Chapter 21: Bonus Chapter A: Working within the Legal Environment
exclusive dealing
selling goods with the condition that the buyer will not buy from a competitor
EEOC
Equal Employment Opportunity Commission
SEC
Securities and Exchange Commission
breach of contract
a failure to follow the terms of a contract
warranty
a guarantee that the product sold will be acceptable for the purpose for which the buyer intends to use it
contract
a legally enforceable agreement between two or more parties
endorsement
a payee's signature
consumerism
a social movement that seeks to increase and strengthen the rights and powers of buyers in relationship to sellers
full warranty
a warranty that requires a seller to replace or repair a product at no charge if the product is not functioning or defective
limited warranty
a warranty that typically limits the defects or mechanical problems that the seller covers
intentional tort
a willful act that results in injury
tort
a wrongful act that causes injury to another person's body, property or reputation
tax credit
an amount firms can deduct from their tax bill
conditions of legally binding contract
an offer is made, voluntary acceptance of an offer, both parties give consideration, both parties are competent, the contract covers a legal act and the contract is in proper form
four conditions of negotiable instruments
be written and signed by the maker or drawer, be made payable on demand or at a certain time, be made payable to the bearer or to specific order and contain an unconditional promise to pay a specified amount of money
negligence
behavior that causes unintentional harm or injury
Uniform Commercial Code (UCC)
comprehensive commercial law that covers sales law and other commercial laws
civil law
covers noncriminal acts like marriage and personal injury suits
precedent
decisions judges have made in earlier cases that guide the handling of current cases
criminal law
defines crimes, establishes punishments and regulates the investigation and prosecution of people accused of committing crimes
patent
document that gives inventors exclusive rights to their inventions for 20 years from the date they file the patent applications
administrative agencies
federal or state institutions and other government organizations created by Congress or state legislatures with delegated power to create rules and regulations within their given area of authority
negotiable instruments
forms of commercial paper (such as checks) that are transferable among businesses and individuals; they represent a promise to pay a specified amount
contract law
law that specifies what constitutes a legally enforceable agreement
trademark
legally protected name, symbol or design that identifies the goods or services of one seller and distinguishes them from those of competitors
strict product liability
liability without regard to fault
interlocking directorate
occurs when a company's board of directors includes members of the boards of competing corporations
product liability
part of tort law that holds businesses liable for harm that results from the production, design or inadequate warnings of products they market
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
passed to reduce the total number of bankruptcy filings and to eliminate the perceived ease of filing for bankruptcy
bearer
person holding a negotiable instrument
Clayton Act of 1914
prohibits exclusive dealing, tying contracts, interlocking directorates and buying large amounts of stock on competing corporations
Robinson-Patman Act of 1936
prohibits price discrimination and applies to both sellers and buyers who knowingly induce or receive price discrimination
Federal Trade Commission Act of 1914
prohibits unfair methods of competition in commerice
copyright
protects a creator's rights to materials such as books, articles, photos, paintings and cartoons
tying contract
requires a buyer to purchase unwanted items in order to purchase desired ones
consideration
something of value
outcomes of breach of contract
specific performance, payment of dances or discharge of obligation
express warranties
specific representations by sellers that buyers rely on regarding the goods they purchase
statutory law
state and federal constitutions, legislative enactments, treaties of the federal government and ordinances; written law
common law
the body of law that comes from decisions handed down by courts; unwritten law
judiciary
the branch of government chosen to oversee the legal system through a system of courts
involuntary bankruptcy
the creditors start legal action against the debtor
voluntary bankruptcy
the debtor applies for bankruptcy
deregulation
the government withdraws certain laws and regulations that seem to hinder competition
bankruptcy
the legal process by which a person, business or government entity, unable to meet financial obligations, is relieved of those debts by a court
damages
the monetary settlement awarded to a person who is injured by a breach of contract
business law
the rules, statutes, codes and regulations that provide a legal framework for the conduct of business and that are enforceable by court action
taxes
the way that federal, state and local governments raise money
reoragnizations
used almost exclusively by businesses
straight bankruptcy
used by businesses and individuals
repayment
used by individuals
implied warranties
warranties legally imposed on the seller specifying that a product will conform to the customary standards of the trade or industry in which it competes