the acquisition of title to real property bt occupying it openly, without the consent of the owner, for a period of time specified by a state statute
adverse possession
job-hiring policies that give special consideration to members of protected classes in an effort to overcome present effects of past discrimination
affirmative action
a designation in the US for a corporation formed in another country but doing business in the US
alien corporation
a clause in an insurance contract that gives the insured a grace period (usually thirty days) within which to pay an overdue premium
antilapse provision
authority that is only apparent, not real. In agency law, a person may be deemed to have had the power to act as an agent from another party if the other party's manifestations to a third party led the third party to believe that an agency existed when, i
apparent authority
the right of a dissenting shareholder, if they objects to an extraordinary transaction of the corporation to have their shares appraised and to be paid the fair value of their shares by the corporation
appraisal rights
a written agreement that sets forth each partner's rights and obligations with respect to the partnership
articles of partnership
a written, temporary insurance policy
binder
state laws that regulate the offer and sale of securities
blue sky laws
identifiable characteristics reasonably necessary to the normal operation of a particular business. These characteristics can include gender, national origin, and religion, but not race
bona fide occupational qualification
a rule that immunizes corporate management from liability for actions that result in corporate losses or damages if the actions are undertaken in good faith and are within both the power of the corporation and the authority of management to make
business judgement rule
a defense to allegations of employment discrimination in which the employer demonstrates that an employment practice that discriminates against members of a protected class is related to job performance
business necessity
the amount payable to a partner on their dissociation from a partnership, based on the amount distributable to that partner if the firm were wound up on that date, and offset by any damages for wrongful dissociation
buyout price
a set of governing rules adopted by a corporation or other association
bylaws
the amount that the insurer has agreed to pay to the insured if a life insurance policy is canceled before the insured's death
cash surrender value
a corporation whose shareholders are limited to a small group of persons, often only family members.
close corporation
the final step in the sale of real estate - also called settlement or closing escrow
closing
a written supplement or modification to a will. Must be executed with the same formalities as a will
codicil
a clause in an insurance contract that encourages property owners to insure their property for an amount as close to full value as possible. If the owner insures the property up to a specified percentage, of its value, they will recover any loss up to the
coinsurance clause
shares of ownership in a corporation that give the owners of the stock a proportionate interest in the corporation with regard to control, earnings, and net assets
common stock
joint owners
concurrent ownership
the process of taking private property for public use through the government's power of eminant domain
condemnation
a contractual and statutory process in which two or more corporations join to become a completely new corporation. The orginal corporation cease to exist, and the new corporation acquires all their assets and liabilities
consolidation
a termination of employment brought about by making an employee's working cnoditions so intolerable that the employee reasonably feels compelled to leave
constructive discharge
a form pf eviction that occurs when a landlord fails to perform adequately any of the undertakings required by the lease, thereby making the tenant's further use and enjoyment of the property exceedingly difficult or impossible
constructive eviction
the tranfer of a title to land from one person to another by deed; a document (such as a deed) by which an interest in land is transferred from one person to another
conveyance
an association that is organized to provide an economic service to its members (or shareholders).
cooperative
the relationship between a corporation and its shareholders - specifically, a system that details the distribution of rights and responsibilities of those within the corporation and spells out the rules and procedures for making corporate decisions
corporate governance
a document by which title to property is passed
deed
to make a gift of real property by will
devise
a principal whose identity is known to a third party at the time the agent makes a contract with the third party
disclosed principal
a form of employment discrimination that results from certain employer practices or procedures that, although not discriminatory on their face, have discriminatory effect
disparate-impact discrimination
a form of employment discrimination that results from when an employer intentionally discriminates against employees who are members of protected classes
disparate-treatment discrimination
the severance of the relationship between a partner and a partnership when the partner ceases to be associated with the carrying on of the partnership business
dissociation
the formal disbanding of a partnership or a corporation. It can take place by 1. acts of the partners or in a corporation, of the shareholders and board of directors. 2. death of a partner 3. the expiration of a time period stated in a partnership agreeme
dissolution
a distribution to corporation shareholders of corporate profits or income, disbursed in proportion to the number of shares held
dividends
in a given state, a corporation that does business in, and is organized under the laws of, that state
domestic corporation
a required standard of care that certain professionals, such as accountants, must meet to avoid liability for securities violations
due dilligence
a document that authorizes a person to act on behalf of an incompetent person
durable power of attorney
a nonpossessory right to use another's property in a manner established by either express or implied agreement
easement
the power of a government to take land for public use from private citizens for just compenstation
eminent domain
an account that is generally held in the name of the depositor and escrow agent
escrow account
authority expressly given by one party to another. In agency law, an agent has express authority to act for a principal if both parties agree, orally or in writing, that an agency relationship exists in which the agent had the power to act in the place of
express authority
an ownership interest in land in which the owner has the greatest possible aggregation of rights, privileges, and power. The owner can use, possess, or dispose of the property as their chooses during their lifetime. On death, the interst in the property p
fee simple absolute
a type of tenancy under which property is leased for a specified period of time, such as a month, a year, or a period of year; also called a tenancy for years
fixed-term tenancy
in a given state, a corporation that does business in the state without being incorporated therein
foreign corporation
in a limited partnership, a partner who assumes responsibility for the mangement of the partnership and liability for all partnership debts
general partner
a deed that simply recited words of consideration and conveyance. Under statute, a grant deed may impliedly warrant that at least the grantor has not conveyed the property's title to someone else
grant deed
the refusal to deal with a particular person or firm by a group of competitors; prohibited by the Sherman Act
group boycott
a document that designates a person who will have the power to choose what type of and how much medical treatment a person who is unable to make such a choice will receive
health-care power of attonery
any agreement that is some way restriant competition between rival firms competing in the same market
horizontal restraint
authority that is created not by an explicit oral or written agreement but by implication. In agency law, implied authority (of the agent) can be conferred by custom, inferred from the position the agent occupies, or implied by virtue of being reasonably
implied authority
an implied promise by a landlord that rented residential premises are fit for huamn habitation - that is, in a condition that is safe and suitable for people to live in
implied warranty of habitability
a clause within a life or health insurance policy that states that after the policy has been in force for a specified length of time, the insurer cannot contest statements made in the policyholder's application
incontestability clause
a person on the board of directors who is also an officer of the corporation
inside director
the purchase or sale of securities on the basis of "insider information" in violation of a duty owed to the company whose stock is being traded
insider trading
an interest either a person's life or well being or in property that is sufficiently substantial that insuring against injury to the person or against damage to the property does not amount to a mere wagering contract
insurable interest
the state of having died without a will
intestate
the taking of private property by the government without payment of just compensation as required by the US constitution. The owner must sue the government to recover just compensation
inverse condemnation
in partnership law, a doctrine under which a plaintiff may sue, and collect a judgement from, one or more of the partners separately or all of the partners together
join and several liability
shared liability. For example, if a third party sues a partner on a partnership debt, the partner has the right to insist that the other partners be sued with them.
joint liability
the joint ownership of property by two ore more co-owners in which each co-owner owns an undivided portion of the property
joint tenancy
a joint undertaking of a specific commercial enterprise by an association of persons
joint venture
an interest in land that exists only for the duration of the life of some person, usually the holder of the estate
life estate
a hybrid form of business enterprise that offers the limited liability of the corporation but the tax advantages of a partnership
limited liability company
a form of partnership that allows professionals to enjoy the tax benefits of a partnership while limiting their personal liability for the malpractice of other partners
limited liability partnership
in a limited partnership, a partner who contributes capital to the partnership but has no right to participate in the management and operation of the business
limited partner
a partnership consisting of one or more general partners and one or more limited partners
limited partnership
a type of life insurance for which permiums are payable for a definite period, after which the policy is fully paid
limited-payment life
a trust created by the grantor and effective during their lifetime
living trust
a document that allows a person to control the methods of medical treatment that may be used after a serious accident or illness
living will
the term used to designate a person who has an ownership interest in a limited liability company
member
a contractual and statutory process in which one corporation acquires all of the assets and liability of another corporation
merger
in a limited liability company an agreement in which the members set forth the details of how the business will be managed and operated
operating agreement
a person on the board of directors who does not hold a management position at the corporation
outside director
a principal whose identity is unknown by a third person, but the third person knows that the agent is or may be acting for a principal at the time the agent and the third person form a contract
partially disclosed principal
any entity that does not have its income taxed at the level of the entity; examples are partnership, S corporations, and limited liability companies
pass-through entity
a lease interst in land for an indefinite period involving payment of rent at fixed intervals, such as week to week, month to month, or year to year
periodic tenancy
to disregard the corporate entity, which limits the liability of shareholders, and hold the shareholders personally liabile for a corporate obligation
pierce the corporate veil
the pricing of a product below cost with the intent to drive competitors out of the market
predatory pricing
rights held by shareholders that entitle them to purchase newly issued shares of a corporation's stock, equal in percentage to shares presently held, before the stock is offered to any outside buyers
preemptive rights
a case in which the plaintiff has produced sufficient evidence of his or her conclusion that the case can go to a jury, a case in which the evidence compels the plaintiff's conclusion if the defedant produces no evidence to dispove it
prima facie case
the process of proving and validating a will and the settling of a matters pertaining to administation, guardianship, and the like
probate
in real property law, the right to enter onto and remove things from the property of another
profit
a document required by federal or state securities laws that describe the financial operations of a corporation, thus allowing invetors to make informed decisions
prospectus
in corporation law, a written agreement between a stockholder and another under which the stockholder authorizes the other to vote the stockholder's shares in a certain manner
proxy
a corporation owned by a federal, state, or municipal government - not to be confused with a publicly held corporation
public corporation
a corporation for which shares of stock have been sold to the public
publicly held corporation
a deed intended to pass any title, interest, or claim that the grantor may have in the property but not warranting that such title is valid
quitclaim deed
the number of members of a decision making body that must be present before business may be transacted
quorum
statutes that allow deeds, mortgages, and other real property transactions to be recorded so as to provide notice to future purchasers or creditors of an existing claim on the property
recording statute
an agreement between a manufacturer and a retail in which the manufacturer specifies the minimum retain price of its products. Illegal per se under the sherman act
resale price maintenance agreement
a doctrine under which a principal or an employer is held liable for the wrongful acts committed by agents or employees while acting within the course and scope of their agency or employment
respondeat superior
any contract or combination that tends to eliminate or reduce competition, effect a monopoly, artificially maintain price, or otherwise hamper the court of trade and commerce as it would be carried on if left to the control of natural economic forces
restraint of trade
a private restriction on the use of land. If its benefit or obligation passes with the land's ownership, it is said to "run with the land
restrictive convenant
the portion of a corporation's profits that has not been paid out as dividends to shareholders
retained earnings
a rule of the securities and exchange commission that makes it unlawful in connection with the purchase or sale of any security to make any untrue statement of a material fact or to omit a material fact if such omission causes the statement to be misleadi
SEC Rule 10b-5
a suit brought by a shareholder to enforce a corporate cause of action against a third person
shareholder's derivative suit
a merger between a subsidiary corporation and a parent corporation that owns at least 90% of the outstanding shares of each class of stock issued by the subsidiary corporation
short-form merger
the simplest form of business, in which the owner is the business. The owner reports business income on their person tax return and is legally responsible for all debts and obligations incurred by the business
sole proprietorship
a deed that warrants that the grantor or seller held good title during his or her ownership of the property
special warranty deed
a permit that allows for a specific exemption to zoning regulations for a particular piece of land in a location that has a particular zoning characteric
special-use permit
a trust created to prevent the beneficiary from spending all the money to which he or she is entitled. Only a certain portion of the total amount is given to the beneficiary at one time, and most states prohibit creditors from attaching assets of the trus
spendthrift trust
an equity interest in a corporation measured in units of shares
stock
a certificate that grants the owner the option to buy a given number of shares of stock, usually within a set time period
stock option
the reamining, or continuing, corporation following a merger
surviving corporation
an investment group of persons or firms brought together for the purpose of financing a project that they would not or could not undertake independently
syndicate
the acquisition of control over a corporation throught the purchase of a substantial number of the voting shares of the corporation
takeover
a type of tenancy under which one who, after rightfully being in possession of leased premises, continues (wrongfully) to occupy the property after the lease has been terminated
taking tenancy at sufferance
a significant change in employment status, such as firing or failing to promote an employee, reassigning the employee to a position with significantly different responsibilities or effecting a significant change in employment benefits
tangible employment action
a type of tenancy under which either party can terminate the tenancy without notice; usually arises when a tenant who has been under a tenancy for years retains possession, with the landlord's consent, after the tenanct for years has terminated
tenancy at will
the joint ownership of property by husband and wife. Neither party can transfer his or her interesr in the property without the consent of the other
tenancy at will by entirety
co-ownership of property in which each party owns an undivided interest that passes to their heirs at death
tenancy in common
an offer to purchase made by one company directly to the shareholders of another company
tender offer
a type of life insurance policy for which premiums are paid for a specified term. Payment of the policy is due only if death occurs within the term period
term insurance
the condition of having died with a valid will
testate
insurance commonly purchased by a purchaser of real property to protect against loss in the event that the title to the property is not free from liens or superior ownership claims
title insurance
an arrangement in which title to property is held by one person for the benefit of another
trust
a latin term meaning "beyond the powers". In corporate law, acts of a corporation that are beyong its express and implied powers to undertake
ultra vires
a principal whose identity is unknown by a third person, and the third person has no knowledge that the agent is acting for a principal at the time the agent and the third person form a contract
undisclosed principal
a form of relief or exception from zoning and other laws that is granted to a property owner
variance
a person or entity that seeks out promising entrepreneurial ventures and funds them in exchange for equity stakes
venture capitalist
any restraint on trade created by agreements between firms at different levels in the manufacturing and distribution process
vertical restraint
a deed in which the grantor guarantees to the grantee that the grantor has title to the property conveyed in the deed, that there are no encumbrances on the property other than what the grantor has represented
warranty deed
shares of stock issued by a corporation for which the corporate receives, as payment, less than the fair market value of the shares
watered stock
a life insurance policy in which the insured pays a level premium for their entire life and in which there is a constantly accumulating cash value that can be withdrawn or borrowed against by the borrower
whole life
the second of two stages involved in the termination of a partnership or corporation
winding up
the various documents used and developed by an accountant during an audit
working papers
the rules and regulations that collectively management the development and use of land
zoning laws
when an unforeseen emergency demands actions by the agent to protect or preserve the property rights of the principal, but the agent is unable to communicate with the principal, the agent has emergency power
Emergency powers
what are the 5 termination by act of parties?
1. lapse of time
2. purpose achieved
3. occurrence of a specific event
4. mutual agreement
5. termination by one party
What is included in the Title 7 of the Civil rights act of 1964?
prohibit job discrimination against employees, applicants, and union members on the basis of race, color, national origin, religion, and gender at any state of employment
to sue on the basis of disparate treatment you must prove (4)
1. they are a member of a protected class
2. they applied and were qualified for the job in question
3. they were rejected by the employer
4. the employer continued to seek applicants for the position or filled the position with a person not in a protecte
When you are determining if someone is being discriminated based on wage, what should you look at?
job content
occurs when sexual favors are demanded in return for job opportunities, promotions, salary increases, or other benefits, "something in exchange for something else
Quid pro quo
when a pattern of sexually offensive conduct runs throughout the workplace and the employer has not taken steps to prevent or discourage it
hostile environment
what are the requirements to sue for age discrimination?
1. the individual is 40 or over
2. must have 20 or more employees
employers must ____ the needs of persons with disabilities unless to do so would cause the employer to suffer an ____
reasonably accommodate, undue hardship
what must a plantiff show to prove discrimination based on disability?
1. have a disability
2. otherwise qualified for the employment in question
3. was excluded from the employment solely because of the disability
what are the 3 qualities of a disability?
1. a physical or mental impairment that substantially limits one or more major life activities of the affected individual
2. a record of having such an impairment
3. being regarded as having such an impairment
What are the main advantages of a sole propreitorship?
1. owner receives all of the profits
2. easier and less costly than starting any other kind of business
3. flexibility
4. taxes
what are the 5 risks of a sole proprietorship?
1. the owner alone bears all losses or liabilities
2. owner has unlimited liability
3. personal assets at risk
4. lack of continuity
5. difficult to raise capital
what is the number 1 reason small businesses fail?
difficult to raise capital
what are the 3 types of franchises?
1. distributorship
2. chain-style business operation
3. manufacturing arrangement
a manufacturer (the franchisor) licenses a dealer (the franchisee) to sell its product
distributorship
a franchise operates under a franchisor's trade name and is identified as a member of a select group of dealers that engage in the franchisor's business
chain-style business operation
the franchisor transmits to the franchisee the essential ingredients or formula to make a particular product
manufacturing arrangement
requires franchisors to disclose certain material facts that a prospective franchisee needs in order to make an informed decision concerning the purchase of a franchise.
the franchise rule
what does the franchise rule require?
1. written disclosures
2. reasonable basis for any representations
3. projected earnings figures
4. actual data
5. explanation of terms
franchises provides the franchisor with an outlet for the firm's goods and services
pricing arrangement
A franchisee must be given reasonable time to wind up the business, to do the accounting and return the copyright or trademark or any other property of the franchisor
notice requirement
A franchise agreement may state that the franchisee may attempt to cure an ordinary, curable breach within a certain period of time after notice so as to postpone, or even avoid, the termination of the contract
opportunity to cure a breach
Governs the operation of partnerships in the absence of an express agreement and has done most to reduce controversies in the law relating to partnerships
uniform partnership act
what are the 3 essential elements of a partnership?
1. a sharing of profits and losses
2. a joint ownership of the business
3. an equal right to be involved in the management of the business
What are the 2 fiduciary duties of partners?
1. care
2. loyalty
Requires a partner to account to the partnership for "any property, profit, or benefit" derived by the partner in the conduct of the partnership's business or from the use of its property
loyalty
What are the 2 main advantages of an LLC?
1. limited liability
2. flexibility in taxation
what does the term double taxation mean?
the company pays taxes on the profits, then the profits are passed to the shareholders who then pay taxes
How is an S corp taxed?
like a partnership, so the corporate income passes through to the shareholders, who pay personal income tax on it
if a corporation has substantially complied with all conditions precedent to incorporation, the corporation is said to have ____ existence
de jure
if the defect in formation is substantial, such as a corporation's failure to hold an organization meeting to adopt bylaws, the outcome will vary depending on the state
de facto corporations
what is done when the corporate veil has been pierced?
the corporation privilege is abused for personal benefit or when the corporate business is treated so carelessly that it is indistinguishable from that of a controlling shareholder
What are the 5 factors that lead courts to pierce the corporate veil?
1. a party is tricked or misled into dealing with the corporation rather than the individual
2. the corporation is set up never to make a profit or always to be insolvent
3. the corporation is formed to evade an existing legal obligation
4. statutory corp
What are the 3 rights of directors in a corporation?
1. right to participation
2. right of inspection
3. right of indemnification
Directors are entitled to participate in all board of directors' meetings and have a right to be notified of these meetings
right of participation
Each director can access the corporation's books and records, facilities, and premises
right of inspection
Reimbursement for the legal costs, fees, and damages incurred when they were director and became involved in litigation because of their actions as directors
right of indemnification
What are included in the duty of care that a director or officer must do?
1. act in good faith
2. exercise the care than an ordinarily prudent person would exercise in similar circumstances
3. do what they believe in to the best interest of the corporation
Informed on corporate matters and to conduct a reasonable investigation of the situation before making a decision
duty to make informed decisions
Directors are not allowed to enter into or supporting businesses that operate in direct competition with corporation on whose boards they serve
conflicts of interest
when threatened with a takeover, management makes the company less attractive to the raider by selling the company's most valuable assets to a third party
Crown Jewel
when a takeover is successful, top management usually is changed. With this in mind, a company may establish special termination or retirement benefits that must be paid to top managers if they are "retired" In other words, a departing high-level manager'
Golden Parachute
to regain control, a target company may pay a higher-that-market price to repurchase all of the stock that the acquiring corporation bought. When a takeover is attempted through a gradual accumulation of target stock rather than a tender offer, the intent
Green Mail
the target corporation issues to its stockholders rights to purchase additional shares at low prices when there is a takeover attempt. This makes the takeover undesirable or even prohibitively expensive for the acquiring corporation
Poison Pill
what are the 2 possible methods of voluntarily dissolving a corporation?
1. by the shareholders' unanimous vote to initiate dissolution proceedings
2. by a proposal of the board of directors that is submitted to the shareholders at the shareholders' meeting
When dissolution takes place by voluntary action, the members of the board of directors act as trustees of the corporate assets
winding up
governs and monitors the sale of securities
the SEC
What does the Securities Act of 1933 govern?
the initial sale of stock by businesses
what are 3 defenses to violation of the 1933 securities and exchange act?
1. the statement or omission was not material
2. the plaintiff knew about the misrepresentation at the time the stock was purchased
3. the defendant exercised due diligence in in preparing the registration and reasonably believed at the time that the stat
___ is the most important defense because it can be asserted by any defendant, except the issuer of the stock
due diligence defense
what does the securities exchange act of 1934 cover?
stocks already on the market and provides for continuous periodic disclosures by public corporations to allow the SEC to regulate subsequent trading
prohibits the commission of fraud in connection with the purchase or sale of any security
Sec Rule 10b
aimed at specific anticompetitive or monopolistic practices practices that the Sherman Act did not cover
Clayton Act
What is an attorney's normal standard of care?
to perform as a reasonably competent lawyer would perform
What are the 3 elements of fraud?
1. a misrepresentation of a material fact
2. an intent to deceive
3. justifiable reliance by the innocent party on the misrepresentation
what is constructive fraud
no intent to deceive, just gross negligence
no discussion between an attorney and their client can be shared between 3rd parties
attorney client privilege
Process by which you can take good clear title to property without the consent of the previous owner and without payment of the previous owner
adverse possession
independent contractor who works with you and contacts different insurance companies to find you the best policy
insurance broker
A person must have a reasonable expectation of benefit from the continued life of another to have an insurable interest in that persons life
life insurance
Insurance obtained by an organization on the life of a person who is important to that organization
key person life insurance
once an insurance policy is issued, what are the 3 basic duties must the insured perform under the contract?
1. to pay the premium as stated in the contract
2. to notify the insurer within a reasonable time if an event occurs that gives rise to a claim
3. to cooperate with the insurer during any investigation or litigation
If the property is not occupied, you need to give notice to the insurance company. You may have an issue if you have not notified the insurance company
occupancy clause
what type of coverage increase the amount of liability coverage?
umbrella coverage
What are the 4 types of business liability insurance?
1. general liability
2. produce liability
3. professional malpractice
4. workers' compensation
a method of dividing an intestate's estate which a class or group of distributees (such as grandchildren), the children of any one descendant take the share that their deceased parents would have been entitled to inherit
per stirpes
each person in a class or group takes an equal share of the estate
per capita