OBC General Legal key terms

The doctrine that courts should follow the legal rules established by earlier decisions in the same or higher courts when the facts are materially similar, promoting consistency and predictability in the law.

A prior judicial decision that serves as authority for deciding a later case with comparable facts. It may be binding on lower courts or merely persuasive.

Judge-made law developed through court decisions over time rather than through statutes, applied where no controlling legislation exists and used to interpret enacted law.

A body of legal principles developed historically to provide fair remedies, such as injunctions and specific performance, where money damages would be inadequate.

A law requiring certain contracts, including those for land sales or lasting more than one year, to be evidenced by a signed writing to be enforceable.

A definite proposal to enter a bargain that creates a power of acceptance in the offeree and is communicated with the intent to be bound.

An unqualified agreement to all terms of an offer, made in the manner the offer invites, which completes contract formation and binds both parties.

Something of legally sufficient value bargained for and exchanged by the parties, such as a promise, act, or forbearance, making an agreement enforceable.

A response to an offer that changes its terms, operating as a rejection of the original offer and a new proposal that the other party may accept or reject.

A doctrine allowing enforcement of a promise without consideration when the promisor reasonably expected reliance, the promisee did rely, and injustice would otherwise result.

A rule barring introduction of prior or contemporaneous oral statements to contradict or vary a fully integrated written agreement, though it may permit clarifying ambiguity.

An equitable remedy ordering a breaching party to carry out the promised performance, typically granted when unique goods or real property are involved and damages are inadequate.

A relationship in which one person, the agent, is authorized to act on behalf of another, the principal, and to create legal relations with third parties.

Authority a third party reasonably believes an agent possesses because of the principal's manifestations, even if the agent lacks actual authorization, binding the principal.

A legal obligation of loyalty and care requiring a person entrusted with another's interests to act in good faith and avoid self-dealing or conflicts of interest.

A default arrangement allowing either employer or employee to end the relationship at any time, for any lawful reason, subject to statutory and contractual exceptions.

A judicial remedy holding shareholders personally liable for corporate obligations when the corporation is used to commit fraud or is so dominated it lacks separate identity.

The duties of care and loyalty owed by directors and officers, requiring informed decisions and undivided allegiance to the corporation rather than personal interests.

A presumption shielding directors from liability for informed business decisions made in good faith and without conflicts, absent fraud, illegality, or gross negligence.

The principle that owners of a corporation or limited liability company generally risk only their invested capital, not personal assets, for business debts.

A creditor's legal right in a debtor's property securing repayment of an obligation, enforceable against the collateral if the debtor defaults.

The steps, such as filing a financing statement or taking possession, that make a security interest effective against third parties and establish priority over competing claims.

A nonpossessory right to use another person's land for a specific purpose, such as crossing it for access, which may be created by grant, implication, or prescription.

A doctrine allowing a person who openly, exclusively, and continuously occupies another's land for the statutory period to acquire legal title to it.

Failure to exercise the care a reasonable person would use under similar circumstances, causing harm, established through duty, breach, causation, and damages.

The legal obligation to avoid conduct that creates an unreasonable risk of harm to others, owed to foreseeable persons within the zone of danger.

A cause that is a substantial factor in producing harm and is close enough in the chain of events that liability is fair, excluding remote or unforeseeable consequences.

Negligence by a licensed professional who fails to meet the standard of care of reasonably competent peers, resulting in harm to a client or patient.

The constitutional guarantee that government will not deprive a person of life, liberty, or property without fair procedures and substantively reasonable legal standards.

A governmental body created by statute to implement and enforce regulatory law, exercising rulemaking, adjudicatory, and investigative powers delegated by the legislature.

A court's authority to examine and set aside decisions of agencies or lower courts that exceed legal authority, act arbitrarily, or violate constitutional rights.

A situation where a person's personal, financial, or other interest could impair, or appear to impair, their ability to act impartially for another party.

A rule protecting confidential communications between a lawyer and client from compelled disclosure, encouraging full and candid legal consultation.

Materials prepared by a party or representative in anticipation of litigation, generally shielded from discovery absent substantial need and undue hardship.

The pretrial process through which parties obtain relevant information and evidence from each other, including documents, interrogatories, and depositions.

The obligation of a party to produce evidence and persuade the fact finder of disputed facts, typically by a preponderance of the evidence in civil cases.

An out-of-court statement offered to prove the truth of the matter asserted, generally inadmissible unless an exception applies.

A doctrine preventing a party from relitigating a claim already decided on the merits by a final judgment, conserving judicial resources and ensuring finality.