LEGAL & REG ENV BUS
LEGAL & REG ENV BUS LEGL 2700
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LEGL 2700 FINAL STUDY GUIDE 0 Sources of Law 0 Constitutions 7 limited not specific broad US Constitution I Smte Constitution regulate the smte governments 0 Legislation laws passed by elected representatives I Act nationalstate passes I Ordinance local only applies to that town I congress can pass a single federal law preempting all smte regulations of the same subject matter I Smtes can work together to pass uniform laws Leaves ambiguity room for manipulation o Administra 39ve Regulations give clarity and provide enforcement of statutes ost important for businesses 0 Judicial Decisions legal opinions issued by a judge deciding a legal issue which has arisen in a case I Also known as case law I Smre decided prior precedence for other cases smbility predictability I Disadvantages volume time expense conflicting precedence o Hierarchy of Law 0 1 US Constitution 2 Federal Smtutes 3 Federal Administrative Regulations 4 Smte Constitutions 5 State Statutes 6 State Administrative Regulations 7 Local Ordinances o 8 Judicial Decisions Case Law Common Law System EnglandUS emphasis role of judges in interpreting and applying the law oooooo Question of Law an issue concerning the application or interpretation of the law what does loitering mean determined by judgesjustices Question of Fact a factual issue disputed by the parties who is telling the truth determined by juries State Court hear cases arising under state law or state constitutions Federal Court Cases Federal question cases federal mxes patents copyrights 39 39 iUldLiUIl stocks bond Cases involving the US as a party Cases between two or more smtes Diversity of citizenship cases2 parties are from different smtes has to be over 75000 o 000 0 Trial Court site of initial trial witness testimony is heard jury determines a verdict Appellate Court review legal decisions made by trial courts usually 3 judges Supreme court highest court hears appeals from the appellate court must grant writ afcern39arari make final decision Litigation bringing and or defending an action in court to enforce a particular right Requirements for Bringing Suit Standing to sue plaintiff must show that it has a legally protectable stallte or interest in the dispute enti ing it to bring the controversy before the court in order to obtain judicial relief legal right was violate I Actual case legal real dispute I Personal stake in the resolution of the case 0 Personal jurisdiction power of a court to hear and determine a lawsuit involving the parties before it I courts automatically obmin over a plaintiff when suit is fi e I courts obmin over a defendant when the defendant 0 voluntarily appears 0 is served with process in the state summoned o committed tort in smte o own property in the smte that is the subject of suit 0 entered a contract or transaction inthe smte that is the subject of suit 0 Subject matter jurisdiction power of a court to hear and determine lawsuits involving the issues of the type before it does this court have power to hear this case 0 Trial Process 0 I1 I 1 Pleadings formal presentation of claims and defenses by parties to a lawsuit 0 Complaint 7 led by plaintiff initiating the law suit sends out summons 0 Answer 7 filed by the defendant admitting or denying each allegation may include counterclaims 0 Reply 7 plaintiffs response to defendants counterclaims if an I 2 Discovery each party obtains the information needed to prepare its case scope of discovery must be likely to lead to admissible evidence 0 Lnterrogatories written questions which must be answered by the other party open ended Requests for Production of Documents relevant to case Depositions oral questioning by an attorney of a witness 1 day and 7 hours Requests for Admissions written es no questions most expensive scope of discovery requested discovery mustbe likely to lead to admissible evidence 0000 o 3 Trial I 1 J my selection Vair dire preliminary examination of prospective juries attorneys choose 0 Kick people off for cause or peremptory just doesn t like I 2 Opening Statement I 4 Presentation of Evidence I 3 Closing Smtements I 5 J uIy instructions I 6 Verdict o Burden of Proof level of proof needed to 0 Criminal beyond a reasonable doubt 0 Civil preponderance of the evidence or clear and convincing proof 0 Easiest to hardest preponderance 51 sure clear amp convincing proof beyond a reasonable doubt I 7 Appeal 0 Alternative Dispute Resolution settling disputes other than litigation Settlement 7 resolution reached through direct negotiations between the parties preserves relationship 0 Arbitration submitting a dispute to a neutral third party who issues a binding decision I Voluntary disputing parties agree to arbitrate can only be overruled if arbitrator had no good reason fraud contradicts public policy an a ory a court or statue requires the parties to arbitrate can be overruled if one party is dissatisfied Process Hearing Award D ecision o Mediation neutral third party helps reach an agreement not binding Supremacy Claus constitution federal smtues US treaties are the supreme law of the land state laws cant con ict with federal but they can go above andbeyond Preemption federal government has claimed the exclusive right to regulate a particular area smte regulation is invalid Commerce clause Article I Section 8 Congress has the power to regulate commerce with foreign nations and among several states 0 Interstate commerce most everything today is interstate 0 Foreign nations tariffs embargoes free trade agreements 0 First Amendment 7 not absolute 0 Speech only in government regulated public places can prohibit if there is compelling reason I limited protection on commercial speech informing public on business false advertisements o Press TV newspaper magazines only specific industries are protected 0 Religion I Esmblishment clause no official state religion I Free exercise clause can t be stopped individually from practicing your religion 0 Assembly 0 P etition 0 Regulatory Process 0 encies make specific regulations in an industry 2 purposes 1 R e m 39 0 have to notify industry of the rule Notice and Comment 0 Challenge promulgated regulation if the agency doesn t have authority didn t follow proper procedure exceeded its authority 0 2 Enforcement monitoring can mke you to court 2 Types of Property 0 Real LAND and xtures tied to the land 0 Personal moveable resources I Tan 39 e touched I Intangible 7 no physical existence copyrights patents stock Acquisition of Property 0 Through Exchange 7 most common trading resources 0 Through Possession I Rule of rst possession you own it if you are the first to ever possess it I Ab andonment I Lost property never aware you lost property the person who nds it owns it o i laid intentionally set down but unintentionally left it owner of real property owns it I Adverse possession continuous possession only pertains to real property requirements 0 Opennotorious 7 owner lmows about it o Actualexclusive 7 physically on land 0 Continuous o Wrongful owner did not give permission 0 Prescribed period of time 7 in GA its 20 years 0 Through Confusion 2 people have fungibleidentical property like corn in a silo 0 Through Accession changes to a person s land is property of owner Through Gift abandoning something to a speci c person I Donor gives donee gets I Testamentary gift 7 gift from a will Special Applications of Property 0 Easement right to cross over someone land can buy it include it in conditions when you sale land easement by prescription Adverse possession have to use it to get to main road 0 Bailment temporary transfer of personal property I Bailer gives bailee gets Bailee must use reasonable care I Person who is getting the most bene t is more liable o Nuisance use of property that interferes with the legal rights of others causing damage annoyance or inconvenience 0 Public prosecuted by government affects large group of people 0 Private affects small amount of eople 0 Zoning division of town into residential commercial industrial district I Variance exception to zoning divisions o Eminent domain power of the government to take private property for public use after the payment of just compensation to the property owner I Iivate property mken for public use must be compensated at fair market value Intellectual Property 0 Trade secrets valuable commercial information unknown by competitors I wner of information must have mken reasonable measures to keep it a secret I Must have economic value for not being publically know 0 Patent an invention or improvement on an existing item I Protected in constitution I 20 years for new invention 14 for design patent I Can be patented machine process composition of matter chemicals improvement I Nonobvious novelty usefulness o Trademark distinctive design picture emblem logo or wording identifying the manufacturer Trade dress colors designs or shapes associated with a certain product or service I Distinctive 7 unique can t be confuse 39 other trademarks I Must sue if someone uses trademark or it will become generic 0 Copyright a literary musical dramatic or artistic work expression I Protected in constitution I Mustbe original in a tangible medium like written down show creativity I Corporations get for 9 5 years individuals gets for lifetime 70 years I air use allow copying for criticism comment news reporting teaching scholarship research Sources of Contract Law 0 mon law judge creates for things like services and employment 0 Uniform Commercial Code statute regulating sale of goods Contract Formation 0 Offer speci c promise or demand not legally binding cover all key elements serious o o Void C o o o o o o o o Statute O o o o o Crimin o o Terminate offer by ocation mke offer back Provision terminates at speci c time Counteroffer Lapse of reasonable time Deathinsanity of offeror Destruction of subject matter Illegality Acceptance entering into a contract by agreeing to an offer I Mirror image rule acceptance has to be exactly the same as offer Mailbox rule accepmnce is binding at time it is ma39 e Consideration something of value given byboth parties to a contract that induces each of them to enter into the agreement both must benefit I Promissory estoppels one party changes position substantially upon another s promise Capacity person s ability to be boundby a contract Don t have minors intoxicated people mentally impaired people Lawful Purpose contract must not be for an unlawful purpose contrary to public policy ontract fraud intentionally lied misrepresentation unintentionally lied Duress forced Undue in uence use relationship to take advantage Mutual mistake both sides were not on same page 000000 0 Breach of contract failure of one party to perform its obligations under a contract Compensatory damages must ay for how much breach cost you originalreplacement Nominal damages better off by breach replacement lt original get 1 Remedies Compensatory damages Nominal damages Liquidated damages both parties agree what damages should be compensated for Specific performance HAVE to do what was promised can t do this for people s performance labor Rescission get money back for fraudmisrepresenmtion go back to where you were before contract 5 of frauds must be written signed I Interest in land Pay debt of another Impossible to be performed in a year r sale of goods 500 Exceptions don t have to be written signed erformance of land looks like you put a lot of work into it Specifically manufactured foods rule highly personalized no one else would ask for it Judicial admission 7 admit in court they entered agreement P erformance I Complete executed done Substanti t be compensated for the work you did did a lot Material breach don t have to be paid anything because didn t do much Nonperformance I Impossibility death of essential party destruction of property illegal Waiver released from duty BEFORE due date Release 7 released from duty AFTER due date al Intent government punishment of wrongs committed against society D 39 y an owingly committed crime intentional Actual criminal act occurred Types of Intent I Felomes punishment by fines imprisonment gt1 issued by grand jury indictment Misdemeanors punishment by finesimprisonment lt1 issued by the government filing a charge called information Fourth Amendment illegal search and seizure I Police usually must have a search warrant require prob able cause Exceptions to search warrant consent placed under arrest can search immediate person and area for safety reasons evidence would likely be destroyed I Police don t need warrant if they are searching a public area of apublic place no reasonable expectation of privacy I Can only use evidence in courtif police obeyed rules 0 Fifth Amendment I Self incrimination right to not testify against yourself only for an individual s testimony not for corporation only for testimony NOT for material evi ence I Double jeopardy can t be tried twice for the exact same thing based on same facts and by same level of overnment g 0 Fraud reckless indifference to truth I Requires intentional false smtement to material fact fact that would makebreak decision Associated crimes helping someone in a crime 0 Conspiracy plan willfully a member in plan from the smr t one member commits an overt act to help conspiracy o Aiding amp Abiding accessory to a crime but not a member from the start help crime being committed Tort non criminal wrongful action other than breach of contract 0 Intentional tort desire to bring about certainlikely results I Once you intentionally do one thing you are responsible for everything that happens afterwards I D intentional in iction of emotional distress outrageous conduct that causes menml distress first amen ent ri ts are greater than IIEDs I Invasion of privacy f a person s quotquot intr39n ion on person s physical solitude public disclosure of highly private information FA 6 7 uc 1 c per on I Trespass entering someone else s land without consent or remaining after being asked to leave I Conversion wrongful exercise of power or control over someone else s personal property not real property had permission to use at first but then kept it beyond that I Defamation publication of untrue statement about another s leading to damage to the persons reputation or character slander is verbal libel is written 0 ses truth privileged communication untruths in court public figure I Fraud intentional misrepresentation of material fact leading to an injury jurious false oo untrue statements about another s business product quality 0 Intentional interference with contractual relations get a person to break a contract with someone else know about their other contract 0 Unintentional tort failed to do something and it caused damage to someone else I e 39gence unintentional injury resulting from the defendants failure to use reasonable care 0 Elements 0 Duty of care requires watchfulness attention and caution that a reasonable person would under the circumstance most people do not owe this do owe I Business to customers I Service agency to clients Land owners to those on the land 0 Breach of duty I Causation in fact did breach cause injury Proximate causation was the injury anticipated I Injury was there an actual injury I Strict liability Torts no negligence d1 thing wrong but are still responsible for damages Product defect few bad apples design defect entire line are bad apples I Defen es assumption of risk misuse o Abnormally dangerous activities high risk of serious harm risk can t be completely prevented by reasonable care not commonly performed in area Factors in selection abusiness organization 0 Creation 0 Continuity Managerial control 0 liability o Taxation Corporations artificial person tion articles of incorporation lots of paperwork annual renewal Continuity con nues after owners change Managerial control lots of owners that don t have much say shareholders board of directors officers liability limited shareholders liability is limited to their share of stock 0 O O o Taxation double taxed corporation is taxed for income and shareholders are taxed for dividends o Fiduciary duty duty of care reasonable care good decisions duty of loyalty corporations interest gt personal interest 0 Piercing corporate veil exception to limited liability become personally liable for debt when used corporate money for personal gain fraud injustice for personal bene t 0 Sole Proprietorships one owner 0 Creation no formal documenmtion 0 Continuity ends when owner leaves none 0 Managerial control owner in total control 0 Liability owner is personally liab e o Taxation all income subject to personal taxes 0 Partnerships 2 owners Creation partners share common interest and profitslosses Continuity dissolves with any change of ownership Managerial control partners have complete control Liability all personally liable for entire debt Taxation each partner pays personal income tax for his share rporation similar to corporation Taxed like partnership single taxed can t be traded on stock exchange only have 75 or less members I b 0 00000000000 0 r Managed equally by members by majority vote Members not personally liab e Taxed like partnership single taxed No limimtions on number of owners 0 Can t be traded on stock exchange 0 Mark to market accounting on future profits 0 Manipulating controlling electricity and prices 0 Fraud Con ict of interest of Fastow s companies that would buy Enron assets to make it look like Enron was making a pro it B ad investments Drive price up and then buy stock Lawsuits Investigation by Congress 0 response was the Sarbanes Oxley Act 0 Securities Act of 19 34 forbids the reselling of a security on a national exchange without an effective registration with the SEC 0 Forbids fraud in connection with the resale of a securi o Insider owner of 10 of a security directorofficer of company issuing security Must file an initial report with SEC about how much they own I Must le report with SEC when they sell share within TWO days I Short swing profits are illegal sell stock within 6 months of buying it o Nonpublic information employee or anyone else who was intentional told insider information cannot use inside non public information for profits in stoc s o Sarb anes Oxley Act of 2002 o Revitalization of SEC increased money and power 0 Accounting Reforms PCAOB regulated big accounting companies k tnr k L must have an outside auditor working for them that report directly to SEC not to the CEO 0 Financial Smtements and Controls CEOs have to sign under oath that every financial statement is all correct 0 Securities and Fraud increased penalties o Antitrust series of laws intended to promote abundant fair competition in marketplace 0 Per 55 illegality certain activities are always ILLEGAL 0 Rule of reason only illegal if they cause restraint of trade 0 Sherman Act of 1890 0 Section 1 2 competing companies 0 Price fixing charging same price agree not to compete o E r 39 39 allocation dividing up r m39 quot am quotY competitors and agree not to sell to others regions oooo 0 0 Horizontal agreements between competitors usually per se illegality because courts are more worried ab out this 0 Vertical agreements between manufacturer and supplierdistributers usually rule of reason because court is less worried 0 Section 2 1 company 0 Relevant market Number of competitors Barriers to entry 0 exclusionary conduct does something unfairanticompetitive 0 Clayton Act of 1914 ll loopholes of Sherman Act I Price discrimination 7 charge different prices to different people I Tying contracts 7 to buy one product you must buy another also I Reciprocal dealings 7 I ll do business with you if you do business with me I Exclusive dealing 7 if you do business with me you can t do it with any of my competitors I Mergers and acquisitions 7 must get government approval beforehand government has ability to stop any companies from merging or buying another company if they feel it would harm competition must have a value of 65000000 Chapter 19 Agency amp Employment Law 0 Types of Employment Relationships 0 E mployer employee 0 Employer independent contractor I Inde ndent contractor hired to perform a speci c task 0 Employee or Independent Contractor How much control does the employer have over details of work 0 More control employer employee ss control employerindependent contractor Is the worker engaged in an occupation distinct from that of the employer does the worker do something related to the business 0 Yes employer employee 0 No employerindependent contractor I Exception business hires and keeps an accountant employeremployee How long is the person employed Short term employerindependent contractor 0 Long term employer employee What is the frequency of payment 0 More frequent employer employee 0 Less frequent employer independent contractor 0 Exception contractor 39 ds a ouse and is paid monthly employer1C Is this type of work usually done under the employer s control 0 Under control employeremployee 0 Less control employee independent contractor Does the employer supply the necessary tools for the work 0 Supplies employer employee 0 Doesn t supply employer independent contractor quired More specialized employerindependent contractor 0 Less specialized employeremployee o Employer s liability o Tort liability varies depending n whether the tortfeasor is an employee or an independent contractor I Employees 7 principal is liable for both intentional and negligent conduct of employees while acting in the scope of employment employer is responsible for employee on the jo o Frolic and detour 7 activity occurring outside employment employee is responsible UPS driver take mpany van to friends and hits a car I Independent contractors 7 principal is generally not liable for torts by independent contractors o Exceptions I therently dangerous activities 7 explosives wild animals Negligently hired independent contractors 7hire someone without background check 0 Contract Liability 7 depends on type of authority and level of disclosure E H 53 m m a 1 m 7 0 Agency consensual relationship under which one person acts on another s behalf and subject to their control contract liability is based on this 0 Types of authority 0 Actual principal expressly instructs an employee to act on his behalf boss tells worker to sell TVs at Best Bu o Implied agency is inferred from the acts of an agent who holds a position of authority not told to do something but it is assumed in the title manager at a bakery must buy bread when they run out o Apparent 7 agency arises through principal leading others to believe that he has an agent used to work there or looks like they work there 0 Agency by rati cation when a principal voluntarily decides to honor an agreement entered by someone without proper authority 0 Types of disclosure 0 Dis losed agent makes it clear they are working for someone else 0 Partially disclosed agent says they are working for someone else but doesn t tell who 0 Undisclosed agent doesn t say they are working for someone else 0 Disclosed 0 Agency has actualimplied authority 0 Agent has apparent no actual or implied authority 0 Agent has no actualimplied apparent authority 0 Partially disclosed 0 Agent has actual implied authority 0 Agent has no actualimplied apparent authority 0 Undisclosed princip o egardless of agents agency status 0 Contract Liability businesses may face criminal liability for the acis of their employees Securities regulation antitrust Duties of Agents 0 Duty of loyalty 7work in best interest of principal can t use information to gain personal bene t cant represent both sides of a conflict 0 Duty of obedience 7 follow reasonable instructions from principal o Duty of care make careful and informed decisions for the principal Duties of Principals 0 Compensation 7 if agents following all duties and gets hurt they have to be paid what you agreed 0 Indemni cation 7 principal has to compensate agent for cost incurred by agent for work related activities traveling expenses Termination of Agency Relationships to avoid apparent authority you must notify everyone that the relationship is OVER 0 Termination by the principal or agent 7one party decides they don t want to work for the other anymore 0 Lapse of time 7contract says it only last specific amount of time 0 Purpose achieved 7ends afterjob is done 0 By operation of law 7 impossible to perform property destroyed death Employmentatwill employment for an inde nite period of time but can be fired or quit at any time Illegal to re for jury duty whistle blowing saying I want my rights Minimum wage and maximum hour laws 725 40 hours a week beyond that is overtime and must get paid time and a ha 0 Regulated though the federal Fair Labor Standards Act Worker Adjustment and Retraining Noti cation ACT WARN y with businesses that have 100 employees Plant closing7 closing an employment site resulting in 50 or more lost jobs during a 30 day period Mass layoff 7 500 or more layoffs in a 30 day period or at least 33 of employees Must provide employees with a 60 day written notice that a plant is closing mass layoff only have to notify those directly affected 0 If you fail to give notice the court may make you pay salary for those 60 days and a 500per day ne 0 There are many exceptions to WARN Family and Medical Leave Act 0 Allows eligible employees to take up to 12 weeks of unpaid leave during a 12 month period for I Birthcare of newborn adoption I Care of an immediate family member with a serious health condition I Employee who is unable to work due to serious health condition I Only pertains to businesses that have 50 employees have to have worked here for at least 12 months I Can tbe discriminated against if you take leave should have all the same rights and privileges that you had before when you come back 0000 0 Occupational Safety and Health Administration OSHA o Regulates hazardous conditions in the workplace 0 Frontline A Dangerous Business 0 McWane Corporation violates many safety laws safety is sacrificed to increase productivity not enough workers dangerous moving parts are exposed that shouldbe closed ignored OSHA laws injuries and death coul prevented inadequate training safety director had no budget or power withheld information to health inspectors kept machines rimning when they were broken lied to federal agents knowingly exposed workers to bad conditions OSHA inadequate penalties outdated laws cheaper to pay penalty than fix problem serious violations that would cause death was only 7000 workers compensation makes company immune to being sued not enough authority to actually do anything dbe Chapter 20 Employment Discrimination 0 Civil Rights Act of 1964 prohibits discrimination based on race color religion sex or national origin 0 Prohibited discrimination includes I Refusal to hire I Unequal Compensation e o I Un qual terms conditions or privileges of employment promotion Not included socioeconomic status age sexual orientation Only applies to businesses that have 15 employees Enforcement Equal Employment Opportlmity Commission s EEOC responsibility I Power given by congress can file suit or represent individuals who have been discriminated against must first file suit with EEOC before filing suit must first try to solve it out of court 0 Types of cases 00 Disparate treatment employer intentionally discriminated against the plaintiff hard to prove because people typically won t admit to intentionally discriminating I Defense Bana Fide Occupational Qualification can discriminate for flmdamental aspects of the type of work those discriminated against could not possibly do work CAN NEV USE AGAINST RACE COLOR customer preference is not a legitimate reason to discriminate Disparate Impact employers practices or policies had a discriminatory effect on a protected group 0 The way it is implemented results in discrimination at face it looks neutral but it really isn t example to work at a job you must be at least 6 foot mll this discriminates against women because women typically aren t that tall I Defenses business necessity defense 7 maybe he policy results in discrimination but there s a legitimate reason this requirement is there mustbe tall to stock high shelves Retaliation discrimination occurs by employer against something an employee does anything that would have affected them negativity employee may have testified against company 0 Types of discrimination I Race Color 7 cant hire people related to current employees because eventually only one race would be hired cant segregate workforce National Origin 7 only hire people who speak a certain language but sometimes it s necessary for worker to speak English currently 25 of discrimination is against Middle EastersMuslims eligion 7 doesn t apply to religious positions like a priest or preacher employers must make reasonable accommodations to workers religions court will look at balance between interfering religious activities and how much it costs the com any I Sex 0 Sexual harassment 7 Quid pro qua direct you give me this I ll give you that you ll get hired if you have sex with me Hostile work environment 7 not 39 t to both e e 39 touching or comments has to be severe and regular occurrence company s only responsible if they know this is going on and don t do anything about it Pregnancy discrimination 7 health insurance plans have to cover child birth mothers who are married or single can t force women to take time off can t not hire a woman for being pregnant Equal Pay Act 7 illegal to discriminate women by paying them different than men lots of ways around it different levels of training education exact job Can t say only men canbe salesperson even if its an international job in a country where women are b elow men 0 o 0 Age Age Discrimination in Employment Act ADEA 9 Legal Studies Study Guide Test 2 Chapter Seven Property The legal right to exclude others from resources that are originally possessed or are acquired without force theft or fraud 0 Resource Anything that someone may need or want Originally possessed resources like your capacity for work and health are protected by the property right in that you can legally exclude others from interfering with them or sue others if they harm these resources There are two legal frameworks that order how people relate to each other concerning scarce resources 0 Communism Socialism 0 Private Property a system of law under which the state recognizes and enforces an indiVidual s right to acquire possess use and transfer scarce resources Property helps generate prosperity by establishing the conditions necessary for capital formation which refers to that quality of resources that produces new or different resources 0 Ex Borrowing money from a bank Mortgag l A transfer of an interest in property for the purpose of creating a security for a debt 2 A type of security interest in land usually securing an extension of credit There are two basic legal divisionstypes of property 0 Real property 0 Personal property Real property ownership and interest in land 0 Includes xtures objects of personal property that have become objects of real property 1 by physical annexation attachment to the land or its buildings or 2 whose use has become closely associated with the use to which the land is put Personal propelty All other types of moveable resources Tangible property Property which can be touched Intangible property Property with no physical existence Methods of Acquiring Property 0 Acquisition through Exchange I The rules in which people exchange resources in a property system are called the rules of contract Contract rules make agreements to exchange resources between owners legally binding and enforceable 0 Acquisition through Possession Rule of rst possession the first person to reduce previously unowned things to possession becomes their owner When someone has abandoned what they own the first person to reduce it to possession owns it o The law determines whether or not someone has abandoned what they previously owned by measuring intent whether the previous owner intended to abandon something The finder of a lost item becomes its owner by reducing it to possession and following a statutory procedure such as turning the item over to the police or advertising it in a local paper for a period of time to allow the owner to claim it Things that are lost go to the first person who subsequently reduces them to possession but things that have been mislaid go to the person who owns the premises where the item was mislaid Adverse Possession Obtaining ownership of land belonging to another through continuous possession o The possession must be 0 Open and notorious 0 Actual and exclusive the possessor must physically occupy the land Continuous o Wrongful the possessor must not have the owner s permission to be on the land for example a lease 0 Last for the prescribed period of time most states specify 10 to 20 years 0 Acquisition through Confusion Ownership through confusion arises when fungible goods ie goods that are identical are mixed together The common example involves grain in a silo when two or more batches of separately owned grain are mixed together 0 If the confusion occurs by mistake or agreement the owners of the originally separate goods now own a proportional share of the confused goods 0 Acquisition through Accession When the owner of an old airplane engine has it restored and has an airplane built around it the owner of the engine now owns the entire airplane through the doctrine of accession which refers to something added 0 Acquisition through Gift Terminology o Donor The person giving the gift 0 Donee The person receiving the gift 0 Testamentary ngt A gift made through a will Types of ownership Fee simple represents the maximum estate allowed under law the owner having the fullest legal rights and powers to possess use and transfer the land 0 O O 0 Estate the bundle of rights and powers of land ownership Fee simple absolute estate has no limitations or conditions attached Fee simple defeasz39ble may have a condition attached to its conveyance transfer EX A seller may convey land to a buyer as long as it is used for agricultural purposes Life estate grants an ownership in land for the lifetime of a speci ed person After the death of this specified person the land reverts to the original grantor who is said to keep a reversion interest in the land If the land goes to someone other than the grantor that person has a remainder interest Reversion and remainder property interests are also called future interests as opposed to the life estate which is a present interest Leasehold estate the property right granted to tenants by a landlord Tenants have a qualified possession use and transfer of the land qualified in that they cannot waste the land which means do something that substantially reduces the value of the land Concurrent ownership More than one person owns the same thing the ownership is undivided meaning that no concurrent owner owns a specific piece of the resources that are owned Joint tenancy and tenancy in common property interest is undivided but the tenants in common can own different shares of the resource eg twothirds and onethird whereas the joint tenants must have equal ownership shares 0 Joint tenants but not tenants in common have the right of survivorsth which means that if one of the joint tenants dies the remaining tenant becomes the sole owner of the entire resource 0 The owners themselves or the creditors of a joint tenancy or tenancy in common can usually force the separation of these concurrent ownerships under the doctrine of partition Title and Property Registration 0 Title A document serving as evidence of ownership of property Deed A document of title transferring ownership of land Warranty deed o Promises the grantee usually the buyer that the grantor seller has good ownership and the full power to convey it 0 The buyer can sue the seller if someone else claims the land 0 A special warranty deed speci es that certain legal claims against the land like mortgages exist but guarantees that no other claims exist Quitclaim deed 0 Makes no guarantees other than that the grantor surrenders all claim against the land Buyers and lenders are protected by registration statutes The law enables buyers to register their deeds to land and lenders to register their mortgage claims against land 0 Potential buyers or other lenders are thus put on notice regarding the land and the legal ownership or claimant is legally and publicly identi ed Generally the private legal fence of property allows an owner to exclude others from interfering with o l The possession of an object or resource 0 2 The transfer of the object or interest by gift or through exchange with other owners 0 3 All uses of the object that do not harm other owners in what belongs to them Special Applications of Property 0 Easement The right to cross over someone else s land I Can involve such uses as the laying of water pipes or the stringing of power wires across land I It can be bought directly from a titleholder or reserved in a deed as part of the purchase and sale of land I A natural easement also called easement by necessity is the right to cross over land to get to the nearest public road I A negative easement means that an adjoining landowner cannot do anything that would cause the land on your side to collapse I An easement by prescription arises when one person has used another s land such as by crossing it openly wrongfully and continuously for a period of years frequently 20 and once an easement by prescription arises atitleholder of the land can no longer prevent a person from continuing to use the land by crossing it o Bailment The temporary transfer of possession of personal property from one person to another I Bailor Owner of the property I m Person with whom the property is left I Bailments arise when you store something in a warehouse rent furniture from the rental store lease a piece of equipment loan your lawnmower to a neighbor etc I Bailments fall into three categories 0 For the sole bene t of the bailor o For the sole bene t of the bailee o For the mutual bene t of both parties Security Interest an application of property that gives someone an interest in what belongs to another usually to secure an extension of credit 0 Two principle types are mortgages and secured transactions Deeds 0ft139ust A type of document to secure an extension of credit through an interest in the land 0 A borrower signs a note which shows the borrower s debt to the lender and then signs a deed of trust which grants the lender a security interest in the building and land put up to secure the loan I The deed is held by a third party called a trustee who holds full legal ownership to the land I Under this arrangement the debtor will obtain legal ownership or title only when the deed has been repaid Land sales contract A type of document to secure an extension of credit through an interest in the land purchased 0 Unimproved land and farmland are often sold through land sales contracts 0 The owner of the land sells it by contract subject to the condition that the seller retains title to the land until the buyer pays the purchase price I Until that time the buyer has the legal right to possess and use the land and is responsible for paying taxes and insurance Ifmortgagees the creditors fail to record mortgages new buyers of the lands who are unaware of mortgages will take the lands free and clear of the mortgages although the debts will still be owed by the mongagors debtors o A creditor who registers a subsequent mortgage on land being unfamiliar with the unrecorded first mortgage will have priority over the rst mortgage Foreclosure If a mortgager fails to perform his or her obligations as agreed the mortgagee may declare the whole debt due and payable and she or he may foreclose on the mortgaged property to pay the debt secured by the mortgage The usual method of foreclosure authorizes the sale of the mortgaged property at a public auction The proceeds of the sale are applied to the debt In many states if foreclosure and auction does not produce enough money to satisfy the debt owed by the mortgagor the creditormortgagee can still sue the debtor for the balance owed called a deficiency 0 Some states however have passed statutes called antide cz39ency judgment statutes which prevent mortgagees from obtaining anything else from mortgagors once the land has been foreclosed and auctioned Before the actual foreclosure most states permit a right of redemption which allows the mortgagor to get back the land upon payment of the full amount of the debt including all interest and costs 0 Even after foreclosure some states have a statutory period of redemption usually siX months or one year after foreclosure in which the mortgagor can redeem the land from a new buyer Limitations on Property and the Common Good 0 Nuisance A use of property that interferes with the legal rights of others by causing damage annoyance or inconvenience I Public Nuisance one arising from some use of land that causes inconvenience or damage to the public 0 EX Discharging industrial waste from one s land that kills the fish in a river I Private Nuisance an unreasonable use of one s property so as to cause substantial interference with the enjoyment or use of another s land 0 In determining whether to issue an injunction the court will take into consideration 0 l The relative economic hardship that will be placed upon the parties if such relief is granted 0 2 The public interest in the continuation of the defendant s activity 0 Zoning the division of a town or county into separate residential commercial and industrial districts I An owner can ask a zoning board for a variance to allow use of land in a way not permitted under a zoning ordinance Several propertyrelated concepts illustrate that when society believes that property no longer promotes the general public welfare owners lose the resources protected by property 0 Duration limitations I Rule against pelletuities the rule that prohibits an owner from controlling what he or she owns beyond a life in being at the owner s death plus 21 years 0 Serves the common good by preventing dead owners from indefinitely limiting the new productive ways that resources can be used 0 Eminent Domain the govemment s constitutional power to take private property for public use upon the payment of just compensation I Over the years public use has come to mean public purpose that is any purpose that bene ts the public whether the public uses the resource or not 0 Taxation Chapter Eleven 0 Intellectual property a type of property in information and its application or expression Patents and copyrights are examples 0 Article 1 Section 8 0 Congress shall have the power to promote the Progress of Science and Useful Arts by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries Trade Secret Valuable commercial information unknown by competitors it s any form of knowledge or information that o l The owner usually a business owner has taken reasonable measures to keep secret I To protect knowledge as a trade secret the business must take reasonable measures to keep the knowledge secret A first step in keeping trade secrets is to identify knowledgebased resources It is useful for all businesses to conduct a trade secret audit Reasonable measures to preserve secrecy over valuable knowledge resources include locking away formulas research results blueprints and various written plans 0 2 Has economic value from not being known to the public 0 The owner of a trade secret may go into court and get an injunction to prevent othersioften former employeesifrom divulging or using a trade secret I An injunction is an order by a judge either to do something or to refrain from doing something In the case of trade secrets the injunction orders those who have misappropriated the trade secret to refrain from using it or telling others about it o The Economic Espionage Act makes it a crime to steal intentionally misappropriate trade secrets and provides for fines and up to 10 years imprisonment for individuals and up to a 5 million fine for organizations 0 Patent An invention or improvement on an existing item 0 Ideas are not themselves patentable Only invention that applies new ideas is patentable 0 To obtain a patent an inventor must pay a filing fee and file an application with the Patent and Trademark Office PTO The application must in words and drawings 1 Explain how to make and use the basic invention 2 Show why the invention is different from prior art that is from all previous and related inventions or state of knowledge 3 Precisely describe what aspects of the invention called claims deserve the patent 0 There is a 20 year monopoly for the use of a new invention 17 years for plant patents and 14 years for a design patent When a patent expires the invention is in the public domain and others may use it without limitation 0 Requirements for Patentability o Patentable Subject Matter Machines Processes o Mere ideas are not a patentable process Nor are mathematical algorithms or formulas like Emc 2 that express truths about the universe Compositions of matter Improvementsto processes machines or compositions of matter Nonfunctional designs of manufactured articles Certain plants 0 Nonobviousness Novelty and Usefulness The characteristic of nonobviousriess refers to the ability of an invention to produce surprising or unexpected results that is results not expected by prior art the previous state of knowledge in the field Perhaps the most common way of challenging a patent s validity is to claim that the invention is obvious to someone with knowledge in the field To qualify for a patent an invention must also possess the characteristic of novelty The test is met when no single prior element of art meets all of the invention s claims 0 However under patent law even if an invention is otherwise new it fails the novelty test if it has been previously described in a publication or put to public use more than one year before a patent application on it is filed the one year rule Except for patents issued on designs or plants an invention to be valid must be useful that is it must do something 0 Usefulness is also defined as utility and patents that are not plant or design patents are called utility patents 0 Patent infringemen unauthorized use of a patented invention o Trademark Distinctive design picture emblem logo or wording identifying the manufacturer of the product 0 Ex McDonald s arches o The Lanham Act of 1946 protects the following marks used to represent a product service or organization Service mark a mark associated with a service for example Monstercom 0 Can also be sounds for example the NBCjingle Certi cation mark a mark used by someone other than the owner to certify the quality point of origin or other characteristics of goods or services for example the Good Housekeeping Seal of Approval Collective mark a mark representing membership in a certain organization or association for example the NFL logo it if it k 0 Trade dress colors designs or shapes associated with a certain product or service 0 Trademark Registration 0 Mark must rst be used in interstate commerce This is a requirement for the federal system not the state Posting the trademark on an Internet website meets this quali cation 0 Register with PTO Mark must be distinctive The mark cannot contain certain prohibited or reserved names or designs including the US ag other governmental symbols immoral names or symbols etc I The mark cannot just merely describe a product or service for example Fast Food 0 Unlike a patent which specifies a limited property duration the trademark enjoys a potentially unlimited protection period But after siX years the trademark owner must notify the PTO that the trademark is still in use Currently every ten years the owner must renew the trademark The attempt to trademark certain descriptive terms or a person s name presents a special problem Generally the PTO will not accept a person s name or a descriptive term for protection on the Principal Register I However if it is listed on the PTO s Supplemental Register for ve years anal acquires a secondary meaning it can then be transferred to the O Princzpal Register for full protection 0 Secondary meaning refers to a public meaning that is different from its meaning as a person s name or as a descriptive term a public meaning that makes the name or term distinctive o EX Ford now refers to an automobile rather than a person 0 Trademark Enforcement 0 Civil violation of a trademark or patent is termed infringement I The violator infringes on the trademark s property right through an unintentional or a willful unauthorized use misappropriating the goodwill and reputation that the trademark represents and confusing the public about the identity of the user 0 Civil enforcement The owner of a trademark can sue to stop an infringement of the mark I Trademark owners must be vigilant in protecting their marks because if a trademark becomes generic if it loses its distinctiveness it also loses its status as a protected trademark A trademark is most likely to become generic when 0 1 An owner does not defend against unauthorized use 0 2 The public becomes confused as to whether a term refers to a particular productservice or refers to a general class of productsservices I Defenses o The mark is not distinctive o No chance of confusion by the public 0 Fair use 0 Fair use of a registered trademark is allowed by the Lanham Act and relates to a discussion criticism or parody of the trademark the product or its owner 0 Criminal enforcement Government enforcement against counterfeit products Trademark Dilution Using someone s trademark in such a way as to reduce the value of the trademark s signi cance reputation and goodwill even if the public is not confused by the use 0 Prevents use of a similar trademark to dilute the signi cance reputation or goodwill associated with the more famous trademark CHEWV WW 0 Copyright A literary musical dramatic or artistic work 0 Deals with expression rather than invention like a patent Copyright Law 0 Three requirements for a Copyright I Must be original 0 Must be created not copied I Must be xed in a tangible medium 0 Ex A book canvas compact disk tape or computer disk I Must show creativity 0 The mere effort and alphabetic arrangement of names that went into a telephone directory s white pages is insuf ciently creative to warrant a copyright 0 The copyright allows the holder to control the reproduction display distribution and performance of a protected work I The copyright runs for the author s lifetime plus an additional 70 years for all works published after 1977 I Copyrights held by corporations and published after 1977 protect expression for 75 years 0 Fair Use Exception allowing copying for criticism comment news reporting teaching scholarship or research I In determining whether a particular use is a fair one a court will consider 0 The purpose and character of the use including whether such use is for commercial or nonpro t educational purposes 0 The nature of the copyrighted work 0 The amount and substantiality of the portion used in relation to the copyrighted work as a whole 0 Ex Two Live Crew s Pretty Woman compared to Roy Orbison s original Pretty Woman o The effect of the use upon the potential market for the copyrighted work 0 Will Two Live Crew s version of Pretty Woman hurt sales for Roy Orbison s original version 0 Copyright Law in the Digital Age I Digital Millennium Copyright Act 0 Makes illegal the effort to get around devices used by copyright owners to keep their works from being infringed o The act will be used to prevent the production marketing or sales of a product or service designed to get around technological protections of computer software videos and compact discs 0 Also restricts the import distribution and sales of analog video recorders and camcorders that lack certain features making it difficult to copy copyrighted materials 0 It further exempts Internet service providers from liability for o 1 Illegal copies that pass temporarily through their systems 0 2 Permanent illegal copies stored in their systems I It exempts them as long as the service provider removes the offending material upon request of a copyright owner Chapter Eight 0 Simply stated a contract involves a promise or an exchange of promises o Promise a commitment or willingness to be bound to a contract obligation o A contract need not be a formal written document and those who make a contract do not have to use the word contract or recognize that they have made a legally enforceable promise Still the rules of contract law apply 0 Sources of Contract Law 0 Contract law has primarily been developed through the common law 0 Common law comes from judge s decisions 0 The courts have developed principles controlling contract formation performance breach and remedies in countless cases This judgemade law affects many types of contracts including real property service employment and general business contracts 0 States have also passed statutes regulating certain areas of contract law 0 A particularly important example of statebased legislation impacting contract law is the Uniform Commercial Code U CC I Article 2 of the UCC covers the sale of gm Goods are tangible moveable items of personal property I Every state has adopted this portion of the UCC thereby making state contract law uniform in the area of contracts involving goods 0 Remember this distinction between these two primary sources of contract law I The UCC relates to contracts involving goods and the common law governs other contracts A party that does not live up to the obligation of contractual performance is said to breach the contract There are several remedies or solutions available for a breach of contract These include the following o Negotiated settlement 0 Arbitration 0 Various awards including damages I Compensatory damages are courtawarded damages to put the plaintiff in the same position as if the contract had been performed Includes lost a39ll39 39J 1 r y 1 1 and nominal profits on the contract and cost of getting a substitute performance 0 Original price 1000 0 Price for replacement 1500 0 Compensatory damages 500 Consequentz39al damages are courtawarded damages arising from unusual losses which the parties knew would result from breach of the contract 0 EX Plaintiff s losses due to closing of business when defendant knew that failure to deliver ordered equipment would cause the losses Liquidated damages 0 Where real damages for breach of contract are likely to be uncertain parties sometimes specify in the contract what the damages should be Courts will enforce these liquidated damages unless they seem to penalize the defendant instead of merely compensating the plaintiff for uncertain losses Nominal damages 0 A small amountioften 17awarded by the court to the plaintiff for breach of contract which causes no financial injury to the plaintiff 0 Original price 1000 0 Price for replacement 750 0 Nominal damages 1 0 Specific performance I Courtordered remedy when subject matter of the contract is unique 0 EX If seller does not deed contractedfor land to buyer buyer can get court to order seller to transfer the land o Rescission I Requires each party to return the consideration given the other Often used in fraud or misrepresentation cases 0 The victim of a contract breach must mitigate damages when possible To mitigate damages requires the victim to take reasonable steps to reduce them 0 Ex When a tenant breaches a house lease by moving away before the lease expires the landlord must mitigate damages by renting the house to another willing and suitable tenant if such a person is available Contracts involve either an exchange of promises by the parties or a promise conditioned on the performance of an act A bilateral contract is an agreement containing mutual promises 0 Ex Paul promises to sell his laptop computer to Pearl if she promises to pay him 1000 for the equipment When Pearl makes her promise in response to Paul s a bilateral contract is formed 0 A bilateral contract involves two promises two rights and two duties While a bilateral contract involves a promise for a promise a unilateral contract is an agreement with only one promise o The maker of such a promise seeks an action rather than a promise in return I Ex Pat tells Alex I am tired of your idle commitments when you install my new stereo equipment Iwill pay you 200 I There is only one promise one duty and one right 0 Many contracts arise from discussions in which parties actually discuss the promised terms of their agreement These are called express contracts There are also implied in fact contracts which arise from the conduct of the parties rather than from words 0 Ex Asking a person such as an accountant for professional advice implies a promise to pay the going rate for this advice even though you do not make an express promise to pay for it When one party is unjustly enriched at the expense of another the law may imply a duty on the first party to pay the second even though there is no contract between the two pa1ties The doctrine that requires this result is based on an implied in law contract 0 Since there really is no actual contractual agreement the phrase Quasi contract often is used 0 Quasi contract not a true contract It is a legal fiction that the courts use to prevent unjust enrichment and wrongdoing Courts permit the person who conferred a benefit to recover the reasonable value of that benefit Nonetheless the elements of a true contract are not present I Ex If a debtor overpays a creditor 5000 the debtor can force the creditor to return that amount by suing under quasicontract The ultimate purpose of a contract is the creation of an agreement which courts will order parties to perform or to pay consequences for the failure of performance 0 O O O O 0 When courts uphold the validity of such promises the resulting agreement is an enforceable contract If a nonperforming party has a justifiable reason for noncompliance with a promise the result is an unenforceable contract When an agreement is enforceable because all the essential requirements are present courts refer to a valid contract A void contract is one that appears to be an agreement but lacks an essential requirement for validity and enforceability I EX An apparent agreement that has an illegal purpose I A contract based on m or misrepresentation is voidable I A contract induced by duress force or threat of force is also voidable o Undue in uence occurs when one is taken advantage of unfairly through a contract by a party who misuses a position of relationship or legal confidence When there is a mutual mistake as to a material fact inducing a contract rescission is appropriate 0 The test of materiality is whether the parties would have contracted had they been aware of the mistake If they would not have contracted the mistaken fact is material There is a difference between a mutual or bilateral mistake and unilateral mistake A unilateral mistake arises when only one of the parties to a contract is wrong about a material fact 0 A contract still results even if there is a unilateral mistake A voidable contract is an agreement when one party has the right to withdraw from the promise made without incurring any legal liability An executed contract is one in which the parties have performed their promises When the parties have not yet performed their agreement it is called an executor contract Five essential elements of forming a valid contract 0 Offer I Offer A specific promise and demand Typically an offer must be of sufficient specificity that the offer could be accepted without any additional terms Under the common law of contracts contractual terms must be definite and specific An offer to purchase a house at a reasonable price cannot be the basis for a contract because of inde niteness Termination of an Offer 0 By revocation 0 Acceptance o I regret to inform you that I am withdrawing my offer By provision in the offer 0 This offer terminates at noon today By rejection or counteroffer By lapse of a reasonable period of time By deathinsanity of the offeror By destruction of subject matter 0 The carpet is destroyed by re before the offer of their sale has been accepted For illegality I Acceptance Entering into a contract by agreeing to an offer I For an acceptance to create a binding contract standard contract law requires that the acceptance must mirror the offer that is match it exactly This is the mirror image rule If the acceptance changes the terms of the offer or adds new terms it is not really an acceptance It is a counteroffer and negotiations continue I Mailbox Rule 0 Consideration Since the offeree typically mails the acceptance of a contract the acceptance becomes binding when it is deposited with the postal serviceihence the deposited acceptance rule also called the mailbox rule The importance of the deposited acceptance rule is that the offeror cannot revoke the offer once the offeree has accepted it An added signi cance is that an offeror s revocation is not effective until the offeree actually receives it 0 Thus a deposited acceptance creates a binding contract even though a revocation is also in the mail I Consideration Something of value given by both parties to a contract that induces each of them to enter into the agreement Before Robert can enforce a promise made by Peter Robert must have given consideration that induced Peter to make that promise In a bilateral contract each party promises something to the other The binding promises are the consideration An important part of consideration is that it must be bargainedfor Prior consideration is no consideration When reasonable grounds for a lawsuit exist an agreement not to sue is consideration to support a promise o EX If First Bank agrees not to sue Maria who has failed to repay a student loan in return for the promise of Maria s parents to repay the loan First Bank has given consideration I Accord and Satisfaction Mutual agreement to settle debt at less than full amount owed o EX Suppose that a consulting rm bills a client 5000 for 50 hours of work at 100 per hour The client disputes the bill and contends that the consulting rm worked only 25 hours and should get only 2500 Ifthe two parties compromise the bill at 3500 for 35 hours this agreement binds them both I Promissory Estoppel When a party changes its position substantially in reliance upon another s promise 0 Capacity I Capacity A person s ability to be bound by a contract I Individuals lacking capacity 0 Minors o Intoxicated Persons 0 Mentally Impaired Persons 0 Lawful Purpose I Lawful Purpose The contract must not be for an unlawful purpose or contrary to public policy I There are several exceptions to the general rule that courts will take no action on an illegal contract A contract may have both legal and illegal provisions to it In such a case courts will often enforce the legal provisions and refuse to enforce the illegal ones I Contracts that restrain trade often are illegal and void They include contracts to monopolize to X prices between competitors and to divide up markets 0 Other contracts that restrain trade are important to the efficient operation of business Covenants not to compete are important in protecting employers from having employees they train leave them and compete against them 0 Third Parties Rights 0 Third party beneficiarie Arises when the original parties to a contract intend for the agreement to bene t a third party I Intended Bene ciary o A thirdparty bene ciary can sue if the parties to the contract intended to bene t that person 0 Suppose Carl owes Terry 10000 for work Terry has already performed Also assume Carl does work for Chris and contracts to have Chris pay Terry Terry is a creditor bene ciary of the CarlChris contract and can sue Chris for the payment owed 0 When the performance under a contract is meant as a gift to a third party that person is a donee bene ciary I You are a donee beneficiary if a parent buys a car for you If the seller does not deliver the car you can sue I Incidental Beneficiary o A third party who unintentionally benefits from a contract The incidental beneficiary has no rights under a contract Assignment of Contract Transfer of rights under a contract from a one party to a non Party 0 In an assignment one of the original contracting parties becomes an assiggor and assigns rights or duties or both to a third party known as the assignee I If the assignment is properly structured the assignee can enforce the original contract 0 An assignment that increases the burden of performance to the obligor cannot be assigned 0 Novation An agreement which extinguishes the rights and obligations that were in effect under the old agreement 0 It is a three or more party contract wherein the original contracting parties agree to relieve the obligor from liability by substituting an assignee in the place of this party I EX Subleasing an apartment Chapter Nine 0 Written vs Oral Contracts 0 Oral contracts are generally as enforceable as written ones Statute of Frauds Specifies that the following types of contracts must be written and signed 0 Contracts involving an interest in land I Includes contracts for mortgages mining rights easements and leases of longer than one year I A contract to insure land or to erect a building is not an interest in land 0 Contracts to pay the debt of another 0 Contracts that cannot be performed within one year of the date of the agreement 0 Contracts for the sale of goods of 500 or more Exceptions to the Statute of Frauds 0 Part performance of a contract involving an interest in land I The doctrine of part performance creates an exception to the requirement that sales of interests in land must be in writing 0 Part performance the contractual doctrine that says when a buyer of land has made valuable improvements in it or has paid part or all of the purchase price the statute of frauds does not apply to prevent an oral land sales contract from being enforceable 0 Speci cally manufactured goods rule I If a buyer places an oral order for more than 500 worth of goods that are made especially for this buyer the seller who has started production on this special order can enforce this agreement to avoid undue hardship 0 Judicial admission I An exception under the statute of frauds allowing courts to enforce oral contracts when a party acknowledges the oral promise in a formal judicial court environment I Most important when the acknowledged oral contract is for the sale of goods Parol evidence rule Parol evidence is extrinsic evidence In contracts the parol evidence rule excludes the introduction of evidence of prior written or oral agreements that may vary contradict alter or supplement the present written agreement 0 Applies only to evidence of oral agreements made at the time of or prior to the written contract It does not apply to oral modifications coming after the parties have made the written contract 0 There are several exceptions to this rule For example when the parties to an agreement do not intend for that agreement to be final and complete then parol evidence is admissible Performance of Contract 0 When the parties perform the obligations of the contract are discharged A party to a contract is discharged when that party is relieved from all further responsibility of performance 0 Complete Performance I Recognizes that a contracting party has fulfilled every duty required by the contract 0 Substantial Performance I Degree of performance recognizing that a contracting party has honestly attempted to perform but has fallen short One who has substantially performed is entitled to the price promised by the other less that party s damages Material Breach O I A level ofperformance below what is reasonably acceptable A party that has materially breached a contract cannot sue the other party for performance and is liable for damages arising from the breach 0 Conditions of Performance 0 If something must take place in future before a party has a duty to perform it is a condition precedent I Ex A building developer may contract to buy certain land when the city annexes i A condition subseguent excuses contractual performance if some future event 0 takes place I Ex A marine insurance policy might terminate coverage for any shipping losses ifwar is declared Concurrent conditions mutual conditions under which each party s contractual performance is triggered by the other party s tendering offering performance 0 0 Tender performance the offer by one contracting party to perform a promise usually associated with the offer to pay for or to ship items under the contract 0 Excuses for Nonperformance o Impossibility 0 Commercial impracticability A Uniform Commercial Code UCC defense to contractual nonperformance based on happenings that greatly increase the difficulty of performance and that violate the parties reasonable commercial expectations 0 Waiver I When a party intentionally relinquishes a right to enforce the contract I Typically occur after a contracting party fails to perform 0 Release I When a party announces the other party does not have to perform as promised I Typically occur before a contracting party fails to perform Chapter Twelve 0 Criminal law Government punishment of wrongs committed against society 0 Case captions I United States v Thomas I State of Georgia v Johnson 0 White collar crime A crime in a business or professional setting committed to achieve a personal or business advantage 0 Particularly a crime committed in order to obtain money property or services I Ex Forgery price fixing accounting fraud etc 0 Criminal Intent For most crimes the defendant must have acted willfullyor knowingly o A few crimes require only reckless conduct 0 A criminal act is also required 0 Classi cations of Criminal Conduct 0 Felonies vs Misdemeanors I Felonies are punishable by ne or imprisonment of more than a year Misdemeanors are punishable by ne or imprisonment for less than a year 0 Initiating a Criminal Case 0 Felonies are initiated by a grand jury indictment I A grand jury determines if there is suf cient evidence to warrant a trial 0 This determination is called probable cause 0 Even an indicted person however is entitled to the presumption of innocenceito be presumed innocent until found guilty A petit jury determines the guilt or innocence of the accused o Misdemeanors are initiated by the government ling a charge typically called an information o Arraignment The accused answers the charges made against himher before the court 0 Possible pleas I Guilty I Not guilty I No contest nolo contendere o The court nds you guilty but you re not admitting wrongdoing If you plead nolo if the victim sues you civilly they still have to go through the process of proving you re guilty If you plead guilty you re admitting to the crime so it makes it easier for the victim to sue civilly sue you later 0 Constitutional Issues 0 Fourth Amendment 7 Illegal Search and Seizure I Police typically must obtain a search warrant before searching a person premises or other property Courts require probable cause in order to issue a search warrant Some exceptions to the warrant requirement exist 0 When consent is given 0 For cars only all they need is probable cause If you get arrested they can search your body and immediate surroundings for weapons If evidence is likely to be destroyed weed ushed o No actual or reasonable expectation of privacy smoking weed outside your house 0 Fifth Amendment I SelfIncrimination o The right to remain silent cannot incriminate yourself cannot be forced to testify against yourself 0 Only applies to people not corporations 0 Only applies to testimony not stuff like hair samples and ngerprints I Double Jeopardy o Courts do not allow individuals to be tried twice by the same governmental entity for the same crime based on the same factual situation 0 Sixth Amendment I Right to a speedy and public trial I Right to a trial by jury I Right to be informed of the charge against you I Right to confront your accuser I Right to subpoena witnesses in your favor I Right to counsel 0 BusinessRelated Crimes 0 Fraud I False statement I Material fact 0 A fact that would be important to a reasonable person in deciding whether to engage or not to engage in a particular transaction I Intent to defraud o Intent to defraud means to act knowingly and with the specific intent to deceive someone ordinarily for the purpose of causing some financial loss to another or bringing about some financial gain to oneself 0 Good faith is a complete defense because good faith on the part of a defendant is inconsistent with intent to defraud or willfulness purposes essential to the charges 0 A prosecutor must establish the presence of a scheme to defraudia plan or program designed to take from a person the tangible right of honest services 0 A scheme involves a course of action to deceive others 0 Bankruptcy crime an action involving the falsification of documents filed in a bankruptcy case I Concealment an intentional misrepresentation of a material fact occurring through the silence of a party 0 Obstruction of Justice Occurs when an individual commits an act with the intent to obstruct the legislative process or ajudicial process 0 False Statement to a Federal Agency Exculpatog no the doctrine that merely denying guilt is not a criminal lie in response to a question from an agency of the federal agency The doctrine is no longer valid 0 False Statement to a Bank 0 Larceny The unlawful taking of personal property with the intent to deprive the rightful owner of it permanently o Commonly referred to as theft or stealing Larceny by violence or threat such as with a gun is robbery Breaking into a building with the intent to commit a felony is burglary Embezzlement occurs when a person entrusted with another s money or property fraudulently appropriates it Money laundering falsely reporting income that is obtained through criminal dirty activity as income obtained through a legitimate clean business enterprise 0 Racketeer In uenced and Corrupt Organizations Act Commonly known as m This law imposes criminal and civil liability upon those businesspersons who engage in certain prohibited activities and who engage in interstate commerce Specifically liability extends to any person who 0 Uses or invests income from prohibited activities to acquire an interest in or to operate an enterprise Acquires or maintains an interest in or control of an enterprise Conducts or participates in the conduct of an enterprise while being employed by or associated with it Each prohibited activity is defined to include as one necessary element proof either of a pattern of racketeeringactivity or of the collection of an unlawful debt Racketeerng is defined in RICO to mean any act or threat involving specific state law crimes any act indictable under various specific federal statutes and certain federal offenses o Endangering Workers 0 Associated crimes 0 Conspiracy Plan or agreement Defendant willfully a member of conspiracy One conspirator commits overt act 592011 83100 PM 41411 Agency and Employment Law Ch 19 When is a company liable for the actions of the employees Types of Employment Relationships 0 Employer 7 Employee 0 Employer 7 Independent Contractor 0 Independent Contractor Someone hired to perform a speci c task I Not somebody who generally works for someone I Someone who has been hired to do a speci c task I Examples I Hiring someone to build house for youinot your employeei generally have less control over independent contractor I Hiring someone to come in and audit I Real estate agent 0 Different relationships determine whether company is liable for actions of employees or not Differentiating between Employees and Independent Contractors courts ask 7 different questionsifor examiknow the 7 different questions because will ask which of the following is not one of the 7 different questionsialso know how to apply with scenario questioninone are automatically the answer and court will look at all of them together 0 How much control does the employer exercise over the details of the work 0 Less control more likely to be independent contractor o More control more likely to be employee 0 Is the worker engaged in an occupation distinct from that of the employer 0 Job directly related to businessimore likely to be employee 0 Job not directly related to business or different line of workimore likely independent contractor I However could hire a full time accountant which would make them an employee 0 How long is the person employed 0 At williat will of company or at your own williindeflnite employmenti more likely employee 0 Indefinite or long term employmentimore likely employee 0 Short term employment or contractimore likely to be independent contractor o What is the frequency of payment 0 Are you paid at frequent interval that most employees are paid atimore likely employee 0 Paid by jobimore likely to be an independent contractor o Is this type of work usually done under the employer s control 0 What is difference between 1 and 5 I Number 1 asks for specific person we are trying to characterize I Number 5 is how much control exercised over work in world 0 Does the employer supply the necessary tools for the work 0 Expect the employer to provide necessary toolsiemployee o Ifyou provide own toolsiindependent contractor o What degree of skill is required 0 More generalized taskemployee o Requires a lot of skill specialized taskimore likely to be independent contractor 0 Will look at all of these factors and determine which it favors overall employee or independent contractor 0 test will be cleariwill all point one way or the other way 0 we care because court liability will be determined if person employee or independent contractor Employer s Liability 0 Tort Liability 7 Varies depending on whether the tortfeasor is an employee or an independent contractor 0 Employees 7 Principal boss is liable for both intentional and negligent conduct of employees while acting in the scope of employment I Has to be within the scope of employment on job doing job when injury occurs Example if you work 95 job Monday thru Friday but on weekend you commit the tort the company is not liable for that action because not in scope of employment Exception I Frolic and detour Activity occurring outside of employment 0 Even though on the clock you kind of go off and do your own thing that the company would not approve of Employer s Liability Tort Liability 0 Example with UPS driver on route and decides to drive a few blocks over and play video games with friend and clearly doing own thing without permission and if he gets in accident while going to his friends route UPS would say they are not liable due to frolic and detour Example with Dominoes guaranteeing delivery 0 in 30 minutes and Dominoes started seeing the number of accidents that drivers were getting into rose stopped promotion because responsible for torts committed by employees 0 Independent Contractor 7 Principal is generally not liable for torts by independent contractors I Exceptions D Inherently dangerous activities 0 Highly dangerous activity no matter how careful 0 Something not normal in that area 0 Example using dynamite to blow up buildings or owning pet tiger 39 39bb urhired J r J o If when hiring did you do sufficient investigation to make sure who you hire was qualified for job 0 If you hire someone not suitable for job and they cause injury as independent contractor you are liable o Exampleiown apt complex in Athens and hire security job as independent contractoriwant to ask about experience or criminal historyiif he has been in jail and accused of theft many times and then breaks into apts and steal tenants stuffiyou are liable because you negligently hired the contractor Contracts do not care if independent contractor or employee Employer s Liability 0 Contract Liability 7 Depends on i type of authority and ii level of disclosure 0 Contractual liability is based on the concept of agency I Agency A consensual relationship under which one person the agentemployee acts on another s the principalemployer behalf and subject to hisher control I Other person is principal or employer I Exampleigo to Best Buy to sell televisions and you are selling television on their behalf and you are working for them I Want you to represent us in business dealings in public Employer s Liability 0 Contract Liability 7 Depends on i type of authority and ii level of disclosure 0 Types of Authority I Actual Authority Principal expressly instructs an employee to act on his behalf I Implied Authority Agency inferred from the acts of an agent who holds a position of authority I Example of being general manager of restaurant you have obligation to hire and manager employees resolve disputes make sure sanitaryinot told specifically if restaurant runs out of bread to go to Kroger to buy it implied authority to keep things running smoothlyihave implied authority to go out and buy what restaurant needs I Apparent Authority Agency arises through principal leading others to believe that he has an agent I No allegation that boss has told agent to do this type of contractiprincipal has lead public to believe that someone is representing them I Exampleiwalk into Best Buy and you know who is a worker because of blue shirt and khakis if Grow went into Best Buy and wore that pretended to be worker he doesn t have actual or implied authorityiBest Buy has a duty to kick him out because they have duty to make sure customers are only dealing with actual employees of the store unlikely scenario n Likely scenario used to be general manager of Barberitos and you are red or leave company and no longer work for Barberitos and walk into Kroger and buy items on Barberitos account Kroger has no idea because you have apparent authority 0 so if you re employee you should notify others that person no longer works for you so don t not enter into contracts with that person on your behalf I Agency by Rati cation When a principal voluntarily decides to honor an agreement entered by someone without proper authority least common a Employer s Liability No authority but someone enters contract on your behalf you are not obligated to ratify contract but if good deal and something you want to do you can voluntarily agree to follow contract Example of full time janitor buying computers for company where he does not have authority you do not have agree to deal because he had no authority but if he got good deal and you want them this would be agency by rati cation 0 Contract Liability 7 Depends on i type of authority and ii level of disclosure 0 Types of Disclosure I Disclosed a You know Tim is an agent for Best Buy and not buying computer from Tim but actually doing business with Best Buy even though doing direct business with Timithe disclosure is that everyone knows he is doing business on behalf of Best Buy I Partially disclosed U Know agent works for somebody but do not know who that somebody else is don t know how principal is Example with Donald Trump building hotel in Athens when people know he will be buying land price of land will go up Trump may call somebody up and have that person to be agent and gure out how much land will be that agent can tell people they work for somebody and not say that they work for Donald Trumpithe person knows they are entering into agreement but unknown contractor I Undisclosed D When you think you are just doing business directly with agent and do not realize that agent is working for somebody else D Same example with Donald Trump but he instructs agent to make customer think that agent is buying land for themselves memorize this next stuff questions on exam about this Disclosed Principal 0 Agent has actual or Implied Authority look at diagram in PowerPoint cannot sue agent and agent will not sue you everyone knows you will sue the store reason for dotted line is that agent can sometimes be liable to Best Buy 0 Example of saying screw Best Buy and sell all TVs for 20 because you are their agent they have to live up to this contract because they had actual or implied authority to that agent best buy could sue the agent because knew it was against wishes o If agent does things principal doesn t want him to do principal can sue agent Disclosed Principal 0 Agent has Apparent Authority but no Actual or Implied Authority Disclosed Principal 0 Agent has no Actual Implied or Apparent Authority 0 No authority at all so principal not held responsible at all Partially Disclosed Principal Agent has Actual or Implied Authority Donald Trump example where he says to agent tell people you are working for somebody else just don t tell them it is me With partially disclosed principal agent is also under the hook on the contract Partially Disclosed Principal 0 Agent has no Actual Implied or Apparent Authority Undisclosed Principal o Regardless of Agent s Agency Status 0 Liability always between third party and agent 0 As long as nobody knows principal exists always in shadows and not liableiagent is liable know these look up with PowerPoint 0 know where there will always be a liability and potential cases where there may be an additional liability 0 put scenario there and usually works out intuitively 41911 Agency and Employment Law Ch 19 Recap from last class 0 Agency 0 When someone hires someone to act on their behalf authorize or given someone authority to act on your behalf 0 Agency drives contractual liability 0 An agent could be either employee or independent contractor 0 Charts 0 Straight lineialways going to be contract liability o Dotted lineisometimes liability in certain scenarios 0 Focus primarily on straight lines but also know why dotted lines are there Employer s Liability 0 Criminal Liability 0 Businesses may also face criminal liability for the acts of their employees I Securities regulation D Example of going public with initial sale of securities and employee lies I Antitrust I Example where Coke and Pepsi sit down and price x each company can face criminal liabilityieven though executives doing criminal act the company itself can be liable criminally Duties of Agents and Principals 0 Agent Responsibilities 0 Duty of Loyalty I Agent always has to act in the best interest of the principal I Cannot pro t at expense of principal I Example where hired to be real estate agent and hired to show Grow houses Grow nds one he likes but you are interested in buying yourself and Grow makes offer of 250K and you say you will offer 270K7competing with principal to buy exact same houseiexample where agent not acting on behalf of principal Also Violation of duty of loyalty if agent represents both sides of transactionicannot represent buyer and seller of houseicannot have split loyalty o Duty of Obedience I Agent has to follow reasonable instructions and commands I Part of being subject to control of principal must follow orders that must be reasonable If they tell you to do something illegal though that is not a reasonable instruction Legal command that is not reasonableiif there is a command that is highly dangerous 0 Duty of Care I If you are an agent and will enter into business transaction on someone s behalf you must be informed and take it just as serious as if making decision for yourself 0 PrincipalResponsibilities 0 Boss owes duty to worker or agent I Compensation I Principal as obligation to pay compensation to agent I Indemni cation I You have to compensate agent for any expenses they incur on your behalf D Examplei y to Omahaiwill cover plane ticket and reasonable travel expenses Termination of Agency Relationship four ways 0 Termination by the principal or agent 0 Decide don t want them to represent you or they decide they do not want to work for you 0 Lapse of Time 0 Sometimes contract will say you will be my agent for six months or certain period of time iif certain period of time in contract agency ends when this period is upicant extend time period once it ends if the parties want 0 Purpose Achieved 0 Sometimes contract will say you will be my agent until my house is sold 7 whether it is two weeks later or two years later agency ends when purpose achieved 0 By Operation of Law 0 Impossibility idea 0 If I hire someone to sell my house and it burns down it is impossible for you to represent me in the sale of my houseiends agency relationship 0 Subject matter burns down or is destroyed if someone dies if someone goes bankrupt important for liability reasons when agency ends liability endsialso very important to notify peopleithis is when apparent authority or agency arisesinotify people that this person is no longer my agent 2 main categories employmentatwill and employment for de nite period of timesports Employmentatwill much more common 0 Employment for an inde nite period of time For as long as you want to work for me and as long as Iwant you to work for me Most employees have been employees at williboss can re you at any time for any reason or no reason at alliby same token can leave whenever you want for various reasonsi exibility on both sidesimost people work for company in this manner Courts have limited reasons to be red a little bit 0 Illegal to re employee because performing important public service I Jury duty I Exercising one of their legal rights I Someone arguing because not being paid min wageithey have legal right to be paid min wage I Whistle blowing I cannot re for these things Minimum Wage and Maximum Hour Laws 0 Regulated through the federal Fair Labor Standards Act 0 Min wage is 725 0 Can work up to 40 hrs and still make min wageiexception are waiters or servers where tips are accepted and this minimum wage is 210 0 Above 40 hours is considered overtime and you make time and a half 1 and a half times normal rate Worker Adjustment and Retraining Noti cation Act WARN 0 Must give employees notice that they might be laid off or may have to go out and get another job 0 Only applies to businesses with 100 or more employees 0 Provide 60 days written notice before engaging in plant closing or massive layoff 0 Plant closing Closing an employment site resulting in 50 or more lostjobs during a 30day period I Whole employment site 0 Mass layoff 500 or more layoffs in a 30day period or at least 33 of workforce 0 Example punishment if you don t do it may end up owing people full two months salaryimust pay them for other days where you should have given them noticeiand 500 dollars per day per person for not providing them with notification o ExceptionsiExample when Leyman Brothers collapsed and some employees filed suit and court ruled that Leyman Brothers did not know 60 days in advanced as they were trying to keep business up to the very last minuteiif occurs unexpectedly with no notice this rule will not apply Family and Medical Leave Act 0 Allows eligible employees to take up to 12 weeks of unpaid leave during a 12month period for 0 Birth and care of a newborn child or adoption of a child 0 Care of an immediate family member with a serious health condition I More practical application based on relation to person rather than where they set on family tree 0 Employee who is unable to work due to hisher own serious health condition this is the minimum many companies give you more time or pay you during your time offican include other conditions to give time off for as well gtapplies to business with 50 or more employees the employee to be eligible must have been working there for 12 months for half time requires company to not discriminate against you for taking time offijob must be available when you get backimust be same salaryitreat you as if you never left Occupational Safety and Health Administration OSHA Regulates hazardous conditions in the workplace Sets set of rules for different environments such as college classroom vs iron manufacturing environment Many people think OSHA is inefficient Video couple questions on test 0 why is OSHA inefficient 0 Why law not strong enough 0 What illegal things was company doing I Video notes a I I I I I I I I Iron Foundry 0 Made water and sewer pipes More safety violations than 7 competitors combined McWane Corporation 4600 McWane workers hurt since 1955 Tyler Pipe in Tyler TXiMcWane s largest plant Discipline Management Practices 0 Reduced workforce 16 hour workdays Not allowed to use restroom Dangerous moving parts must be covered and stopped periodically to be checked 0 These rules have been ignored at this plant I I I I I I I a Company was aware of hazards but made not steps to correct hazards McWane Company Handbook Gap between policy and practice Tyler Pipe and McWane continued to violate OSHA rules Current OSHA law is inadequate for dealing with repeated violators o Penalties are inadequate for people who refuse to take responsibility repeatedly 0 Max of 7000 rule made in 70s Tyler Pipe started hiring eX convicts as it became a last resort for a place of employment Company received misdemeanor even after death of employee 0 Law is inadequate even though they disobeyed law and someone died as a result Workers compensation for Tyler Pipe tripled and Tyler Pipe proposed that none of the injuries were legitimate 0 Tyler Lopeziin extreme pain Tyler Pipe sent him to private clinic who was affiliated with Tyler Pipe 0 Finally had X ray that revealed his back was broken and they did not hospitalize or even tell Mr Lopez that he had compression fracture of spine Rober Rester o Pushed issue about how the way the plant treated people 0 Said they put production concerns ahead of safety and environmental compliance OSHA asked Union Foundry if tests done about air quality plant owned by same people 0 They lied about testing 0 McWane way was to not tell anybody OSHA authority and budgets have been curtailed 0 Companies would rather pay fines than abide by law 0 OSHA needs to address people who are repeated violators Criminals referralsimost notable is Tyler Pipe o Referred five cases to justice dept but little further action 0 ll convictions o more wildlife protection than plant regulation I movie review Frontline A Dangerous Business 39 workplace 0 httpwww obs or wgbh a es fromquot 0 Why was law inefficient o Penalties too low Insufficient nancial penalties and criminal prosecution Too little personnel Dept Of justice not prosecuting cases because misdemeanors O O O 0 Tyler Pipe I Too many hours I No safety regulations I Lying to federal agents I 16 X pollution in the air What did they do that was illegal o Lying to fed Investigators 0 Not following safety precautions 0 Moving parts guarded o Repairing machines while moving 0 Too much air pollution Why OSHA inefficient 0 Needs to be more stringent Con ict to managers 0 More profitable to break the law 0 Fiduciary dutyican make argument that it is all about profit Which is better decision 0 Being safe probably better decision for company rather than the increased profitability 592011 83100 PM Chapter 1 Introduction to Law What is law 0 Three primary elements I A rule I Laid down by the government I Enforced by the government 0 In order for a law to be effective it has to be written down and accessible to public 0 The law provides certainty predictability and stability I The law allows businesses and individuals to have the confidence to enter business agreements and make longterm investments Types of law 0 Common law vs civil law I Common law emphasizes the role ofjudges in interpreting and applying the law I Civil law relies more on legislation than judicial decisions I US uses common law system 0 Public law vs private law 0 Criminal law vs civil law 0 Substantive law vs procedural law Sources oflaw o Constitutions I US constitutions 0 It s the rule but doesn t have every rule I State constitutions 0 States also have constitutions which establish and regulate the state governments 0 Legislation I Laws passed by elected representatives 0 Statute or act 0 Statute law passed by Congress ofa state legislature I EX Last year passed health care act which goes into effectin 2013 says everyone has to purchase health insurance or have to pay a fine I EX State statute HOPE scholarship 0 Ordinance law passes at local level and only applies to that city in certain neighborhoods where students can t live as more than 3 students open container laws in Athens I We elect Congress people to go pass laws and we have to abide by what they say LEGL 2700 Study Guide for Test 1 Grow Chapter 1 Introduction to Law 39239 Law gt gt gt gt V V Law a rule laid down and enforced by the government The Code of Hammurabi is the first known written set of laws Law provides certainty predictability and stability A nation employs the rule of law when the law is made generally and equally applicable this is more the case for more prosperous nations Jurisprudence the philosophy of law I Natural Law jurisprudence focuses on the philosophy of universal moral principles Positive Law jurisprudence believes that law is simply the commands of the state backed by force and punishment Historical School jurisprudence emphasizes that contemporary law should focus on legal principles that have withstood the test of time SociologicalJurisprudence supports the idea that law can and should change to meet new developments in society Legal Realism tries to go beyond the words of law to examine what the government is actually doing as they enforce interpret and apply laws Types of Law I Law Common Law vs Civil Law 0 Common Law emphasizes the role ofjudges in interpreting and applying the law 0 Civil Law relies more on legislation than judicial decisions O Civil Law law dealing with private rights between people O Civil Law generally means any non criminal lawsuit O The same set of facts may give rise to both separate criminal and civil actions I Public Law vs Private Law 0 Public Law matters involving the regulation of society O Constitutional Law involves the interpretation and application of the federal andor state constitutions O Administrative Law covers the legal principles that apply to government agencies bureaus boards or commissions O Criminal Law government prosecution of citizen who commits an illegal action 0 Private Law matters arising between private citizens O Property Law involves recognition of exclusive right in both tangible and intangible resources gt Property the legal right to exclude other from you resources and from interfering with what is quotyoursquot Public Property applies to public resources owned by the government Private Property applies to resources that you own as an individual Common Property applies to resources like land that more than one individual owns jointly O Contract Law covers the rules of how owners transfer resources by exchanging them Q Tort Law establishes rules for compensation when an owner s legal boundaries are wrongfully crossed by another I Substantive Law vs Procedural Law 0 Substantive Law the legal relationship between people business and the state 0 Procedural Law provides the rules that courts use when resolving disputes gt Sources of Law I Constitutions o US Constitution O Article I establishes Congress 9 Article III establishes Judiciary 10 h Amendment all powers not delegated to the federal government are reserved for the states 0 State Constitutions Legislation formal written laws passed by elected representatives O Statute orAct legislation adopted by Congress or a state legislature O Ordinance deals locally within an area 0 Congress can pass a single federal law preempting all state regulations of the same subjectrmatter 0 States can work togetherto pass uniform laws Interpretation of Legislation Administrative Regulations give clarity and provide enforcement of statutes Judicial Decisionsilegal opinions issued by a judge deciding a legal issue which has arisen in a case also know as Case Law 0 These opinions are then followed by later courts as prior precedent Stare decisis Advantages ofJudiciaI Disadvantages ofJudiciaI Decisions Decisions 0 Reliance on past 0 Volume time and precedent offers expense Stabiliw in the legal 0 Conflicting precedent Stem 0 Lack of precedent 0 Allowsjudges to take Rejected precede t unique facts of a case into consideration to reach ajust outcome 0 Allowsjudges to consider changes in circumstances 0 Conflict of laws gt Hierarchy of Laws US Constitution Federal Statutes Federal Ad rninistrative Regulations State Constitutions State Statutes State Ad rninistrative Regulations Local Ordinances Judicial Decisions Case Law Chapter 3 The Court System 39239 The Court System gt Questions of Fact vs Questions of Law Question ofFact a factual issue disputed by the parties Question ofLaw an issue concerning the application or interpretation of the law gt Court Personnel Judges and Justices Jurors and Lawyers Trial Court Judges 0 Judges are in trial court and most appellate courts 0 Decide questions of law and preside over jury trials 0 Occasionally may also decide questions of fact and render a verdict known as quotbench trialquot Appellate Judges and Justices o Justices are in the US Supreme Court and some state appellate courts 0 Determine whether the trial judge correctly applied the law 0 Generally do not review determinations of fact o In deciding an appeal appellate judges and justices role is similar to legislators in that their decision can determine how the law is interpreted and act in a way similar to legislators 0 Supreme Court justices are appointed by the President subject to advice and consent of the US Senate majority of the Senate must vote to confirm the president s nominee and the nominees are questioned by the Senate Judiciary Committee Jurors o The jury is a factfinding body 0 The right to a trial by jury is protected by the Bill of Rights O 6 h Amendment guaranteesjury trials in criminal cases O 7 h Amendment guarantees jury trials in most civil cases gt The reason its most for civil cases is because the dispute may be over a very small monetary amount 0 Rule 48 of the Federal Rules of Civil Procedure states that the quotcourt shall seat a jury of not fewer than 6 and not more than 12 members and local rules allow districts to set the number ofjurors consistent with this rule studies show that there is no difference between the results reached by juries of 6 and juries of 12 Petit Jury issues a verdict in criminal and civil trials after hearing evidence from both sides 12 jurors Grand Jury determines whether the government has enough evidence to go forward with a criminal prosecution 1623 jurors depending on state 9 Criminal prosecution cases go before a grand jury before trial to ensure that if the defendant if he is not guilty will not have his name tarnished or have to go through the time money and stress surrounding a case Jury System Reforms 9 Sometimes jurors are allowed to take notes and O In some states jurors can ask questions directly to the judge who at their discretion may require witnesses to answer Q Many people try to avoid jury duty because it may cause them stress or to lose money Many times the trial ends up with more jurors who are unemployed or retired as a result courts have made it harder to avoid O Sometimes cases can last several months or even years sometimes for cases in the hundreds of millions of dollars which makes many try to avoid jury duty O For these reasons some experts to recommend that juries should be abolished in some cases Lawyers Represent private parties in court by presenting evidence points of law and legal arguments O AttorneyClient Privilege all confidential communications between an attorney and hisher client are privileged gt AttorneyClient Privilege also extends to paralegals legal assistants who gather facts and assist attorneys Lawyers main duty is to uphold the justice system Lawyers serve in 3 capacities Counselor Advocate and Public Servant O They know his or her client s most important secrets and affairs help their clients make important decisions and they form relationships that require high standards of professional and ethical conduct Things To Know About Court Personnel In cases tried without a jury judges are responsible for deciding questions of fact In cases tried with a jury the jury is responsible for deciding questions of fact In most states the jury s decision must be unanimous because it is believed that acts as one common conscience although due to holdout jurors contribute to mistrial This has caused many states to eliminate the requirement of unanimity it is not constitutionally mandated gt Organization ofthe Court System I Sub39ect Matter Jurisdiction the authority of a court to hear cases involving specific issues of law For any court to hear and decide a case at any level they must have subject matter jurisdiction Some states trial courts use general jurisdiction the power to hear any type of case Examples of limited jurisdiction 9 O O Probate Courts deal with wills and the estate of deceased persons Juvenile Courts deal with juvenile crime and dependent children Criminal and Police Courts deal with violators of state laws and municipal ordinances Traffic Courts deal with traffic violations I State Courts vs Federal Courts State Courts hear cases arising under state law or state constitutions 9 Their operations are governed by gt State Constitutions that provide framework for the court system gt State Legislatures who pursuant with constitutional authority enact statutes that add body to the framework V Other legislation that may establish general rules of procedure to be used by the courts Federal Courts hear 4 categories of cases 9 O 9 Federal questions cases questions of federal law gt Based on issues arising out of the US Constitution or federal statutes gt May involve any amount of money constitutional rights or rights guaranteed in the Bill of rights Cases involving the United States as a party Cases between two or more states O Diversity of citizenship cases gt Must include the following I The 2 parties must be citizens of different states I You must be suing somebody for at least 75000 gt This provides a guard against state court bias against the nonresident party O Federal District Court trial courts of the federal judicial system gt There is at least on federal district court in each state and in the District of Columbia V Federal Rules of Civil Procedure provide the details concerning procedures to be followed in federal court litigation O Federal Appellate Courts gt There are 12 US Courts oprpeaI gt There is one special Court of Appeal for the Federal Circuit as an intermediate between appellate courts in the federal system I It is located in Washington DC and hears appeals from special courts such as the US Claims Court and Contract of Appeals as well as from administrative decisions such as those made by the Patent and Trademark Office Trial Courts vs Appellate Courts Trial court are the site of the initial trial where parties file lawsuits or complaints seeking to protect their property rights or redress a wrongdoing questions of fact Q Can take on a number of names superior court circuit court district court O Witness testimony is heard and the jury renders a verdict Appellate Court review the legal decisions made by trial decisions questions of law O Appeal the right of litigation parties to have the legal decisions of the trial judge reviewed by an appellate court O In some states there are 2 levels ofappellate courts gt Court oprpeaI intermediate courts typically consisting of 35 judges where most appeals are settled V Supreme Court highest court typically consisting of 79 judges that reviews only very important cases I A second review by a higher reviewing court is obtained at the court s discretion through the process of presenting and writ ofcertiorari Supreme Court Typically the highest court in the jurisdiction and the highest legal authority O Hears appeals from court of appeals on a discretionary basis US Supreme Court must grant a writ ofcertiorari asks the court to take your case before taking an appeal and 4 US Supreme Justices must vote yes to grant the petition for a writ ofcertiorari This is to ensure that only cases of substantial federal importance or where there is an obvious conflict between decisions of two or more US Circuit Court of Appeal Very few cases make it to the US Supreme Court only 75 cases in the 20062007 term If a case does not involve a federal question the decision of the highest state court is not subject to review by the US Supreme Court gt Power ofJudicial Review Judicial Review power to review the constitutionality of laws passed by the legislature and declare them unconstitutional or void Judicial Review is the ultimate power to invalidate actions by the President or Congress Judicial Restraint the belief that power of judicial review should have a very limited role for the courts in our system of government Believers ofJudicial Restraint believe that the power ofjudicial review grants the Judicial Branch too much power over the Legislative and Executive Branch They believe that judicial review be used very sparingly and only if absolutely necessary This philosophy is sometimes referred to as strict constitutionalism as it provides a certain degree of checks and balances that may be in jeopardy through the process of judicial review Those who believe in judicial restraint believe that social political and economic change in society should result from the political process rather than from court action Decisions from judicial restraint believers are more based on fact than a principle of law JudicialActivism the belief that the power ofjudicial review should be used whenever the needs of society justify its use Judicial activism believers believe that constitutional issues must be settled within the context of contemporary society 0 Judicial activism brings about more changes to law as it questions law rather than interprets fact and precedent by asking questions such as llWhy is this wrongrightquot rather than llWhat does the law sayquot 39239 Things To Know From Chapter 3 gt Subject Matter Jurisdiction must exist for a court to hear a case gt Stare decisis llthe making of common law in the process of deciding casesquot gt Most cases are resolved before trial and even fewer cases lead to an appeal gt The role of reviewing courts create case law through Stare decisis most final decisions of reviewing courts are published to make the precedent of each case available for inclusion into the body of law gt Habias corpus is a legal doctrine that orders one holding custody of another to produce that individual before the court for the purpose of determining whether such custody is proper Appellate Courts Trial District Courts gt Chapter 4 Litigation 39239 Litigation gt Litigatio bringing andor defending an action in court to enforce a particular right gt Parties and Terms to a Litigation I Sample Complaint sets out the parties jurisdiction venue facts and legal causes and remedies just like a real case The complaintformallystarts the lawsuit I Plaintiff the party initiating the lawsuit I Defendant the party being sued o In most state and federal jurisdictions the law allows all persons to join in one lawsuit as plaintiffs or defendants to determine resolutions of the questions involved I Counterclaims different claims brought by the defendant against the plaintiff o Counterplaintiff the defendant who files a counterclaim o Counterdefendant the plaintiff who must defend itself against the counterclaim I ThirdParty Defendant party brought into a lawsuit as an additional defendant by the original defendant ClassAction Suit a lawsuit in which one or more plaintiffs file suit on both their own behalf and on behalf of all other who may have a similar claim 0 Lawyers love class action because it makes them a lot of money but companies do not like them because there is a lot of risk involved and therefore they usually settle the cases before trial The US Supreme Court discourages classaction suits because it can be so destructive that no side wants to set it off It requires all members of the class to be noticed and can be so expensive for the plaintiff that it can be impractical for litigation to occur gt Requirements for bringing Suit Standing to sue o The plaintiff must show that it has a legally protectable stake or interest in the dispute entitling it to bring the controversy before the court in order to obtain judicial relief 0 Requirements for standing to sue O Actual case or controversy O Personal stake in the resolution of the case Jurisdiction 0 Personal Jurisdiction the power of a court to hear and determine a lawsuit involving the parties before it Q Defendants may allow a court s exercise of personal jurisdiction even if the personal jurisdiction is not obtained under the rules regarding personal jurisdiction 0 Courts automatically obtain personal jurisdiction over a plaintiff when he or she files suit 0 Courts obtain personal jurisdiction over a defendant through any of the following means 9 The defendant voluntarily appears O The defendant is served with process in the state gt Service of summons llnotice to appear in court O The defendant is served with process outside the state through longarm statutes a summon given from a state to and individual in another state gt Requires that I The defendant committed tort in the state 0 Tort a wrongful act or an infringement of a right other than under contract leading to legal liability The defendant owns property in the state that is the subject matter of the suit The defendant entered a contract or transacted business in the state that is the subject matter of the suit gt Extradition n criminal cases the crime must have been committed within the state for the court to have jurisdiction over the case The governor of the state of arrest voluntarily arrests the prisoner at the request of the governor of the requesting state and transports them to that state Standing to Subject Personal Jurisdiction Jurisdiction quot gt Pretrial Procedures I Pleading the formal presentation of claims and defenses by parties to a lawsuit 0 Complaint fled by the plaintiff initiating a lawsuit 0 Answer filed by the defendant admitting or denying each allegation O May also contain counterclaims Q If the defendant does not give his answer the court may claim the defendant guilty for the charges 0 Reply the plaintiff s response to defendant s counterclaims if any I Discovery the procedure by which each party obtains the information needed to prepare its case ensures that there will be no surprises o 4 Methods of Discovery O Interrogatories written questions which must be answered by the other party gt Identify any individual that you are aware has personal knowledge of the facts and circumstances of this case including all eyewitnesses to the accident V List all insurance agreements you have regarding the vehicle operated by Defendant at the time of the collision with the Plaintiff O Requests for Production of Document written requests for certain categories of documents in the possession of the other party gt All maintenance records concerning the vehicle being driven by the Plaintiff on the date of the accident for the two years prior to the auto accident V All notes bills photographs xrays or other documents prepared or reviewed by any doctor performing a medical examination of the Plaintiff for the 6 months following the auto accident O Deposition oral questioning by an attorney of a witness who must answer under oath O Requests for Admission written questions asking the other party to specifically admit or deny a certain fact gt Admit that you were driving a 2000 Toyota with Maryland motor vehicle tags on the date of the car crash gt Admit that the light was red when you crashed into the Plaintiff s car 0 Scope of Discovery O Requested discovery must be likely to lead to admissible evidence O Parties may object to discovery if it seems llout of the scope of discovery and seek the judge s opinion in which case a ruling must be given O Rule 37 of the Federal Rules of Civil Procedure Provides that quota party upon reasonable notice to the other parties and all persons affected thereby may apply for an order compelling disclosure or discoveryquot I Motions typically written requests made to a court or judge to obtain a ruling or order directing that some act be done in favor of the applicant often used to narrow the issues for trial 0 Judgment on the Pleading a principle of litigation in the form ofa motion whereby one party tests the validity of the allegations contained in the complaint and answer Q Upon this motion a judge might determine that the pleadings contain no issues of fact or law and thus grant a judgment prior to a trial 0 Summary Judgment a judicial determination that no genuine factual dispute exists and that one party to the lawsuit is entitled to judgment as a matter of law O Af davit a sworn written statement made before an officer authorized by law to administer oaths used as evidence when a party files a motion for summary judgment O Many cases settle a ruling on the motion forsummary judgment Typical Motions Motion to Motion to Motion to limine Motion for Motion to compel compel exclu e summar dismiss production of discovery for evidence from ud men evidence sanctions trial J g Frivolous Cases 0 Either on motion by a party or on their own initiative judges may terminate the litigation process if there is a finding that the lawsuit is frivolous lacking in merit 0 Rule 11 of the Federal Rules of Civil Procedure Authorizes the imposition of fines for filing frivolous papers in other words courts may fine lawyers who file frivolous cases gt Trial Jury Selection 0 Voir Dire the preliminary examination of prospective jurors to determine their qualifications and suitability to serve on the jury means llspeak the truth O Helps ensure the selection of fair and impartial jury o Peremptory Challenge the power granted each party to reject a limited number of potential jurors during voir dire examination No reason for the rejection is needed Opening Statement 0 Each side previews their case and evidence and says why the jury should side with them Presentation of Evidence 0 Attorneys question the witnesses plaintiff first defendant second Closing Statements Jury Instructions a statement made by the judge to the jury informing them of the law applicable to the case the jury is bound to accept Verdict the jury s decision the judge decides whether to accept it Judgment official adjudication of the law entered by the judge in favor of the winning pa rty V V I Posttrial Motion motion presented by the party dissatisfied with the jury s verdict that seeks either a judgment notwithstanding the verdict state court or motion for judgment as a matter of federal law federal court 0 Posttrial motions are not usually granted as they are only granted when the judge feels that reasonable people would not reach the verdict the jury returned Burden of Proof the level of proof necessary to prevail at trial I 2 Types 0 Criminal Cases 9 beyond reasonable doubt 0 Civil Cases 9 preponderance of the evidence or clear and convincing proof I Burden ofPersuasion describes the responsibility a person has to be persuasive as to a specific fact 0 The party with burden of persuasion fails to meet this burden then that party loses the lawsuit Appeals I Parties submit trial records and written briefs explaining their legal position and a short description of the case 0 Attorneys often are allowed to give oral arguments explaining orally their position on the case I The court of appeals will then typically schedule an oral argument I Appellant the party appealing I Appellee the successful party in the trial court I Petition For Certiorari when a party petitions against their case s rejection from the Supreme Court Enforcement of Judgments and Decrees I Judgment Debtor loser of a case Judgment Creditor winner of a case Sometimes the judgment debtor may not voluntarily pay the judgment creditor When this occurs the judgment creditor requests an execution of the judgment or decree which is followed out by a court official such as a marshal or sheriff Garnishment when the judgment debtor pays wages to the court who pay the judgment creditor Resudicata the decision of the court has become final llthe thing has been decided o v Things To Know From Chapter 4 gt Order of Litigation 1 Pretrial Procedure 3 1 Plaintiff files complaint 2 Complaints and summons served to defendant 3 Defendant answers with counterclaims and defenses 4 Court rules on motion 5 Plaintiff files reply to answer 6 Attorneys conduct discovery procedures 7 Parties may file motions for summary judgment or judgment on pleading 8 Court conducts pretrial conference Trial Procedure 1 Voir dire 2 Opening Statement 3 Presentation of Evidence 1 Plaintiff questions witnesses 2 Defendant questions witnesses 4 Closing Statements 5 Jury Instructions 6 Verdict Appeal Chapter 5 Alternative Dispute Resolution Dispute quot 39 for settling disputes by means other than litigation gt Settlement resolution reached through direct negotiation between the parties gt Arbitration submitting a dispute to a neutral thirdparty who issues a binding decision Submission the process of beginning an arbitration proceeding Arbitrator the decision maker who should be disinterested in any financial impact of the decision and neutral regarding the issues presented in the dispute in essence takes the place of the jury and judge 0 Selecting an arbitrator both parties typically agree on the arbitrator o The number of arbitrators is determined by the agreement of the parties Award the decision made by the arbitrators Voluntary vs Mandatory Arbitration Voluntary Arbitration arises when the disputing parties agree to arbitrate their dispute O 2 forms gt Predispute Arbitration Clause applicable to ADR systems agreed to by contracting parties prior to a dispute arising usually this clause is included in the original contract signed between the parties gt Postdispute Arbitration Agreement can be applicable to arbitration mediation or other methods of ADR I Such as clause is signed by parties who are already in dispute 0 Mandatory Arbitration arises when a court or statute requires the disputing parties to arbitrate their dispute Judicial Review of Arbitrator s Decision 0 Voluntary Arbitration decision overruled by court only if Q Arbitrary obtained via fraud or contrary to public policy 0 Mandatory Arbitration judicial review is available if one party is dissatisfied with result due process requires availability ofjudicial review O De nova Judicial Review means that the court tries the issues anew as if no arbitration occurred Federal Arbitration Act encourages disputing businesses to utilize arbitration Some states have laws that specifically provides that designated matters are not to be submitted to arbitration 0 State laws cannot prevent arbitration of disputes if the parties are engaged in or impact interstate commerce gt Mediation similar to arbitration only not a binding process the parties themselves are the decision makers and a mediator attempts to assist the parties Trial judges can require parties to submit to the mediation process before a complaint can be formally litigated There is no formal presentation of evidence Procedure of Mediation 1 Mediator makes an opening statement describing the procedures and any quotrulesquot 2 All parties make a statement about their views of the dispute 3 Parties discuss their issues and exchange dialogue 4 The parties brainstorm and work together to discuss possible options 5 The agreement is written and signed I Caucus occurs when the mediator decides meets privately with one party without the other present 39239 Things To Know From Chapter 5 Voluntary Arbitration Mandatory Arbitration ISubmission Based on parties39 ISubmission Required by statute agreement IProcedures Associated with a court39s IProcedures Not tied to a court and supervision and are arbitrators usually not bound by rules of evidence must follow formal rules of evidence IReview Award is final with no judicial IReview The court will conduct de review unless a party can prove that nova hearings as if the arbitration the arbitrator engaged in farudulent process had not occurred arbitrary or inappropriate actions gt Chapter 6 The Constitution and Regulation of Business 39239 Constitutional Law gt US Constitution I Article I establishes the Congress I Article II established the Executive Branch I Article III establishes the Judiciary I Article IV includes the Full Faith and Credit and Privileges and Immunities clauses states must accept other states rules or contracts I Article V governs Amendment gt Separation of Powers The Constitution provides a system of checks and balances between the Legislative Executive and Judicial branches of government The Constitution also divides power between the federal and statelocal governments Federalism a system of government in which power is divided between a central national government and various regional state governments I The Supremacy Clause Article VI establishes that the Constitution all federal statutes and US treaties are llthe supreme law of the land US Constitution State and Local Laws Preemption occurs when the federal government has claimed the exclusive right to regulate a particular area Any subsequent state regulation is invalid Applies to federal statutes and the rules and regulations of federal administrative agencies Contract Clause Article I Section 10 quotNo State shallpass anyLaw impairing the Obligation of contractsquot applies only to state law gt Amendments and Basic Protections The First Amendment Freedom of Speech 9 O O O 9 quotCongress shall make no lawabridging the freedom of speech Limited protection for commercial speech deals with advertising Only applies to the government private parties such as businesses can restrict speech Overbreadth Doctrine a principle used by courts to invalidate legislation that is broader in scope than is necessary to regulate an activity This doctrine may be utilized to protect constitutional rights such as freedom of speech against a wide sweep of government action gt Example of Overbreadth Doctrine use This was used to declare child pornography unconstitutional although there is the right to freedom of speech Commercial Speech can be limited because of the public s right to knowquot the truth Freedom of the Press 9 quotCongress shall make no lawabridging the freedom ofthe pressquot O Prohibits Prior Restraint the government cannot prevent something from being published O Defamation the publication of anything injurious to the good name or reputation of another O Libel a defamatory written statement communicated to a third party gt Libel suits require the defendant pay the plaintiff for monetary damages caused by defamation O Malice the state of mind that accompanies the intentional doing ofa wrongful act without justification or excuse 0 Freedom of Religion O Establishment Clause llCongress shall make no law respecting an establishment of religionquot O Free Exercise Clause llCongress shall make no lawprohibiting the free exercisequot of religion 0 Freedom of Assembly 0 The right to petition the government for a redress of grievances The Second Amendment The Right to Bear Arms 0 quotA well regulated militia being necessary to the security of a free state the right of the people to keep and bear arms shall not be infringedquot The Fourteenth Amendment 0 Due Process the requirement that all legal proceedings be fair O Procedural Due Process one must be given notice of the proceedings and an opportunity to be heard before the government acts to take away one s life liberty or property 0 Equal Protection llnor shall any statedeny to any person within its jurisdiction the equal protection of the lawsquot 0 Created to protect individuals subject to state and local regulations Commerce Clause Article I Section 8 quotCongress shall have the Powerto regulate Commerce with foreign Nations and among the several states 0 Regulation of Foreign Commerce O Ensures that state and local governments trade with foreign nations is controlled by the federal government O Embargo restricting trade with another foreign nation 0 Regulation of Interstate Commerce O Interstate Commerce commercial trade business movement of goods or money or transportation from one state to another regulated by Congress O Intrastate Commerce commerce occurring exclusively in one state regulated by the state 0 Limitation on State Police Powers O Police Powers the capacity of a state to regulate matters affecting public welfare security morality and safety O Dormant Commerce Clause states may not pass laws or regulations which could affect interstate commerce O In 1937 when Roosevelt and the Supreme Court declared that the federal government basically has unlimited powers over the regulation of business throughout the United States This established the federal government as an unlimited authority when it comes to commerce O Irreconcilable Conflicts conflicts that exist when it is not possible for a business to comply with federal statutes and state statutes that are inconsistent The Commerce Clause invalidates state laws that impose an undue burden on interstate Commerce The Commerce Clause invalidates the use of discrimination between interstate commerce in favor of intrastate commerce The Commerce Clause limits property taxes income taxes and sales or use taxes levied by the state and local governments on interstate commerce O Apportionment the concept used by states to divide a company s taxable income so that no one state burdens a company with an unfair tax bill O Nexus a logical connection between the taxing state and a business that justifies the tax 39239 Regulation of Business gt Administrative Agencie the boards bureaus commissions and organizations that make up the governmental bureaucracy I 2 Types Ch 7 Property Law 0 Property 39 legal 39 39p and to resources 0 Resources are wants or needs 0 o Sidebar 71 0 Government does not have to compensate if somebut not all property rights are taken The Property System The Problem with Limited Resources In a state planning system government regulate limited resources through taxation or direct ownership In a private property system individuals completely regulate limited resources under recognition of the government Most governments including the US mix the two systems Sidebar72 0 Private property is owned by individuals 0 Public property is owned by government 0 Common property is owned by more than one entity such as air Property and Prosperity 0 Property promotes incentive by protecting and allowing individuals to keep and bene t from what they produce Property enables capital formation or creating resources from other quality resources One example is investing resources gained through a mortgage or putting forth a house as collateral for a loan Property makes resources easily divisible or broken down into parts while the owner still keeps property interest such as renting out part of the resource and putting up a loan against another part of the resource Sidebar 73 o A Peruvian economist Hernando de Soto states that capitalism strives in the Western society because of secure property laws Two Basic Divisions of Property 0 Real property is property that applies to real estate or ownership of land 0 Personal property is all other property 0 A xture is property associated with real property It can either be attached to the land such as a building or associated with the land such as a dishwasher to be sold with the land Tangible property applies to property that can be touched Intangible property applies to property that cannot be touched such as stock Acquiring Resources in a Property System 0 Ownership means the same thing as property Acquiring Resources Through Exchange 0 This is the most popular way of gaining property 0 Exchange is trading resources such as services for a paycheck 0 Contract rules control how owners exchange resources Acquiring Resources Through Possession The rule of rst possession is possessing something that was previously unowned When something is abandoned the rst person to reduce it to possession owns it The law measures the intent to which something was abandoned Sidebar 74 o In Popov vs Hayashi property was divided between the parties because it was unclear who owned frrst possession Lost Items 0 If an item is lost it may be acquired by another owner through possession if the owner who lost the item does not claim it Depending on if the owner knows where to come back to retrieve an item the item could be determined as mislaid granting ownership back to the original owner Adverse Possession o Adverse possession gives ownership to land when the possession is 0 Open and notorious Possessor must occupy the land in a way so that he she is the true owner Actual and exclusive Possessor must physically occupy or build on o the land 0 Continuous Possession must not be interrupted o Wrongful Possessor must not have owner s permission to be on the land 0 For a prescribed period oftime Possessor must be on the land for a period of time set by the state Acquiring Resources Through Confusion Ownership through confusion happens when fungible or identical goods are mixed together such as two identical cups at a party If confusion occurs upon honest mistake or agreement the ownership is divided between the parties involved If the confusion occurs intentionally and wrongfully the ownership of the whole mass is granted to the innocent party Confusion over ownership boundaries falls under this category Acquiring Resources Through Confusion When resources are added to property the newly formed property is reduced to ownership through accession If a builder accidentally picks up a resource owned by someone else and uses it to build a new property the ownership of the new property will go to the builder with compensation to the owner of the original resource Acquiring Resources Through Gift 0 Ownership can be acquired if a donor gift giver gives a gift to a donee gift receiver Gifts must be given with intent and delivery Examples of constructive delivery are when a someone hands over keys instead of a car or a deed instead of the land but the gift is the car or the land o A testamentary gift is a gift made through a will The dead donor is called the testator Types of Ownership 0 Fee Simple Ownership 0 An estate is all rights a powers to land ownership 0 Fee Simple Absolute FSA gives absolute and unconditional ownership to property 0 Fee Simple Defeasible FSD gives conditional ownership such as A sells B land on the condition that heshe uses it for agriculture Ifthe condition is broken the ownership goes back to the original owner If B sells the land to C the condition still applies 0 Life Estate 0 A Life Estate is ownership based on the duration of someone s life ie A sells B land as long as B lives At the end ofB s life the ownership goes back to A or A s family ifA is no longer living Life estate ownership may also be based on a random party s life ie A sells B land as long as LeBron James is alive 0 Leasehold Estate 0 A Leasehold Estate is when property rights are granted to atenant by a landlord o Tennant may not waste or bring down the value of the property but unless otherwise agreed upon may capitalize on the property 0 Lease may be for a de nite duration or an inde nite duration where rent is payable periodically or at will or for as long as both shall agree 0 Concurrent Ownership 0 Concurrent ownership is where there is more than one owner of property and the property is undivided such as shareholding stock 0 Joint tenancy is where possession is equal and tenancy in common is where possession is unequal In both cases property is still undivided 0 Joint tenants have right to survivorship meaning that if one tenant dies the remaining tenant becomes the complete owner of the property 0 In concurrent ownership owners or creditors may be able to force separation of ownership through the doctrine of partition Title and Property Registration 0 Ownership of property is called title 0 A deed is a document title to land 0 There may be mistakes in the system of deeds 0 There are two protections from this First a warranty deed protects the buyer from making a bad purchase The buyer can sue the seller if someone else makes a claim to the land In contrast a quitclaim deed gives know guarantees Second ownership of land may be registered This allows potential buyers to track the ownership of the land 200 years Specialty Applications of Property Easements 0 An easement is a right to cross over land such as a shared driveway An easement can be acquired through purchase from a titleholder or written in a deed A negative easement is an easement prohibiting an adjoining landowner from doing anything that would cause your land to cave in or collapse A scenic easement is an easement that prohibits an adjoining landowner from blocking a scenic view Easement by prescription occurs when a person wrongfully uses land for a period of time usually 20 years This would cause an easement to be prescribed by the government Bailments A bailment happens when a bailor loans property to a bailee with the absolute duty of return Bailrnent can bene t the bailor the bailee watches the bailor s dog while on vacation the bailee bailor loaning money for a movie or both parties furniture rental If the property comes up missing the bailee is at fault if heshe it has taken intentional possession of the property such as a hotel employee hanging your coat for you If the bailment mutually bene ts both parties the bailee will not be responsible for destruction of property due to natural disaster but the bailee is still expected to have reasonable care for the property Sidebar 75 0 When a bailee uses property in a way that was not intended by the bailor and an act of God damages it the bailee will be at fault The more the bailment bene ts the bailee the more liability the bailee has Limitations on Property and the Common Good Property the Use of Resources and the Equal Right of Others Property is not a thing but a person s right to exclude others from resources Nuisance and Zoning A public nuisance is a nuisance that affects the general public such as dumping waste into a river A private nuisance is a nuisance that affects an individual or individuals such as a noisy neighbor If a nuisance is taken to court the court may order the defendant to stop the nuisance and if property is damaged the defendant may compensate The court will take into consideration the plaintiff s the defendant s and the public s interests Case 71 o Spur v Del Webb Arizona 0 Del Webb was developing land sold by Spur a cattle feedlot into residential area Del Webb sued Spur because the feedlot brought odor and ies o Spur was ordered to move or shut down with compensation from Del Webb 0 0 Zoning ordinances divide counties or municipalities into residential commercial or industrial as well as the size location height and number of buildings 0 Owners may ask the zoning board for a variance to allow building not permitted by zoning laws which can be passed if the board determines adequate economic bene ts 0 Zoning ordinances are based off of buildings that are currently in the area or nonconforming uses Property Limitations and the Common Good 0 Durations Limitations on Property 0 The rule against perpetuities limits property ownership to life plus twentyone years It prevents dead owners from inde nitely limiting access to resources 0 The rule prevents future generations from setting up trust arrangements and trustees required to comply to the owners wishes for the extended duration 21 years Eminent Domain 0 Eminent Domain and the Common Good 0 The Fifth Amendment allows property to serve the common good and the government to take resources away from individuals for public use with just compensation eminent domain 0 Public Use 0 Public use is use by the public 0 Public use has come to being public purpose which benefit the public ie private utility companies 0 Case 72 I In Kelo v City of New London Connecticut the courts granted land obtained by eminent domain to the New London Development Corporation a private entity because the development would bring about new jobs and increase tax revenue 0 Just Compensation 0 Just compensation for eminent domain is usually the cost at market value It is agreed upon by the landowner and the government If a decision cannot be made the courts may decide the cost of just compensation Taxation 0 Article 1 Section 8 of the Constitution grants congress the power to tax 0 The 17th Amendment grants congress the power to pass indirect taxes such as income tax 0 The top 1 of taxpayers pay more dollars than the bottom 60 however the poorer pay a higher percentage of taxes than do the wealthy Property A Conclusion and Comment 0 Property law enables capitalism by setting boundaries on ownership 0 A large middle class or well educated people enable a property system to be successful Ch 11 Intellectual Property 0 Property establishes a legal exclusion between an owner and limited resources 0 Sidebar 111 0 Most people favor a private property system and will enforce one even without law 0 Intellectual property is property that includes trade secrets patents trademarks and copyrights The Iustification for Intellectual Property 0 Article 1 Section 8 gives congress the power to protect intellectual property in the progression of useful arts and sciences for a period of time to the author or inventor o The purpose of intellectual property is the same as private property to provide incentive 0 Intellectual Property and Competition 0 Research and Development RampD would slow down dramatically without intellectual property laws because business B could easily copy business A s invention causing increased competition and lower sales prices for business B This would give business A a competitive disadvantage o Sidebar 112 0 Countries with strong property laws usually have a higher standard of living than those without The Knowledge Assets of Modern Business 0 Tangibleresources are physical whereas intangible resources are not 0 Intangible resources make up about 75 of today s businesses property Trade Secrets 0 Trade secrets are knowledge that a business has gone through efforts to keep secret and have economic value that is unknown to the public Trade Secret Taking Reasonable Measures to Keep the Secret 0 For a trade secret business must take reasonable measures to keep knowledge secret 0 Many businesses create trade secret audits in which they list valuable intellectual property to determine which can be kept a trade secret 0 After a potential trade secret is identified a business must reasonably keep it secret ie locking up a formula If secrecy is not upheld a business may lose its trade secret Case 111 o In the case Incase Inc v TimeX Corp Incase Inc sued Timex for sharing a packaging trade secret with another company However the courts ruled that Incase Inc did not keep the design adequately secret and therefore lost the case 0 Employees and Reasonable Measures 0 Many businesses require employees to sign contracts stating that they will not compete with a trade secret obtained from that business Trade Secret The Economic Value Requirement o Businesses have no reason to create a trade secret if it has no value to them Trade Secret Civil Enforcement 0 An injunction is an order from a judge to refrain from doing something In the case of trade secrets it is to refrain entities from sharing a misappropriated or infringed trade secret Trade Secret Criminal Enforcement 0 The Economic Espionage Act makes it a crime to steal trade secrets resulting in up to 10 years imprisonment or 5 million in fines for organizations Patent Law 0 A patent is a legal monopolyin copying and marketing a new invention Obtaining a Patent 0 To file a patent the inventor must pay a filing fee and file an application with the US Patent and Trademark Office PTO o The application must explain how to make and use the invention show why the invention is different from the prior art previous and related inventions and which Claims aspects deserve the patent o A patent examiner is an employee of the PTO who reviews the applications Patentable Subject Matter 0 A patent protects against infringers those who make use or sell an invention without license from the owner Many challengers of a patent attack the subject matter of the patent o In Diamond v Chakrabarty the courts ruled that a patent cannot be placed on genetically modified organisms Case 112 o In EM Ag Supply Inc v Pioneer HiBred International Inc the courts ruled that a specific hybrid of corn could not be patented due to previous acts 0 A discovery ofa gene cannot be patented but a genetic modification of a gene can be 0 In State Street Bank and Trust Co v Signature Financial Group Inc the court upheld a patent on a data processing system 0 In 2007 the court decided in In re Comisky that a patent cannot be granted on processes for conducting mandatory arbitration involving legal documents ie contracts Nonobviousness Novelty and Usefulness o Nonobviousness means that the result of the invention cannot be predicted by previous art Novelty means the invention must be new and different from the prior art A patent must be filed within one year of an inventions use oneyear rule This includes use by the inventor or a person in another country 0 The invention must be useful to obtain a patent Patent Duration and Enforcement 0 Patents are limited to 20 years for utilities 17 years for plants and 14 years for design Trademark Law