Chapter 1:

Act: A legislative enactment. Or Statute.

Administrative Law: The legal principles involved in the workings of administrative agencies within the regulatory process.

Breach of Contract: A party’s failure to perform some contracted-for or agreed-upon act, or failure to comply with a duty imposed by law.

Citation: The reference identifying how to find a case.

Civil Law: The area of law governing the rights and duties between private parties as compared with the criminal law. This term also describes the system of codifying law in many countries as compared with the judicial orientation of the common law system.

Codes: A compilation of legislation enacted by a federal, state, or local government.

Common Law: That body of law deriving from judicial decisions as opposed to legislatively enacted statutes and administrative regulations.

Compensatory Damages: Usually awarded in breach-of-contract cases to pay for a party’s losses that are a direct and foreseeable result of the party’s breach. The award of these damages is designed to place the nonbreaching party in the same position as if the contract had been performed.

Conflicts of Law: Rules of law the courts use to determine that substantive law applies when there is an inconsistency between laws of different states or countries.

Constitutional Law: The legal issues that arise from interpreting the U.S. Constitution or a state constitution.

Constitutional Relativity: The idea that constitutional interpretation is relative to the time in which the Constitution is being interpreted.

Contract Law: The law of legally enforceable promises.

Corporate Governance: A term that has at least two meanings. One relates to how business organizations are created and managed. A second concerns how the various levels of government regulate business organizations as they transact business.

Corporation: An artificial, but legal, person created by state law. As a business organization, the corporation’s separation of owners and managers gives it a high level of flexibility.

Criminal Law: That area of law dealing with wrongs against the state as representative of the community at large, to be distinguished from civil law, which hears cases of wrongs against persons.

Dicta: Statements made in a judicial opinion that are not essential to the decision of the case.

Exemplary Damages: Punitive damages. Monetary compensation in excess of direct losses suffered by the plaintiff that may be awarded in the intentional tort cases where the defendant’s conduct deserves punishment.

Holding: The precise legal response in an opinion by an appellate court on an issue of law raised on appeal.

Intentional Torts: Noncontractual legal wrongs caused by one who desires to cause the wrongs or where the wrongs are substantially likely to occur from the behavior.

Jurisprudence: The science of the law; the practical science of giving a wise interpretation of the law.

Law: The rules of the state backed up by enforcement.

Legislation: Laws passed by an elected body such as Congress, a state legislation, or local council/commission. Those laws enacted at the federal or state levels are called statutes. At the local level, such laws are often referred to as ordinances.

Negligence: A person’s failure to exercise reasonable care that foreseeably causes another injury.

Opinion: The decision of a judge, usually issued in a written form.

Ordinances: The legislative enactment of a city, county, or other municipal corporation.

Precedent: When a judges opinions, or decisions, are collected and published in book volumes known as “reporters,” and are used for future cases involving similar facts and legal issues.

Private Law: A classification of legal subject matters that deal most directly with the relationships between legal entities. The law of contracts and the law of property are two examples of this classification.

Procedural Law: The body of rules governing the manner in which legal claims are enforced.

Property: A bundle of private, exclusive rights in people to acquire, possess, use, and transfer scarce resources.

Property Law: The law of the legal fence that establishes exclusive right in someone called an owner.

Public Law: A classification of legal subject matters that regulates the relationship of individuals and organizations to society.

Punitive Damages: Monetary damages in excess of a compensatory award, usually granted only in intentional tort cases where defendant’s conduct involved some element deserving punishment. Also called exemplary damages.

Remedy: The action or procedure that is followed in order to enforce a right or to obtain damages for injury to a right; the means by which a right is enforced or the violation of a right is prevented, redressed, or compensated.

Rule of Law: The general and equal application of laws, even to lawmakers.

Sanctions: Penalties imposed for violation of a law.

Specific Performance: Equitable remedy that requires defendants in certain circumstances to do what they have contracted to do.

Stare Decisis: The doctrine that traditionally indicates that a court should follow prior decisions in all cases based on substantially similar facts.

Statute: A legislative enactment. Or Act.

Statutory Construction: The rules courts use in interpreting the meaning of legislation.

Substantive Law: A body of rules defining the nature and extent of legal rights.

Tort: A civil wrong other than a breach of contract.

Tort Law: Establishes rules for compensation when an owner’s legal boundaries are wrongfully crossed by another. Often but not always requires actual injury to the owner’s resources.

Uniform Commercial Code (UCC): The most successful attempt to have states adopt a uniform law. This code’s purpose is to simplify, clarify, and modernize the laws governing commercial transactions.

Chapter 6

Administrative Agencies: An organization, usually a part of the executive branch of government, that is created to serve a specific purpose as authorized by the legislative branch. An agency’s function usually is characterized as quasi-legislative or quasi-judicial.

Apportionment: The concept used by states to divide a company’s taxable income so that no one state burdens a company with an unfair tax bill.

Commerce Clause: A provision in Article 1, Section 8, of the U.S. Constitution that grants the federal government the power to regulate business transactions.

Commercial Speech: Speech that has a business-oriented purpose. This speech is protected under the First Amendment, but this protection is not as great as that afforded to noncommercial speech.

Contract Clause: The constitutional provision that prohibits states from enacting laws that interfere with existing contacts. The Supreme Court has refused to interpret this clause in an absolute manner.

Defamation: The publication of anything injurious to the good name or reputation of another.

Dormant Commerce Clause Concept: The impact of the commerce clause as a means of limiting state and local governments’ powers to regulate business activities.

Due Process Clause: A provision found in the Fifth and Fourteenth Amendments of the U.S. Constitution. This clause assures all citizens of fundamental fairness in their relationship with the government.

Equal Protection Clause: A provision in the Fourteenth Amendment of the U.S. Constitution that requires all citizens to be treated in a similar manner by the government unless there is a sufficient justification for the unequal treatment.

Establishment Clause: A provision in the First Amendment of the U.S. Constitution that prohibits the federal government from establishing any government-supported religion or church.

Exhaustion of Remedies: A concept that requires any party to an administrative proceeding to give the administrative agency every opportunity to resolve the dispute before appealing to the court system.

Federalism: A term used to describe the vertical aspect of the separation of powers. The coexistence of a federal government and the various state governments, with each having responsibilities and authorities that are distinct but overlap, is called federalism.

Free Exercise Clause: A provision in the First Amendment of the U.S. Constitution that allows all citizens the freedom to follow or believe any religious teaching.

Irreconcilable Conflicts: When a state or local law requires something different than a federal law or regulation and both laws cannot be satisfied. Under Commerce Clause analysis, the state or local law is declared invalid and void.

Libel: A defamatory written statement communicated to a third party.

Malice: The state of mind that accompanies the intentional doing of a wrongful act without justification or excuse.

Minimum Rationality: A legal test used by courts to test the validity of governmental action, such as legislation, under the equal protection clause of the U.S. Constitution. To satisfy this test, the government needs to demonstrate that there is a good reason for the government’s action

Nexus: A logical connection.

Overbreadth Doctrine: A principle used by courts to invalidate legislation that is broader in scope than is necessary to regulate an activity. This doctrine may be utilized to protect constitutional rights, such as freedom of speech, against a wide sweep of some governmental action.

Police Powers: The authority a state or local government has to protect the public’s health, safety, morals, and general warfare.

Preemption: A condition when a federal statute or administrative rule governs an issue to the extent that a state or local government is prohibited from regulating that area of law.

Primary Jurisdiction: A doctrine used by reviewing courts to determine whether a case is properly before the courts or whether it should be heard by an administrative agency first since such an agency might have expertise superior to the courts’.

Prior Restraints: A principle applicable under the freedom of press and speech clauses of the First Amendment of the U.S. Constitution. The courts have announced decisions that encourage governments to allow the publication or expression of thoughts rather than to restrain such thoughts in advance of their publication or expression.

Procedural Due Process: The process or procedure ensuring fundamental fairness that all citizens are entitled to under the U.S. Constitution.

Prohibiting Discrimination: A standard of review under the Commerce Clause that can invalidate state and local laws. When state and local laws discriminate against or negatively impact interstate commerce, such laws are invalid and void.

Quasi-judicial: Administrative actions involving factual determinations and the discretionary application of rules and regulations.

Quasi-legislative: This term describes the rule-making functions of administrative agencies.

Quasi-strict Scrutiny: A legal test used by courts to test the validity of governmental action, such as legislation, under the equal protection clause of the U.S. Constitution. To satisfy this test, the government needs to demonstrate that the purpose of the action is substantially related to an important governmental objective.

Separation of Powers: The doctrine that holds that the legislative, executive, and judicial branches of government function independently of one another and that each branch serves as a check on the others.

Strict Scrutiny: A legal text used by courts to test the validity of governmental action, such as legislation, under the equal protection clause of the U.S. Constitution. To satisfy this test, the government needs to demonstrate that there is a compelling state interest justifying the government’s actions.

Supremacy Clause: Article VI of the U.S. Constitution, which states that the Constitution, laws, and treaties of the United States shall be the “supreme law of the land” and shall take a precedence over conflicting state laws.

Symbolic Speech: Nonverbal expression.

Undue Burden: Under the Civil Rights Act of 1964 and the Americans with Disabilities Act an employer need not take action that is excessively costly or creates excessive inefficiency in order to accommodate an employee’s religious beliefs or disability. This concept of undue burden.

Chapter 7:

Accession: Property acquired by adding something to an owned object.

Adverse Possession: Property ownership acquired through open, notorious, actual, exclusive, continuous, and wrongful possession of land for a statutorily prescribed period of time.

Artisan’s Lien: The lien that arises in favor of one who has expended labor upon, or added value to, another person’s personal property. The lien allows the person to possess

the property as security until reimbursed for the value of labor or materials. If the person is not reimbursed, the property may be sold to satisfy the claim.

Attachment: The term attachment has three meanings. First, attachment is a method of acquiring in rem jurisdiction of a nonresident defendant who is not subject to the service of process to commence a lawsuit. By “attaching” property of the nonresident defendant, the court acquires jurisdiction over the defendant to the extent of the value of the property attached. Second, attachment is a procedure used to collect a judgment. A plaintiff may have the property of a defendant seized, pending the outcome of a lawsuit, if the plaintiff has reason to fear that the defendant will dispose of the property before the court renders its decision. Third, attachment is the event that creates an enforceable security interest under the Uniform Commercial Code (UCC). In order that a security interest attach, there must be a signed, written security agreement, or possession of the collateral by the secured party; the secured party must give the value to the debtor; and the debtor must maintain rights in the collateral.

Bailee: In a bailment, the person who takes possession of an object owned by another and must return it or otherwise dispose of it.

Bailment: An owner’s placement of an object into the intentional possession of another person with the understanding that the other person must return the object at some point or otherwise dispose of it.

Bailor: In a bailment, the person who transfers possession of tangible, personal property to another person with the understanding that the other person must return the object at some point or otherwise dispose of it.

Buyer in the Ordinary Course of Business: A buyer who buys from someone who ordinarily sells such goods in his or her business.

Collateral: The valuable thing put up by someone to secure a loan or credit.

Confusion: Property ownership that arises when identical masses of objects, such as grain, are mixed together.

Contract: A legally enforceable promise.

Deed: A document representing the title or ownership of land.

Deeds of Trust: A type of document to secure an extension of credit through an interest in the land.

Deficiency: In a land based security interest, the amount of the loan which remains unpaid after the land has been sold.

Easement: The right of one other than the owner of land to some use of that land.

Eminent Domain: The government’s constitutional power to take private property for public use upon the payment of just compensation.

Estate: The bundle of rights and powers of real property ownership.

Fee Simple: The maximum bundle of rights, or estate, permitted by law.

Financing Statement: An established form that a secured party files with a public officer, such as a state official or local clerk, to perfect a security interest under the Uniform Commercial Code (UCC). It is a simple form that contains basic information such as a description of the collateral, names, and addresses. It is designed to give notice that the debtor and the secured party have entered into a security agreement.

Fixture: Personal property that has become real property, generally through physical attachment (annexation).

Foreclosure: If a mortgagor fails to perform his or her obligations as agreed, the mortgagee may declare the whole debt due and payable, and she or he may foreclose on the mortgaged property to pay the debt secured by the mortgage. The usual method of foreclosure authorizes the sale of the mortgaged property at a public auction. The proceeds of the sale are applied to the debt.

Gift: Transfer of ownership by intent and the delivery of the object gifted.

Joint Tenancy: A property ownership that is undivided (common) and equal between two or more owners. Permits survivorship.

Land Sales Contract: A type of document to secure an extension of credit through an interest in the land purchased.

Leasehold Estate: The property granted to tenants (lessees) by a landlord (lessor).

Mechanic’s Lien: A lien on real estate that is created by statute to assist suppliers and laborers in collecting their accounts and wages. Its purpose is to subject the owner’s land to a lien for material and labor expended in the construction of building and others improvements.

Mortgage: 1. A transfer of an interest in property for the purpose of creating a security for a debt. 2. A type of security interest in land, usually securing an extension of credit.

Mortgagees:

Mortgagors: The owner of land who places a mortgage on it.

Ownership: The property right that makes something legally exclusive for its owner.

Perfection: The status ascribed to security interests after certain events have occurred or certain prescribed steps have been taken, e.g., the filing of a financing statement.

Personal Property: All property that does not involve land and interests in land.

Private Nuisance: An unreasonable use of one’s land so as to cause substantial interference with the enjoyment or use of another’s land.

Property: A bundle of private, exclusive rights in people to acquire, possess, use, and transfer scarce resources.

Public Nuisance: An owner’s use of land that causes damage or inconvenience to the general public.

Purchase Money Security Interest (PMSI): A security interest given to the party that loans the debtor the money that enables the debtor to buy the collateral.

Real Property: Property in land and interests in land.

Right of Redemption: The right to buy back. A debtor may buy back or redeem his or her mortgaged property when he or she pays the debt.

Rule Against Perpetuities: The rule that prohibits an owner from controlling what he or she owns beyond a life in being at the owner’s death, plus 21 years.

Rule of First Possession: The rule that says one becomes an owner by reducing to possession previously unowned objects or abandoned objects.

Secured Transactions: Any credit transaction creating a security interest; an interest in personal property that secures the payment of an obligation.

Security Interest: An application of property that gives someone an interest in what belongs to another, usually to secure an extension of credit.

Tenancy in Common: A property ownership that is undivided (common) but not necessarily equal between two or more owners.

Title: A synonym for ownership. Sometimes represented as a document.

Zoning Ordinance: Laws that limit land use based usually on residential, commercial, or industrial designations.

Chapter 8:

Acceptance: The contractual communication of agreeing to another’s offer. The acceptance of an offer creates a contract.

Accord and Satisfaction: Payment of money, or other thing of value, usually less than the amount demanded, in exchange for cancellation of a debt that is uncertain in amount.

Assignee: A third party, who is not an original contracting party, to whom contractual rights or duties or both are transferred. This party may enforce the original contract.

Assignment: A transfer of contractual rights.

Assignor: An original contracting party who assigns or transfers contractual rights or duties or both to a third party.

Bilateral Contract: An agreement that contains mutual promises, with each party being both a promisor and a promisee.

Capacity: Mental ability to make a rational decision that includes the ability to perceive and appreciate all relevant facts. A required element of a contract.

Consideration: An essential element in the creation of a contract obligation that creates a detriment to the promisee or a benefit to the promisor.

Counteroffer: An offer made in response to another’s offer. Usually made in place of an acceptance. A counteroffer usually terminates an offer.

Covenant not to Compete: An agreement in which one party agrees not to compete directly with the business of the other party; may be limited by geography or length of time.

Deposited Acceptance Rule: The contractual doctrine that a binding acceptance of an offer occurs when a mailed acceptance is irrevocably placed with the postal service.

Duress: Action by a person that compels another to do what he or she would not otherwise do. It is a recognized defense to any act that must be voluntary in order to create liability in the actor.

Enforceable Contract: A contract that can be enforced in court.

Exculpatory Contract: A contract that excuses one from accepting responsibility or blame.

Executed Contract: A contract that is fully accomplished or performed, leaving nothing unfulfilled.

Executory Contract: An agreement that is not completed. Until the performance required in a contract is completed, it is executory.

Express Contract: A contract in which parties show their agreement in words.

Firm Offer: An offer in signed writing by a merchant to buy or sell goods; it gives assurances that the offer will be held open for acceptance under the Uniform Commercial Code (UCC).

Fraud: A false representation of fact made with the intent to deceive another that is justifiably relied upon to the injury of that person.

Goods: Tangible (touchable), movable personal property.

Implied-in-fact Contract: A legally enforceable agreement inferred from the circumstances and conduct of the parties.

Implied-in-law Contract: A quasi-contract.

Indefiniteness: When the terms of an agreement are not sufficiently specific, the agreement does not rise to the level of a contract because the doctrine of indefiniteness.

Mailbox Rule: The rule that an acceptance is effective once it is sent. See Deposited acceptance rule.

Merchant: A term used in the Uniform Commercial Code to describe parties to a contract that regularly do business in the goods being sold and purchased.

Mirror Image Rule: The common law rule that the terms of an acceptance offer must mirror exactly the terms of the offer. Any variations of terms would make the attempted acceptance a counteroffer.

Misrepresentation: An untrue manifestation of fact by word or conduct; it may be unintentional.

Mitigate: To lessen the consequences of. Usually used to refer to the contractual duty to lessen damages following breach of contract.

Mutual Mistake: A situation in which parties to a contract reach a bargain on the basis of an incorrect assumption common to both parties.

Novation: The substitution of a new contract in place of an old one.

Offer: A contractual communication that contains a specific promise and a specific demand. The offer initiates the process of making a contract.

Option: A contractual arrangement under which one party has for a specified time the right to buy certain property from or sell certain property to the other party. It is essentially a contract to not revoke an offer.

Promise: A commitment or willingness to be bound to a contract obligation.

Promissory Estoppel: Court enforcement of an otherwise unbinding promise if injustice can be avoided only by enforcement of the promise. A substitute for consideration.

Quasi-contract: A quasi-contract, often referred to as an implied-in-law contract, is not a true contract. It is a legal fiction that the courts use to prevent unjust enrichment and wrongdoing. Courts permit the person who conferred a benefit to recover the reasonable value of that benefit. Nonetheless, the elements of a true contract are not present.

Recession: A contractual remedy that cancels the agreement and returns the consideration exchanged to each party.

Restitution: A contractual remedy involving one party returning to another the value previously received.

Specific Performance: Equitable remedy that requires defendants in certain circumstances to do what they have contracted to do.

Third-party Beneficiary: Persons who are recognized as having enforceable rights created for them by a contract to which they are not parties and for which they have given no consideration.

Undue Influence: Under the Civil Rights Act of 1964 and the Americans with Disabilities Act an employer need not take action that is excessively costly or creates excessive inefficiency in order to accommodate an employee’s religious beliefs or disability. This is the concept of undue burden.

Unenforceable Contract: A contract that cannot be enforced in court.

Unilateral Contract: A contract in which the promisor does not receive a promise as consideration; an agreement whereby one makes a promise to do, or refrain from doing, something in return for a performance, not a promise.

Unilateral Mistake: Arises when only one of the parties to a contract is wrong about a material fact. It is not usually a basis for rescinding a contract.

Valid Contract: A contract that contains all of the proper elements of a contract.

Void Contract: A contract that is empty, having no legal force; ineffectual, unenforceable.

Voidable Contract: Capable of being declared a nullity, though otherwise valid.

Chapter 9:

Commercial Impracticability: A Uniform Commercial Code (UCC) defense to contractual nonperformance based on happenings that greatly increase the difficulty of performance and that violate the parties’ reasonable commercial expectations.

Concurrent Condition: Mutual conditions under which each party’s contractual performance is triggered by the other party’s tendering (offering) performance.

Condition Precedent: An event in the law of contracts that must occur before a duty of immediate performance of the promise arises. Contracts often provide that one party must perform before there is a right to performance by the other party. For example, completion of a job is often a condition precedent to payment for that job. One contracting party’s failure to perform a condition precedent permits the other party to refuse to perform, cancel the contract, and sue for damages.

Condition Subsequent: A fact that will extinguish a duty to make compensation for breach of contract after the breach has occurred.

Delivery: The physical transfer of something. In sale-of-goods transactions, delivery is the transfer of goods from the seller to the buyer.

Discharge: In bankruptcy the forgiving of an honest debtor’s debts. In contract law an act that forgives further performance of a contractual obligation.

Duty of Performance: In contract law the legal obligation of a party to a contract.

Express Conditions: Conditions that are explicitly set out in a contract.

Implied Conditions: Conditions to a contract that are implied by law rather than by contractual agreement.

Impossibility of Performance: A defense to contractual nonperformance based on special circumstances that render the performance illegal, physically impossible, or so difficult as to violate every reasonable expectation the parties have regarding performance.

Judicial Admissions: An exception under the statute of frauds allowing to enforce oral contracts when a party acknowledges the oral promise in a formal judicial/ court environment.

Parol Evidence Rule: Parol evidence is extrinsic evidence. In contracts, the parol evidence rule excludes the introduction of evidence of prior written or oral agreements that may vary, contradict, alter, or supplement the present written agreement. There are

several exceptions for this rule. For example, when the parties to an agreement do no intend for that agreement to be final and complete, then parol evidence is admissible.

Part Performance: The contractual doctrine that says when a buyer of land has made valuable improvements in it or has paid part or all of the purchase price, the statute of frauds does not apply to prevent an oral land sales contract from being enforceable.

Release: The relinquishment of a right or claim against another party.

Statute of Frauds: Legislation that states that certain contracts will not be enforced unless there is a signed writing evidencing the agreement.

Substantial Performance: Degree of performance recognizing that a contracting party has honestly attempted to perform but has fallen short. One who has substantially performed is entitled to the price promised by the other less that party’s change.

Tender Performance: The offer by one contracting party to perform a promise; usually associated with the offer to pay for or to ship items under the contract.

Waiver: An express or implied relinquishment of a right.