2033 Business Law Study Guide Unit 1
2033 Business Law Study Guide Unit 1
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Date Created: 02/14/14
Legal Environment Lecture Notes 1 Intro to Law a Systems of Law i Common Law 1 Accepted Legal system of Great Britain during rebellion in 1776 49 of 50 states accept common law the exception is Louisiana 2 a Once a decision is made on case it should be respected and future cases of similarity should be judged accordingly b This is how the common law became established ii Civil Law Louisiana is the only state accepting this 1 Louisiana ca1ne from French and Spanish law 2 Civil law based upon written code a Formal written code religious or decreed b Napoleonic code is this c Roman Code i Roman Code and Napoleonic code make up the Louisiana Code d Common Law is more evolutionary and reactionary while civil is more initiative i Common law responds to the cases at hand but civil laws are set in place initially before the laws are broken However it is my understanding that the laws are changed due to something changing in the behavior there fore a reaction to the new behavior iii Others 1 Religious Law 2 Classi cations of Law a Criminal Law v Civil Law 1 Action of Govemment a ainst accused ii 1 Govemment must overcome assumption of innocence beyond reasonable doubt 2 Not guilty means that there is reasonable doubt that the defendant didn t do the crime 3 Beyond reasonable doubt can be compared to being inside the 5 yard line in football 4 Not guilty is not the same as innocence Not Guil means not proven iii There is also a burden of proof in civil 1 By preponderance of doubt 3 Double Jeopardy a Multiple criminal prosecutions by the same sovereign i This is NOT allowed b New evidence is discovered just after jury s not guilty verdict i Trial still cannot be retried c Can the prosecution call it something else such as rape the rst time and assault and battery the second 1 g i Example if the state of Georgia prosecutes someone for attempting to take the life of a federal judge and the defendant is found not guilty be prosecuted by the United States 1 Absolutely a Te Nichols of Oklahoma 1 OJ Simpson f Liable and Guil are not the same thin i ii 4 Sources of Law a Constitutional Law i ii a Written in 1787 b Doctrine of i ii c Two famous constitutional doctrines i Due Process 1 Basic fair play Most general expression in constitution but only applies to the constitution a If rosecuted for a felony I b When academic dishonesty is suspected students are righted to due process at UA and other public universities but not at private institutions P0 such as Hendrix College or Wheaton a b Ex Arkansas passes law saying Walmart must pay 10 income tax but all other companies pay only 5 tax This is NOT legal under equal protection c Treating classes of people differently is not always illegal i Income tax brackets ii Draft Legislation 1 11 1 Judiciary controls this determination iii What US Court case first stated this idea 1 Administrative regulator law Executive Orders Case law common law stare decisis i The Value of stare decisis 1 2 Out of court settlements are NOT law 3 4 5 6 On matters of state law state courts are supreme a State courts are supreme to matters of state law Only when law con icts with Federal law can it be taken to the US Supreme Court b State V Brown Arkansas Supreme Court c The case being decided is seldom exactly the same as the case being relied upon as a precedent i Miranda Warnings d Sometimes precedents are overtumed i Brown V Board of Education 1954 1 Separate but equal in education is rejected Chapter 2 Civil Litigation A Civil Liti ation a i There is a ling fee ii Nothing prevents you from ling a case against anyone for anything for any reason iii More lawsuits are led per capita in US than in any other country iv In Arkansas we have fewer lawsuits per capita than 90 of the other states v In Arkansas we have about the same number of tort lawsuits as we did ve years ago b Frivolous Lawsuits i Crazy courts pay out millions to idiots and crooks who sue 1 wvvwsnoopscomlegallawsuitsasp shows if articles about suits are actually true ii Hot Coffee Case 1 Because it was settled it does not constitute precedent even though it had been ruled in a trial case It had not been appealed c Alternatives to Civil Litigation i Arkansas Democrat Gazette 1 2 3 d Role of the Attomey i The entire civil system is based on the 1 Attomeys for both sides act as the biased supporter and presenter of his client His role is to present his clients case in the best light possible 2 The attomey does not have to agree with the case that he presents a A man may confess that he is guilty but this does not ethically keep the attomey from defending him in the best possible light even though he knows he is guilty 3 Attomeys are bound by ethics to not use arguments that are ridiculous 4 In criminal court the attorney does not need to believe in the innocence of his client ii Payment hour V contin enc a 3 Not all countries embarrass contingency format a The fact that we have it keeps the courthouse open to everyone iii Class Action Lawsuits 1 Many plaintiffs against very solvent defendants e Role of the Ju 1 1 ii f Trial Courts v A 1 TF The appellate court will reheard key testimonies False 2 Appellate court only reads transcript of courttrial and arguments oral argument and then makes decision based on legal record iii Once appellate court issues a decisions it is usually recorded 1 httplibinfouarkedu a Lexis Nexis 5 1 Must have jurisdiction over person and over subject matter to acce t case 2 a b i 1 2 3 ii ii Cole v Mileti 1 Federal district court decided that the court in Ohio had jurisdiction over Mileti because he had suf cient contacts via mail and phone iii Federal Courts or State Courts 1 Federal Court a b iii Decisions are nal on all other courts within its boundaries c 1 ii Very few cases are heard by US Supreme Court iii d Jurisdiction of Federal Court 1 ii 000 2 State Courts shake in state courts most state justices are 92211 4338 AM Comment 1 Local defendants are more elected likely to have fair a Their 111 1Sd1Ct10I1 is anything that is not exclusive to Luke Holland the Federal Courts b Various states have different formats of their courts h Court Procedures i a er of plaintiff will le complaint with court clerk ii otifying the defendant of the lawsuit 1 Generally has to be delivered to the defendant in person 2 Many unique ways to serve the purpose a Pizza man iii 1 2 3 1 2 3 b Pretty woman c Tow Truck May take form of answer a Where the defendant either admits or denies the statements or allegations stated in the complaint i When denied outlines reasons for defense b Cross Complaint affirmative defense i Admits to wrongdoing set out in complaint but brings forth new facts that show defendant should not be held liable Counterclaim a Denial of charges in complaint and stating that plaintiff is actually liable for damages done to defendant b Plaintiff must answer counterclaim as well Generally WHAT this stage takes a lot of time Interrogatories and depositions swom testimonies but are not used as re lacement for actual testimon Prevents surprises by giving both parties access to evidence that might otherwise be hidden Allows the issues to be narrowed so that trial time can be s ent on the main questions of the case i i Jury Se 1 2 ii 1 lection if a licable peremptory a Cause bias in trial knowledge of key players in triallawsuit b Peremptory cut without cause i Lawyers are limited the number which they can cut this way for each trial as set forth by the state it varies from state to state Voir Dire Jury Selection i Meaning to see and to say iii Testimoni a Hearsay testimony given in court about a statement made by another person b Basically what a person remembers someone else saying Not allowed because it is not verifyable or reliable 2 iv Closin Statements V i vi a unanimous verdict is not always necessary 1 It varies from state to state j Judge i How the trial 39ud e exercises control over the jury 1 Generally in the favor of the defendant 2 b Is motioned on grounds that the plaintiff did not provide any evidence to support his claim c In this case the judge looks at the evidence in the most favorable light to the plaintiff and grants the motion only if there is insuf cient evidence to raise an issue of fact 3 a This occurs after the jury has deliberated and ruled a verdict If the defendant motioned for a directed verdict then he has the opportunity to motion for Jud ment NOV notwithstandin b c Judge often lowers damages to be paid by defendant in this case k Collection of Judgment i Nonexempt assets may be seized 1 What is and is not exempt varies from state to state ii iii 1 1 Alternative Dispute Resolution ADR i Faster than trial ii Cheaper than Trial iii Avoids the all or none result iv I 1 Mediation ets arties to work together to settle and does not have to be accepted a This is most popular form because it isn t binding bitrator reviews case and a Not as popular because it IS binding Chapter 3 Torts and Cyber Torts Torts a De nition b Examples personal injury trespassing i Vioxx c Sources of law i Generall case law 11 iii 1 Nobody argues the law but people do disputedisagree with the facts d Tort Reform i Will be dealt with on the state level ii President doesn t have any direct central overlaws iii Most common type of reform 1 Cap on punitive damages those awards that go over and above the actual damages 2 No state has limited compensatory actual damages includes pain and suffering they have only limited punitive damages and the limit is triple the compensatory damages more or less e Intentional Torts i Deliberate personal injury including 1 Assault the fear threat or apprehension of being attacked 2 Battery the actual attack 3 Wrongful death ii Defenses of intentional torts 1 Reasonable force or deadly force a Reasonable force can only be used as a means to defend property b Deadly force is appropriate when danger to life is present iii Statute of Limitations must le within legal time limit allowed by the state Once this time has passed the suit cannot be led The time limit is different for every state and also different for different circumstances iv FALSE IMPRISON1ENT wrongful detention 1 Occurs frequently with merchants who detain shoplifters a Shopkeeper s privilege generally states that given reasonable belief there occurred shoplifting the store has the right to detain the suspect for a reasonable amount of time using reasonable methods of constraint v Intentional In ictions of Emotional Distress 1 Near Misses don t generally count auto nearaccidents 2 Generally must also have suffered physical injury or the action must be completely intolerable in society vi Defamation Libel and Slander 1 Wrong illy hurting someone s good reputation a Libel defamation in writing b Slander defamation orally Must be communicated towith a third party It must be false It must cause damage to the person Truth is a defense and is NEVER defamation Public gure doctrine a For a public gure to sue for defamation must be MALICE i A statement that is made with either knowledge of falsity or a reckless disregard of the truth 39gt vii Invasion of Privacy 1 Truth is not a defense 2 No communication is required a Girls Gone Wild b Unreasonable intrusion upon seclusion c Appropriation of another s name 3 Any invasion must be intentional substantial and highly offensive 4 Cyber Law a Your employer has the right to read your email and track your usage on the Intemet because you are using the equipment of the company viii Interference with a contract 1 A and B have a contract C comes along knowing that A and B are in a contract and persuades B to breach his contract with A to establish a contract with C 2 Persuading one to abandon a contract to take another 3 Alienation of Affection a home wrecking ix Torts Against Property 1 Trespass to land a Occurs when a person without permission enters onto above or below the surface of land that is owned by another b Also when a person causes anything to enter the land when the individual stays on the land or when the person permits something to remain on the land c Actual harm to the land is NOT an essential element of the tort d Before a person can be a trespasser the real property owner must establish that person as a trespasser i Posted signs ii Entering and committing an illegal act thief e Generally the owner cannot be held liable for the injuries sustained by a trespasser while on the owner s land 2 Trespass to personal property a When an individual without consent harms the personal property of another or otherwise interferes with the personal property owner s right to exclusive possession and enjoyment of that property b Involves intentional meddling 3 Conversion a Any act that deprives an owner of personal property without the owner s permission and without just cause b Good intentions are not a defense in this case 4 Disparagement of Property a Occurs when economical injurious falsehoods are mad about another person s property i E g Szechuan Chinese Food s kitchen is dirty when there is no evidence as such b Slander of Quality trade libel i publishing false information about another s product alleging that it is not what its seller claims c Slander of Title ii f Negligence Unintentional Torts Occurs when a publication falsely denies or casts doubt on another s legal ownership of property Must result in fmancial loss for the plaintiff i Very Fact oriented area of the law 1 Generally there is no issue of law it is all based on fact 2 Ask questions like a What happened b Who is responsible 3 These things are determined by the jury 4 Basic elements a Duty 1 iii Notion that if we are to live in society with other people some actions can be tolerated and some cannot Reasonable Person Standard 1 In determining whether a duty of care has been breached for example the courts ask how a reasonable person would have acted in the same circumstances 2 Society s judgment of how an ordinarily prudent person should act In negligence cases the degree of care to be exercised varies depending on a vast array of factors b Breach of Duty fault i Prove it 1 Preponderance of evidence 2 Af rrnative defenses a Contributory negligence i Plaintiffs own negligence contributed to his or her injury b Comparative fault i Both parties had some level of negligence 3 Assumption of risk ii Unique Defenses 1 Negligence per se a Occurs if an individual violates a statute or an ordinance providing for a criminal penalty and that violation causes another to be injured b Failure to act is liable when actions are required by law 2 Res ipsa loquitur c Causation Defendant s negligence must have caused the victim plaintiff harm i l a Presumption of the defendant s negligence b Occurs when the courts presume that negligence has occurred presumption is made before initiation of court trial The failure to exercise reasonable care must have caused the victim harm ii Must have 1 Proximate Cause 2 Causation in fact 3 Forseeability iii Ambid of Foreseeable Risk d Damages i Property ii Medical expenses iii Loss of earnings iv Pain and suffering 1 If you break your leg because of someone else s negligence you are entitled to Pain and Suffering 2 Done to compensate the loss of the use of the leg for the period of time How much is your leg worth to you V Loss of consortium 1 Damages spouse receives for the loss of of emotionallove support received from dead spouse vi Punitive Damages l Intended to punish because of purposeful negligence or neglected the responsibilities required Limitations have been passed by legislature Limitations have been placed by courts a Sup court stated not to exceed single digit range of multiplication 5 Product strict liability a Consumer buys defective product b To apply professional seller sells defective product and defect must be dangerous No reasonable changes can be made to the product by the consumer i Negligence not a factor but misuse by consumer is 1 Even if it is a l5million problem the company is still liable for defects even though it is not negligence Chapter 4 Contract Formation Contracts are the foundation of business agreements Business must have con dence in the legality of contracts otherwise business cannot occur smoothly A Contract a Any agreement that a court is willing to enforce b Elements of a Contract 1 Agreement ii Consideration iii Capacity iv Legality c Writing of a conract a handshake and the exchange of money are not necessarily necessary The two parties must merely have an agreement of some sort d A deal is a deal in the common law 1 However we have the WalMart syndrome that when you buy an item you can take it back however from a leg perspective there is no obligation to cancel a contract e Social obligations are NOT enforceable standing up someone for a date is not an enforceable contract f Contracts must have a mutual obligation to both parties B Sources of Contract Law a Common Law of Contracts b Restatement of Contracts 1 Summary just like restatement of common law c UCC Uniform Commercial Code 1 State law legislation in all of the states ii Deals with sales contracts among other things 111 Not much different than common law iv Only sale of personal property not land C Types of Contracts a Bilateral Contract 1 Promise for a promise ii There must only be a promise to perform No performance such as payment of money or delivery of goods need take place for a bilateral contract to be formed iii Two sided with two obligations 1 Jeff offers to buy Ann s digital camera for 200 Jef tells Ann that he will give her the money for the camera next Friday when he gets paid Ann accepts J eff s offer and promises to give him the camera when Jeff pays her on Friday This is a bilateral agreement a However on Friday when Jeff has the money and they are in the process of making a sale a new contract is being formed and that is a Unilateral Contract because upon acceptance of the money will the camera be transferred from one to another b Unilateral Contract 1 Onesided ii The offer is phrased so that the offeree the party the deal is offered to can accept the offer only by completing the contract performance iii It is the promise for an act 1 If you carry this package across the Brooklyn Bridge I ll give you 10 c Express v Implied 1 Express Contracts 1 In an express contract the terms of the agreement are fully and explicitly state in words either oral or written 11 Implied in Face 1 A contract that is implied from the conduct of the parties 2 Example a Going to an accountant giving him all of the necessary information learning of his fees and then leaving There was no oral communication about what was to be done but given the nature of an accountant there is an understanding about what is to be accomplished therefore no oral communication is necessary d Executory v Executed i Executed Contract 1 One that has been performed in full by both parties 11 Executory Contract 1 A contract that has not been fully performed on either side Valid Void Voidable and Unenforceable 1 Valid Contract 1 Has the elements necessary to entitle at least one of the parties to enforce it in court ii Void Contract 1 No contract at all Produces no legal obligations on the part of any of the parties iii Voidable Contracts 1 A valid contract but one that can be avoided at the option of one or both of the parties 2 The party with the option can elect either to avoid any duty to perform or ratify make valid the contract iv Unenforceable Contracts 1 One that cannot be enforced because of certain legal defenses against it a Note that it is not unenforceable because of certain legal defenses against it b But rather it is unenforceable because it is in violation of some statute or law D The Agreement a b C Begins with an offer 1 Expresses a willingness to enter into a contract ii Lucy V Zirnmer iii An advertisement is only an invitation to negotiate and is not an offer to contract 1 Honoring advertisements makes good business sense though Ends with an agreement 1 Both parties agreeing to the conditions of the contract resulting in the formation of a contract 11 Mutual Assent occurs when both parties agree to the conditions of the contract Both the offeree and the offeror must be aware of the contract for it to be binding E Acceptance a b c Completes the deal Bilateral Contract promise completes the deal it is a promise to perform Unilateral contract completed act seals the deal the act itself is what completes the contract If you promise to hold an offer open there is no legal requirement to do so before it is accepted Offeror can revoke at any time however Once action has been taken to complete the contract the deal cannot be revoked Exceptions 1 Option involves the payment of value by offeree g h 1 I ll hold offer open for 30 days if you pay me 300 right now 2 Offer is irrevocable for time period 11 Firm Offer rule under UCC 1 Special rule offer made in writing by professional merchant offer is irrevocable for time period Between professional merchants this would be goods sold or bought and the offer must be irrevocable for a time period not to exceed three months Acceptances of common law are valid upon dispatch 1 When you send a letter of acceptance in the mail the deal is sealed as soon as you send it If you receive a fax ve minutes after you send the letter canceling the deal then the deal is still on Mirror Image Rule 1 States that the contract accepted by the offeree must be the exact same as the contract offered by the offeror F Consideration the price which a person charges for a promise a b To have a contract both parties must give up something of value No obligation for offeringpromising a gift 1 Because the recipient would not be giving anything up Adequacy of Consideration i Courts are not usually concemed with fairness and is not usually an issue Preexisting Duty 1 States that consideration does not exist if parties are already contractually obligated to carry out the contract ii Ex Trevor with the baseball team in the world series iii Practice Question 22 Past Consideration 1 Our friend is drowning in the ocean so you go and save his life After you have revived him he said he will give you 5000 on your next birthday The birthday comes around and he does not pay up Is he legally bound by contract to carry out the agreement 1 No because past consideration states that agreements made after the occurrence are not considerable 2 Lesson to learn bargain before you save his life G Capacity the legal ability to enter into a contractual relationship a Minors are contractually incapable 1 If a minor enters into a contract it is voidable by the minor only 11 To void contract it must be done so while the minor is still a minor or by a reasonable time after becoming legal iii Nonwaivable this right cannot be revoked in any contract Insane only legal guardians of insane people have the authority to enter into a contractual relationship on behalf of the person in their care Intoxicated only EXTREME cases of intoxication intoxication is not a very good defense unless the intoxication is ridiculously so 1 Contract cannot be avoided because of two or three drinks H Legality I a Civil liability 1 Gambling your buddy cannot sue you to force payment on casual gambling because casual gambling in AR is illegal 1 Some sates allow casual gambling but Arkansas does not 2 This is not enforceable civilly 11 Criminally 1 Gambling is legal only in two places in Arkansas neither of which is Fayetteville 111 Internet gambling is illegal in Arkansas as well b License c Non compete agreements 1 When high level executive may be asked to enter into a non compete agreement so competitors can t steal you 1 Some states laws differ 2 Area regarding noncompete must be reasonable 3 Timeframe by which noncompetitiveness must also be reasonable 11 Those states that enforce these agreements will probably be upheld if the time and area are reasonable Vices of Consent Lack of genuineness of assent would be not genuinely assenting to the terms of the contract a Mistake 1 Only mistakes of fact may be reason for voiding contract 11 NOT mistakes of valuequality 111 UnilateralBilateral 1 Bilateral mistakes occur when the mistake is made by both of the parties in the contract In this case either party may void the contract if they desire to do so 2 Unilateral contracts occur when the mistake is made by ONE party within the agreement In this case the party that did NOT make the mistake has the option to void the contract at their consent a But if the nonmistake party is aware of the mistake then the contract may be voided b When the mistake is made mathematically and is inadvertent the contract may be voided b Fraud deliberate misstatement of a material fact ie lying 1 Is there a duty to speak 1 Depends on the circumstances c Misrepresentation 1 Fraudulent misrepresentation occurs when a contract is made on the basis of intentionally misleading the other party 1 In this circumstance the party wronged can generally avoid the contract 2 For this to occur there must have been intent to deceive the deception must have been about material fact and the innocent party must have justi ably relied on the misrepresentation 3 In order to collect damages the party must have been injured in some way d Duress 1 Forcing someone to enter into a contract by means of fear created by threats ii The threat must be illegal or wrongful iii The threat of civil suits is not duress e Adhesion Contracts and unconsionability i Adhesion contracts occur when the offeror makes a deal to the offeree that is a take it or leave it type of deal When the offeree has no opportunity to bargain for the contract then an adhesion contract has occurred 11 Unconscionable contracts are those that are deemed so unfair as to be unenforceable 1 Under Section 2302 of the UCC this applies only to contracts for the sale of goods Many courts however have broadened this to cover other aspects of the law Statute of Frauds a Not all contracts must be in writing however there are a few exceptions to the rule 1 Sale of land ii Contracts that cannot be completed within one year 111 Promise to stand behind the debt of another collateral iv Marriage v Sale of goods greater than 500 UCC Parole Evidence Rule if the parties have bothered to put the agreement into writing then the writing controls at the point of the written contract All verbal communication then becomes obsolete
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