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Chapter 2 Notes

by: Whitney Davis

Chapter 2 Notes BUS 131 - 010

Whitney Davis
Kutztown University of Pennsylvania

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These notes cover the entire Chapter 2.
Business Law I
Dr. Slamon
Class Notes
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This 5 page Class Notes was uploaded by Whitney Davis on Sunday January 31, 2016. The Class Notes belongs to BUS 131 - 010 at Kutztown University of Pennsylvania taught by Dr. Slamon in Spring 2016. Since its upload, it has received 33 views. For similar materials see Business Law I in Business at Kutztown University of Pennsylvania.

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Date Created: 01/31/16
Chapter 2: Courts and Alternate Dispute Resolution Judiciary (the courts)  Essential role is to interpret laws and apply them to a specific situation  Review established by U.S. Supreme Court in Maury vs. Madison dispute Jurisdiction  Juris means “law”, and diction means “to speak” o “power to speak the law”  Overpersons o A particular court can exercise in personam jurisdiction (personal jurisdiction) over any person or business that resides in a certain geographic area  Over property o “in rem”, or “jurisdiction over the thing”  Long arm statutes o Courts use these for non-resident parties based on “minimum contacts” with the state o “Minimum contacts” requires defendant to have some connection with forum state  Forum state: the state in which the lawsuit is filed  Corporate contacts o Courts use some principles to determine whether it is fair to exercise jurisdiction over a corporation o Minimum contacts requirement is usually met  General/Limited Jurisdiction o Statutory limitation on types of cases a court can hear o Usually determined by Federal and State statutes  Original/Appellate Jurisdiction o Distinction between original and appellate depends on whether case is being heard for the first time o Courts of original jurisdiction is where the case started (trial) o Courts having appellate jurisdiction act as reviewing courts o District courts  “Trial courts” in federal court system  Federal Court o “Question” cases  Rights or obligations violated o Diversity of Citizenship  Parties are NOT from same state  Amount in controversy > $75,000  Plaintiff AND defendant must be residents of different states  Exclusive vs. Concurrent Jurisdiction o Exclusive  When cases can be tried ONLY in federal or state courts o Concurrent  When both federal and state courts have power to hear a case  Also true involving diversity of citizenship  Cyberspace o Includes a party’s contacts with court’s geographic jurisdiction o Courts use “Sliding Scale” standard to determine whether to exercise jurisdiction over out-of-state defendant  Based on defendant’s Web activities  International Issues o How courts apply “Sliding Scale” standard Venue  Concerned with most appropriate location for trial  Proper venue is whether injury occurred  Venue is also where the defendant resides  Lost some significance in today’s world because of the Internet and 24/7 news reporting Standing to Sue  Sufficient stake in a matter to justify seeking relief through court system  Three elements o Harm – an invasion of legally protected interest o Causation – Casual connection between conduct complained of and the injury o Remedy – make up for injury suffered State Court System  Includes several tiers (levels) of courts  Trial courts: o General Jurisdiction o Limited jurisdiction o Appellate courts  About ¾ of states have intermediate appellate court o State’s highest court  A.K.A. State Supreme Court o Small claims courts  Inferior trial courts that hear only civil cases  Involves claims of < certain amount (amount varies from state to state) Federal Court System  Three tiered model o U.S. district courts o U.S. courts of appeals o U.S. Supreme Court  Federal court judges appoints by U.S. president, subject to confirmation by U.S. Senate  U.S. District Courts o Equivalent of state trial court of general jurisdiction o Typically Federal cases o There are 94 federal judicial districts  U.S. Courts of Appeal o 13 U.S. courts of appeals in federal court system  Referred to as U.S. circuit courts of appeals o 13 Circuit (Federal Circuit) has national appellate jurisdiction over certain types of cases  U.S. Supreme Courts o Highest level of the three-tiered federal court system o All other courts are considered “inferior” o Consists of 9 justices o Can review any case decided by federal courts of appeals o Final authority on the Constitution and federal law o Appeals to the Supreme Court  Writ of certiorari: an order issued by Supreme Court to a lower court  Requires latter to send writ the record of case review  4/9 justices must approve writ (A.K.A. Rule of four)  Denial of writ has no value as a precedent  Denial means lower court’s decision remains the law in jurisdiction o Petitions Granted by the Court  For cases that raise important constitutional questions  Or when lower courts have conflicting decisions on significant issue Alternative Dispute Resolution (ADR)  A means of settling businesspersons’ disputes  Litigation o Process of resolving a dispute through court system o Expensive and time consuming  Flexibility is advantage of ADR o Parties can control attempt to settle dispute themselves o Parties can decide what procedures will be in use  ADR offers more privacy than court proceedings  Allows disputes to be resolved relatively quickly  Negotiation o Simplest form of ADR o A process in which the parties attempt to settle their dispute informally, with or without attorneys o Usually involves just the parties themselves and their attorneys  Attorneys are advocates (obligated to put clients’ interests first)  Mediation o Neutral 3 party works as an a mediator o Works with both sides in dispute to facilitate resolution o Mediator’s proposal  When mediator proposes a solution o Mediator can NOT be a lawyer o Advantage: less adversarial than litigation  Arbitration o A more formal method of ADR o Arbitrator (a neutral 3 party or a panel of experts) hears dispute and imposes resolution on parties  3 party makes decision for the parties o Legally binding o Arbitrator’s Decision  Called an “Award”  The final word on the matter  A court will set aside an award only in the event if: 1. The arbitrator’s conduct or “bad faith” substantially prejudiced the rights of one of the parties 2. The award violates an established public policy 3. The arbitrator exceeded her or his powers o Arbitration Clauses  Specifies, in a contract (written agreement), that any dispute arising under the contract will be resolved through arbitration rather than through the court system o Arbitration Statutes  Federal Arbitration Act (FAA)  Enacted in 1925  Enforces arbitration clauses in contracts involving maritime activity and interstate commerce o Issue of Arbitrability  The court decides whether the matter is covered by arbitration agreement  Other Types of ADR o Early neutral case evaluation  Parties select neutral 3 party and explain respective positions to that person o Mini-trial  Parties’ attorneys briefly argue party’s case before other party and panel of representatives from each side who have authority to settle dispute o Summary jury trials  In which the parties present their arguments and evidence and the jury renders a verdict  Providers of ADR Services o Provided by both government agencies and private organizations o Major provider: American Arbitration Association (AAA)  Founded in 1926  Online Dispute Resolution o Settlement of disputes in online forums o ODR resolves small-medium sized business liability claims International Dispute Resolution  Forum-Selection and Choice-of-Law Clauses o Parties to international transactions often include FS and COL clauses in their contracts  Clauses designate the jurisdiction  Arbitration Clauses o International contracts include A.C. that require a neutral 3 party to decide any contract disputes o The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards assists enforcement of A.C.  International Treaties and Arbitration o International treaties sometimes stipulate arbitration for resolving disputes


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