CLEP Introductory Business Law flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Supremacy Clause

Article VI clause stating the Constitution, federal statutes, and treaties are the supreme law of the land, preempting conflicting state law.

Stare decisis

Doctrine that courts should follow precedent established by prior decisions, promoting stability and predictability in common law.

Commerce Clause

Article I, Section 8 power of Congress to regulate interstate commerce, interpreted broadly to include activities substantially affecting interstate commerce.

Strict scrutiny

Highest level of judicial review applied to content-based speech restrictions and suspect classifications; law must be narrowly tailored to compelling government interest.

Diversity jurisdiction

Federal court subject matter jurisdiction when parties are citizens of different states and amount in controversy exceeds $75,000, requiring complete diversity.

Summary judgment

Pretrial motion granted when no genuine dispute of material fact exists and moving party is entitled to judgment as a matter of law.

Personal jurisdiction

Court's power over a defendant, requiring minimum contacts with the forum state consistent with fair play and substantial justice.

Standing

Justiciability requirement that plaintiff have injury-in-fact, causation, and redressability to bring a case in federal court.

Consideration

Bargained-for exchange of legal value that makes a promise enforceable; pre-existing duty is not consideration.

Statute of Frauds

Requires certain contracts to be in writing and signed by party to be charged, including land sales, contracts over one year, and goods over $500.

Parol evidence rule

Bars admission of prior or contemporaneous oral or written statements that contradict a fully integrated written agreement.

Perfect tender rule

UCC rule allowing buyer to reject goods if they fail to conform in any respect to the contract, subject to seller's right to cure.

Expectation damages

Contract remedy placing nonbreaching party in position as if contract performed, including lost profits and incidental damages.

Administrative Procedure Act

Federal statute governing agency rulemaking, adjudication, and judicial review, requiring notice-and-comment for legislative rules.

Sherman Act Section 1

Prohibits contracts, combinations, or conspiracies in restraint of trade; per se illegal for price fixing, bid rigging, market allocation.

Title VII

Civil Rights Act provision prohibiting employment discrimination based on race, color, religion, sex, or national origin.

Securities Act of 1933

Requires registration and prospectus for public offerings of securities, focusing on full disclosure to investors in primary market.

Negligence elements

Duty, breach, actual and proximate causation, and damages; plaintiff must prove all four to recover for unintentional harm.

Comparative negligence

Defense reducing plaintiff's recovery by percentage of fault; pure comparative allows recovery even if plaintiff mostly at fault.

Strict products liability

Liability without fault for defective products causing harm, requiring defect, causation, and harm; defenses include misuse and assumption of risk.

Defamation

False statement of fact published to third party causing harm to reputation; public figures must prove actual malice.

Joint tenancy

Concurrent ownership with right of survivorship; requires unity of time, title, interest, and possession.

Recording statute

State law determining priority of competing interests in land based on race, notice, or race-notice recording.

Fourth Amendment

Protects against unreasonable searches and seizures; requires warrant based on probable cause or exception.

Agency fiduciary duties

Agent owes principal duties of loyalty, obedience, care, and accounting; principal owes compensation and indemnification.

Apparent authority

Authority created when principal's manifestations lead third party to reasonably believe agent has authority, binding principal.

Business judgment rule

Presumption that directors acted in good faith and in best interests of corporation; protects from liability absent breach of duty.

Piercing corporate veil

Court disregards limited liability when corporation used for fraud, alter ego, or undercapitalization, holding shareholders personally liable.

Firm offer rule

UCC rule making a merchant's signed written offer to buy or sell goods irrevocable for up to three months without consideration.

Implied warranty of merchantability

UCC warranty that goods are fit for ordinary purposes, arising automatically when seller is a merchant of such goods.

Risk of loss

UCC rules allocating risk between buyer and seller based on delivery terms; shipment contract passes risk to carrier, destination contract at destination.

Cover

Buyer's remedy of purchasing substitute goods and recovering difference between cover price and contract price plus incidental damages.