Acceptance
an agreement to an offer resulting in a contract
Accord and Satisfaction
an agreement made and executed in satisfaction of the rights on has
from a previous contract
Agent
the party appointed by the principal to enter into a contract with a
third party on behalf of the principal
Alien Corporation
one that is incorporated in a foreign country
Answer
official document detailing a defendant's defense
Antitrust
laws which seek to promote competition among businesses
Appellate Courts
courting hearing cases appealed from lower courts
Arraignment
charging a person with a crime and asking for that person's plea
Arrest
to take into police custody
Assignee
the party to whom the assignment is made
Assignment
a means whereby one party conveys rights to another person who is not
a party to the original contract
Assignor
the party making the assignment
Authority
power to act for someone else
Bailee
the party who acquires possession but not the title of personal
property in a bailment
Bailment
the transfer of possession but not the title of personal property by
one party to another, under agreement
Bailor
the party who gives up possession, but not title, of property in a bailment
Bearer
a peson in possession of an instrument
Bearer Paper
a commercial paper payable to bearer; i.e. to the person having
possession of such
Beneficiary
recipient of the proceeds of a life insurance policy; one who
inherits property as specified in a wall
Bill of Lading
the contract existing between the consignor (shipper) and the carrier
Bill of Sale
a document of conveyance that provides written evidence of one's
title to tangible personal property
Blank Endorsement
having no words other than the signature of the endorser
Board of Directors
a body of persons elected by the stockholders to define and establish
corporate policy
Booking
administrative step taken after an arrested person is brought to a
police station, which involves entry of the person's name, the crime
for which the arrest was made, and other relevant facts on the police
"blotter" and which may also include photographing,
fingerprinting and the like
Breach of Contract
a situation in which one of the parties to a contract fails or
otherwise refuses to perform the obligation established in that contract
Business Law
those rules of conduct prescribed by a government and its agencies,
regulating business transactions
Cashier's Check
a check drawn on a bank's own funds and signed by a responsible bank official
Certificate of Deposit
the acknowledgment by a bank of a receipt of money with an agreement
of repayment
Certified Check
a check for which the bank assures that the drawer has sufficient
funds to make payment
Check
an order by a depositor on the bank to pay a sum of money to a payee
Civil Law
legal proceedings concerned with the rights of public citizens
Close Corporation
a designation which applies to a corporation in which outstanding
shares of stock and managerial control are held by a limited number of
people (often members of the same family)
Commercial Paper (Negotiable Instrument)
a writing drawn in a special form which can be transferred from
person to person as a substitute for money or as an instrument of credit
Common Law
customs that have become recognized by the courts as binding on the community
Compensatory Damages
an award paid to the injured party to cover the exact amount of their
loss, but no more
Complaint (petition)
a written request initiating a civil suit
Consideration
that which the promisor demands and receives as the price for a promise
Consignee
one to whom goods are shipped by common carrier
Consignor
one who ships goods by common carrier
Contract
an agreement between two or more competent persons which is
enforceable by law
Contract to Sell
an agreement wherein a seller agrees to transfer title of goods to a
buyer for a consideration (price), at a future time
Contractual Capacity
the necessity that the parties desiring to enter into contracts meet
all requirements
Corporation
an artificial being, invisible, intangible and existing only in
contemplation of law; an entity that has a distinct existence separate
and apart from the existence of its individual members
Counteroffer
an intended acceptance which changes or qualifies the offer, and is a
rejection of the original offer
Creditor Beneficiary
the person to whom the promise of a contract owes an obligation or
duty which will be discharged to the extent that the promisor performs
the promise
Crime
an offense which is injurious to society as a whole
Criminal Law
laws dealing with crimes and the punishment of wrongdoers
Defendant
the person against whom legal action is brought
Disaffirmance
the repudiation of, or election to avoid, a voidable contract
Discharge
termination of a contract by performance, agreement, impossibility,
acceptance of breach, or operation of law
Discovery
pretrial steps taken to learn the details of the case
Domestic Corporation
operates in the state that granted the charter
Donee Beneficiary
a third party beneficiary to whom no legal duty is owed and for whom
performance is a gift
Draft
a written order signed by one person requiring the person to whom it
is addressed to pay a particular sum of money to the bearer, either on
demand or at a certain time
Drawee
the person, company, or financial institution ordered to pay a draft
Drawer
the person who executes any draft
Duress
a means of removing one's free will; obtaining consent by means of
threat to do harm to the person, his family, or his property
Employee
the person hired to perform work and who is obligated both as to the
work to be done and as to the manner ins chin it is to be done
Employer
the party who hires employees to do certain work
Executed Contract
those contracts in which the parties have fulfilled the terms;
execution: the carrying out or completion of some task
Execution
the carrying out of completion of some task
Executory Contract
those contracts in which the terms have not been completely executed
or fulfilled
Existing Goods
those goods which are, at the time of the contract, in existence and
owned by the seller
Express Authority
the authority of an agent, stated in the document or agreement
creating the agency
Express Contract
a contract in which the parties express their intentions, either
orally or in writing, at the time of the agreement
Express Warranties
the actual and definite statement of a seller, either verbally or in
writing, guaranteeing a standard or level of performance
Felony
a criminal offense that is punishable by confinement in prison or by death
Ficuciary
a relationship of trust and confidence, such as that which exists
between partners in a partnership
Foreign Corporation
designation that applies when a corporation operates in any state
other than where it is chartered
Formal Contract
those contracts that must be in special form or produced in a certain
way, such as under seal
Fraud
the intentional or reckless false statement of a material fact upon
which the injured party relied which induced the injured party to
enter into a contract to his or her detriment
General Agent
one who is authorized to execute the principal's business of a
particular kind, or all the principal's business at a particular
place, if not all of one kind
General Partner
an individual actively and openly engaged in the business and held
out to everyone as a partner
Goods
movable tangible personal property
Holder
one in possession of commercial paper
Identified Goods
the goods specified by the buyer and seller
Implied Authority
an agent's authority to do things not specifically authorized in
order to carry out express authority
Implied Contract
one in which terms of the contract are implied by acts or conduct of
the parties
Implied Warranties
a warranty imposed by law, arising automatically because the sale has
been made
Independent Contractor
one who contracts to perform certain tasks for a set fee, but who is
independent of the control of the contracting party as a means by
which the contract is executed, except for specifications established
in the contract
Endorsee
a person who becomes the holder of a negotiable instrument by
endorsements which names him or her as the person to whom the
instrument is negotiated
Endorsement
the signature or statement of purpose by the owner on the back of a
negotiable instrument, which indicates the future control of the instrument
Endorser
person who writes his or her name on back of instrument
Injunction
a judicial order or decree forbidding the performance of a certain act
Intangible Personal Property
evidences of ownership of personal property such as stock of
corporations, checks and copyrights
Judgment
a decision of a court
Law
those rules of civil conduct commanding what is right and prohibiting
what is wrong
Limited Liability Corporation
newest form of business ownership recognized in the US; combines
features of both the corporation and partnership
Limited Parter
partner whose liability for the firm's debts is limited to the amount
of his/her investment
Liquidated Damages
a provision in a contract fixing the amount of the damages to be paid
in the event one party breaches the contract
Maker
the person who executes a promissory note
Malpractice
a breach of contract by a professional; failure to perform a
professional service with the ability and care generally exercised by
others in the profession
Merchant
a person who deals in goods of the kind, fro otherwise by occupation
purports to have knowledge or skill peculiar to the practices or goods
involved in the transaction
Minor
a person under full legal age; in most states (but not all), the
standard is under the age of 18
Misdemeanor
a criminal offense which is neither treason nor a felony
Misrepresentation
stating an untrue fact
Necessaries
items, required or proper and useful, for sustaining a human being at
an appropriate living standard
Negligence
failure to exercise ordinary care; omission to do something which a
reasonable, prudent person would do under ordinary circumstances or
the doing of something which a reasonable and prudent person would not
do; the lack of due care (exercised by a wrongdoer who has not acted
as a reasonable person would)
Negotation
the act of transferring ownership of a negotiable instrument to
another party
Nominal Damages
a token award to symbolize vindication of the wrong done to the
plaintiff; generally, the award is $1.00
Novation
the change of one of the parties to a contract at the mutual
agreement of the original parties
Offer
an expression of willingness to enter a contractual agreement
Offeree
the person to whom an offer is made
Offeror
the party who initiates, or makes an offer
Order Paper
a commercial paper made payable "to the order of" some
named party; the word "order" or its equivalent must be used
Ordinance
laws enacted by local municipalities
Partnership
the voluntary association of two or more people who have combined
their resources to carry on as co-owners of a lawful enterprise for
their joint profit
Payee
the party to whom any negotiable instrument is made payable
Personal Property
all property which is not real property
Petition (Complaint)
a written request initiating a civil suit
Plaintiff
the individual who initiates a civil action
Price
that consideration stipulated by contract, generally expressed in
money or money's worth
Principal
a party who appoints a second party to serve as an agent
Private Corporation
a corporation formed by individuals to form some non-governmental function
Process (Summons)
a notice of complaint given to a defendant, defining the complaint
and a time frame in which a response, or answer, must be filed, and
which serves the purpose of conferring personal jurisdiction over the defendant
Promissory Estoppel
an equitable doctrine that prevents the promisor from revoking the
promise when the promisee justifiably acts in reliance upon the
promise to his detriment
Promissory Note
a negotiable instrument containing a promise to pay
Public Corporation
a corporation formed to carry out government functions
Punitive Damages
an award paid to the plaintiff in order to punish the defendant, not
to compensate the plaintiff
Qualified Indorsement
an endorsement which limits the liability of the endorser
Ratification
confirming an act that was execute without authority or an act which
was voidable
Real Property
land and those objects permanently attached to land
Recission
canceling, annulling, avoiding
Rejection
refusal to accept
Restrictive Indorsement
an endorsement which prevents the use of the instrument for anything
except the stated use
Revocation
the annulment or cancellation of an instrument, act or promise by one
doing or making it
Sale
the transfer of title to goods from the seller to the buyer for a
consideration called the price
Service Contracts
the contracting of services rather than goods
Shareholders (Stockholders)
those having title to one or more shares of stock in a corporation;
combined, they represent ownership of the corporation
Sherman Antitrust Act
legislation intended to promote competition among businesses by
prohibiting restraint of trade
Silent Partner
an individual who takes no active part in the management of a
business but has capital invested in the business
Simple Contract
any contract other than a formal contract, whether written, oral or implied
Sole Proprietorship
a business owned by one person
Special Agent
one authorized by the principal to execute specific acts
Special Indorsement
an endorsement which designates the particular person to whom payment
is to be made
Specific Performance
a contract remedy by which the court requires the breaching party to
perform the contract
Stare Decisis
the principle that the decision of a court should serve as a guide or
precedent and control the decision of a similar case in the future
Statute of Frauds
a statute originally enacted by the English Parliament and now
enacted in some form in all states, listing certain types of contracts
which could be enforced only if in written form
Statute of Limitations
a law that restricts the period of time within which an action may be
brought to court
Statutes
laws which are enacted by legislative bodies
Subchapter S Corporation
a creation of the tax codes; shareholders elect to be taxed as a
partnership (no double taxation) without losing corporation status
Summons (Process)
a notice of complaint given to a defendant, defining the complaint
and a time frame in which a response, or answer, must be filed, and
which services the purpose of conferring personal jurisdiction over
the defendant
Third Party Beneficiary
person not party to a contract, but whom parties intended to benefit
Tort
a private or civil wrong, either intentional or caused by negligence,
for which there may be action for damages
Trial Court
courts that conduct the original trial and render their decision
Undue Influence
improper influence that is asserted by one dominant person over
another, without the threat or harm
Unenforceable Contract
an agreement which is not in the form required by law
Uniform Commercial Code
recognized as the most important statute in business law; includes
provisions which regulate certain sales of goods
Unilateral Contract
a one-sided contract/agreement formed when an act is done in
consideration for a promise
Usurious
exceeding the maximum rate of interest which may be charged on loans
Valid Contract
a contract which will be enforced by the court
Void Contract
an agreement of no legal effect
Voidable Contract
a contract that would be an enforceable agreement, but due to
circumstances, may be set aside by one of the parties
Warranties
guarantees made by a seller than an article, good or service will
conform to a certain standard or will operate in a certain manner
Actuating (Directing)
regulating the activities or course of activities of an organization:
to guide and/or supervise the activities of an organization
Advertising
the art of making the public aware of the services or commodity that
the business has for sale
Age Discrimination in Employment Act
Federal legislation that requires employers to treat applicants and
employees equally regardless of age
Americans with Disabilities Act (ADA)
legislation that guarantees disabled people equal access to
employment, as well as access to public places
Angels
private investors who are willing to supply financing for new and/or
risky small venture start ups
Bona fide occupational qualification (BFOQ)
a qualification that is absolutely necessary for the job; it is an
allowed and approved reason for discrimination
Break-even analysis
the point at which total sales revenue equals total costs
Business
an organization that combines inputs of raw materials, capital, labor
and management skills to produce useful goods and services so as to
earn a profit
Business interruption insurance
an insurance that protects companies during the period necessary to
restore property damaged by an insured peril; coverage pays for lost
income and other expenses related to recovery
Business plan (New venture plan)
a written description of a new idea that projects marketing,
operational, and financial aspects of a proposed business
Business policies
fundamental statements that serve as guides to management practice
Cash discounts- 2/10, n/30
2% discount if paid 10 days from date of invoice/net amount must be
paid within 30 days of date of invoice
Casualty insurance
insurance that provides monetary benefits to a business that has
experienced an unforeseen peril such as flood, fire, etc.
Census of Business
a source of market data that explains where certain businesses are located
Census of Housing
a source of market data that keeps track of new home sales by region
and/or the construction of new houses by region and specific area
Census of Population
a source of market data that compiles population statistics with
regard to distribution of population by region, area, etc.
Chamber of Commerce
an association of business people who attempt to protect and promote
the commercial interests of a community
Circulating capital (Working capital)
the current asset items consisting of cash, inventories, and accounts receivable
Civil Rights Act
federal legislation that prohibits discrimination on the basis of
race, color, religion, sex, or national origin
Closed end credit (Installment credit)
balance of costly goods paid for in small monthly (fractional)
payments over a period of time
Competition
the practice of trying to obtain something that is being sought by
others under similar circumstances at the same time
Consumer credit
a type of credit granted by retailers that is used by individuals or
family for satisfaction of their own wants
Consumerism
the emphasis placed on providing to customers products and services
that are safe, reliable, and honestly advertised; also, a social
movement that seeks to strengthen the rights of consumers relative to sellers
Controlling (Evaluating)
a management function which compares organizational and individual
performance with predetermined standards or expected results
Copyright
the registered rights of a creator to reproduce, publish, and sell
the work that is the product of the intelligence and skill of that person
Corporation
a legal form of organization whereby a legal entity is authorized by
a state to operate a business under the entity's charter or articles
of incorporation
Credit
an agreement that payment for a product or service will be made at
some later date
Debit equity
any borrowed or loaned capital invested in the business that must be
repaid to creditors
Demographics
the statistical study of human populations with respect to their
size, density, distribution, composition, and income
Earnings valuation approach
a business valuation approach which centers on estimating the amount
of potential income that may be produced by the business in the next year
Economic base
the wealth produced in or near a community that provides employment
and income to the local population
Economic order quantity (EOQ)
the quantity to be purchased which minimizes total costs
Employment application
a record of statements made at the time the applicant first seeks employment
Employment interview
the primary way of judging the job applicant's appearance, poise,
speech, etc.
Entrepreneur
one who organizes, manages, and assumes the risk of a business firm
or venture
Equal Employment Opportunity Act
the absence of employment discrimination based on race, color,
religion, sex, or national origin
Equal Pay Act
outlaws discrimination in pay against those who are over forty years old
Equity capital (Personal capital)
capital that is invested in the business by the owner(s)
Factoring
obtaining cash before payments are received from customers by selling
off one's account receivables to a third party
Fair Labor Standards Act (Wage and Hour Law)
outlaws discriminatory practices in pay; requires employers to pay a
minimum wage to employees, and to pay a minimum of one and one-half
times the regular rate for any hours beyond forty worked in a week
Fixed capital
long-term capital that is invested in the small business; also, funds
invested in such long-term assets as; land, building, machinery,
furniture, fixtures, and other equipment
Fixed expenses
a cost that, for a given period of time and rang of activity called
the relevant range, does not change in total but becomes progressively
smaller on a per unit basis as volume increases; these expenses do not
increase with increased business, nor do they decrease with declining
business activity
Goodwill
an intangible asset such as the name of the funeral home; also, an
intangible asset which enables a business to earn a profit in excess
of the normal rate of profit earned by other businesses of the same kind
Human resource management (Personnel Management)
process of acquiring, training, developing, motivating, and
appraising a sufficient quantity of qualified employees to perform
necessary activities; developing activities and an organizational
climate conducive to maximum efficiency and worker satisfaction
Immigration Reform Act
federal legislation requiring employers to check job applicants'
papers to be sure they are either US citizens or aliens authorized to
work in the US
Innovation
the introduction of something new; a new idea, method or device
Installment credit (Closed end credit)
balance of costly goods paid for by a small monthly (fractional)
payment over a period of time
Insurance
uneventful protection for the small business or small business owner
in regards to monetary compensation in the event that a business
and/or personal peril is experienced
Intangible assets
a type of asset that is not able to be physically touched but is
retained by a small business because of its genuine value appeal
Inventory (Merchandise)
those goods or stock of goods that are held for resale
Inventory turnover
the number of times the average inventory has been sold or used up
during a period
Job analysis
a process for determining the critical components of a job for
purposes of selecting, training, and rewarding personnel
Job description
a document that lists the major responsibilities and tasks of the job
Job specification
a document that lists the knowledge, skills, abilities, and personal
characteristics a jobholder must possess to perform effectively
Key-person life insurance
life insurance that protects a firm against losses due to the death
of a key employee
Limited Liability Company (not corporation)
new form of business ownership (approved in most states since
approximately 1994); combines aspects of partnerships with the limited
liability of a corporation; owners known as members
Liquidation value approach
the anticipated value of an asset that would be realized in case of
liquidation of the business; aka Market Value approach
Management
the art and science of motivating people toward the achievement of a goal
Manufacturing business
a business that makes finished goods from raw materials by hand or machinery
Markdown
a reduction of selling price below the original selling price
Market
a group of potential customers possessing purchasing power and
unsatisfied needs
Marketing
the process of planning and executing the development, pricing,
promotion, and distribution of an organization's goods and/or services
Market survey
a study that is used by a business to determine where the potential
customers are
Market value approach
an approach used in business valuation that determines value based
upon previous sales of similar businesses
Markup
the difference between merchandise cost and selling price; i.e. gross margin
Merchandising business
a business that purchases finished goods for resale
Motivating
energizing, channeling and sustaining people's behavior
New venture plan (Business Plan)
a written description of a new idea that projects marketing,
operational, and financial aspects of a proposed business
Occupational Safety and Health Act (OSHA)
federal legislation that mandates that employers provide a workplace
that is free from hazards likely to cause death or serious physical harm
Open-end Credit (Revolving account)
a line of credit that may be used over and over again up to a certain
borrowing limit
Operating ratios
a comparison of profit and each item of expense in the income
statement expressed as a percentage of sales income; the operating
ratios can be compared to the industry standard in regards to
measuring the possible growth of the business
Organizing
the way in which work is arranged and distributed among members of
the firm
Overhead
any cost not specifically associated with production of identifiable
products and services
Partnership
a form of legal organization in which a business association made up
of two or more persons is formed for the purpose of carrying on as co-owners
Patent
the registered rights of an inventory to make, use, and sell an invention
Personal capital
capital that is invested in the business by the owner(s); aka Equity capital
Planning
that function of determining in advance what needs to be accomplished
in order to achieve a particular goal
Pricing policy
factors which influence prices
Product liability insurance
insurance that protects a firm against claims that its product caused
bodily injury or property damage to the user
Proprietorship
a legal form of organization whereby the business is owned and
operated by one person; Sole proprietorship
Recruitment
the process of forming a pool of qualified applicants for tasks that
need to be filled
Replacement value approach
the fair market price to purchase similar assets
Resume
written summary of one's personal, educational, and professional achievements
Revolving account
a line of credit that may be used over and over again up to a certain
borrowing limit; aka Open end credit
Risk
a condition in which there is a possibility of an adverse deviation
from a desired outcome that is expected or hoped for
Risk management
all efforts designed to preserve assets and earning power associated
with a business
Sales promotion
a plan which provides inducements to potential purchasers of products
and/or services
Self-insurance
a form of risk management whereby a part of the firm's earnings is
earmarked as a contingency fund for possible future losses,
specifically for individual loss categories such as property, medical,
or worker's compensation
Service business
a business that provides a service as opposed to a product
Small business
a business which is independently owned and operated and is not
dominant in its field of operations
Small Business Administration (SBA)
the principal government agency concerned with the financing,
operation, and management of small businesses
Tangible assets
a physical asset that possesses genuine value
Trade credit
a form of credit that is extended by one business to another business
to help finance distribution of producer's goods
Trademark
an intangible asset that is a distinct name, sign, or symbol for
which the Federal government grants exclusive rights to use for a
specified period of time
Variable expense
a cost that is uniform per unit, but fluctuates in total in direct
proportion to change in the related total activity or volume
Venture capitalist
anyone who invests in, or financially sponsors, a new business
Vietnam Era Veterans Readjustment Act
outlaws discrimination in employment against Vietnam Era veterans
Working capital
the difference between current assets and current liabilities
(circulating capital)