Chapter 10 & 11 Notes 3/28 - 4/1
Chapter 10 & 11 Notes 3/28 - 4/1 ACCT 2700
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This 4 page Class Notes was uploaded by jcsumlin on Thursday March 10, 2016. The Class Notes belongs to ACCT 2700 at Auburn University taught by Robert Hollis Cochran in Spring 2016. Since its upload, it has received 18 views. For similar materials see Business Law in Accounting at Auburn University.
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Date Created: 03/10/16
Chapter 10 Wednesday, March 9, 2016 9:00 AM Spring Break You don’t have to give a cop permission to search your car or person If there is probable cause they can search or if there is something in plain view You can say NO to an officer Burdon of proof • There must be a level of proof to convict a person in criminal and civil cases • In civil cases its more likely than not that the defendant did it, and the defendant will have to pay to make the plaintiff to make him whole • In a criminal case it’s a higher requirement of evidence, beyond a reasonable doubt that the defendant did it • Guilty => Criminal • Liable => Civil • If the result is anything but unanimous in a criminal case then it’s a "hung jury" the defendant's case is a mistrial but he can be accused again • Many torts are also crimes (i.e. battery) • There can be two trials because it's both criminal and civil • Double jeopardy only applies in criminal cases, not civil, but a second civil trial must be ordered by an appellate court Classifications of crimes • Felonies: Serious crimes, punishable by Death or prison for more than one (1) year and/or by fines ○ Class A,B,C …etc. • Misdemeanors: Non-serious (petty) crimes punishable by jail for less than one (1) year and/or by fines. ○ Usually takes 3-4 times to send that person to jail ○ If you've been convicted of a class C misdemeanor its less likely to get a job • Violations: Violation of city, county minor traffic/good order ordinances ○ Usually a violation of ordinances ○ Parking, speeding, PU, etc. To be convicted of a crime… • Has to be specifically stated as a crime in a code • If it's never been specified as a crime then you can't be convicted • The Actus-Reus: describes a criminal act *Know this* ○ "the Actus Reus is…." ○ A legal term to describe a crime ○ There's a statute and it's been violated • Mens Rea : Mental state of a person who has committed a crime ○ Having a guilty mind or mental state during commission of the guilty act ○ Specific intent: the defendant had purpose or intention that was driving them to committing a crime ○ General Intent: do not require specific intent to commit the crime ○ Criminal Negligence or Recklessness: Unjustified substantial and foreseeable risk that results in harm ○ No intent (strictly liability) ○ Federal code lists over 4000 criminal offenses and many do not list a mental state ○ Strict liability crimes • Corporate Criminal Liability ○ A corporation itself cannot be imprisoned but can be convicted of crime through acts of its officers. ○ Corporations may be convicted if: ○ Crime is within agent or employee’s scope of employment; or ○ Crime authorized or requested by corporate principal/officer. ○ Liability of corporate officers and directors Corporate officers and directors are personally liable for crimes either they or their angers commit under the "responsible corporate officer" doctrine □ Holds top corporate officer inside the corporation responsible for any criminal acts. □ It is their job to know what is going on ignorance isn't a defense Types of crimes • Violent Crime ○ Murder, Sexual Assault, Rape, Robbery • Property Crime ○ Burglary, Larceny/Robbery, Receiving Stolen Goods, Arson, Forgery ○ Burglary vs. Larceny/Robbery *Know this* The unauthorized entry into a place with evil intent to cause harm to property or people (Burglary) The theft with no violence or threat of violence (Larceny) Theft with the threat of violence or acts of violence, you do not have to have a weapon(Robbery) ○ You have no right to possess or purchase stolen goods ○ Arson (more business related) Public Order Crime • White collar crime: Crimes occurring in the business context using non-violent means to obtain personal or business advantage ACCT 2700 Page 1 or business advantage ○ Embezzlement: when an owner entrusts money to someone else and some money was taken ○ Mail and Wire Fraud (federal): Email, text messages, and phone calls. ○ Bribery: paying someone extra to get an extra benefit over anyone else ○ Bankruptcy Fraud (federal) ○ Insider Trading (federal) ○ Theft of Intellectual property ACCT 2700 Page 2 Chapter 11 - Contracts Nature and Terminology Friday, March 11, 20168:58 AM Prevalence of Contracts Sanctity of promises • Rooted in our Western Tradition • Morally important • Economic Necessity Responsibility and "taking care of your own self-interest" All businesses rely on their contracts to survive Where does contract law come from? • Contract common Law ○ Common law for all contracts except sales and leases ○ Sale and lease contracts - Uniform Commercial Code (UCC) * don’t have to know that* (This is a small percentage of contracts) • Function of Contract Law ○ Provides stability and predictability for commerce Vital for commerce ○ Three Legged stool Definition of a contract • A promise or set of promise for breach of which the law provides a remedy or the performance of which the law in some way recognizes a duty Objective theory of contracts • We determine what a contract and or its terms means by what the parties did, not by what the parties tell us they meant • "Actions speak louder than words." • People may change their mind and lie or their recollection of the truth is clouded The most important reason courts enforce contracts is/are? • Contracts are a foundation of our economy. Contract law emphasizes personal responsibility and accountability… True Elements of a contract. 1. Agreement a. Not all agreements rise to the level of contracts 2. Consideration a. *Value* 3. Contractual capacity a. The parties have to be able 4. Legality a. They have to be for a legal purpose How to form a contract • Bilateral or Unilateral ○ A promise for a promise for a promise or a promise for an act • Formal or Informal ○ Requires a special form for creation or requires no special form for creation ○ Almost all contracts are informal • Express and implied ○ Formed by words or formed by the conduct of the parties Types of Contracts • Executed - A contract that has been fully preformed on both sides. • Executory - where on or both of the parties in a contract fail to fully preform the contract. ○ There are different remedies depending on the status of the contract Contract Enforceability • Valid: agreement, consideration, contractual capacity and legality • Void: No contract. • Voidable (unenforceable) Quasi-Contracts • There is no actual contract but the courts create one in the interest of fairness and justice • Contracts implied in law • "You would have agreed if…" An otherwise valid contract may still be unenforceable (T) Interpretation of Contracts • "Plain meaning" rule This is the first thing courts do to determine the meaning of a contract ○ If it is plain to the judge that is likely the farthest they will go ○ However if terms are unclear or ambiguous, court may admit "extrinsic" (external) evidence. Aka they have to look for different outside evidence. • Contracts are interpreted as a whole • Terms that are negotiated separately given greater weight ○ If you changed a contract then it is clearly something you intended to include • Words given ordinary, common meaning. • Specific wording given greater weight than general language. ○ • Written or typewritten given greater weight than preprinted. ○ The information that is added into a contract from a preprinted contract or a non-preprinted contract is given more weight • Ambiguous terms interpreted against the drafter. ○ The drafter is the one who wrote the contract ○ Being the drafter is the best way to protect your own self interest • Trade usage, prior dealing, course of performance to allowed to clarify. Agreement • The starting point of a contract • The most important part of the contract process • Do not have to be In writing A bilateral Contract • An exchange of a promise for a promise Consideration (value) is the respect you pay the other person in a contract (F) • Agreement = offer and acceptance ○ Parties are the offeror and the offeree Offeree: to whom the offer is made, they can accept or reject the offer or do nothing (basically the same as rejection) Offeror: the person who is making the offer of a contract ○ Parties must show mutual assent to terms of contract Must be true for contracts to be created They both have to be in agreement about the terms of the contract ○ Once an agreement is reached, if the other elements of a contract are present, a valid contract is formed. ACCT 2700 Page 1 ○ formed. Doesn't mean the contract is enforceable necessarily • Requirements of the offer ○ Offeror's serious intention Can't be silly ○ Definiteness of terms ○ Communication to Offeree Offers made to one person doesn’t necessarily transfer to another person • The offeror's serious intention ○ Contract is judged by what a reasonable person in the offeree's position would conclude about the offer ACCT 2700 Page 2
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