BLAW Exam 2
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Date Created: 10/11/16
1. Contract a. An agreement that a court is willing to enforce i. Social agreements are not contracts ii. Illegal contracts are not contracts 1. Elements a. Agreement b. Consideration c. Capacity d. Legality i. Writing is not required 1. Would be nice, but not required a. What you cannot prove in court, does not exist ii. Handshake not required iii. No money must be exchanged iv. Neither party can cancel the deal without the other party b. Sources of contract law i. Common law on contracts 1. Case law 2. Not much statutory law ii. Restatement of contracts 1. Summary of basic common law in the U.S. a. American Law Institute i. Not statutory 1. Not legally binding a. Very influential iii. Uniform commercial code 1. State law 2. Not federal a. National conference of commissioners on state laws i. Wrote uniform state code 1. Uniform State Code a. Article II 2. Sales contract 3. Contract for the sale of personal property 4. Types of Contracts a. Bilateral i. Two sides 1. Two promises b. Unilateral i. One side 1. One promise 5. Important terms p 160163 a. Express i. Something that is not implied 1. Parties have explicitly stated their agreement b. Implied i. Terms not specifically stated 1. Understood by both parties c. Executory i. Not been fully performed d. Executed i. Fully performed and now part of history e. Void i. Never has legal effect at all f. Voidable i. Initially had legal effect but could be canceled by one of the parties 6. The offer a. The expression to a willingness to enter into a legally binding agreement i. Three requirements 1. Legal intent 2. Communicating a. Intent has to be judged by the outward manifestation of intent, not by the unexpressed intent b. Lucey v. Zehmer i. Land c. Advertisements are not offers i. Only invitation to negotiate 1. Different from smoke ball case d. Offer must be communicated directly from offeree to offered 7. The acceptance “completes the deal” a. Bilateral contract i. Promise completes the deal b. Unilateral contract i. Completed act 1. Offer can revoke at any time a. Offer to hold an offer open, is not legally binding 8. A promise with no consideration has no validity in the law 9. Two exceptions a. The option: A makes offer to B i. States that the offer will be held open for 30 days 1. If B will pay A $100 b. The Firm Offer Rule under the UCC i. Has to be made by a merchant ii. Has to be the sale of personal property 1. Ex a. Merchant writes that someone can purchase a TV at a price for 30 days i. This is unchangeable 10. A counter offer terminates the old contract 11. Mirror image rule a. Acceptance cannot change the offer at all i. That would make it a counter offer 12. Consideration a. Bargained for exchanged i. Doesn't have to be fair 1. Trevor (pitcher) won’t take the mound unless he gets $100,000 bonus a. Team says ok i. Team doesn't pay him 1. Preexisting duty rule 13. Past consideration rule a. The act is done already i. You have nothing to offer 14. Capacity a. Minors i. Voidable by the minor only. Must act while still a minor or within a reasonable time after becoming an adult b. Intoxication c. Insane in law i. Ruled incompetent d. Insane in fact i. Don’t know the material 15. Legality a. Gambling i. Hypothetical 1. A business allows you to register to win a big screen TV, but only if you make a $5 or more purchase a. Answer i. This is gambling 1. If they switch it to “no purchase necessary” then it is legal ii. Basic rule regarding the enforcement of gambling contracts 1. Gambling contracts are not enforceable by way of action or defense (rule of “in pari delicto” equally at fault). The court will leave the parties where it finds them a. If your friend won’t pay you for losing a bet, he can’t be held legally accountable to pay you i. If your friend pays you, finds out gambling is illegal and wants his money back, you can’t be held legally accountable to pay him back b. Failure to obtain a license required by law: only if “regulatory” i. The purpose of providing a license is to protect the public 1. If it is a regulatory license, a person without said license can not collect on contracts regarding that license c. Exculpatory clauses: i. Sometimes called a “waiver” or “disclaimer” 1. “No lifeguard on duty swim at own risk” a. These are legally enforceable i. “Except when it isn’t” d. Covenant not to compete (AKA: “non compete clause”). i. If you leave our company, you can’t go work for a competitor for a given period of time 1. Basic rule: a. Reasonable business purpose b. Limited as to time i. 2 years is a good rule of thumb c. Limited as to area: i. Two possible rules: 1. Entire contract invalidated 2. Area of contract changed by court (blue pencil rule) a. In Missouri, the judge is allowed to rewrite part of the contract in regards to area b. In Arkansas, if the area is “too broad” then the whole contract is void 16. WRONG Arkansas changed the law, now a blue pencil state a. Can a judge refuse to enforce a contract because he/she feels that the contract is “grossly unfair”? i. Yes 1. Adhesion b. Statute of frauds i. Contracts have to be in writing when they concern; 1. Sale of land 2. Contract which cannot be completed in one year 3. Promise to stand behind the debt of another 4. Sale of goods greater than $500 (not a service) a. If it has been “carried out” or “executed” it does not have to be in writing 17. Satisfying the statute of frauds: a. Who must sign it? i. The person against whom enforcement is sought 18. Parole evidence rule a. Oral agreements which are in contradiction to the writing cannot be held up against the writing in a court of law 19. UETA a. “A record or authentication may not be denied legal effect or enforceability solely because it is in electronic form” Week 6 1. Voluntary consent a. Mistake: unilateral v. bilateral b. Fraud: i. Is there a duty to speak? 1. No c. Misrepresentation i. Misstatement of fact, relied upon by the other side d. Undue influence e. Duress i. Threat 2. Conditions a. The most common “condition” specifically stated in a contract i. The “condition precedent” 1. Having to borrow money to pay for the house a. Contract void if you can’t find money to borrow b. Discharge by performance i. Substantial performance doctrine 1. Contractor acted in good faith and the difference is small a. Supposed to make a 12’ driveway, makes it 11’11” c. Satisfaction doctrine i. Don’t pay unless satisfied 1. Money back guarantee d. Time for performance i. If there’s a specific date 1. Most of the time, if it’s slightly late, that’s ok, except when it’s essential 3. Discharge by agreement or operation of law a. Statute of limitations i. If it has run out, it’s run out b. By impossibility i. Apartment burns down c. Illegality i. It becomes illegal d. Bankruptcy i. Is bankrupt, can’t pay 4. Remedies a. Compensatory damages i. Dollar amount that will “make the victim whole” b. Understand what consequential damages are i. Read the file under “Smith v. Russ” on Blackboard 1. Not in book, Fayetteville case c. Mitigation doctrine d. Nonpecuniary (economic) damages e. Punitive damages i. Not allowed in cases for “breach of contract f. Liquidated damages i. When 2 parties enter into a contract, there are promises 1. This is an advanced agreement for what the damages will be if the contract is breached a. Only enforceable if they are reasonable 5. Equitable remedies a. No money involved i. The injunction 1. Often used with noncompete clause b. Specific performance 6. Attorney’s fees a. In the contract i. Not recoverable 1. Unless a. Stated in contract i. By statute 1. Are recoverable in Arkansas Chapters 9 and 10 7. Tort law a. A tort is a breach of duty created by law i. Where does it come from? 1. Case law b. Damages? i. Compensatory damages 1. Make the victim whole ii. Punitive damages 1. To punish the defendant 8. Tort reform a. People say tort law is “too vague” i. Federal statutory law 1. Product liability lawsuits shifted to federal courts ii. Limits on “noneconomic” damages by state legislatures iii. Limits on punitive damages by state legislatures 1. Such limits declared unconstitutional by some state supreme courts a. Including Arkansas iv. By the courts 1. State Farm v. Campbell a. 538 U.S. 408, U.S. Supreme Court, 2003 i. Trial court 1. $1M compensatory 2. $145M punitive a. This was changed to “single digit” (9M) i. That’s tort reform Intentional torts 9. Intentional personal injury, including: a. Assault b. Battery c. Wrongful death d. Defenses i. “Reasonable force” or “deadly force” Criminal and Civil 1. If a person committing a felony a. And they’re hurt i. Not a trap ii. Not retreating 1. Then it’s legal a. Illegal if they’re retreating or walk into a trap 10. False imprisonment a. Keeping someone against their will without reason i. The shopkeeper’s privilege 1. Can detain someone but: a. Reasonable period of time b. Reasonable suspicion 11. Intentional infliction of emotional distress a. “Near misses?” i. In an accident barely avoiding an accident ii. Near misses are not compensable b. Action must EITHER result in a physical injury or the action must be completely intolerable in society 12. Defamation (aka libel and slander) a. “Defamation of character” i. Have to communicate to a 3rd party ii. Has to be false 1. Truth is a defense iii. Has to have caused damages a. Public figure doctrine i. N.Y. Times v. Sullivan 1. Plaintiff must prove the defendant is guilty of actual malice 2. Or they were grossly negligent 13. Five forms of invasion of privacy (p. 227) a. Appropriation of identity b. Intrusion into individual’s affairs or seclusion c. Public disclosure of private facts d. False light e. Publication of private facts i. No communication required ii. Truth not a defense iii. Case example: Lane v. MRA Holdings “Girls Gone Wild,”242 F.Supp.2d 1205 (U.S. Dist. Court, Fla. 2002) f. Recording conversations i. One party states 1. Only need consent from one party a. Arkansas is one of these ii. Two party states 1. Need consent from both parties a. Florida is only SEC State that is two party g. Illegally misappropriating name or likeness i. EA Sports 1. NCAA Football ii. Lindsay Lohan v. makers of Grand Theft Auto V, July 2, 2014 iii. Times Square billboard ad with picture of Obama in 2010 14. Business tort: Interference with a contract (p. 229) a. A and B have a contract i. C knew this 3rd party has to know 1. C sweet talks B into breaching the contract a. Alienation of affection i. A + B are married 1. C knows this a. C conveniences B to abandon the marriage and come with C 15. Fox v. Netflix 16. Intentional tort against property: (p. 230, 231) a. Conversion (talking) 17. Law of torts (tort law) is based primarily on case law Unintentional torts 18. A “fact oriented” area of law a. What happened? b. What is reasonable? c. These are decided by: i. Judge or Jury 19. Basic elements a. Duty i. Landlord doesn’t have duty to protect the tenants 1. Bartley v. Sweetser, Arkansas Supreme Court, 890 S.W.2d 250 (1994) a. Courts are reluctant to not follow a precedent ii. Someone who gives alcohol to a minor is not liable 1. Sullivan v. (fraternity), 740 S.W.2d 927, Arkansas Supreme Court (1987) iii. Shannon v. Wilson, 947 S.W.2d, 349, Arkansas Supreme Court, 1997 1. Go onto blackboard and read the summary of this case, print it off and bring to class on 9/30/16, be ready to answer questions a. What was law BEFORE this case? b. Where did the law come from? c. Did the majority opinion follow this law or did they change it? i. Changed it d. What is a dissenting opinion? iv. Duty of landowners 1. “To exercise reasonable care to protect individuals coming onto property.” a. Business invitees: i. Duty is to warn invitees of foreseeable risks ii. Duty to discover and remove hidden dangers b. Trespassers: i. Only duty is to avoid deliberate harm b. Breach of duty c. Causation d. Damages 20. Breach of Duty a. Not exercising reasonable care i. Everyone has an obligation to exercise reasonable care 1. Reasonable care is to be decided by jury (or judge) a. Burden of proof: i. Preponderance of evidence 1. Defenses: a. Contributory negligence 21. Defendant is also arguing that the plaintiff was also (contributory) negligent let’s say the defendant proves that the plaintiff was 25% negligent; then the COMPENSATORY damages would be released by 255 22. If the plaintiff knew there was a risk, the defendant is not guilty example, baseball game a. Negligence per se: i. Automatic liability if the defendant’s act is in violation of statute b. Good Samaritan law i. Exempts a person who ‘attempts’ a rescue 1. If the person trying to rescue someone causes more damage (in most states) they are ok c. Ambit of foreseeable risk i. P. 235 1. If you're not in the “ambit of foreseeable risk”, then the company/person is not responsible for the damages you occur a. New York Time, Aug. 25, 1934 d. Damages i. Property ii. Medical iii. Loss of earnings 1. Wages iv. Pain and suffering v. Punitive damages 1. Severe negligence by defendant vi. Loss of consortium 1. Guy has to stay in hospital, wife is not receiving the ‘love and affection’ he normally gives her 23. Strict liability a. “Strict Liability” i. Liability regardless of fault (negligence) 1. Areas where this might apply: a. Abnormally dangerous activities i. Blasting and demolition ii. Storing explosives iii. Keeping wild animals 1. Exceptions a. Professional malpractice b. Dogs biting people i. Some states give the dog 1 bite (Arkansas, Texas) ii. Some states don’t “strict liability” (California, Oklahoma) 24. Product liability a. The basic “public policy”: Shift the risk from the victim to the seller. Negligence not a consideration i. Tort action: requirements (Restatement 402A) 1. Professional seller 2. Defective 3. Unreasonably dangerous 4. No “privity of contract” required 5. Not liable if product changed 6. Liability cannot be waived a. Urban legends: i. No one has actually: 1. Filed a lawsuit for using a lawn mower as a hedge fund clipper a. Normally, strict liability only deals with products that are defective i. On a child’s Superman costume “this device does not actually make you superman” 1. Breach of Duty a. Not exercising reasonable care i. Everyone has an obligation to exercise reasonable care 1. Reasonable care is to be decided by jury (or judge) a. Burden of proof: i. Preponderance of evidence 1. Defenses: a. Contributory negligence 2. Defendant is also arguing that the plaintiff was also (contributory) negligent -- let’s say the defendant proves that the plaintiff was 25% negligent; then the COMPENSATORY damages would be released by 255 3. If the plaintiff knew there was a risk, the defendant is not guilty -- example, baseball game a. Negligence per se: i. Automatic liability if the defendant’s act is in violation of statute b. Good Samaritan law i. Exempts a person who ‘attempts’ a rescue 1. If the person trying to rescue someone causes more damage (in most states) they are ok c. Ambit of foreseeable risk i. P. 235 1. If you're not in the “ambit of foreseeable risk” then the company/person is not responsible for the damages you occur a. New York Time, Aug. 25, 1934 d. Damages i. Property ii. Medical iii. Loss of earnings 1. Wages iv. Pain and suffering v. Punitive damages 1. Severe negligence by defendant vi. Loss of consortium 1. Guy has to stay in hospital, wife is not receiving the ‘love and affection’ he normally gives her 4. Strict liability a. “Strict Liability” i. Liability regardless of fault (negligence) 1. Areas where this might apply: a. Abnormally dangerous activities i. Blasting and demolition ii. Storing explosives iii. Keeping wild animals 1. Exceptions a. Professional malpractice b. Dogs biting people 5. Some states give the dog 1 bite (Arkansas, Texas) 6. Some states don’t - “strict liability” (California, Oklahoma) a. Product liability i. The basic “public policy”: Shift the risk from the victim to the seller. Negligence not a consideration 1. Tort action: requirements (Restatement 402A) a. Professional seller b. Defective c. Unreasonably dangerous d. No “privity of contract” required e. Not liable if product changed f. Liability cannot be waived i. Urban legends: 1. No one has actually: a. Filed a lawsuit for using a lawn mower as a hedge fund clipper b. The normally strict liability only deals with products that are defective 7. On a child’s Superman costume -- “this device does not actually make you superman” 8. Laws assisting unsecured creditors a. The statutory lien i. Helping a creditor to collect on an unsecured debt 1. Example a. Mechanics lien i. Mechanic can go repossess the car if he isn’t paid b. Statutory lien i. Brandon Barber borrowed $42,000 to build part of a house 1. He sold that house to Family A a. Branton Barber never paid back that $42,000 and skipped town 9. Family A had to pay it or have their house repossessed a. Garnishment of wages i. Limited by both federal law (federal consumer credit protection act) and state law 1. Takes a portion of the debtor's income each paycheck a. Some states don’t allow this i. Texas doesn’t allow garnishment of wages 1. Federal law says the debtor has to be able to keep 75% of their pay b. Remedies for secured creditors i. Mortgages 1. Cars 2. Houses c. Real property loans i. Fixed rate loan 1. Interest rate does not change over the time of the loan ii. Adjustable rate loan 1. Interest rate changes, based on the current rate iii. Reverse mortgage 1. Borrowers have to be at least age 62 2. The bank pays the borrower every month a. They have to pay this back “when the last person leaves the home i. Moving ii. Dies 1. The bank sells the house 10.Real property a. Acceleration clause i. House is “underwater” 1. Owes more than its worth 11.Personal property: foreclosure procedures and the “self-help” doctrine a. Can foreclose “on your own” but cannot “breach the peace” i. What constitutes “breach of the peace”? 1. Chrysler Credit Corp. v. Koontz, 661 N.E.2d 1171 a. Guy had his car repossessed at midnight, he ran out screaming “don’t take it” but they did anyways i. They can legally take it b. After repossession of personal property i. Keep property in full satisfaction of debt (both parties must consent) ii. Private sale (must notify debtor) iii. Public sale (must notify debtor) iv. Deficiency judgment 1. If the sale doesn’t bring enough money to pay off the debt 12.Other protections for debtors a. Exemptions i. Both state and federal law (bankruptcy) ii. Protection against unreasonably high interest rate 1. Usury a. Traditionally state law i. Arkansas 1. 17% - very low a. Most other states are in the mid to high 20%s b. This 17% is stated in the Arkansas constitution 13.That means it would have to be changed by a vote by the citizens 1. Payday loan a. Very short loan i. Maybe 2 weeks 1. He’ll pay it back then because that’s when it’s payday and he’ll have money a. These have “low” rates i. Until you multiply it out week by week, month by month…. 2% for 2 weeks is 52% for the year ii. We are interested in the annual interest rate, not just what it’s going to be for two weeks Wednesday 10/05/16 14.Top five reasons people go bankrupt a. Medical expenses (62%) b. Job loss c. Poor (excess) use of credit d. divorce/separation e. Unexpected expenses (thefts/casualty) 15.Bankruptcy law a. Combination of federal and state law b. Bankruptcy reform act of 2005 i. 10 years in the making 1. Bankruptcy courts a. Under the authority of the U.S. District Courts i. Not appointed, not lifetime, only hear bankruptcy cases 1. Subservient to U.S. district judges in their area a. Which state has the most bankruptcy filings per capita for the year ended 2015? i. Tennessee b. Texas has less than ½ the national average 16.Kinds of bankruptcy a. Chapter 7 i. Straight liquidation (70%) b. Chapter 9 i. Cities c. Chapter 11 i. Business reorganization 1. Assets are not repossessed d. Chapter 12 i. Farmers e. Chapter 13 i. Wage earners plan 1. Consumer reorganization a. Assets not repossessed i. Will slowly pay off debt 17.The bankruptcy reform act of 2005 a. Gives bankruptcy judge authority to dismiss a chapter 7 (straight liquidation) and convert it to a chapter 13 (wage earner’s plan) i. Presumption of abuse if current monthly income is above a certain level 1. Basically, if family income is greater that the median income in that state, a chapter 13 may be required a. About $50,000 i. The court uses “the means test” b. Credit counseling i. Must get a statement from an accredited non-profit credit counseling 18.Procedures a. File in federal court: “date of bankruptcy” DOB i. Automatic stay 1. Forms under oath a. Selection of trustee i. Trustee represents the creditors 1. Will try to gather up as much property as possible, liquidate it and give the money to the creditors a. Straight liquidation = all non- exempt property seized and sold i. If chapter 11 or chapter 13, reorganization plan submitted and approved ii. Debts paid over 3-5 years 19.Straight liquidation procedures a. Anything you earn after the date of bankruptcy is yours to keep i. That what you earn after the DOB is not part of the bankruptcy estate 1. This does not include “passive” income a. When the debtor files for bankruptcy he forfeits stocks too i. Anything inherited or received by a gift within 6 months after the date of bankruptcy is not yours to keep 20.Fraudulent transfer a. When someone gives away all their assets and then files bankruptcy i. The two-year rule 1. The debtor either had actual intent to defraud creditors OR the transfer caused the debtor to become insolvent (some states longer than 2 years) a. If you do it with “specific intent” then you can spend 3-5 years in federal prison i. Preference 1. The 90-day rule a. Any payment to an unsecured creditor which gives them an unfair advantage (paid back more) over other creditors, must pay that back to the Trustee, who will redistribute it 21.Exemptions in a straight liquidation a. Debtor chooses either federal or state exemptions 22.Arkansas Exemptions a. Wearing apparel i. Not jewelry b. $200 i. $500 if married c. Homestead (if married or have a family) Friday 10/07/2016 23.Homestead exemption a. Took a long time to get passed i. A lot of political turmoil 1. “The homestead cap is a violation of state’s rights” - George W. Bush 24.Priorities a. “All creditors are equal, but some are more equal than others….” i. Priority creditors (in order) 1. Secured creditors 2. Child and spousal support obligations 3. Administrative expenses 4. Wages and salaries (when the debtor has employees) up to a dollar maximum 5. Taxes (3 years) 25.Non-dischargeable debts a. Taxes within 3 years b. Any debt resulting from fraud c. Liability for willful torts i. Accidental torts are dischargeable though d. Alimony and child support e. Any debt not listed i. If you forget to list it, it won’t/can’t be discredited f. Government guaranteed student loans i. Unless undue hardship (not important for test) g. Debts resulting from DWI 26.Denial of a discharge (aka: the death penalty) a. destroying/falsifying records b. Making a false statement under oath c. Secretly transferring or concealing property d. Having received a discharge in the previous 8 years 27.A few final things “just chill, ignore these” a. You can reaffirm a debt with court permission b. Bankruptcy will stay on your credit report for ten years c. Some employers review your credit record (and Facebook!) before deciding whether to offer a job d. Some creditors will abuse the 8 years 28.Chapter 12: Real Property a. Real property i. Land, buildings, plants, mineral rights, air rights ii. Fixtures 1. Something that was originally personally property a. But i. Has been affixed to your real property 1. Ceiling fans 2. Chandeliers a. NOT i. Above ground pool ii. Curtains iii. Above ground hot tub 29.Forms of ownership a. Fee simple absolute i. Highest form of ownership under common law 1. Owner has ownership in his/her life and can decide who gets it when they die b. Life estate i. Lesser than fee simple absolute 1. Owner has property fee simple absolute a. He transfers his property to two people under two forms i. Life tenant 1. Present interest a. Has that property until they die i. This person can sell the estate ii. The buyer will own it until the life tenant dies ii. Remainderman 1. Future interest a. Gets the property when the life tenant dies i. They will own it in fee simple absolute ii. The remainderman can sell their future ownership 30.Forms of multiple ownership a. Ownership in common i. A - B - C 1. They can own in ANY proportion 2. Any one of them can sell their interest to another party without permission from the other owners a. If one dies, their heirs inherit the property (or whoever he willed it to) b. Joint ownership (joint tenancy) - defeats the rights of heirs i. A - B - C 1. The proportions have to be equal a. 33.33333333% each 2. One can sell their ownership a. If A sold to X i. X owns in “ownership in common” 1. X is not a joint owner a. He could split that up 3. If one dies, their share goes to the other owners a. If X, B and C are now owners and B dies, C receives all of B’s share c. Tenancy by the entirety i. The owners are married 1. The survivor takes the share of the other a. Neither spouse can independently sell their share i. If sold, must be sole in entirety 1. Homestead exemption a. Took a long time to get passed i. A lot of political turmoil 1. “The homestead cap is a violation of state’s rights” - George W. Bush 2. Priorities a. “All creditors are equal, but some are more equal than others….” i. Priority creditors (in order) 1. Secured creditors 2. Child and spousal support obligations 3. Administrative expenses 4. Wages and salaries (when the debtor has employees) up to a dollar maximum 5. Taxes (3 years) 3. Non-dischargeable debts a. Taxes within 3 years b. Any debt resulting from fraud c. Liability for willful torts i. Accidental torts are dischargeable though d. Alimony and child support e. Any debt not listed i. If you forget to list it, it won’t/can’t be discredited f. Government guaranteed student loans i. Unless undue hardship (not important for test) g. Debts resulting from DWI 4. Denial of a discharge (aka: the death penalty) a. destroying/falsifying records b. Making a false statement under oath c. Secretly transferring or concealing property d. Having received a discharge in the previous 8 years 5. A few final things “just chill, ignore these” a. You can reaffirm a debt with court permission b. Bankruptcy will stay on your credit report for ten years c. Some employers review your credit record (and Facebook!) before deciding whether to offer a job d. Some creditors will abuse the 8 years 6. Chapter 12: Real Property a. Real property i. Land, buildings, plants, mineral rights, ari rights ii. Fixtures 1. Something that was originally personally property a. But i. Has been affixed to your real property 1. Ceiling fans 2. Chandeliers a. NOT i. Above ground pool ii. Curtains iii. Above ground hot tub 7. Forms of ownership a. Fee simple absolute i. Highest form of ownership under common law 1. Owner has ownership in his/her life and can decide who gets it when they die b. Life estate i. Lesser than fee simple absolute 1. Owner has property fee simple absolute a. He transfers his property to two people under two forms i. Life tenant 1. Present interest a. Has that property until they die i. This person can sell the estate ii. The buyer will own it until the life tenant dies ii. Remainderman 1. Future interest a. Gets the property when the life tenant dies 8. They will own it in fee simple absolute 9. The remainderman can sell their future ownership 10. Forms of multiple ownership a. Ownership in common i. A - B - C 1. They can own in ANY proportion 2. Any one of them can sell their interest to another party without permission from the other owners a. If one dies, their heirs inherit the property (or whoever he willed it to) b. Joint ownership (joint tenancy) - defeats the rights of heirs i. A - B - C 1. The proportions have to be equal a. 33.33333333% each 2. One can sell their ownership a. If A sold to X i. X owns in “ownership in common” 1. X is not a joint owner a. He could split that up 3. If one dies, their share goes to the other owners a. If X, B and C are now owners and B dies, C receives all of B’s share c. Tenancy by the entirety i. The owners are married 1. The survivor takes the share of the other a. Neither spouse can independently sell their share i. If sold, must be sole in entirety Monday 10/10/16 11. Leasehold estate a. Combination of real property law and contract law i. Fixed term tenancy 1. If you have a year contract, you have to stay for a year a. If you want out, you must pay damages ii. Periodic tenancy 1. Usually month to month 2. One month’s notice is required to terminate 12. Easement a. The right to make limited use of property i. Less than actual ownership 1. Dominant estate gets to use the property 2. Servient estate lets the property be used a. Ways they are created i. Express 1. In the deed ii. Eminent domain 1. Forced taking 13. Transfer of ownership a. The listing agreement i. Obligation to sell ii. Listing agent’s fee iii. Earnest money 1. If the real estate comes up with a full price offer a. The seller doesn’t have to sell, but they have to pay 2. If the owner, during the listing period, sells the property, they still owe commission 3. If a lesser price is offered, and accepted, the commission is earned b. The general warranty deed i. Guaranteeing good title c. The offer and acceptance 14. Filing of the conveyance (or mortgage) a. The “race/notice” system i. A sells to B 1. B doesn’t file at the courthouse ii. A sells to C 1. C files at the courthouse a. B can get his money back from A, if he can find him, but he doesn’t own the property 15. Adverse possession a. The requirements i. Open possession ii. Under claim of ownership iii. Continuous iv. For the statutory period 16. Eminent domain a. The taking of private property for public use i. Has to be 1. For public use 2. For just compensation 17. The restrictive (neighborhood) covenant a. Enforceable and restrict what can be done to property 18. Zoning - must be followed a. Residential b. Commercial c. Industrial i. 3 or more unrelated people cannot live in a Fayetteville home REVIEW 1. Contracts a. Writing is not required i. An agreement with consideration 2. Sources of contract law a. Case law i. Statutory precedent b. Restatement of contracts c. Sales contracts fall under article 2 i. You go to a store and buy something 3. Bilateral a. Two sided i. Promise for promise 4. Unilateral a. One side i. One promise if the other does something 5. The offer a. Three requirements i. Willingness to enter into a legally binding agreement 1. Must have intent a. Can’t be a joke b. Can’t be an add ii. Has to be communicated deliberately by the offeror iii. Has to be reasonable definite 1. Limit of time a. No legal obligation to hold offer open for said amount of time i. Unless 1. The offeree has paid to have that window 2. The mailbox rule a. Offer sent in mail b. Offer accepted in male i. Offer is done ii. Cannot change the offer and accept it at same time 6. Consideration a. Doesn’t have to be fair i. It is not consideration if you already have to do it or if you have already done it 7. Capacity a. Minors i. Minors can void the contract b. Intoxication is not a good defense 8. Legality a. Gambling i. Not legally enforceable 1. Businesses cannot force one to put up something of value to win something ii. Failure to obtain a license 1. Only if regulatory a. Medicine, law, real estate b. Exculpatory i. No lifeguard on duty 9. Covenant not compete a. Reasonable business purpose b. Reasonable amount of time c. Reasonable area 10. Can a judge refuse to enforce ta contract because he feels it is grossly unfair? a. Yes 11. Statute of frauds 12. Can’t go against writing contract with verbal contract Chapter 8 13. Voluntary consent a. Adhesion contracts i. Take it or leave it, no bargaining 14. Conditions a. Must be satisfied i. Borrowing money before buying house 15. Satisfaction doctrine a. Matter of personal taste or choice i. Individual is not satisfied 16. Discharge by operation of law 17. Remedies a. Compensatory damages b. Smith v. Russ i. Consequential damages c. Punitive damages are not allowed in a contract case, but are allowed in tort cases d. Liquidated damages 18. Equitable remedies a. Not for money 19. Attorney’s fees a. Not in contract law i. Some states (such as Arkansas) do allow them Chapter 9, 10 torts 20. Breach of duty 21. Common law of torts is cased based, just like contract law 22. Compensatory damages normally punitive damages sometimes 23. Tort reform a. Noneconomic damages are limited in many states b. Product liability lawsuits are now federal c. Some states outlawed punitive damages d. Supreme court allows punitive damages (1:9) 24. False imprisonment a. Merchant may detain a customer for no more than a reasonable time, merchant has suspicion of shoplifting 25. Intentional infliction of emotional distress a. Must either result in physical injury or the action must be completely intolerable on society 26. Defamation a. Communication b. False c. Damages i. If public figure 1. Must be malice 27. Recording conversations a. One party vs two party states i. Arkansas is a one party state 28. Business tory a. Interference with a contract i. Competitor steals an employee who still has 2 years left in their contract 29. Unintentional torts a. Duty i. Shannon v. Wilson blackboard ii. Duty of landowners 1. Not strictly liable 2. Reasonable care a. Warn invitee of risk b. Attempt to discover b. Breach of duty i. Reasonable man test 1. Reasonable man would have not done this ii. Proving breach of duty 1. Preponderance of evidence 2. Affirmative defense a. Golf balls in golf tournament c. Causation 30. Damages Chapter 10 strict liability 31. Product liability a. Person who sells the products is a professional b. Shift risk from victim to seller i. Professional seller ii. Defect iii. Unreasonable dangerous iv. Not liable if product changes v. Liability cannot be waived Chapter 11 32. Statutory lien a. Repossessing a house 33. Garnishment of wages a. Up to 70% 34. Real property a. Foreclosure procedures i. Acceleration clause ii. Notice of default iii. Public auction iv. Right of redemption v. Judgement (except in a few states) 35. Personal property a. Creditor can go get the stuff 36. Know the usury laws of Arkansas a. 17% 37. Payday loan a. Short time i. 2 weeks, 3 weeks, 4 weeks 1. Interest rate looks low, until multiplied over long time 38. Bankruptcy reform act of 2005 was enacted in 2005 39. Bankruptcy types a. Chapter 7 b. Chapter 11 c. Chapter 13 i. Maybe chapter 9 40. Bankruptcy reform act of 2005 a. Chapter 7 can be switched to chapter 13 by trial judge i. Above average income 41. Procedures a. File in federal court “date of bankruptcy” i. Automatic stay ii. Forms signed under oath 42. Straight liquidation procedures a. If you earned it by the sweat of your brow after DOB then it’s yours b. If you inherit it within 6 months of DOB then it is part of estate 43. Fraudulent transfers a. If you give away or sell at low price your property, then it is probable fraudulent 44. Preference a. 90day rule 45. Arkansas Homestead Exemption a. Must be married b. Unlimited value 46. To claim state exemptions a. Must life there for at least 2 years 47. Priorities a. Child and spousal b. Administrative expenses c. Wages d. Taxes over previous 3 years 48. Nondischargeable debts a. Taxes b. Debts resulting from fraud c. Willful torts d. Alimony and child support e. Student loans f. DWI issues g. Loans not stated 49. Fraud a. Destroying or falsifying records b. Making a false statement under oath
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