Business Law Test #2

negligent tort

A civil wrong that occurs when the defendant acts in a way that subjects other people to an unreasonable risk of harm.

strict-liability tort

A civil wrong that occurs when the defendant takes an action that is inherently dangerous and cannot ever be undertaken safely, no matter what precautions the defendant takes.

bribery

A corrupt and illegal activity in which a person offers, gives, solicits, or receives money, services, or anything of value in order to gain an illicit advantage.

misdemeanor

A crime that is less serious than a felony and is punishable by a fine and/or imprisonment for less than one year.

forgery

A criminal falsification by imitating, impersonating, or altering a legal document with the intent to deceive or defraud.

extortion

A criminal offense in which a person obtains money, property, and/or services from another individual by wrongfully threatening or inflicting harm on the other's person.

insolvent debtor

A debtor who cannot pay debts in a timely fashion.

bait-and-switch advertising

A deceptive practice in which a seller advertises a low-priced item, generally unavailable to the consumer, then pushes the consumer to buy a more expensive item.

contributory negligence

A defense to negligence whereby the defendant can escape all liability by proving that the plaintiff failed to act in a way that would protect him or her from an unreasonable risk of harm and that the plaintiff's negligent behavior contributed in some way to the plaintiff's accident.

assumption of the risk

A defense whereby the defendant must prove that the plaintiff voluntarily assumed the risk the defendant caused.

hacker

A person who illegally accesses or enters another person's or a company's computer system to obtain information or to steal money.

trespass to realty

A tort that occurs when someone goes on another's property without permission or places something on another's property without permission.

nominal damages

Monetary damages awarded to a plaintiff in a very small amount, typically $1 to $5, to signify that the plaintiff has been wronged by the defendant even though the plaintiff suffered no compensable harm.

compensatory damages

Money awarded to a plaintiff as reimbursement for her or his losses; based on the amount of actual damage or harm to property, lost wages or profits, pain and suffering, medical expenses, disability, etc.

insider trading

The illegal buying or selling of a corporation's stock or other securities by corporate insiders such as officers and directors, in breach of a fiduciary duty or some other relationship of trust and confidence, while in possession of material, nonpublic information about the security.

false pretense

The illegal obtaining of another's property by making a materially false representation of an existing fact, with knowledge of the falsity of the representation and with the intent to defraud.

vicarious liability

The liability or responsibility imposed on a person, a party, or an organization for damages caused by another; most commonly used in relation to employment, with the employer held vicariously liable for damages caused by its employees.

deceptive advertising

The practice of advertising with claims that mislead or could mislead a reasonable consumer.

liquidation

The process in which a debtor turns over all assets to a trustee.

fraudulent misrepresentation

The tort that occurs when a misrepresentation is made with the intent to facilitate personal gain and with the knowledge that it is false.

intentional interference with contract

The tort that occurs when someone intentionally takes an action that will cause a person to breach a contract that she or he has with another.

unfair competition

The act of competing with another not to make a profit but for the sole purpose of driving that other out of business.

bankruptcy estate

The assets that are collected from a debtor who files for bankruptcy.

Racketeer Influenced and Corrupt Organizations (RICO) Act

A US law that provides extended penalties for criminal acts performed as part of an ongoing criminal organization.

disparagement

A business tort that occurs when a statement is intentionally used to defame a business product or service.

trade libel

A business tort that occurs when false printed statements criticize a business product or service and result in a loss of sales.

slander of title

A business tort that occurs when false published statements are related to the ownership of the business property.

slander of quality

A business tort that occurs when false spoken statements criticize a business product or service and result in a loss of sales.

intentional tort

A civil wrong resulting from an intentional act committed on the person, property, or economic interest of another.

battery

A civil wrong that occurs when one person intentionally and voluntarily brings about a nonconsented harmful or offensive contact with a person or something closely associated with him or her.

assault

A civil wrong that occurs when one person intentionally and voluntarily places another in fear or apprehension of an immediate, offensive physical harm.

negligence per se

A doctrine that allows a judge or jury to infer duty and breach of duty from the fact that a defendant violated a criminal statute that was designed to prevent the type of harm that the plaintiff incurred.

res ipsa loquitur

A doctrine that allows the judge or jury to infer that, more likely than not, the defendant's negligence was the cause of the plaintiff's harm, even though there is no direct evidence of the defendant's lack of due care.

defamation

A false statement or an action that harms the reputation or character of an individual, business, product, group, government, or nation.

disparate impact

A form of discrimination that arises when an employer's policy or practice appears to everyone equally but its actual effect is that it disproportionately limits employment opportunities for a protected class.

disparate treatment

A from of intentional discrimination in which an employee is hired, fired, denied a promotion, or the like, based on membership in a protected class. This is a form of intentional discrimination.

cyber terrorist

A hacker whose intention is the exploitation of a target computer or network to create a serious impact, such as the crippling of a communications network or sabotage of a business or organization, which may have an impact on millions of citizens if the terrorist's attack is successful.

strict liability

A legal term that imposes responsibility for damages regardless of the existence of negligence.

reasonable person standard

A measurement of the way members of society expect an individual to act in a given situation.

petty offense

A minor crime that is punishable by a small fine and/or imprisonment for less than six months in jail.

private nuisance

A nuisance that affects only a single person or a very limited number of individuals. Class notes: "the use of your property harms the enjoyment of your neighbor's property"

preferential payment

A payment made by an insolvent debtor that gives preferential treatment to one creditor over another.

Family and Medical Leave Act (FMLA)

Federal act requiring that employers provide all eligible employees with up to 12 weeks of leave during any 12-month period for several family-related occurrences.

felony

A serious crime, such as murder, rape, or robbery, that is punishable by imprisonment for more than one year or death.

public figure privilege

A special right, immunity, or permission given to people that allows them to make any statement about public figures, typically politicians and entertainers, without being held liable for defamation for any false statement made without malice.

conditional privilege

A special right, immunity, permission, or benefit given to certain individuals that allows them to make any statements about someone without being held liable for defamation for any false statement made without actual malice.

absolute privilege

A special right, immunity, permission, or benefit given to certain individuals that allows them to make any statements about someone without being held liable for defamation for any false statement made, regardless of intent or knowledge of the falsity of the claim.

unemployment compensation

A state system, created by the Federal Unemployment Tax Act (FUTA), that provides unemployment compensation to qualified employees who lose their jobs.

consent order

A statement in which a company agrees to stop disputed behavior but does not admit that it broke the law.

consumer law

A statute or administrative rule serving to protect consumer interests.

fraudulent transfer

A transfer of property made with intent to defraud creditors or made for an amount significantly lower than the property's fair market value within two years of filing for bankruptcy.

white-collar crime

A variety of nonviolent legal acts against society that occur most frequently in the business context.

tort

A violation of another person's rights or a civil wrongdoing that does not arise out of a contract or statute; primary types are intentional, negligent, and strict-liability torts.

discharge

A written federal court order signed by a bankruptcy judge stating that the debtor is immune from creditor actions to collect debt.

embezzlement

A wrongful conversion of another's funds or property by one who is lawfully in possession of those funds or that property.

automatic stay

After bankruptcy has been filed, a moratorium during which creditors cannot bring or continue action against the debtor or his or her property.

cease-and-desist order

An FTC order requiring that a company stop its illegal behavior.

False Claims Act

An act that allows employees to sue employers on behalf of the federal government for fraud against the government. The employee retains a share of the recovery as a reward for his or her efforts.

Sarbanes-Oxley Act

An act that criminalizes specific nonaudit services when provided by a registered accounting firm to an audit client; also increases the punishment for a number of white-collar offenses.

gross negligence

An action committed with extreme reckless disregard for the property or life of another person.

reaffirmation agreement

An agreement in which the debtor agrees to pay a debt even though it could have been discharged in bankruptcy.

creditor

An entity to which a debtor owes money.

fraud

An intentional deception that causes harm to another.

negligence

Behavior that creates an unreasonable risk of harm to others.

punitive damages

Compensation awarded to a plaintiff that goes beyond reimbursement for actual losses and is imposed to punish the defendant and deter such conduct in the future.

computer crime

Crime committed using a computer.

actual malice

In defamation, either a person's knowledge that his or her statement or published material is false or the person's reckless disregard for whether it is false.

Occupational Safety and Health Act (OSHA)

Federal law that established the Occupational Safety and Health Administration, the agency responsible for setting safety standards under the act and enforcing the act through inspections and the levying of fines against violators.

Equal Pay Act (EPA)

Federal law that prohibits an employer from paying workers of one gender less than the wages paid to employees of the opposite gender for work that requires equal skill, effort, and responsibility.

Americans with Disabilities Act (ADA)

Federal law that prohibits discrimination against employees and job applicants with disabilities.

Age Discrimination in Employment Act (ADEA)

Federal law that prohibits employers from refusing to hire, discharging, or discriminating in terms and conditions of employment on the basis of an employee's or applicant's being age 40 or older.

Title VII of the Civil Rights Act (CRA) of 1964

Federal law that protects employees against discrimination based on race, color, religion, national origin, and sex; also prohibits harassment based on the same protected categories.

Employee Retirement Income Security Act (ERISA)

Federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.

COBRA

Federal law which ensures that when employees lose their jobs or have their hours reduced to a level which they would not be eligible to receive medical, dental, or optical benefits from their employer, the employees will be able to continue receiving benefits under the employer's policy for up to 18 months by paying the premiums for the policy.

Fair Labor Standards Act (FLSA)

Federal law which requires that a minimum wage of a specified amount be paid to all employees in covered industries; also mandates that employees who work more than 40 hours in a week be paid no less than 1 1/2 times their regular wage for all hours beyond 40 worked in a given week.

trustee

In bankruptcy proceedings, an individual who takes over administration of a debtor's estate.

half-truth

Information that is true but not complete

actus reus

Latin for "guilty act"; a wrongful behavior that is associated with the physical act of a declared crime.

mens rea

Latin for "guilty mind"; the mental state accompanying a wrongful behavior.

strict-liability offense

Offense for which no mens rea is required.

conversion

Permanent interference with another's use and enjoyment of his or her property.

workers' compensation laws

State laws that provide for financial compensation to employees or their dependents when a covered employee is injured on the job.

trespass to personal property

Temporary interference with another's use or enjoyment of his or her personal property.

puffing

The use of generalities and clear exaggerations.

sexual harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that makes submission a condition of employment or a factor in employment decisions or that creates an intimidating, hostile, or offensive work environment.