business-llcs-corporations

third-party beneficiary

Definition

A person who is neither a promisor nor promisee in a contractual agreement, but stands to benefit from the contract’s performance. A third-party beneficiary may legally enforce that contract, but only after his or her rights have already been vested (either by the contracting parties’ assent or by justifiable reliance on the promise).

According to the Restatement (First) of Contracts § 133 (1932), there are three classes of third-party beneficiaries:

 

Sherman Antitrust Act

Definition

A federal anti-monopoly and anti-trust statute, passed in 1890 as 15 U.S.C. §§ 1-7 and amended by the Clayton Act in 1914 (15 U.S.C. § 12-27), which prohibits activities that restrict interstate commerce and competition in the marketplace.

Overview

 

Poison pill

Definition

A corporation’s defensive strategy against a hostile takeover bid in which current shareholders other than the tender-offer bidder or prospective bidder, upon a triggering event, have the right to purchase additional corporate stocks at a deeply discounted price. The effect is to dilute the value of the stock and increase the bidder’s acquisition costs. Also called a shareholder rights plan.

 

arm's length

Definition

Of or relating to transactions between two parties who are independent and do not have a close relationship with each other. Presumably, these parties have equal bargaining power and are not subject to undue pressure or influence from the other party. Transactions of this nature do not give rise fiduciary duties between the parties.

 

Subscribe to RSS - business-llcs-corporations