1. The Legal Context of Business
Business Essentials
Eleventh Edition
Appendix II
The Legal Context of Business
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved

2. Types of Law (1 of 2) Laws Common Law
codified rules of behavior enforced by a society
Common Law
body of decisions handed down by courts ruling on individual cases

3. Types of Law (2 of 2) Statutory Law Regulatory (Administrative) Law
law created by constitution(s) or by federal, state, or local legislative acts
Regulatory (Administrative) Law
law made by the authority of administrative agencies

4. Trends in Deregulation and Regulation
elimination of rules that restrict business activity

5. The Court System Court Appellate Court
general court that hears cases not specifically assigned to another court
Appellate Court
court that reviews case records of trials whose findings have been appealed

6. Contract Law Contract Capacity Consideration
agreement between two or more parties enforceable in court
Capacity
competence required of individuals entering into a binding contract
Consideration
item of value exchanged between parties to create a valid contract

7. Tort Law Tort Intentional Tort Compensatory Damages Punitive Damages
civil injury to people, property, or reputation for which compensation must be paid
Intentional Tort
tort resulting from the deliberate actions of a party
Compensatory Damages
monetary payments intended to redress injury actually suffered because of a tort
Punitive Damages
fines imposed over and above any actual losses suffered by a plaintiff

8. Negligence Torts Negligence Product Liability Strict Product Liability
conduct that falls below legal standards for protecting others against unreasonable risk
Product Liability
tort in which a company is responsible for injuries caused by its products
Strict Product Liability
principle that liability can result not from a producer’s negligence but from a defect in the product itself

9. Property Law (1 of 3) Property Tangible Real Property
anything of value to which a person or business has sole right of ownership
Tangible Real Property
land and anything attached to it

10. Property Law (2 of 3) Property Tangible Real Property
anything of value to which a person or business has sole right of ownership
Tangible Real Property
land and anything attached to it
Tangible Personal Property
any movable item that can be owned, bought, sold, or leased

11. Property Law (3 of 3) Intellectual Property
property created through a person’s creative activities

12. Protection of Intellectual Rights
Copyright
exclusive ownership right belonging to the creator of a book, article, design, illustration, photo, film, or musical work
Trademark
exclusive legal right to use a brand name or symbol
Patent
exclusive legal right to use and license a manufactured item or substance, manufacturing process, or object design

13. Restrictions on Property Rights
Eminent Domain
principle that the government may claim private land for public use by buying it at a fair price

14. Agency Law Agent Principal
individual or organization acting for and in the name of another party
Principal
individual or organization authorizing an agent to act on its behalf

15. Authority of Agents Express Authority Implied Authority
agent’s authority, derived from written agreement, to bind a principal to a certain course of action
Implied Authority
agent’s authority, derived from business custom, to bind a principal to a certain course of action
Apparent Authority
agent’s authority, based on the principal’s compliance, to bind a principal to a certain course of action

16. Commercial Law (1 of 2) Uniform Commercial Code (UCC) Warranty
body of standardized laws governing the rights of buyers and sellers in transactions
Warranty
seller’s promise to stand by its products or services if a problem occurs after the sale

17. Commercial Law (2 of 2) Express Warranty Implied Warranty
warranty whose terms are specifically stated by the seller
Implied Warranty
warranty, dictated by law, based on the principle that products should fulfill advertised promises and serve the purposes for which they are manufactured and sold

18. Bankruptcy Law Involuntary Bankruptcy Voluntary Bankruptcy
bankruptcy proceedings initiated by the creditors of an indebted individual or organization
Voluntary Bankruptcy
bankruptcy proceedings initiated by an indebted individual or organization

19. The International Framework of Business Law
International Law
general set of cooperative agreements and guidelines established by countries to govern the actions of individuals, businesses, and nations