exam2 MGT 2106 D
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MGT 2106 D
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This 13 page Study Guide was uploaded by Sonita Hong on Friday October 23, 2015. The Study Guide belongs to MGT 2106 D at Georgia Institute of Technology taught by karie davis nozemack in Summer 2015. Since its upload, it has received 45 views. For similar materials see Legal Aspects-Business in Business, management at Georgia Institute of Technology.
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Date Created: 10/23/15
STRICT LIABILITY CH6 Unlike negligence strict liability does not require the injured person to prove that the defendant breached a duty of care Strict liability only applies to products not services Strict Liability a tort doctrine that makes manufacturers distributors wholesalers retailers and others in the chain of distribution of a defective product liable for the damages caused by the defect regardless of fault Liability wlo faut Strict liability There are two kinds of strict liability 1 abnormally dangerous activitymining demolish sth 2 products liability Product liability the liability of manufacturers sellers and others for the injuries caused by defective products product liability is strict liability All parties in the chain of distribution of a defective product are strictly liable for the injuries caused by that product Thus all manufacturers distributors wholesalers retailers lessors and subcomponent manufacturers involved in a transaction may be sued and assessed liability under the doctrine of strict liability in tort Elements of Products Liability Defendant is in the chain of distribution Defect the injured party must show that the product that caused the injury was somehow defective The injured party does not have to prove who caused the product to become defect Plaintiffs can allege multiple product defects in one lawsuit a product can be found to be defective in many ways Type of Defects o Defect in manufacture manufacturer fails to assemble a product properly test a product properly or check the quality of the product adequately eg ladder is missing the screw decomposed body of mouse found in the soft drink 0 Defect in design occurs when a product is designed improperly In evaluating the adequacy of a product s design a court may apply 1 risk utility analysis the likelihood that the injury will occur the cost of producing a safer alternative design and 2 consumer expectation test which requires a showing that the product is more dangerous than the ordinary consumer would expect Failure to warn did not place a warning on the packaging of products Defect in packaging fails to put tamperproof seals Failure to provide adequate instructions does not provide detailed directions for safe assembly and use of a product Injury Defenses to Product Liability Defendant manufacturers in negligence and strict liability actions may raise certain defenses to the imposition of liability 0 Generally known danger a defense that acknowledges that certain products are inherently dangerous and are known to the general population to be so Assumption of risk Misuse of product o correction of defect recall 0 supervening event product is materially altered or modified after it leaves the seller s possession and the alteration or modification causes an injuryeg a consumer purchases a truck and then replace the tires with large offroad tires that cause the truck to roll over 0 government contractor defense a defense that provide that contractors that manufacture products to government specifications are not usually liable if such a product causes injury 0 Statute of Limitation and Statute of Repose 10 years statute of limitations a statute that requires an injured person to bring an action within a certain number of years from the time that heshe was injured by a defective product statute of repose a statute that limits the seller s liability to a certain number of years from the date when the product was first sold o Plaintiff partially at fault Contributory negligence a defense that says that a person who is injured by a defective product but has been negligent and has contributed to hisher own injuries cannot recover from the defendant Comparative negligence a person who is partially responsible for causing hisher own injuries is responsible for a proportional share of the damage INTELLECTUAL PROPERTY CH7 is a term that describes property that is developed through an intellectual and creative process Most persons are familiar with the fact that intellectual property includes patents copyrights and trademarks trade secrets Intellectual property falls into a category of property knowns as intangible rights Trade Secret a product formula pattern design compilation of data customer list or other business secret 339 what law protect them for how long Under state law Uniform Trade Secret Act 339 what must a company do to gain trade secret protection the owner of a trade secret is obliged to take all reasonable precautions to prevent that secret from being discovered by others 339 what is misappropriation of a trade secret the owner of a trade secret can bring a civil lawsuit under state law against anyone who has misappropriated a trade secret through unlawful means a successful plaintiff can 1 recover the profit made by the offender from the use of the trade secret 2 recover from damages 3 obtain an injunction prohibiting the offender from divulging or using the trade secret oz what about reverse engineering taking apart and examining a rival s product or recreating a secret recipe A competitor who has reverse engineered a trade secret can use the trade secret but not the trademarked name used by the original creator Economic Espionage Act EEA a fed crime for any person to convert a trade secret for hisher own or another s benefit knowing or intending to cause injury to the owners of the trade secret PATENT A grant by the federal government to the inventor of an invention for the exclusive right to use sell or license the invention for a limited amount of time oz what law governs Federal law 339 what can be protected for how long There are two kind of patents Utility patent valid for 20 years machines processes improvements to existing machineprocess and living material Design patent valid for 14 years ornamental nonfunction oz purpose for this law patent law is intended to provide an incentive for inventors to invent and make their inventions public and to protect patented inventions from infringement oz requirement to obtain a patent Novel new and not been invented and used in the past Nonobvious Useful serve a useful purpose oz registration requirement to obtain a patent a patent application must be filed with the PTO in Washington DC The PTO provides for the online submission of patent applications and supporting docs through its EFS Web system a patent application must contain a written description of the invention should hire a patent attorney to assist since its complicated the PTO must make a decision whether to grant a patent within 3years from the date of filing payment of approximately 5000 an inventor may file a provisional application with PTO which gives an inventor 3months to prepare and file a final complete patent application if a patent is granted the invention is assigned a patent number oz The major change of the 2011 law 2011 Patent Reform Act now first to file litigation make uniform w EU amp Japan PTO had backlog of 750K apps amp 3 years timeline some fast tracking amp higher fees new challenge to frivolous patents wPTO not court oz what is patent infringement unauthorized use of another s patent A patent holder may recover damages and other remedies against a patent infringe such as 1 money damages equal to a reasonable royalty rate on the sale of the infringed articles 2 other damages caused by the infringement loss of customers 3 an order requiring the destruction of the infringement article 4 an injunction preventing the infringer from such an action in the future After the patent period runs out the invention or design enters the Public Domain which mean that anyone can produce and sell the invention without paying the prior patent holder COPYRIGHT vou can t coovriqht an idea Copyright is a legal right that gives the author of qualifying subject matter and who meets other requirements established by copyright law the exclusive right to publish produce sell license and distribute the work federal copyright law protects the work of authors and other creative persons from the unauthorized use of their coprighted materials and provides a financial incentive for authors to write thereby increasing the number of creative works available in society oz What law govern Federal 339 what can be protected for how long lifetime plus 70 years copyrights owned by businesses are shorter either 120 years from the year of creation or 95 years from the year of the first publication after the copyright runs out the work enters the public domain which mean anyone can publish the work without paying the prior copyright holder tangible writing writings that be physically seen books periodicals newspapers lectures sermons addresses poems musical compositions plays motion pictures radio and tv productions maps works of art including painting drawings jewelry glassware tapestry photographs greeting cards postcards cartoon travelogues sound recording published in the form of CDs and MP3 file oz requirements to obtain Original expression writing is broad software no need to register automatic oz what is the fair use exception a doctrine that permits certain limited use of a copyright by someone other than the copyright holder without the permission of the copyright holder citation fair use for academic purpose oz registration requirement to be protected under fed copyright law a work must be the original work of the author A copyright is automatically granted the moment a work is created and fixed in tangible form oz what is copyright infringement an infringement that occurs when a party copies a substantial and material part of a plaintiff s copyrighted work without permission The copying does not have to either word for word or the entire work A copyright holder may recover damages and other remedies against the infringer Trademark any trade name symbol word logo design or device used to identify and distinguish goods of a manufacturer or seller or services of a provider from those of other manufacturers or providers can t trademark flags geographic names surname alone nth scandalous can t be too similar to others can t be generic 339 what law governs what is the law designed to protect federal designed to protect owner s investment and goodwill in a mark and prevent consumers from being confused about the origin of goods and services oz Purpose of this law for how long Congress enacted the Lanham Act to provider federal protection to trademarks service marks and other marks 10 years and can be renew for an unlimited number of 10year periods 339 requirements to obtain distinctive or secondary meaning Distinctive a distinctive mark would be a word or design that is unique The words of the mark must not be ordinary words or symbols eg Acura Honda Motor Corporation Google Google Inc Exxon Exxon Mobil Corporation Secondary meaning ordinary words or symbols that have taken on a secondary meaning eg Just Do It Nike Corporation l m lovin it McDonald Windows Microsoft oz Registration of a Mark Mark can be registered with the US Patent and Trademark Office PTO in Washington DC a registrant must file an application with the PTO a registrant must prove that he has used the intended mark in commerce use in the sale of good or service within 6 months from the filing of the application lfthe proposed mark is not used in commerce within this 6 month period the applicant loses the right to register the mark he can file the extension to use the mark in commerce usually the registration fee is 375 oz what is trademark infringement unauthorized use of another s mark and likely to cause confusion mistake or deception of the public as to the origin of the goods or services A successful plaintiff can recover 1 the profits made by the infringer through the unauthorized use of the mark 2 damages caused to the plaintiff s business and reputation 3 an order requiring the defendant to destroy all goods containing the unauthorized mark 4 an injunction preventing the defendant from such act in the future Dilution is defined as the lessening of the capacity of a famous mark to identify and distinguish its holder s goods and services The two most common forms of dilution are blurring and tarnishment Blurring occurs when a party uses another party s famous mark to designate a product or service in another market so that the unique significance of the famous mark is weakened Tarnishment occurs where a famous mark is linked to products of inferior quality or is portrayed in an unflattering immoral or reprehensible context likely to evoke negative beliefs about the mark s owner V Secret catalogue vs Victoria s Secret Trademark Dilution Revision Act this act provides that a dilution plaintiff does not need to show that it has suffered actual harm to prevail in its dilution lawsuit but instead only needs to show that there would be the likelihood of dilution The FTDA as amended has 3 fundamental requirements that the holder of the senior mark must prove 1 its mark is famous 2 the use by the other party is commercial 3 the use by the other party causes a likelihood of dilution of the distinctive quality of the mark Trade dress protection trade dress does not have to have secondary meaning because it is image of business CONTRACT CH91011121416 ringpromise eth elseconsideration sale inventory over than 500 need contract marriage sell piece of property what are the requirements to form a contract OAC A contract is an agreement that is enforceable by a court of law or equity PARTIES TO A CONTRACT every contract involves at least two parties The OFFEROR is the party who makes an offer to enter into a contract The OFFEREE is the party to whom the offer is made A contract is created if the offer is accepted Element of a Contract OACC Offer Acceptance Consideration Contractual capacity Defenses 1 Genuineness of assent To consent of the parties to create a contract must be Genuine if the consent is obtained by duress undue influence or fraud there is no real consent 2 Writing and form it s required by law that certain contracts be in writing or in a certain form failure of such may be raised against the enforcement of the contract offeror makes offer offeree receive offer three elements are required for an offer to be effective 1 the offeror must objectively intend to be bound by the offer 2 the terms of the offer must be definite or reasonably certain 3 the offer must be communicated to the offeree What is required Obiective theorv of K a use reasonable person standard to judge intent to create contract bjudge by words actions and circumstances Definite term of offer a Express terms the term of an offer must be clear enough for the offeree to be able to decide whether to accept or reject the terms of the offers b Need reasonably certain terms identification of the partieswho are the parties identification of the subject matter and quantity consideration to be paid usually time of performance c Exception implied term implied terms from the market or course of dealing eg the blue book for an automobile price usually not subject matter of K if an item or a service is unique or personal such as the construction of a house or the performance of a professional sports K Communication to offeree Not a real offer until you communicate to other party SPECIAL OFFERS There are several types of offers ads rewards auctions Ads not an offer it s the Invitation to make offer this rule is intended to protect advertiserseller from the unwarranted breach of K suits for nonperformance that would othenNise arise if the seller ran out of the advertised goods There is one exception to this rule an ads is considered an offer if it is so definite or specific that it is apparent that the advertiser has the present intent to bind himself to the term of the ads Rewards is an offer to form a unilateral K requiring offeree to 1 have knowledge of the reward offer and 2 perform the requested act Auctions the seller offer goods for sale through an auctioneer auction with reserve an invitation to make an offer because the bidder is the offeror the seller can refuse the highest bids and withdraw the goods from sale the seller doesn t offer the good for sale auction without reserve the seller is the offeror and the bidders are the offerees The seller must accept the highest bid and cannot withdraw the good from sale the seller offers the good for sale How can you revoke withdraw an offer The revocation may be communicated to the offeree by the offeror or by a third party and made by 1 the offeror s express statement I hereby withdraw my offer 2 an act of the offeror that is inconsistent with the offer selling the goods to another party The revocation of an offer is not effective until it is actually received by the offeree Rejection express words or conduct by the offeree to reject an offer Rejection terminates the o en Counteroffer a response by offeree that contains terms and conditions different from or in addition to those of the offer A counteroffer terminates the existing offer and puts a new offer into play An offer can be terminated by operation of law Destruction of the Subject Matter if a fire destroys an office building that has been listed for sale the offer automatically terminates Death or incompetency of the Offeror or Offeree death of either party Supervening illegality if the object of an offer is made illegal prior to the acceptance of the offer the offer is terminated Lapse of Time a stated time period after which an offer terminates Acceptance Requirement An offeree s acceptance must be an Unequivocal acceptance the acceptance must be clear and unambiguous and it must have only one possible meaning An equivocal response by the offeree does not create a K Mirror Image Rule a rule stating that for an acceptance to exist the offeree must accept the terms as stated in the offer Mailbox rule acceptanceupondispatch rule effective when it is dispatched even if it is lost in transmission acceptance is valid as soon as you put into the mailbox Silence as Acceptance not considered acceptance even if the offeror states that it is This rule is intended to protect offerees from being legally bound to offers because they failed to respond When can silence be acceptance 1 The offeree has indicated that silence means assent If you do not hear from me by Friday ship the order 2 The offeree has signed an agreement indicating continuing acceptance of delivery until further notification Bookof themonth club memberships are examples of such acceptance 3 Prior dealings between the parties indicate that silence means acceptance a fish wholesaler who deliver 30le of fish to restaurant each friday for several years and is paid for the fish can continue the deliveries with expectation of payment until notified othenNise by the restaurant Consideration consideration must be given before a K can exist It is define as sth of legal value given in exchange for a promise The most common type consist of either a tangible payment property or the performance of an act providing legal service Requirement 1 sth of legal value must be given and 2 there must be a bargainedfor exchange Promise that Lack Consideration Gift Promise gratuitous promises are unenforceable To change a gift promise into an enforceable promise the promisee must offer to do sth in exchange illegal consideration a promise to refrain from doing an illegal act such illegal consideration are void a person threatens a business owner that he will burn the business unless the owner agree to pay this muchout of fear the owner promise to pay this agreement is not an enforceable K illusory promise sth either party can choose not to do preexisting duty a promise lacks consideration if a person promises to perform an act or do sth he is already under an obligation to do past consideration a party promise to pay s1 some for work done in the past not new promise therefore a is not enforceable Defense Accord amp Settlement In some situation one of the parties to a K believes that he did not receive what he was due This party may attempt to reach a compromise with the other party by paying less consideration than was provided for in the K If the two parties agrees to a compromise a settlement of the claim has been reached The settlement agreement is called Accord if the accord is performed it is called a satisfaction if the accord is not satisfied the other party can sued to enforce the accord the other party can do so because the party reasonably disagreed as to the value of the goods or services contracted for Capacity what is it legally recognized ability to enter into a K Minors K is voidable ratified if don t void when 18 Minorparents obligated to pay for necessities of life food shelter Minor must restore return good other party restore minor or give restitution to mino Insanity 339 legal term only not medical termdiagnose oz incapable of understanding the transaction or the wrongness of the actions Intoxication El voidable if so intox that they can t understand what they are agreeing to Source of Contract Law Common Law of K judicial made usually State court limited amount of federal common law of k UCC Uniform Commercial Code Drafted code to govern sale of goods amp leases Attempts to make State law uniform Restatement of the Law of K Not LAW it s guidance for disputes when no clear K law applies Bilateral Contract promise for a promise Unilateral Contract promise for an act Contract law places contracts in the following catagories Valid K K that meets all the essential elements to establish a K 1 consists of an agreement between the parties 2 is supported by legally sufficient consideration 3 is between parties with contractual capacity and 4 accomplishes a lawful object Void K has no legal effect it is as if no contract had ever been created A k to commit a crime is void a thing of no important or worth Voidable K at least one party has the option to void his or her contractual obligations if a K is voided both parties are released from their contractual obligations Unenforceable K a K in which the essential elements to create a valid contract are met but there is some legal defense to the enforcement of the K Executory Vs Executed Contracts Executory Contracts a contract that has not been fully performed by both sides Executed Contracts a completed contract that has been fully performed on both sides Express Vs lmpliedinfact contracts Express Contract an agreement that is expressed in written or oral words lmpliedinfact Contract 1 plaintiff provided propertyservices to the defendant 2 plaintiff expected to be paid by the defendant for the services and did not provide the services gratuitously 3 the defendant was given an opportunity to reject the service but fail to do so Defenses to a Contract failure of OACC failure of form statute of fraud what K have to be in writing in order to be enforceable formal contracts like negotiable instruments letter of credit Promissory Estoppel is an equity doctrine that permits a court to order enforcement of a K that lacks consideration Promissory Estoppel is applied to avoid injustice use when a proper K has not been formed Elements X made promise X should have reasonably expected Y to reply on X s promise Y did rely on X s promise and did sthgave up sth because of it would be unfair not to enforce X s promise Exculpatory Clauses a contractual provision that relieves one or both of the parties to a K from tort liability exculpatory clauses that either affect the public interest or result from superior bargaining power are usually found to be void as against public policy eg a venue may print an exculpatory clause on tickets it sells for a concert indicating that it is not responsible for personal injury caused by employees or others during the show Often found in leases sales contracts sporting event ticket stubs parking lot tickets service contract Statute of Frauds a state statute that requires certain types of contracts to be in writing not oral must be sign to enforce against a party this statute is intended to ensure that the term of important K are not forgotten misunderstood or fabricated Most states require the following types of contracts to be in writing K involving interests in real property K that by their own terms cannot possibly be performed within one year Collateral K in which a person promises to answer for the debt or duty of another Promises made in consideration of marriage K for the sale of goods for 500 or more K for the lease of goods with payment of 1000 or more real estate agents contracts agents contracts where the underlying K must be in writing promises to write a will K to pay debts barred by the statute of limitations or discharged in bankruptcy K to pay compensation for services rendered in negotiating the purchase of a business finder s fee K Incorporation by Reference can refer to other reference book How do we interpret words in contract if the parties have not defined the words and terms of a K the courts apply the following standards of interpretation Ordinary words Technical words Specific terms are presumed to qualify general terms if both parties are members of the same trade or profession words will be given their meaning as used in the trade If the parties do not want trade usage to apply the K must indicate that when a preprinted form K is used typed words in a K prevail over preprinted words Parol Evidence Rule any oral or written words outside the four corners of a written K The parol evidence rule states that if a written k is a complete and final statement of the parties agreement any prior or contemporaneous oral or written statements that alter or are in addition to the terms of the written k are inadmissible in any court proceeding concerning the k Nothing outside the four corners of the docs UNLESS shows that a K is void or voidable K was induced by fraud misrepresentation duress undue influence or mistake explains ambiguous language concerns prior dealings or course of performance between the parties or a usage of trade fills in the gaps in a K if a price term or time of performance term is omitted from a written K the court can hear parol evidence to imply the reasonable price or time of performance under the k corrects an obvious clerical error or typo What are the 3 types of performance of a contract 1 Complete Performance 2 Substantial Performance Minor Breach If the breaching party does not correct the breach the nonbreaching party can sue to recover damages by 1 deducting the cost to repair the defect from the K price and remitting the balance to the breaching party 2 sue for the cost of repair 3 Inferior Performance Material Breach not done what suppose to do 1 the nonbreaching party may rescind the K and seek restitution of any compensation paid under the K to the breaching party or 2 sue to recover damages What are the kinds of damages available for breach of contract The most common remedy for a breach of contract is an award of monetary damages its included Compensatory Consequential Liquidated and Nominal Damages Monetary Damages an award of money Compensatory Damages an award of money intended to compensate a nonbreaching party for the loss of the bargain compensatory damages place the nonbreaching party in the same position as if the K had been fully performed by restoring the benefit of the bargain Consequential Damages Foreseeable damages that arise from circumstances outside a k To be liable for these damages the breaching party must know or have reason to know that the breach will cause special damages to the other party Nominal Damages damages awarded when the nonbreaching party sues the breaching party even though no financial loss has resulted from the breach Nominal damage are usually 1 or some other small amount win by name only Mitigation Damages a nonbreaching party s legal duty to avoid or reduce damages caused by a breach of k if an employee who has been dismissed improperly accepts a job that is not comparable the employee can sue the prior employer for damages Liquidated Damages Damages that parties to a k agree in advance should be paid if the k is breached what are specific performance rescission reformation and injunction specific performance a remedy that orders the breaching party to perform the acts promised in the k force to complete the k reformation an equitable doctrine that permits the court to rewrite a k to express the parties true intentions eg a clerical error is made during the typing of a k and both parties didn t realized the error therefore the court can reform the k to correct the clerical error to read as the parties originally intended lnjunction a court order that prohibits a person from doing a certain act professional sport contract Anticipatory breach if breaching party tells nonbreaching party of the future breach tell in advance then nonbreaching party is discharged from performance and can sue immediately what is intentional interference with a k a tort that arises when a third party induces a contracting party to breach the k with another party A party to a k may sue any third person who intentionally interferes with the k and causes that party injury or damages The 3rd party does not have to have acted with malice or bad faith elements a valid enforceable k between the contracting parties 3rd party knowledge of this k 3rd party inducement to breach the k
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