as an extensions of credit and as record-keepings devices
Special types of checks
Certified checks and cashier's checks
Final settlement
Checks are considered paid when the payor bank pays the check in cash, settles for the check without the right to revoke it, or fails to dishonor it within certain statutory time periods
"On Us" Checks
Checks in which the depository and payor bank are the same, and must be paid by the next banking day
Employment related injury
Claimants must prove that their injuries arose from their work in order to get recovery
Title VII of the Civil Rights Act of 1964
Congress enacted several major federal statutes that outlawed employment discrimination against members of certain classes
Special endorsement
Contain both the signature of the endorser and the name of the endorsee
Blank endorsement
Contain only a signature of the endorser, do not specify a particular endorsee, and are considered bearer paper
Certificate of deposit
Created by a depositor (payee) depositing money with a financial institution (maker) in exchange for a promise to pay back the deposited sum plus interest at a set time
Series of forgeries
Customers must report forgeries or alterations within a reasonable time, not exceeding 30 days from the date of their bank statement, or the bank will be discharged from liability on all similarly forged or alter checks
Provisional credits
Depository banks are not required to pay the customer until the check actually clears, but may elect to issue provisional credit until it settles. If check returns, the credit is reversed
Order to pay
Drafts and checks contain the drawer's unconditional order for the drawee to pay a payee
Secondary liability for negotiable instruments
Drawers of checks and draft and unqualified endorsers of negotiable instruments have secondary ability, similar to guarantors on a contract
A right to sue letter is issued by the EEOC if the ________.
EEOC finds a violation and decides not to bring suit against the employer
Qualified endorsement
Each subsequent endorser is presumed to be liable if the maker defaults on a negotiable instrument. Qualified endorsements disclaim or limit liability on instruments.
Employer-employee relationship
Employer hires employee. Employee is not an agent unless they are specifically empowered to enter into contracts on the principal employer's behalf
Undue Hardship
Employers are not obligated to provide accommodations that would impose an undue hardship.
Unemployment compensation
Employers are required to pay unemployment contributions to assist employees that are temporarily unemployed under FUTA and various state laws. Un employment
Qualified endorsers
Endorsers who endorse instruments without recourse have no secondary liability because they have expressly disclaimed any liability
_____ requires that both employers and employees make contributions into the Social Security fund, just as the Self-Employment Contributions Acts (SECA) requires that self-employed individuals make similar contributions
FICA
Child labor
FLSA forbids the use of oppressive child labor and allows the department of labor to establish regulations defining permissible child labor
Agency
Fiduciary relationships formed by mutual agreement between the principal and an agent. The principal employs the agent to act on his or her behalf
Fraud in the inception
Fraud in the fact or the execution are universal defenses
Power of attorney
Gives an agent the power to sign legal documents. General gives broad powers, Special power of attorney limits the powers of the agency
NLRA
Gives employees the right to join together as an appropriate bargaining unit and form a union
Certified checks
Guaranteed by the bank with funds set aside from the customer's account
Family and Medical Leave Act
Guarantees workers unpaid time off from work for family and medical emergencies and other specified situations. Applies to companies with 50 or more workers
Types of Union Elections
If 30 percent of the employees comprising a bargain unit are interested in joining a union, the union can petition the NLRB to set an election date
Incomplete check
If a check is left uncompleted, the payee or holder may complete the check. If a payor bank makes a good faith payment the completed check, the drawer will be liable
One year rule
If alteration of a check is not reported within one year of receipt of the bank statement, the bank is relieved of any responsibility
Reasonable Accommodation
If an employer makes a reasonable accommodation to accommodate an individual's disability, there is no violation of the ADA.
Material alteration
If an instrument has been fraudulently and materially altered, it cannot be enforced.
Employee Retirement Income Security Act (ERISA)
If employers offer pension plans, ERISA establishes the record-keeping, disclosure, and other requirements that will apply to them. It also establishes how and when an employee will become vested in the plan
Multiple payees or endorses
If the word "and" is used, both person's names will be required to negotiate the instrument; however, if either the word "or" or a slash mark is used, either party may endorse and negotiate the instrument
Principal's duties to reimburse
In carrying out an agency, an agent may spend his or her own money on the principal's behalf. The principal owners a duty to reimburse the agent for all such expenses if they were authorized by the principle, with the scope of the agency, and necessary to discharge the agents duties in carrying out the agency
Postdated Checks
In order for the terms of a postdated check to be honored by a bank, the drawer must postdate the check and must give separate written notice to the bank, including a full description of the check. If these steps are taken and the bank pay the check early, it will be held liable for any losses suffered by the drawer
Minority
Infancy, provided there has been no misrepresentation, allows for disaffirmance
Illegality
Instruments arising from illegal transactions will declare the instrument void
Cashier's checks
Issued to specific payees, and are considers non-cancelable negotiable instruments
Criteria That Justifies a Differential In Wages
It is allowed in payment systems based on seniority, merit, quantity or quality of product, and shift differentials.
No strike clause
It is illegal to strike if the union contract includes a negotiated no-strike clause
Affirmative Action Plan
It provides that certain job preferences will be given to members of minority racial and ethnic groups, females, and other protected-class applicants when making employment decisions.
Point-of-sale terminal
Machines at retail business for debit cards
Signature defined
May be any name, word, or mark, including handwritten, typed, stamped or printed symbols that used to authenticate writings.
Deposit of cash
Money deposited into an account becomes available on the next banking day
Restrictive endorsement
Most endorsements are nonrestrictive and have no instructions or conditions attached. Restrictive endorsements have some form of instructions attached, like endorsements for deposit or collection, trust endorsements and agency endorsements
Creating a negotiable instrument
Negotiable instrument must be in writing and be signed by the maker or drawer, offering an unconditional promise to pay a stated amount at a set time or upon demand to the bearer
Transfer of a negotiable instrument
Negotiation occurs when a negotiable instrument is transferred by someone other than the issuer
Can negotiable instruments be tied to any undertakings in addition to the payment of money?
No, Negotiable instruments cannot be tied to any undertakings in addition to the payment of the money
The ________ Act states that it is legal for employees to organize.
Norris - LaGuardia
Promise to pay
Notes must include the maker's unconditional promise to pay
Promissory note
Notes that are unconditional written promises by a party (the maker), to pay money to another (the payee).
General duty standards
OSHA also requires general duty standards, such as providing a work environment free from hazards
Specific duty standards
OSHA standards address both specific duties, like establishing safety requirements for equipment
Agency by ratification
Occurs when a person misrepresents themselves as another's agent when in fact they are not and the purport principle ratifies (accepts) the unauthorized act. In such cases, the principle is bound to perform and the agent is relieved of any liability for misrepresentation
Dual agency
Occurs when an agent acts for two or more different principals in the same transaction. Generally prohibited unless all the parties involved in the transaction agree to it
Partially disclosed agency
Occurs when the agent discloses their agency status but not the identity of the principal to the third party.
Negotiating order paper
Order paper is payable to a specific payee or endorsed to a specific indorsee
Stop-payment order
Orders by the drawer of a check to the payor bank not a pay a particular item be be oral or in writing. Failure to honor the stop-payment order will make the bak liable for actual damages suffered by the drawer
Altered checks
Payor banks can dishonor altered checks. They can charge the drawer's account for the original tenor (amount) under the doctrine and presentment warranty
Primary liability for negotiable instruments
Primary liability lies with the makers of promissory notes and Certificates of deposits. There is no primary liability with drafts or checks because they are merely orders to pay.
Principal-agent relationship
Principal hires agent
Principals duty to compensate
Principal owes a duty to compensate the agent for performance of services, either the amount stated in the contract or, if there was no agreement, whatever the customary fee paid in the industry is due
Principals duty to indemnify
Principal owes a duty to indemnify the agent for any losses the agent suffers because of the principal's conduct. Usually arises when an agent is held liable for the principal's misconduct
The coming and going rule
Principals are generally not held liable for injuries caused by agents or employees on their way to and from work, even if the principal supplies the transportation
Disparate treatment discrimination
Prohibits disparate treatment and disparate action discrimination
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Provides that a terminated employee or his beneficiaries must be offered the opportunity to continue his group health insurance at the group rate plus administration fees
National origin discrimination
Refers to the country of a person's ancestors
Fund transfer procedures
Security procedures are used to protect the banking institutions during fund transfers
____ comprised the membership of the American Federation of Labor at the time it was developed.
Skilled craft workers
Failure to examine bank statements in a timely manner
Statements must be sent regularly to the customer indicting sufficient information for them to able to identify paid checks. Further, the customer owes a duty to examine the statements and promptly notify the bank of any discrepancies
Requirements for 'holder in due course' (HDC) status
Taking for value requirement, taking in good faith requirement, taking without notice of defect requirement, cannot be overdue instruments, dishonored instruments, there cannot be evidence of forgery, alteration or irregularity. Payees are not usually considered HDCs.
Which of the following statements accurately captures the taxation of sole proprietorship?
Taxes are reported on the sole proprietor's personal income taxes.
Uncovered Conditions
Temporary or nonchronic impairments of short duration with little or no residual effects usually are not considered disabilities.
Undocumented Workers
The Immigration Reform and Control Act requires employers to verify whether prospective employees are either US citizens or otherwise authorized to work in the country (have proper work visas)
Misuse of confidential information
The agent often acquires confidential information about the principal's affairs. The agent is under a legal duty not to disclose or misuse confidential information either during or after the course of the agency
Reverse Discrimination
The courts have held that if an affirmative action plan is based on pre- established numbers or percentage quotas for hiring or promoting minority applicants, then it causes illegal reverse discrimination.
Parties to a check
The drawer is the person who maintains the checking account at the drawee, or payor bank. The payee is the party to whom the check is written
EEOC
The federal administrative agency responsible for enforcing most of the federal anti discrimination laws
Express agency
The most common form of an agency, where the agent contracts with the principal to act on the principal's behalf. Contract may be oral or written but is bound by the statute of frauds
Endorsement of a check
The payee may either demand payment of a check or endorse the check to another party, who becomes the endorsee
Misspelled or wrong name
The payee or the payer may choose to have the endorsement on the instrument made in the misspelled name, the correct name or both.
Liability for an independent contractor's torts
The principal is not liable for the torts of their independent contractors, since they do not control the means by which the results are accomplished
Principal's duty to cooperate
The principal owes a duty to cooperate with and assist the agent in the performance of the agent's duties and the accomplishment of the agency
Strikes
The union may call a strike if a collective bargaining agreement cannot be reached
H-1B Foreign Guest Worker Visa
These visas allow foreign nationals that skilled in specialty occupations to work in the US
Lilly Ledbetter Fair Play Act of 2009
This act provides that each discriminatory pay decision restarts the statutory 180-day clock. It also provides that a count can award back pay for up to two years preceding the filing of the claim if similar violations occurred during the prior two-year time period
National Labor Relations Board (NLRB)
This administrative body oversees union elections and prevents both unions and employers from engaging in unfair labor practices
EB-1 Extraordinary Ability Visa
This allows US employers to employ in the US foreign nationals who possess extraordinary ability for certain types of employment
Illegal strikes
This includes violent strikes, sit down strikes that occupy employer's premises, intermittent strikes, wildcat strikes
Fraud in the inducement
This is a personal defense that is not effective against HDCs, but is against ordinary holders
Trade acceptance
This is a sight draft arising when credit is extended with the sale of goods
Discharge in bankruptcy
This is a universal defense
Fully disclosed agency
This is the result of the third party knows that the agent is acting as such for an identified principal. The contract is between the principal and the third party. Agent has no liability under the contract unless they have guaranteed the performance of the principal
Secondary boycott picketing
This picketing is only legal if it is against the struck employer's product, and not against a neutral employer
Fixed amount of money
This requirement ensures the value of the instrument, as well as any interest being charged
Extreme duress
This requires some form of force or violence; ordinary duress is not enough
Social security
This system provides limited retirement and death benefits to certain employees and their beneficiaries
Variable interest rate loan
This type of loan ties interest rates to a set measure such as a prime rate. They may be considered negotiable instruments
The Fair Employment Practices Act
This was passed to eliminate job discrimination in the hiring, maintaining, and termination of employees based on the protected classes of race, color, national origin, sex and religion
Replacement workers
Those hired by management to replace striking workers
Drafts
Three-party instruments by which a drawer orders a drawee to make a payment to a payee
Check
Three-party instruments like drafts that are drawn on specific financial institutions and are payable on demand
Limits on Employer Questions
Title 1 restricts an employer from asking about the disability, but may query the applicant's ability to perform job-related functions.
Genetic Information Nondiscrimination Act (GINA)
Title II of GINA makes it illegal for an employer to discriminate against job applicants and employees based on genetic information.
A simple majority vote at the election will win the election. (T or F)
True
If employees no longer wish to be represented by the union, a decertification election will be supervised by the NLRB. (T or F)
True
If management does not contest the union, a consent vote may be held without NLRB oversight. (T or F)
True
Managers and professional employees may not join unions formed by the employees whom they supervise (T or F)
True
Once a bargaining unit is defined, the union may petition the NLRB to hold an election. (T or F)
True
Persons in a protected class are not a defense to a Title VII action, T or F?
True
Forgery
Unauthorized endorsements are inoperative unless ratified by the person authorized
Partnership law is codified in the ________.
Uniform Partnership act
Crossover workers
Union members that choose not to strike or return to work after striking for a time
Cooling - off period
Unions must give a 60-day notice of their intent to strike
Unqualified endorsers
Unqualified endorsers have secondary liability
Honoring checks
When a drawee bank receives a properly drawn check, it has a duty to honor the check and debit the drawer's account
Disparate-Impact Discrimination
when an employer discriminates against an entire protected class. To prove disparate-action, the plaintiff must show a causal link.
Stale checks
A check that has been outstanding for more than a certain period of time is consider stale, and a bank is under no obligation to pay it
Complaint process
A complainant must first file a complaint with the EEOC, if violation is found, it will decide whether to sue the employee.
Forged signature of the drawer
A forged instrument bears the drawer's forged signature and the payor bank cannot charge the customer's accounts, or, having done so, must reaccredit the account and recover from the party who presented the check
Shelter principle
A hold may qualify as a holder in due course if they acquire the instrument through a holder in due course
Holder in due course
A holder is the person in possession of a negotiable instrument, and has the same rights as an assignee of an ordinary nonnegotiable contract. The holder takes an instrument for value, in good faith, and without notice of defects, and is afforded protection against any personal defenses that might be asserted.
Requirements for imposing secondary liability
A party is held to have secondary liability if the instrument is properly presented for payment, has been dishonored, and notice to timely given to the person who is secondarily liable
Intentional tort
A principal is not liable for the intentional torts of agents and employees that are committed out the principal's scope of business
Prior to holding an election to form a union, the group wanting to unionize must define a..
bargaining unit
According to Title VII of the Civil Rights Act of 1964, if an employer treats an individual less favorably than others because of that person's religion, ________ has occurred.
disparate treatment discrimination
Type of negotiable instruments
drafts, checks, promissory notes, and certificates of deposits
The simplest form of a business organization is the ________.
sole proprietorship