Exam 1 (Chapters 1, 2, 4 & 5) Flashcards Preview

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Flashcards in Exam 1 (Chapters 1, 2, 4 & 5) Deck (115):

Treble Damages

A statue that says any individual or company harmed may bring a separate action to receive three times the damages actually sustained


Federal Trade Commission Act

One of the statues that regulate unfair competition. It
outlaws unfair methods of competition and unfair acts/practices that affect commerce


Price Discrimination

Occurs when a seller charges different prices to different buyers for "commodities of like grade and quality", with the result being reduced competition or a tendency to create a monopoly

Also prohibits charging different prices to buyers as related to marginal costs

The Clayton Act is the federal law that makes this an illegal crime


Ex Post Facto

Laws that make criminal an act that has already been committed but was not criminal when it was committed

Laws that increase the penalty for an act already committed above the penalty in force when the act was committed

The Constitution prohibits both states and the federal government from adopting these laws


Difference in Grade

Quality or quantity


Six justified permitted basis of Price Discrimination

1. A difference in grade (quality or quantity)

2. The cost of transportation involved with performing the contract

3. A good-faith effort to meet competition

4. Differences in methods or quantities, that is, marginal cost differences

5. Deterioration of goods

6. A close-out sale of a particular line of goods



A body of principles that establishes the structure of a government and the relationship of the government to the people who are governed; State and federal

The U.S. adopted theirs in 1789, after the 13 colonies won their independence from King George


The Branches of Government

Legislative Branch (Congress)

Executive Branch (President)

Judicial Branch (Courts)


Legislative Branch

The branch of government that makes the laws

U.S. Congress (Senate & The U.S. House of Representatives)


Executive Branch

The branch of government that executes or enforces the laws

The President


Judicial Branch

The branch of government that interprets the laws

The Court System


Delegated Powers

Powers, given by the Constitution, that are exclusive to either the state governments or to the national government

i.e. The national government alone may declare war or establish a currency


Shared Powers

The powers delegated to the national government that may still be exercised by the states

i.e. The grant of power to the national government to impose taxes did not destroy the state power to tax


Police Power

The states possess the power to adopt laws to protect the general welfare, health, safety and morals of the people

i.e. States may require that businesses be licensed with state agencies to protect persons dealing with the business


Prohibited Powers

The powers given by the Constitution that does not allow both states and the federal government from doing certain things

i.e. Neither states nor the national government may adopt ex post facto laws



The filing of this begins a lawsuit

Generally contains a description of the wrongful conduct and a request for damages, such as a monetary amount


Bedrock View

The argument that the U.S. Constitution should be interpreted strictly; Originalist view suggesting that the federal government gets the least power possible

The purpose of a constitution is to state certain fundamental principles for all time


Living Document View

The argument that the U.S. Constitution should be interpreted broadly, suggesting that the federal government should be given the greatest power that the words would permit

This view also states that a constitution is merely a statement of goals and objectives and is intended to grow and change with time (Supreme Court follows this view)


Trier of Fact

Person, or group of persons, who determines facts in a legal proceeding, usually a trail


Voir Dire

Examination process where jury selection takes place

Jurors drawn for service are questioned by the judge and lawyers to determine whether they are biased or have any preformed judgments about the parties in the case


Due Process Amendments

Fifth and Fourteenth Amendments both limit the power of the government by prohibiting the national government and the state governments from depriving any person of "life, liberty or property without ___ of law"


Due Process Clause

(As a result of liberal interpretation of the Constitution) This clause now provides a guarantee of protection against the loss of property or rights without the change to be heard

The amendments also guarantee that all citizens are given the same protections

[U.S. Constitution, Fourteenth Amendment as to the states; modern interpretation of the ___ ______ clause of the Fifth
Amendment as to national government. Congress adopted the Civil Rights Act to implement the concept of equal


Equal Protection Clause

The Constitution prohibits the states and the national government from denying any person the ____ _____ of the law

This guarantee prohibits a government from treating one person differently from another when there is no reasonable ground for classifying them differently


Interstate Commerce Clause

To protect commerce, Congress was given Article I, Section 8, Clause 3: the power to regulate commerce with foreign nations, and along the several states and with the Indian Tribes

-Until 1937, The Supreme Court held that this provision gave Congress the power to control or regulate only that commerce crossing a state line (i.e. interstate railway train/telegraph message)

-1947 The power expanded to the point that it gave authority to Congress to adopt regulatory laws that were "as broad as the economic needs of the nation" (manufacturing, agriculture, mining, stock exchanges, insurance, loan sharking etc)

- Today legislation and congressional authority is shared, some limitations are placed on this clause in order to asses the nature in which underlying activities are being regulated


Discrimination against Interstate Commerce

States many not use their tax power for the purpose of discriminating against interstate commerce



Occurs when the seller makes a buyer who wants to purchase one product buy an additional product that he or she does not want

It is a violation of the Sherman Antitrust Act (section 1)



A sale on goods of a type that will no longer be carried by the store


The Sherman Antitrust Act

Contains two sections that control monopolistic behavior

1. Every contract, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is declared to be illegal

2. Every person who shall monopolize or attempt to monopolize any part of trade or commerce among the several states (or foreign nations), or combine with others (who plan to do the same), shall be deemed guilty of a felony


Per Se Violation

(Of the Sherman Antitrust Act) Any agreement to change an agreed-upon price or to set maximum or minimum prices between or among competitors are doing this

Sometimes referred to as Horizontal Price-Fixing


Divestiture Order

If the Clayton Act is violated through ownership or control of competing enterprises, a court may order the violating defendant to dispose of such interest by issuing a decree called _____


Parens Patriae

"Parent of its people"

i.e. The attorney general of a state may bring a class-action suit to recover damages on behalf of those who have paid the higher prices, this action is based on the theory that the sate is suing as the parent of its people



An official appointed to investigate individuals' complaints against maladministration, especially that of public authorities



Attempts to monopolize

Monopolies and combinations that restrain trade are prohibited under the federal antitrust laws


The Right of Privacy

An individual right granted by The Constitution that has two components
1) The right to be secure against unreasonable searches and seizures by the government

The Fourth Amendment (exclusionary rule) of the U.S. Constitution guarantees this position



Written questions used as a discovery tool that must be answered under oath


1937 Supremacy Clause

In this year, the Supreme Court moved from an expansive interpretation of the Commerce Clause to a more narrow view, striking down numerous laws intended to protect the publics health


Conflict of Law

When a lawsuit is brought, there is not just the question of where a case will be tried but also of what law will be applied in determining the rights of the parties. The principle that deter- mines when a court applies the law of its own state—the law of the forum—or some foreign law is called

Some general rules apply. For example, the law of the state in which the court is located governs the case on procedural issues and rules of evidence. In contract litigation, the court applies the law of the state in which the contract was made for determining issues of formation. Performance disputes and damages for nonperformance are generally governed by the law of the state where the contract is to be performed. International con- tracts follow similar rules. * In the absence of a law-selecting provision in the contract, there is a growing acceptance of the rule that a contract should be governed by the law of the state that has the most significant contacts with the transaction.*


Specific Performance

Courts can order defendants in contract disputes to actually perform the contractual duties as originally agreed if it is determined that money alone cannot resolve the issue

An equitable remedy

i.e. could require the owner to convey title to the house



When a court decides a new questions or problem its decision becomes a ____

Which stands as the law in future cases that involve that particular problem


Stare Decisis

Using precedent and following decisions is also known as the doctrine of ___

This rule is not set in stone, judges have some flexibility. When a court finds an earlier decision to be incorrect, it overrules that decision


Common Law

The body of unwritten principles originally based upon the usages and customs of the community that were recognized and enforced by the courts; time honored rules of the community


Changes in The U.S. Constitution

Changes in the constitution are brought about by

1. Interpretation
-The U.S. Supreme Court has made the greatest changes by interpreting

2. Amendment
-Article V gives the procedure to follow for amending the constitution

3. Practice
-In practice, the letter of the constitution is not always followed


Substantive Law

Creates, defines and regulates rights and liabilities; the law that determines when a contract is formed


Procedural Law

Specifies the steps that must be followed in enforcing those rights and liabilities (substantive law)


Criminal Law

The laws that define wrongs against society

Violations carry fines and imprisonment as penalties


Civil Law

The laws that define the rights of one person against another

Violations carry damage remedies for the wronged individual`


Positive Law

Law enacted and codified by governmental authority


Natural Law

A system of principles to guide human conduct independent of, and sometimes contrary too, enacted law and discovered by man's rational intelligence

Imposes higher standards of behavior and they must be followed even if those higher standards run contrary to codified law


Civil Disobedience

The term used when natural laws proponents violate positive law



The usual writ for the summoning of witnesses or the submission of evidence, as records or documents, before a court or other deliberative body



The order or pattern of rules that society establishes to govern the conduct of individuals and the relationships among them


Sources of Law

The U.S. Constitution
State Constitutions
Federal Statues
State Statues
Common Law
Case Law
Administrative Law


Administrative Agencies

Promulgate administrative regulations, they have a significant amount of power delegated to them. All members belonging to these entities are not elected by voters, they are appointed by the president and at certain levels appointment they possible candidates must be approved by Congress

State and federal examples
-Securities and Exchange Commission (SEC)
-Environmental Protection Agency (EPA)


Statutory Law

Legislative acts declaring, commanding or prohibiting something


Private Law

The rules and regulations parties agree to as part of their contractual relationships


Case Law

Law that includes principles that are expressed for the first time in the court decisions


Administrative Agencies and The Constitution

These units of government were virtually unheard of in 1789, and the Constitution made no mention of them

The vast powers of the new Constitution are exercised to a very large degree by administrative agencies.

They are in effect a fourth branch of the government, not provided for in the written Constitution

They are ones that come in contact with the majority of businesspersons and citizens



The testimony of witness taken out of court before a person authorized to administer oaths;


Expert Witness

One who has acquired special knowledge in a particular field as through practical experience or study, or both, whose opinion is admissible as an aid to the trier of fact



The power of a court to hear and determine a given class of cases; the power to act over a particular defendant


Original Jurisdiction

The authority to hear a controversy when it is first brought to court (trail court)


Appellate Jurisdiction

The power of a court to hear and decide a given class of cases on appeal from another(lower) court or administrative agency


Limited (Special) Jurisdiction

The authority to hear only particular kinds of cases

i.e. many states have courts that can hear only disputes where damages are $10,000 or less


General Jurisdiction

The power to hear and decide most controversies involving legal rights and duties


Subject Matter Jurisdiction

Judicial authority to hear a particular type of case



Taking a case to a reviewing court to determine whether the judgment of the lower court or administrative agency was correct


The U.S. District Courts

The general trial courts for the federal system, they are courts of original jurisdiction that hear both civil and criminal matters


Civil Case in Federal Court

1. Civil suits in which the United States is a party

2. Cases between citizens of different states that involve damages of $75,000 or more

3. Cases that arise under the U.S. Constitution or federal laws and treaties.


Writ of Certiorari

The U.S. Supreme Court granting a right of review by the court of a lower court decision



A claim that the defendant in an action may make against the plaintiff, which is asking the court for damages as a result of the underlying dispute



The papers filed by the parties in an action in order to set forth the facts and frame the issues to be tried, although, under some systems, the pleadings merely give notice or a general indication of the nature of the issue (all documents filed in the the initial phase of the case)



Procedures for ascertaining facts prior to the time of the trial in order to eliminate the element of surprise in litigation

Requires each side to name its potential witnesses and to provide each side the chance to question those witnesses in advance of the trial



Using prior inconsistent evidence to challenge the credibility of a witness


Motion for Summary Judgment

Request that the court decide a case on basis of law only because there are no material issues disputed by the parties


Direct Examination

Examination of a witness by his or her attorney


Cross Examination

The examination made of a witness by the attorney for the adverse party


Redirect Examination

Questioning after cross examination, in which the attorney for the witness testifying may ask the same witness other questions to overcome effects of the cross examination


Recross Examination

An examination by the other side's attorney that follows the redirect examination


Motion for Directed Verdict

A direction by the trial judge to the jury to return a verdict in favor of a specified party to the action


Motion for Mistrial

A court's declaration that terminates a trial and postpones it to a later date; commonly entered when evidence has been of a highly prejudicial character or when a juror has been guilty of misconduct


Motion for Judgment n.o.v.
(non obstinate verdicto/not with standing the verdict)

A judgment entered after verdict upon the motion of the losing party on the ground that the verdict is so wrong that a judgment should be entered the opposite of the verdict


The Taxing Power

"Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States"


Privileges and Immunities Clause

A clause that entitles a person going into another state to make contracts, own property, and engage in business to the same extent as citizens of the state


Power to Regulate Business

Under the police power, states may regulate all aspects of business so long as they do not impose an unreasonable burden on interstate commerce or any activ- ity of the federal government.


Horizontal Restraints

Statues set in place, by both the federal and state governments, that regulate anticompetitive behavior among competitors


Vertical Restraints

Statues set in place, by both the federal and state governments, that regulate anticompetitive behavior throughout the supply chain


Clayton Act

The Sherman Anti Trust Act does not prohibit bigness.. However, this act provides that "no corporation ... shall acquire the whole or any part of the assets of another corporation ... where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.”

Prohibits price discrimination



Mergers among competitors is feared because the combination of large companies could result in their domination of the distribution chain and would result in price increases

When large-size enterprises plan to merge, they must give written notice to the FTC and to the head of the Antitrust Division of the Department of Justice. This advance notice gives the department the opportunity to block the merger and thus avoid the loss that would occur if the enterprises merged and were then required to separate


Farmers' Cooperatives

An association of export, who is exempt from the Sherman Act


State Constitutions

Each state has one


Goods Deterioration

Price discrimination expresses permission for this reason



Even though technology affords others the ability to eavesdrop on conversations and intercept electronic messages the law has stepped in to reestablish that the right of privacy still exists even in these technologically nonprivate circumstances

Some laws now make it a crime and a breach of privacy to engage in such interceptions of communications


National Conference of Commissioners on Uniform State Laws (NCCUSL)

Facilitates the national nature of business and transactions, composed of representatives of every state and has drafted statues on various subjects for adoption by the states


Legal Remedy

Also known as judicial relief is the means with which a court of law, usually in the exercise of civil law jurisdiction, enforces a right, imposes a penalty, or makes another court order to impose its will


Currency/War Power

A delegated power that belongs to the national government alone (U.S. Congress)


Transport Costs (goods)

Price discrimination expresses permission for this reason


Closeout of Line (goods)

Price discrimination expresses permission for this reason


Contempt of Court

Actions which either defy a court's authority, cast disrespect on a court, or impede the ability of the court to perform its function

Two types: Civl & Criminal Contempt


Criminal Contempt of Court

A party causing a serious disruption in the courtroom, yelling at the judge and refusing to testify before a grand jury are all actions that constitute a


Civil Contempt of Court

Someone failing to adhere to an order from the court (with resulting injury to a private party's rights) and someone failing to pay court ordered child support are both that constitute a


Who has the power to borrow on U.S. credit?

Federal Government (U.S. Congress Only)


Conspiracy, in Restraint of Trade or Commerce

The Sherman Antitrust Act declared this to be illegal


Article I of the Constitution

Gives Congress its powers and limits, creates the two sections of Congress and Article 8 contains The Commerce Clause


Article II of the Constitution

Makes The Executive Branch of the United States


Article III of the Constitution

Creates The Judicial Branch of The Constitution


Choice of Law

A set of rules used to select which jurisdiction's laws to apply in a lawsuit

It is becoming more common for parties to specify this in their contract


General Welfare Clause

Article I, Section 8 of The Constitution/The Commerce Clause


Peremptory Challenges

A challenge that is used to strike (remove) a juror for any reason except on racial grounds


Challenge for Cause

Attorneys question potential jurors to determine if they should be


Motion to Dismiss

A pleading that may be filed to attack the adverse party's pleading as not stating a cause of action or a defense


Diversity Jurisdiction

A form of subject-matter jurisdiction in civil procedure in which a United States district court in the federal judiciary has the power to hear a civil case when the amount in controversy exceeds $75,000 and where the persons that are parties are "diverse" in citizenship, which generally indicates that they are citizens of different states or non-U.S. citizens


Question of Law

An issue in court that is to be decided by the judge


Burdening Interstate Commerce

Under the police power, states may regulate all aspects of business so long as they do not impose an unreasonable ___ on ____ _____ or any activity of the federal government

i.e. If the federal government establishes safety device regulations for interstate carriers, a state cannot require different devices


Price Regulation

The Sherman Act is the federal law that regulates this form of anticompetitive behavior among horizontal competitors

Both national and state governments may do this



A raw material or primary agricultural product that can be bought and sold, such as copper or coffee