Business Law Basics

Cards (24)

• 1
  Front

  What are the four essential elements required to form a valid contract?

  Back

  Offer, acceptance, consideration, and capacity (some add a fifth: legality of purpose).

• 2
  Front

  What is 'consideration' in contract law?

  Back

  Something of legal value exchanged by each party; it can be a promise, act, or forbearance that induces the other party to enter the contract.

• 3
  Front

  What is the difference between a void and a voidable contract?

  Back

  A void contract has no legal effect from the start (e.g., illegal subject matter). A voidable contract is valid but can be cancelled by one party (e.g., a contract signed under duress).

• 4
  Front

  What is promissory estoppel?

  Back

  A doctrine that enforces a promise even without consideration when one party reasonably relied on the promise to their detriment.

• 5
  Front

  What are compensatory damages in contract law?

  Back

  Money awarded to put the non-breaching party in the position they would have been in had the contract been performed; they cover direct losses caused by the breach.

• 6
  Front

  What is a tort?

  Back

  A civil wrong, other than a breach of contract, that causes harm to another person and for which the law provides a remedy, typically monetary damages.

• 7
  Front

  What are the three elements a plaintiff must prove in a negligence claim?

  Back

  Duty of care, breach of that duty, and causation resulting in damages (often broken into actual cause and proximate cause).

• 8
  Front

  How does strict liability differ from negligence in tort law?

  Back

  Strict liability imposes liability without proof of fault or intent; it applies in cases like abnormally dangerous activities or defective products regardless of the defendant's care.

• 9
  Front

  What is the difference between an agent's actual authority and apparent authority?

  Back

  Actual authority is expressly or impliedly granted by the principal. Apparent authority arises when the principal's conduct leads a third party to reasonably believe the agent has authority.

• 10
  Front

  Under agency law, when is a principal liable for an agent's tort?

  Back

  When the agent commits the tort within the scope of employment (respondeat superior); the principal is generally not liable for torts of independent contractors.

• 11
  Front

  What is a sole proprietorship and what is its key liability feature?

  Back

  A business owned and operated by one person with no legal separation between owner and business; the owner has unlimited personal liability for business debts.

• 12
  Front

  How does a general partnership differ from a limited partnership in terms of liability?

  Back

  In a general partnership, all partners have unlimited personal liability. In a limited partnership, limited partners are liable only up to their investment, while general partners retain unlimited liability.

• 13
  Front

  What is the primary advantage of an LLC over a sole proprietorship or general partnership?

  Back

  An LLC provides limited liability protection to its members, shielding personal assets from business debts, while still offering flexible management and pass-through taxation.

• 14
  Front

  What does 'piercing the corporate veil' mean?

  Back

  A court disregards the corporation's separate legal identity and holds shareholders personally liable, typically when the corporation is used as an alter ego or to commit fraud.

• 15
  Front

  What is the difference between a C corporation and an S corporation regarding taxation?

  Back

  A C corporation is taxed at the corporate level and shareholders are taxed on dividends (double taxation). An S corporation has pass-through taxation where income flows directly to shareholders' personal returns.

• 16
  Front

  What is a copyright and how long does it typically last for works created after 1977?

  Back

  A copyright protects original works of authorship (writing, music, art). For works created after 1977, protection lasts the author's life plus 70 years.

• 17
  Front

  What is a patent and what types of inventions does it protect?

  Back

  A patent grants an inventor exclusive rights to make, use, or sell an invention for a limited period (usually 20 years from filing) and covers novel, useful, and non-obvious inventions or processes.

• 18
  Front

  What is a trademark and what does it protect?

  Back

  A trademark is a word, symbol, logo, or phrase that identifies and distinguishes the source of goods or services; it protects brand identity and can last indefinitely with continuous use and renewal.

• 19
  Front

  What is a trade secret and what legal protection does it receive?

  Back

  A trade secret is confidential business information that provides a competitive advantage (e.g., formulas, processes). It is protected as long as secrecy is maintained; disclosure destroys protection.

• 20
  Front

  What is the at-will employment doctrine?

  Back

  Either the employer or employee can terminate the employment relationship at any time, for any reason or no reason, without liability, unless a specific exception applies (e.g., discrimination, retaliation).

• 21
  Front

  What federal law prohibits employment discrimination based on race, color, religion, sex, and national origin?

  Back

  Title VII of the Civil Rights Act of 1964, which applies to employers with 15 or more employees.

• 22
  Front

  What is the Fair Labor Standards Act (FLSA) primarily concerned with?

  Back

  The FLSA establishes minimum wage, overtime pay (1.5x regular rate for hours over 40/week), recordkeeping, and child labor standards for covered workers.

• 23
  Front

  What is the difference between an independent contractor and an employee under employment law?

  Back

  An employee works under the employer's control (how, when, where); an independent contractor controls their own work methods. Classification affects taxes, benefits, and liability.

• 24
  Front

  What is workers' compensation and what trade-off does it create for employees?

  Back

  Workers' compensation provides no-fault benefits (medical expenses, lost wages) to employees injured on the job; in exchange, employees generally give up the right to sue their employer in tort.