BSL 212 Final Study Guide
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This 13 page Study Guide was uploaded by Jackline Kraiouchkina on Sunday February 8, 2015. The Study Guide belongs to a course at University of Miami taught by a professor in Fall. Since its upload, it has received 48 views.
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Date Created: 02/08/15
BSL 212 Study Guide Chapter 1 Introduction to Law UCC uniform commercial code Sale of Goods If UCC applies on the sale of goods it gives every buyer a warranty assurance that the sellers are legally responsible for the defects UCC does not apply to 1 Sale of services surgery etc 2 Real Estate 3 Stocks and Bonds 4 Gifts Predominant Purpose test looks at a transaction as a whole Gravamen test looks to the portion of transaction upon which the complaint is Chapter 3 Jurisdiction of Courts Two types of jurisdiction 1 over the person service of process impersonal jurisdiction 2 over the subject power in pem jurisdiction State Court no requirements to sue in the state court Federal Court Requirements 1 Minimum of 75000 the diversity of citizenship 2 Removal Rule move from state to federal court 3 Venue where the defendant lives OR where the dispute occurs Altimate Dispute Resolution 1 Arbitration unbinding private 2 Mediation form of resolving disputes Chapter 6 Ethics Punitive damages should not exceed actual damages you better think about consequences Theories of ethics are our rules of law for ethics 1 2 3 4 5 Egoism opinion based inly on selfsatisfaction What is best for me Deontology the golden rule do things to others that you want to be done to you karma It is presented in almost all religions Fundamentalism decisions are based upon outside sources of authority different celebrities etc Utilitarianism the greatest good for a greatest number of people Individual benefits are secondary to societal results Experientialism right or wrong decisions are determined by the life experiences of the decisionmaker Middle between egoism and fundamentalism Chapter 9 Contracts Contracts 1 Bilateral promise for a promise most situations 2 Unilateral promise for an act rare situations Four types of contracts 1 2 3 4 Express all details are spelled out Implied in fact missing facts from the circumstances Quasi implied in law Question Is it unjust enrichment Unfairly benefited Here is a negligent mistake that benefits you Legal test could you reasonably prevent a mistake If yes you should at least pay a fair market value If not you do not have to pay Promissory Estoppel somebody made you a promise gift you make me a promise you know I will rely on it I rely change my position to my financial detriment If so you are estopped to DENY that your promise is enforceable Chapter 10 Offer and Acceptance Three elements of a valid offer in an express contract situation 1 Present intention 2 Definite terms price location time subject matter quantity etc If there are not all definite terms there is no valid offer UCC exception UCC GAP Filling Rules What is reasonable 3 Communication to offeree Auction with reserve just invitation Auction without reserve legal one absolute auction Revocation cancellation of offer General Rule an offeror can revoke his offer at ANY time before its acceptance even if he tells you that you have time There are 4 exception situations when you can protect yourself and make sure you have time for offeree 1 Unilateral form contract promise for an act once the proposed act is started we cannot revoke 2 For you to create an option verbal or written an exchange of value value does not have to be equivalent separate agreement when you guarantee the time Some value need to be paid to the seller 3 UCC firm offer a transaction is a sale of goods has to be in writing maximum time amount 90 days The legal offer should include time amount description of the offer signature The seller should be a MERCHANT 4 Promissory Estoppel somebody gives you an enforceable promise promise cannot revoke the offer Revocation by the offeror has to be communicated to the offeree verbal or written Counterof39f39er legal rejection of the original offer and the creation of a new one Revocation by law if Offer is illegal Destruction of a subject matter Death of the offeror If you change any of the initial offer s terms you violate the mirror image rule and the offer is not enforceable Acceptance 1 Present Intention 2 Approval of all terms Mirror image rule UCC exception Battle of the forms 3 Communication to offeror General Rule acceptance is effective when received by the offeror The mailbox rule an acceptance of a mailed offer could be legally effective when sent if stamped addressed and dispatched even if it was lost and never received by the offeror Now it is updated and called the reasonable medium rule allows acceptance to be legally effective when sent if the method of communication used is reasonable under the facts of the case one that is specified in the offer one that is the same way the offer was sent or one that arrives as fast or faster than the offer If the offer violates the mirror image rule it is not valid acceptance unless it deals with the battle of forms Silence as acceptance by the general rule silence is rejection but if the offeree agrees to be bound by silence it is acceptance UCC Battle of the Forms exception to the mirror image rule if the parties agree on the basic terms the front of the forms there is an agreement Different terms of the second form do not revoke the agreement they are only proposed additions to the contact Acceptance usually binds the offeree however three day right to rescind acceptance can be revoked within 72 hours of the purchase when buying goods on credit Chapter 11 Is acceptance valid legal consent 1 Duress improper coercion force to do something without will to do that Economic duress a strong party has an opportunity to explode the weak party which has no reasonable alternatives In this case weak party agrees however they will be not legally binding 2 Undue in uence unfair persuasion first cousin of duress Example elderly person dies and leaves money to his lawyer doctor etc not the family If the family wants money it has to prove Special relationship between dead person and one who got money in trust and confidence Transfer of asset by the dead one to the person who took care of him from weak to strong party If so it is unfair under Undue in uence and the gift is cancelled It is Burden of proof situation to other party to disprove the situation It is tough to prove unless it is a impartial witnesses presented Fiduciary a special relationship between people highest trustconfidence exists 3 Mistake error Rules Mutual Bilateral Mistake if both parties are mistaken over the Material important Fact not opinion the transaction can be cancelled by either party Also needs existence identity of subject matter Value is not a fact value is opinion and cannot be a basis of revocation upon Mistake Unilateral Mistake Rule if only 1 party is mistaken over the material fact the transaction cannot be cancelled Exception if the nonmistaken party is an expert it can be cancelled 4 Fraud deception cancel recover money damages Elements of Fraud Defendant made a misrepresentation of a material fact not opinion Defendant intends to deceive you he knows that he is lying because if he tells the truth there will be no transaction Plaintiff has to reasonably rely Plaintiff suffers damages pays more than the thing is worth General Rule silence itself is not a fraud Exception unless the seller has a duty to speak when hidden details can cause buyer s health problems or will affect value Future prediction even of a material fact is NEVER fraud If the seller is a merchant expert his opinion is a FACT gt FRAUD Chapter 12 Is agreement enforceable 1 Agreement a current mutual bargained for exchange of something value of benefit what you receive and detriment what you give up Each party MUST receive and give up something in order for agreement to be legally effective 2 Gift Promises General Rule gift promises are not legally enforceable because there is no detriment Exception legal charity or promissory estoppel detrimental reliance cases It is possible to make gift legally enforceable by creating detriments 3 Preexisting duty promises GR preexisting duty promises are not legally enforceable Exceptions 1 Create a current detriment 2 Make a substituted contract cancel existing and create a new one 3 Unforeseen Difficulties made a contract but unforeseen acts of God happened and you ask for a higher pay Legal test were they reasonably unforeseen If they were foreseen you cannot be paid more Force major clause in the contract parties agree that the price will be increased by a certain amount in the case of acts of God 4 UCC merchant promise if it is a sale of goods and one who promises a higher pay is a merchant it is enforceable 5 Debt Settlement Disputes it is an agreement to buy something on a fixed price but the buyer sends a check for a less amount marked payment in full If so when the creditor cashes the check debtor can be released from future liability 4 Past consideration is not legal consideration to support a promise Chapter 13 Illegality void contracts A 1 2 3 Contract violates a law Licensing Laws b Revenue Raising Laws even without license a contract is still valid Only the government is allowed to complain impose a fine Regulatory Laws laws that license various professions purpose is to protect the public If there is no license the contract is not valid Lending Laws usury laws to protect the borrowers from lenders high interest rates Usury a ciVil penalty in a case where is more than a legal Florida up to 18 a year If more than 5000 borrowed allowed more 25 Gambling Laws gambling is void illegal unenforceable Contract violates a public policy 1 2 3 NonCompetition Agreements purchase of existing business and employment contracts valid when are not harmful to the public serve to protect a business interest as part of valid contract and are reasonable in time area and scope of activity protected Exculpatory Cases release of liability you cannot release public policy from negligence Minority of states allow to release ordinary negligence Majority of states refuse to allow release of any negligence allow release of liability in sporting events for ordinary not gross negligence Unconscionable Contracts extreme onesided exploitation contracts The weak party does not have enough education It is hard to get out of the contract claiming it is unconscionable You cannot make changes terms are unfair great difference in power between parties and do not have reasonable alternatives if so you can try to claim that the contract is void Chapter 14 Voidable Contracts A Mental impairment is the party understands the legal effect of the contract when it was creating Impairment illness guardianship voluntary one drugs alcohol situational ones pollen Legal test selfimpartment cannot void the contract except not impaired party caused your impairment or obvious impairment B Minority age under 18 by most states GR majority allows a minor to cancel a contract at any time before 18 plus a reasonable time afterwards Minor needs to return property in existing condition if it is destroyed not intentionally no return is needed but the major still needs to return minor all the money GR minority minor can still cancel at any time BUT the cost for use repair etc should be deducted from the value returned to the minor When the minor cannot cancel the contract 1 Such agreements as student loans married minor contracts insurance and medical ones cannot be cancelled by a minor 2 When it is not a reasonable time after 18 3 Age misrepresentation can still cancel but requires a duty of restoration Some states prohibit cancellation if an adult reasonably relied on the misrepresentation 4 Purchasing of necessities not luxuries if the purpose of buying the product is necessity the minor should pay a fair market value Chapter 15 Contracts in Writing Statute of Frauds if within proper writing is required if outside verbal is okay Contracts within the statue 1 Real Estate contracts Exceptions 1 Part performance verbal agreement is made and a deposit is paid or 2 Pure estoppel situation no deposit the buyer made improvements on the land 2 Guarantee to pay the debt of another to the creditor Exception benefit to promisor or main purpose rule verbal promise made with the motivation that promisor also gets benefit treated as a primary promise 3 Fixed definite performance term of 1 year or more contracts that cannot be fully performed in 1 year have to be in writing Exception for life contracts are outside the statute I verbally agree to hire you for life in NY and Michigan they are inside 4 Sale of goods for 500 of more UCC has to be in writing If signed by less than all parties at least it has to be signed by the party to be charged Exception nonsigner rule if signed by less than all parties and both parties are merchants and one party sends another a written contract it receives it and does not reply in 10 days parties are legally bound Exception for specially manufactured goods when the work was already started verbal is okay Chapter 16 Third Party Rights 1 Assignment if rights transfer of a legal right to collect to the third party It can be a gift verbal or in writing Stand in shoes rule everything that is good for the obligor is good for the obligee If the buyer does not pay the seller he does not have to pay to the third party Promissory note promise to pay in future not cash 90 days note Negotiable instruments law if the promissory note is in negotiable form and the outsider is a holder in due course bought instrument and has no proper knowledge he is free from stands in shoes rule and can still collect from the buyer Consent of obligation law normally not accept Key is Hardship exception if you work in Miami and supposed to go to NY tomorrow for work you can refuse to do that due hardship Example third party buys the AR wants the buyer to pay but buyer cannot pay due to hardship The more personal is the right the more hardship 2 Delegation of duties when a person requires someone else to perform required duties 3 Third party beneficiary contracts a third party gets some benefit from the contract between other 2 parties Have rights if pass the test of intended beneficiary rule a Intended beneficiary the third party has rights To be intended beneficiary your name or the name of a group in which you are a member should be included in to the contract life insurance contracts b Incidental beneficiary the third party does not have any rights 4 Impossibility of performance Example Harry is hired to park cars on the event but now the event is cancelled gt it is a frustration of purpose and Harry is excused from doing things it is not his fault He was not obliged unless the condition happened Chapter 17 Performance Breach and Discharge 1 Conditional Contracts have a contract but are not bound unless the condition occurs Cprecedent past excused from performance unless the condition occurs buy the house Csubsequent future legally bound now but if a condition happens in future you can be excused from future performance pay the rent 2 Satisfaction Contracts Cprecedent not bound until satisfied subject of approval by the customer Legal test what is the nature of a contract If personal surgery portrait etc does not have to pay if not satisfied If commercial paint the house and the work is objectively well done customer has to pay 3 Impossibility of performance Distraction of subject matter Illegality Frustration of purpose when purpose gets impossible to perform 4 Engagement cases unless it is a marriage condition it is no legal gift and the ring should be returned Cprecedent Chapter 18 Remedies 1 Monetary Damages a Compensatory damages you loose the benefit of the bargain and get a compensation for that Direct amounts such as value loss etc b Consequential Damages indirect amounts to compensate losses that will be in future loss of wage Nominal damages small ones sued for principle not money 10 C Punitive Damages ones awarded in addition to base ones tort cases Mitigation of damages requires the nonbreaching party to use best efforts to lessen the amount of potential damages Liquidated Damages any agreement has to be completed by a certain date and it is extra pay for each late day Amount of damages has to be reasonable to actual damages If no they are void 2 Nonmonetary Remedies Speci c performance contract promises should be performed real estate Injunction restraining order an example is relationship contracts If somebody is bothering you you can go to court for injunction and the court would not let the person to follow you Chapter 21 Transfer of Title and Risk of Loss Imperfect Title 1 Void title rule and 2 Voidable title rule 1 True owner TO I Thief void I GFP void You can get your thing back GFP good faith purchaser paid a fair market value and has no knowledge the thing is stolen 2 3 TO I voluntary delivery to a person who frauds you voidable I GFP good title In this case you cannot get your thing back TO I merchant sells by mistake voidable I GFP good Cannot get it back When taking something to a merchant have something on your thing saying that it is yours If so no GFP occurs Risk of Loss Example Sam is a seller from Miami Bu is a buyer from NY UPS is a shipper Act of god happened and the thing is damaged Who has a risk to pay 1 2 3 4 Shipment Contract Rule good for seller risk comes from seller to buyer at the moment goods are delivered to the shipper Destination Contract Rule good for buyer risk stays with seller all the way until goods are delivered to the buyer If it is silence and nothing mentioned in the contract I it is a shipment contract favors the seller FOB free on board if FOB and seller name or the city mentioned I it is a shipment contract if FOB and buyer name or city I it is a destination contract 11 Duties 1 Seller deliver goods 2 Buyer inspect with a reasonable time for damages pay Condition Sales 1 Sale on approval Cprecedent 30 days to return on the 20th day goods are destroyed Who has a risk On the 20th day the seller us still the owner and he is responsible Exception you try to sell goods to someone else 2 Sale on return Csubsequent in the same situation buyer is the owner at the time he paid and has a risk of loss unless he wants to return the goods in 30 days Chapter 22 Negligent Liability Sellers liability for defective goods 1 Negligence Fault Liability product liability industrial accidents plaintiff need to prove that the defendant was at fault defendant had a duty to maintain a certain standard of care defendant breached this duty by failing below the standard plaintiff was injured as a direct result of breach 2 Strict Liability no fault liability the seller may be sued even if he was not at fault plaintiff only has to prove that 1 goods sold by a merchant 2 goods were dangerously defective and 3 goods were sold to plaintiff doctrine of strictabsolute liability In this case plaintiff should win The defendant can try to prove that at the moment goods were delivered to the shipper they were okay however it is usually impossible to prove 3 Breach of Warranty contract concept a guarantee that that the goods sold have a certain standard of quality and performance If they do not work are defective and defects cause injury breach of warranty may be recovered from the seller a Express Warranties verbal or written factual representations by the seller description performance promises facts about the goods etc b Implied Warranties for goods bought from a merchant 1 Merchantability claim that goods purchased fit for the normal customary purposes of use If no can claim for breach of warranty 2 Fitness for Special Use not normal usage applies for all sellers of goods whether merchants or not Includes garage sales special things 1 Seller knows of buyer s desired use 2 Seller knows that buyer relies on him 3 Seller breaches by failing to provide the correct goods 4 Buyer suffers damages due breach 12 3 Fitness for human consumption for the products consumed by a human food For cases when food causes damages for a consumer Foreign object test consumer Wins cutting a mouth on a piece of metal in burger Natural object test seller Wins cutting a mouth on a fish bone in a fish soup 13
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