LEGAL & REG ENV BUS
LEGAL & REG ENV BUS LEGL 2700
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This 24 page Class Notes was uploaded by Dr. Guadalupe Christiansen on Saturday September 12, 2015. The Class Notes belongs to LEGL 2700 at University of Georgia taught by Reed in Fall. Since its upload, it has received 65 views. For similar materials see /class/202181/legl-2700-university-of-georgia in Legal Studies at University of Georgia.
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Date Created: 09/12/15
1082009 701 00 PM VI PROPERTY A The problem of limited resources 1 Definition of Property private property market legal fences around what is privately proper must have some system in which people can resolve disputes about exchanges of resources who got what amp is that what you were supposed to get has someone injured something Legal de nition of property Right to exclude ownership Right to possess physical or legal control Right to use very important part if you use something you have a private property interest in it something in use is something owned use is part of the resource of private property Right to transfer 2 Property and prosperity o Property promotes incentive o Property promotes capital formation o Property makes resources divisible 3 Two basic divisions of property o Real property real estate o Personal property o The fixture personal property real property that is attached or affixed 1082009 701 00 PM 4 The right of ownership o You become an owner by 0 Exchange 0 Possession own something by reducing something to possession a must be abandoned H ex boats in open ocean Adverse possession only applies to land if you own land you need to keep it in use amp boundaries recognized a if someone uses your land openly wrongfully continuously for some period of time they OWN IT a IF they are given permission to use property then they will not be granted possession after period of time Confusion Accession if you add something to something you already own then you own the addition as well Ex you own original tree then you own lumber from it 0 Gift Intervivos gift between two living people Testamentary gift between someone who is dead and someone alive Ownership of gift is transferred by 2 things a Intent donor intends to transfer ownership to donee a Make actual delivery a Not a PROMISE to give must have physical transfer o Types of resource usually land ownership 0 Fee simple means maximum amount of ownership one can transfer to someone else about something Absolute Defeasible if you don t use land according to directions of person who gave you fee simple then ownership is taken away 0 O O O 0 Title 0 0 Life estate spouses often leave each other this in land amp use of land can use it for life but then ownership goes to someone else Leasehold estate an estate that is owned through a lease for a period of time only Can tell person who leased it to you to stay off property unless something was written in contract Concurrent ownership describes relationships that arise when private individuals own something together Tenancy in common Joint tenancy often with right of survivorship ownership Deed is evidence of ownership register something land car so you can prove you have ownership Types of deeds to real estate Full warranty deed Special warranty deed Quit claim deed Registration of property Property ownership and eminent domain a Purpose of patentscopyrights is to promote the general welfare why they only last for a certain amount of time intellectual property law a Property can be taxed for the common good u Eminent domain legal power that state has to take whatever is privately proper to someone as an individual if they use it for a public purpose ex roads amp state pays just compensation 5 The right of possession possession 9 points of the law bailment possession without ownership 0 O 0 three types of bailments amp duty of care disclaimers special bailments 6 The right of use o Property is absolute but it is not infinite and its boundaries often boundaries of use are often ambiguous 0 When can use interfere w someone s possession o Many of the subjects you study in this course are limits on the use of property such as o Tort law Antitrust law Environmental law Labor amp employment law Nuisance Zoning Restrictive covenants O O O O O O INCUDED IN 1013 NOTES VII TORTS IN THE BUSINESS ENVIRNOMENT o A tort is a legal wrong other than a breach of contract 0 Wronging someone legally other than a breach of contract o Contract law is the way property is transferred o Tort law limits one s use of property as it injures the property of others including the property that others have in themselves o Torts are divided into three categories 0 Intentional torts o Negligence injured by accident 0 Torts ofstrict liability ex selling goods that cause an injury liable even though you didn t intend to do something or weren t negligent KNOW DIFFERENCES BETWEEN THESE test question o Intentional torts 0 These are all things plaintiff must prove for there to be an intentional tort Almost always have punitive damages and actual damages attached 0 Assault intentionally placing one in immediate apprehension for hisher physical safety Ex someone with gun says they are about to shoot you amp plaintiff must offer evidence to prove cause of action Elements to prove intent immediate just about to happen not just a threat for the future would be injury to their physical safety If someone shoots and misses someone and that person does not know they were shooting that is not assault maybe attempted murder 0 Battery an intentional offensive unconsented to touching without a privilege Civil tort of battery may but doesn t have to follow assault Elements to prove intentional even if firing gun into crowd and hitting someone you didn t mean to unconsented privileged people may detain others example someone they think is shoplifting if reasonably detained o Intentional infliction of mental distress intentional outrageous conduct causing mental distress physical symptoms Elements to prove intent outrageous conduct causing mental distress sometimes physical symptoms must show 0 Invasion of privacy Includes misappropriation of likeness intentional invasion of personal space and malicious publication of personal information Invasion of privacy going through someone else s stuff Misappropriation of likeness using someone s photo for advertising wout their consent can be in the news though 0 False imprisonment intentionally confining someone against hisher will and without a privilege o Malicious prosecution bringing criminal charges against someone for ulterior motives Involves usually a private person o Trespass going on another s land without permission remaining on another s land after being asked to leave or putting something on another s land without permission 0 Conversion an intentional unpermitted act of control over another s property 0 Defamation published slander or libel that holds up another to contempt or ridicule Truth is an absolute affirmative defense Public figures and public officials Plaintiffs must prove that the defendant published a defamatory falsehood with malicious or reckless disregard for the truth a Defendant must prove that what they published is true a People who say things about public figuresofficials have special protection that involves freedom of speech in the press if plaintiff is a public official amp comment is about them as an official or public figure plaintiff must prove that what was said about them was false or said w reckless disregard for the truth a Public Figure Doctrine where did it come from UGA Football program Must be made public 10 Common law business torts o Trade disparagement intentional untruth about another s product or service 0 Defamation is about a humans reputation know difference Intentional interference with contractual relations intentionally inducing one to break a contract with the plaintiff Misappropriation of trade secrets trade secret is defined as any information that has economic value and is not generally known by the public and where the owner takes reasonable measures to keep secrecy of the information 11 Statutory torts o Include antitrust employment di555crimination intellectual property violations and others H Iquot LA 45 Pquot 9 1082009 701 00 PM Negligence o What does the plaintiff have to prove in presenting their case to the jury What sort of evidence do that have to offer so defendant doesn t move for directed verdict o Offer evidence on each of the required proofs Duty of care o Must use reasonable care when using duty to do something o Cannot carelessy cross lines that are proper to others o In business own duty to protect guarantees that you must act reasonably to protect customers 0 Ex supermarket must clean up spills even if they didn t do it they have a duty to protect Unreasonable conduct lack of due care o Duty is to act reasonably plaintiff must offer evidence that defendant was acting unreasonably o Reasonable behavior what the jury thinks it is Causation in fact material causation o Must have been carelessness that caused accident o Important contributing factor that caused injury Proximate causation foreseeability o Defendant must have been able to see what was about to happen Injury to property of plaintiff o did it cause injury to something proper to plaintiff Defense to negligence include o Affirmative defense must be proved by defendant o Contributory negligence includes comparative negligence 0 Similar to assumption of the risk if plaintiff s own fault contributed to their injury lack or reasonable behavior 0 Jury decides who was at fault and for example plaintiff s carelessness attributed to 30 of their injuries then payment from defendant is decreased by 30 0 ex if plaintiff and defendant were both speeding plaintiff wasn t speeding but wasn t wearing a seat belt o Assumption of the risk you assume all risk by buying this ticket prevents plaintiff from recovering anything if defendant proves this plaintiff gets nothing E Strict Liability only thing plaintiff must show is that injury occurred while defendant was doing something 1 Ultrahazardous activities Such as use of explosives use of poisons maintaining dangerous wild animals or artificially storing large quantities of liquid 0 Does not matter if there was no negligence 2 Respondeat superior Employer s liability for torts committed by employee within the scope of business Ex if employee is sent by company to pick something up and kills someone the liability is on the company can sue the employee but they have no money can t just tell employee don t speed before they leave and get out of everything 0 Can say employee was not acting in scope of employment ex employee went to eat lunch with friend when that was not what they were supposed to be doing Defense frolic or detour employee was acting on own business 3 Worker39s compensation Employer s statutory responsibility to compensate for accidental injury that arises out of and in the course of employment Type of insurance makes employer liable for any accidental injury during employment or from employment If employer knows of something that may come out of the job their employee does working with cyanide when they don t know they are it can be battery 4 Strict products liability Applies to a commercial seller who places a defective product in the stream of commerce that causes an injury to a user Define production and design defects Cause of action in MouseDrinking Case Ex McDonald s coffee being too hot wout warning causing 3rd degree burns on woman o Not liable for punitive damages though because they did not purposely do this 1082009 701 00 PM 8 Intellectual Property property fence that protects some type of knowledge huge wealth exists because of these fences 3050 o Trade secrets any economically valuable information that is not general knowledge and reasonable steps must be taken to keep from being known publically 0 Used to make or improve the value of something 0 Ex of how to hide make employees sign agreements keep recipe in safe 0 Ex of secrets customer lists marketing plans ways to advertise how assembly line is configured how records are kept IF THEY QUALIFY see definition o Patent law invention must be new useful and non obvious improvement was not obviously going to be made 0 Patentable subject matter Processes useful way of doing something u Ex new way of bookkeeping etc Machines Compositions of matter Certain plants Nonfunctional designs of a manufactured article 0 The requirements of nonobviousness novelty amp usefulness o Obtaining a patent from the PTO Explaining it with words and drawings Why the invention differs from prior art inventions Precisely describing the claims that deserve the patent Role of the patent examiner is to decide if person deserves a patent based on above amp issues patent a Patent is not valid until it is tested in court you sue someone for infringing your patent they defend by saying what you did was obvious and patent is not valid amp it is court who ultimately decides whether patent is valid validity of patent is tested in court 0 Patent duration amp enforcement utility patents 20 years plant patents 17 years design patents 14 years injunction damages amptriple damages for infringement o Trademark law 0 the different marks Trademark ex mcdonald s sign Mercedes sign Servicemark ex orkin sign Certification mark ex housekeeping seal of approval Collective mark ex UGA represents organization NFL NBA o Trademark registration 0 requirement of distinctiveness cannot be similar to other marks be immoral be descriptive be generic be of the flag likenesses of living persons or dead presidents validity is tested in court 0 the official Gazette amp the Principal Register secondary meaning o Trademark enforcement 0 Civil violation is termed infringement 0 Civil remedies include damages injunctions amp destruction of infringing products 0 Defenses to civil violation include mark not distinctive little chance of confusion fair use 0 counterfeiting palming off o Anticybersquatting 0 Consumer Protection Act 0 Damages to transfer of a famous trademark 0 domain name to owner for bad faith registration 6 Federal Trademark Dilution Act o Even if no confusion cannot dilute significance reputation amp good will c Copyright Law 1 Copyright protection arises automatically for a work that is a original b fixed in a tangible medium c creative d applies to literary dramatic musical graphic choreographic audio or visual works e runs for the author s lifetime plus 70 additional years for works published after 1977 f cannot sue for statutory copyright infringement unless work registered with copyright office and the copyright symbol accompanies work 2 Fair use is the most common civil defense a The court looks at 1 commercial or educational 2 nature of the copyrighted work 3 amount of copying in relation to the work as a whole 4 effect of the use on the potential market 3 Napster Digital Millennium Copyright Act a makes illegal the effort to get around technological copyright protections exempts internet service providers under certain circumstances from copyright violation Property as the Foundation of the Private Market b 9 1082009 701 00 PM Criminal Law amp Business A crime is an offense against the state that is punishable by fine or imprisonment Criminal laws mostly protect property exclusive rights of possession use and transfer of valued resources Terms Felony and misdemeanor Grand jury indictment upon finding of probable cause Knowingly and willfully mean that crimes must be voluntary and intentional Please to charges of crime guilty not guilty nolo contendere no contest o Plea bargaining o Not guilty goes to trial o Noo contendere allows judge to sentence as if person plead guilty no contest has effect on 3rd parties outside criminal trial can connect the evidence from this case to a civil case if already proved beyond a reasonable doubt 0 Driving under the influence if plead guilty state would revoke license if plead no contest state could not revoke it cant do this anymore Conspiracy a criminal agreement plus an overt act the PLAN to do something plus example buying objects needed to commit crime o Business to catch business owners for fraud need evidence tell employees that are going to be arrested for being in conspiracy with boss or that they instead must testify against boss charge people of conspiracy Aiding and abetting federal and Accessory before the fact or after the fact state o Assisting a crime o Accessory ex hiding someone after a crime even if you didn t know they had committed the crime Burden of proof beyond a reasonable doubt for criminal cases Constitutional Guarantees gm Amendment prohibition against unreasonable search and seizure including the requirement of the search warrant based on probable cause o Exceptions to the search warrant requirement Searches incident to an arrest ex being pat down Consent given for the search Automobile searches Emergency searches cry for help fire etc 0 Border searches o Exclusionary rule not mentioned in constitution but is implied state cannot use evidence if it is acquired against your rights Em Amendment right against selfincrimination o Individuals cannot be compelled to testify against themselves o Fingerprints voice handwriting samples lineups and blood samples are not protected o Business records are usually unprotected o In business always refer sensitive questions from authority to attorney Em Amendment prohibition against doubly jeopardy gm Amendment right to have counsel for your defense o Right to have an attorney represent you c Must tell you that you have this right 0 O O 0 Specific Business Crimes Common theme of these crimes lying o Lying to get what belongs to someone else o Ex lying about value of stock trading on inside information bc law says certain info must be disclosed Endangerment of workers Willfully making a false statement in order to obtain a loan from a federally insured financial institution Mail and wire fraud o Instrumentalities of interstate commerce it is a federal crime if cell phones etc something to contact people in other states to defraud Fraud by counterfeit or unauthorized access device o People using your identity credit cards etc Knowingly and willfully making a materially false statement to an agency of the federal government No exculpatory no o Lying on material matter to an agency of the federal government o ex Martha Stewart lied to FBI agent about whether she made a phone call sent to prison Bankruptcy crimes of debtors and creditors Racketeer Influence and Corrupt Organizations Act RICO o Requires a pattern of racketeering criminal activity defined as two or more related acts of racketeering win a 10year period c Passed to enable local gov ts to seek the investigation power of the FBI to deal with crimes that have impact on interstate commerce o Civil remedies are available under this also Federal Sentencing Guidelines IX Business Organizations Types of business organizations more than one person o Sole Entrepreneurship 0 You are the sole owner may have employees o Partnership 2 or more owners 0 General each partner has unlimited person liability 0 Limited one general partner and 1 or more partners who s liability is limited to extent of investment o Corporation owned by shareholders liability limited by how much they invested 0 Regular 0 Chapter subchapter S regular except for tax structure o Hybrid features of corporation and partnership 0 Limited liability company LLC also called limited company or LC Generally involve goods of some sort 0 Limited liability partnership Generally involve business services 0 Regulated under state law where they cant be over a certain size cant have innumerable investors Created bc no limits to size of corporations 0 Organizational Factors Ease of creation Taxation generally most important factor Liability Control ex people who run corporations usually don t own them Continuity ex what happens if an investor dies or withdraws Ease of Creation Sole entrepeneurship Partnership 0 General Two or more people carrying on a business for profit Partnership Agreement Contract articles of partnership 0 Limited Certificate of limited partnership Corporation 0 Articles of incorporation Hybrids 0 Articles of organization Taxation Sole entrepeneurshop owner pays personal income tax on net income Partnership partners each pay personal income tax on the egually divided net income unless there is agreement to divide net income unequally o Same applies to both general amp limited partnerships o Business losses offset income from other sources o Information tax return Corporations pay a corporate income tax on net income o Double taxation o Shareholders pay personal income tax on their investment returns dividends o Minimizing double taxation on investment Hybrids pay taxes like partnerships and avoid double taxation Liability Business owners and employees are always liable for what they do personally o Additionally business owners are frequently liable for what others in their business do 0 Employees acting win the scope of employment respondeat superior 0 Agents acting win the scope of their express implied or apparent authority Corporate shareholders limited partners and LLC members have liability only for what they personally do or agree to Inc Ltd and LLC Agents openly acting on behalf of their principles are not liable for agreements made win the scope of their authority o Corporations can only act through agents Control Sole entrepreneurship o Owner makes all decisions can delegate some authority but in the end it all comes back to the owner Partnership o General partners have equal voice in running of partnership unless otherwise agreed o Limited partners are usually passive investors Corporation o Shareholders elect board of directors who appoint management 0 Publicly held on traded corporation Importance of the proxy 0 Closely held corporation Importance of control Derivative lawsuits o Hybrids similar to partnerships controlled by members unless articles of organization specify a manager Continuity Sole entrepreneurship ends with death or withdrawal Partnership dissolves with death or withdrawal of a partner and must be wound up and terminated unless otherwise agreed Corporation can continue perpetually forever LLC or LLP dissolves upon death or withdrawal of a member but can continue upon agreement of remaining members 1082009 701 00 PM Apparent authority agent who is no longer in authority uses their connections to act as if they are still in authority o Advertising example at Atlanta motor speedway XI Regulation of CompetitionAntitrust Law Antitrust law places limits on how we compete for resources o The intended purpose of antitrust law is to increase the total wealth of society o Permits consumers to set price in marketplace on how much to pay competitors o Laws in place to ensure competition o Regulating private property through interstate commerce for the common good The common law prohibited restraints of trade but the law was difficult to end o John Rockefeller example why many of these laws are in place he gained control through trusts controlled peoples businesses and would give them profits but they couldn t make decisions o Passed Sherman Antitrust Law bc of Rockefeller Sherman Antitrust Act of 1890 In response to the Standard Oil Trust Congress enacted this Act 0 A trust Section 1 prohibits o Every combination contract or conspiracy agreement o In restraint of trade o Among the several states What do you have to prove offer evidence of o An agreement 0 The agreement requirement of Section 1 means that you cannot violate Section 1 by yourself unilaterally Colgate doctrine emphasizes the above Colgate company said to retailers if you want to keep buying from us you must never sell our toothpaste below suggested retail price printed on box n bc they spent millions of dollars advertising and made it where people were willing to spend a little extra on colgate u never sought agreement from retailer so court dismisses case bc no evidence o Some sort of restraint of trade o Interstate commerce bc congress can regulate private amp proper interests that deal with interstate commerce Among the several states means that the restraint of trade must have a substantial impact on interstate commerce Restraints of trade the two types o Rule of reason restraints or violations 0 Eg joint ventures and price and nonprice vertical restraints like restraints on territory o Per se restraints or violations 0 O 0 PER SE refers to court decisions means of itself Price xing horizontal amp vertical any agreement that you make about what price that some goodservice will be offered for sale does not have to be written contract Ex agree to keep price at certain amount worst type is horizontal bc with competitors Horizontal division of markets sales representatives who choose which customersgeographic area they will take in order to minimize competition and keep prices up this can be committed right out of school Production limitations competitors agree to each cut production in order to keep prices up usually happens during a recession Group boycotts often occurs when two or more get together amp threaten some manufacturer and say if we don t do what we want you to we won t buy from you anymore Ex group of mom amp pop health food stores manufacturer of popular vitamin decided to increase by selling product to discount stores group had problem w one large discount chain store sent letter to manufacturer and all agree to sign said if you don t stop selling to discount store we won t buy from you anymore committed felony o Tying contracts mostly dealt with under section 3 under the Clayton act where you take some product generally one with a patent on it and you think how can I increase my revenue so you make new things and just tie them in with the patented product o Horizontal restraints agreements you make w competitors the worst o Vertical restraints measured by rule of reason not per se 1082009 701 00 PM EXAM Chapter 7 only held responsible for the outline information powerpoint Amendments to know 4 5 6 Civil Remedies Government can seek injunctions of divorce divestiture or dissolution Private parties can seek injunction or treble triple damages o Defendants have joint amp several liability Criminal penalties Corporations can be fined 100 million for each offense Individuals can be fined 1 million andor imprisoned up to 10 years Seizure of property that is being transported across state lines in violation for the Act Use of the nolo contendere plea Exemptions and Exceptions Certain activities of labor unions insurance companies farming cooperatives and others are exempt State action exemption Parker vs Brown doctrine NoerrPennington doctrine The Clayton Act of 1914 Need to know sections 2 3 amp 7 Section 2 of the Clayton Act o Prohibits sellers of commodities goods not services of like grade or quality from discriminating in price in selling goods that cross state lines where the effect may be substantially to lessen competition or tend to create a monopoly o Specifies certain activity price discrimination not the same as price fixing occurs when a seller sells to two different buyers at two prices 0 Is this per se illegal No illegal only if plaintiff can show a tendency to reduce competition or create a monopoly because of that price discrimination 0 Most common price discrimination buyers have to be competitors competitors are being sold to by the seller at different prices 0 ALSO illegal to knowingly receive the price discrimination Primary line price discrimination predatory pricing usually involves selling to buyers in one area at below cost in order to drive out the seller s competitors Secondary line price discrimination involves selling to a buyer or buyers at a lower price than the seller sells to other competing buyers Effect of the price discrimination is on the competitors of the favored buyer Cost justification defense Know defenses to Section 2 Section 3 of the Clayton Act Prohibits making of exclusive dealing contracts that may lessen competition substantially or tend to create a monopoly Includes requirements or needs output and tying contracts 0 Output contract when a big buyer tells little seller they will buy ALL of their output not illegal unless that s the only manufacturer or a certain part or if there are multiple and they are all locked up by certain company Not per se illegal rule of thumb when you ve locked up 20 or more of a national market in long term exclusive dealing contracts hints that you may be lessening competition or creating a monopoly Section 7 of the Clayton Act Known as merger section Prohibits any acquisition of assets by one business of another where the effect may be substantially to lessen competition or tend to create a monopoly in any line of commerce in any section of the country Involves horizontal vertical and conglomerate mergers 0 Most commonly challenged is horizontal bc with competitors 0 Most least likely is conglomerate mergers bc outside chain of distribution ex broom company merges with mop company
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