A business organization or venture undertaken for profit or other purposes. The term encompasses both formal legal entities and informal associations of persons pursuing unified activities under common control.
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How its tested
Common Examples
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Agency Scope of Employment
Emma Erickson directs her employee at Echelon Security to install surveillance equipment at a client's site. The employee instead uses the tools to conduct an unauthorized search of a neighboring property. The court examines whether the employee's act fell outside the enterprise of the master when assessing vicarious liability.
Contract Offer Analysis
Enigma Technologies publishes a detailed price list for its software services on its website. Eduardo Enriquez reviews the list and emails the company stating he accepts the terms for a one-year license. The court determines whether the price list constituted an offer by a business enterprise or merely an invitation to negotiate.
Edgewater Capital holds an easement across Eastern Electric's land to access a power substation. Over time the company upgrades the lines to support increased demand from a growing data-center enterprise on the dominant estate. The servient owner challenges whether the intensified use remains reasonably necessary for the enterprise benefited by the servitude.
Business Records Exception
Ella Emerson, a claims adjuster at Eastern Electric, prepares an accident report immediately after a workplace injury. The report follows company protocol but is created with an eye toward potential litigation. The court decides whether the document qualifies as a record of the railroad's regular enterprise or instead serves a primary litigation purpose.
Trustee Conflict Analysis
Enzo Eastwood serves as trustee of a family trust that holds shares in Echelon Security. Eastwood also owns a controlling interest in a competing security firm. The beneficiaries challenge whether the competing firm constitutes an enterprise in which the trustee holds an interest that might affect his judgment.
Conspiracy Enterprise Distinction
Emily Ellis and several associates each submit separate loan applications through a single broker. Prosecutors argue the submissions form one overarching enterprise. The court distinguishes a single common enterprise from multiple separate but similar ventures undertaken by the participants.
Kotteakos v. United States328 U.S. 750, 764–65 (1946)
In 1939 and 1940, petitioners Kotteakos, Lekacos, Regenbogen and other defendants obtained loans insured by the Federal Housing Administration by submitting applications through Simon Brown, president of the Brownie Lumber Company, that contained false statements about the purpose of the loans, property ownership, purchase prices, and financial details. Brown prepared the applications, received the loan proceeds from lending institutions, paid the sellers, and divided the difference with the defendants who had procured each application. Each petitioner or small group of defendants dealt exclusively with Brown on distinct transactions and had no knowledge of or connection to the activities of any other group.
The indictment named thirty-two defendants and charged them with one conspiracy to defraud the United States by making false statements and representations to the Federal Housing Administration for the purpose of obtaining credit. Nineteen defendants were brought to trial, and the jury acquitted seven, disagreed as to four, and convicted the remaining twelve petitioners. The Government's evidence established at least eight separate and independent groups of defendants, each acting independently with Brown as the sole common link and without any agreement or communication among the groups. Brown pleaded guilty and testified at trial. No evidence showed that any defendant knew of or participated in the transactions of defendants outside his own group.
The trial court instructed the jury that the indictment charged a single conspiracy, that the jury must find each defendant was a member of that conspiracy to convict, and that the acts or statements of any conspirator could be considered against all defendants once membership was established. The court did not instruct the jury that it could convict only upon finding the single conspiracy charged or that it must keep evidence of separate transactions separate. The Circuit Court of Appeals affirmed the convictions, recognizing that the proof showed multiple conspiracies rather than the single conspiracy alleged but concluding that the variance and instructional error were not prejudicial. The Supreme Court granted certiorari because of the importance of the issues for the administration of criminal justice in the federal courts.
How does the term enterprise affect the scope of vicarious liability in agency?
The inquiry focuses on whether the servant's act lies outside the master's enterprise or was never entrusted to any servant. Courts weigh prior relations between master and servant and the similarity between the authorized act and the act performed.
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When does an advertisement by a business enterprise constitute an offer?
Advertisements and price lists are ordinarily invitations to negotiate rather than offers. An offer arises only when the communication contains language of commitment or invites acceptance without further negotiation.
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May the holder of an easement expand its use to accommodate growth of the benefited enterprise?
The holder may increase the manner, frequency, and intensity of use to reflect technological developments and normal development of the dominant estate or enterprise, provided the use remains reasonably necessary and does not cause unreasonable damage.
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When is a record excluded from the business records exception because of its relation to an enterprise?
A record prepared primarily in anticipation of litigation rather than in the regular conduct of the enterprise's business does not qualify. The primary purpose of the document controls admissibility.
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What creates a conflict of interest for a trustee involving an enterprise?
A conflict arises when the trustee or a person owning a significant interest in the trustee holds an interest in a corporation or other enterprise that might affect the trustee's best judgment.
Supporting sources
505 U.S. 833, 112 S. Ct. 2791, 120 L. Ed. 2d 674 (1992)
…66.2 (Purdon 1959 and Supp. 1991-1992). As the Court of Appeals observed, "[w]hen a state provides money to a private commercial enterprise, there is a legitimate public interest in informing taxpayers who the funds are benefiting and what services the funds are supporting." 947 F. 2d, at 718. These reporting requirements…