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Chapter 1 1142011 30300 PM Ch 1 Intro 0 Law 0 What System of limitations on our actions imposed by the government 0 Why For order safety predictability to control our behavior etc o Theory 0 Market will correct bad business decisions it regulates o Rely on selfregulation 0 Government intervention if both these fail Classifications of law o Public v Private 0 Public law is relationship between govt and its citizens Criminal law civil rights United States v John Doe Proceed even if actual victim doesn t want it to go forward 0 Private law is legal relationship between individuals One of the parties must bring the claim forward no one will do it for you Contract disputes divorce o Civil v Criminal 0 Civil law rights obligations and duties between individuals entities and the govt Job is to make somebody whole again in our system by giving monetary compensation n Injunctive relief compensation in forms other than money getting rid of pigs example a Must be brought forward by you 0 Criminal law crimes are wrongs committed against society Usually has specific victim Brought forward by local state national govt One of big goals is punishment Categories of crimes 4 n Violations o Speeding tickets noise violations n Misdemeanors Class A or B o Crimes punishable by up to 12 months jail time n Felony Class A B C or D o Crime punishable by a year or more ofjail time o Class D 15 years c Class C 510 o Class B 1020 o Class A 20 n Treason o Burden of proof Civil a When a plaintiff brings forth a civil claim the plaintiff must convince the jury by preponderance of the evidence o Roughly 60 sure o 912 must agree guiltyinnocent Criminal n Beyond a reasonable doubt o Roughly 90 sure o 1212 must agree guiltyinnocent o Substantive v Procedural o Substantive law that dictates what we can and cannot do Law that defines creates and regulates our rights and obligations 0 Procedural the methods of enforcing our rights and obligations set forth by substantive law Rules and procedure o Common v Statutory 0 Common judgemade law Court looks at decisions in past and uses it to make decision on current case 0 Statutory law passed by a governmental body Congress that takes written form o Law v Equity 0 Law a set of rules we have to follow Has rules and punishment 0 Equity court uses discretion for when doesn t fall under law Uses sense of fairness Purposes of Law c To maintain or to keep order c To influence conduct o Help us to honor expectations contract c To promote equality o Allows for different voices to be heard Characteristics 0 Flexibility o Consistent o Pervasiveness 0 Covers all areas Sources of Law o The Constitution o Statutes Congress 0 US Code contains all statutory laws 0 Kentucky Revised Statutes KRS o Administrative regulations o Executive orders o Case law o Private law 0 Contract International Law o Intro 0 Not bound by any international govt o Custom something that develops over time and through repeated conduct 0 Different cultures can t look someone in the eye in some countries o Treaties Agreement between or among nations on a subject of international law signed by the leaders of those nations and ratified by their governing bodies o Bilateral treaty between two nations 0 Multilateral agreement between several nations 0 Generaluniversal most all nations recognize this o Private law agreements between companies in different countries 0 Beginning to be recognized by courts o Trade agreements Stuff to Know for Exam o Difference in public and private law o Difference in felonies and misdemeanors 1142011 30300 PM Ch2 Ethics o Intro Ethics Defined o Standards 0 Ethical standards are higher than legal standards 0 Generally accepted rules of conduct that govern society o Rules 0 Things you must go by with your conduct Business Ethics o Three layers 0 Basic values 0 Notions of fairness 0 Social responsibility o Dilemmas business Sources of Moral Standards o Actual law positive law 0 Establish moral standards based on whether an activity is moral or not o Natural law 0 Use common sense o Moral relativism situational ethics 0 Situation we re in establishes our moral standards o Religious beliefs Categories of Ethical Dilemmas o Stealing Lying o Giving false impressions o Buying influence or engaging in a conflict of interest o Taking unfair advantage o Perpetrating interpersonal abuse Resolution of Ethical Dilemmas Use for paper o Blanchard and Peale model 0 Legal If no you re done if yes go on to next step o Balanced If no you re done if yes go on to next step 0 How does it make me feel o Front of the Newspaper Test 0 Ask how a news reporter would phrase the headline in the paper and if you like it o Laura Nash s Model 0 missed question 0 Am I able to discuss the situation with family and friends 0 What am I trying to accomplish 0 Will I still be comfortable overtime o Wall Street Journal Model 0 Compliant If no stop if yes go on 0 Contribution How does my decision affect others involved 0 Consequences Long term effects of decision Rationalizations o It doesn t really hurt anyone o I was just following orders Why business ethics o Adds to value of business s success o More profitable o Voluntary regulations 0 Saves us time and effort Creating an Ethical Culture o Tone 0 Code of ethics 0 Anonymous reporting hotlines o Pressuresignals 0 Some companies stress anything to get the numbers Leads to bad ethics 1142011 30300 PM Intro Types of Courts o Trial court Lower court 0 One judge Gives us our first decision Evidence presented and witnesses testify Sometimes bench trial court with no jury Usually jury s decision o Appellate court 0 Review what happened at trial court appeal it o 3 judges 0 Makes sure everything was properly taken care of 0 Case law comes from here Decision Making o Judicial review 0 Error o Statutory interpretation Stare Decisis Latin for let the decision stand o Setting precedent o Purpose o Not following 0 Makes new decisions because things change Parties in the Court System o Plaintiffpetitioner 0 Files lawsuit o Defendantrespondent 0 Plaintiff files suit against them o Lawyers o Judges KY Court System o District court 0 Judges are elected Trial court Court of limited jurisdiction What is handled in district court Traffic court 0 O O O O O O Criminal misdemeanors and violations Civil 4000 or less small claims court Probate takes care of wills and inheritances Forcible detainers Domestic violence Paternity DNampA Dependency neglect and abuse cases Juvenile a Last 4 cases all have family court ties o Circuit Court 0 Primarily considered a trial court Can sometimes act as an appellate court and review lower court decisions 0 General jurisdiction 0 What circuit court handles Civil n Anything above 4000 Criminal Family a Divorces n Adoptions n TPR s Appellate u If you are appealing a district court o Family court 0 Considered a circuit court 0 69 0 3 abc 0 trial court o Kentucky Court of Appeals 0 Judges elected o No trials here appellate court 0 14 judges 2 from each district o Kentucky Supreme Court 0 Final interpreter of Kentucky state law Their decision is final o 7 justices one from each district Federal Court System o US District Court 0 Same idea as KY district court 0 At least one US District Court in every state o Specialty courts 0 Limited jurisdiction 0 Created by Congress o US Court of Appeals 0 Appellate court 0 US District Courts appealed here 0 In 6th circuit with Tennessee Michigan and Ohio o US Supreme Courts 0 Receives appeals from state courts Jurisdiction o Subject matter Jurisdiction o Court s power and authority to hear a case 0 Limitations on what a court can hear 0 Federal Court ways to get there Anytime US is a party Dealing with a federal question Diversityjurisdiction n Citizens of different states and more than 75000 0 Concurrent Jurisdiction You have an option of being in federal court or state court 0 Exclusivejurisdiction Only one court has the authority to hear case Always the case if the US is a party must go to Supreme Court o Personal Jurisdiction 0 Three ways they get this In Rem jurisdiction n Gives a court jurisdiction over an individual to the extent that person owns property in that court s jurisdiction and that property is the subject of the lawsuit Volunteerjurisdiction n Agree to be part of the lawsuit Presence in a jurisdiction n Defendant resides in that statejurisdiction a Minimum contacts o Connection between out of state contact and the jurisdiction you re in a Long Arm Statutes o Allows a state to reach into another state if needed for jurisdiction Venue o Geographic location to hear a case o Can ask for a change of venue o If too much bias o Trial court determines if change of venue is proper or not Standing to Sue o Does plaintiff have significant interest in the outcome of the case 0 Is the plaintiff suffering 0 Do they need the case International Courts o Determines cases between international cases o Been around since 1920 s o Parties agree to be here o 15 judges o International Court of Justice Know difference in trial and appellate courts 1142011 30300 PM Civil Litigation o Intro o Civil trial processes 0 Pleadings documents filed by the parties for the court Complaint document filed by plaintiff that starts the lawsuit Content n Identify the parties a Statement on jurisdiction o Why this court has jurisdiction n Basis of lawsuit a Prayer for relief o What the person following the lawsuit wants 0 Summons Issued by the court clerk tells defendant they are being sued brings defendant underjurisdiction of the court 0 Answer Default judgment u If the defendant doesn t respond to the summons you get what you asked for by default judgment File an answer a Counter claim o Turns around argument and blames the plaintiff a Cross claims o Defendants sue each other a Third party complaint 0 Defenses affirmative Even if all allegations from plaintiff are true we have a defense and the plaintiff should lose despite their allegations 0 Discovery The primary information gathering stage of the civil trial process Info is discoverable if it is relevant Methods 1 Deposition o Attorneys ask questions and videotape the responses Interrogatories o Given sheet of paper with written questions you respond in writing o Swear under oath Request for documents o Ask the other party for any possible useful info Admissions Exams o Independent doctor runs exams on person Benefits of Discovery 1 n n o Motions Preserves testimony Reduce perjury Promotes settlement Narrows issues Conclude a case Prevents surprises Show up for aural arguments o Pretrial conference Parties don t show up just attorneys and judges 0 Civil trial Fact finder n 1 Have to keep in mind who your fact finder is judge or jury Ifjudge is fact finder voir dire isn t necessary Voir dire to speak the truth a n Questioning of potential jurors o court and attorneys ask questions Strikes challenges o For cause o Peremptory 0 Good because you don t have to give your reason Opening statements a Council for each party will summarize what they re out to prove Burden of proof n Plaintiff has the burden of proof a Civil preponderance of the evidence a Criminal beyond reasonable doubt Defendant s case Closing statements Deliberations and Verdict a Civil 912 a Criminal 1212 Post trial a Motions Appeals n Takes case out of trial court and sends it up to appellate court level Criticisms of legal system c Very expensive o Time it takes for the process to drag out ADR Alternative Dispute Resolution o Intro 0 Alternative method to court 0 More informal than courts o Types of ADR o Arbitration Panel of arbitrators make a decision Parties beforehand decide if it will be binding or nonbinding o Mediation Very common Parties meeting with independent third party mediator The mediator listens to each side and tries to facilitate an agreement on both sides Don t render a decision themselves More costeffective o Medarb Brings in a third party Third party tries to act as mediator If this fails they become an arbitrator and make decision Minitrial Each case if presented to a group of people Usually highly ranked representatives of each company Group provides feedback 0 Rent a judge Like Judge Judy Judge Joe Brown 0 Summary jury trial Usually for big money cases Go through mediationarbitration center a Arrange for a mockjury to come in n Has a retired judge reside over the case a Each side presents to jury n Jury reports findings Often leads to a settlement Litigation vs ADR o ADR is faster cheaper o ADR is more private o ADR has creative remedies 0 Exam 100 pts o everything but essays Ch 14 o 2 bonus questions at 2 pts a piece o be on time 1142011 30300 PM Chapter 5 The Constitution Intro o History 0 Govt o Liberties Structure and Purpose o Preamble 0 First paragraph of Constitution 0 Sets forth the goals of Constitution 0 Memorize the Preamble o Roles of the Constitution 0 To establish a national govt 0 To control relationship between national and state govt 0 Define and develop personal rights and liberties 0 To be able to continue on o Protection 0 Protects us the people 0 Protects us from the govt o Separation of powers o Checks and balances o No one branch is more powerful than the others o Articles 0 Article one Creates the legislative branch of govt Congress Senate House of Reps Commerce clause a Regulates commerce among the states 0 Article two Executive branch a President 0 Article three Judicial Branch 0 Article four Full faith and credit clause states need to respect and uphold the laws and judicial decisions of other states Privileges and immunities clause States need to treat citizens of other states the same as they treat citizens of their own states a n 0 Article five Procedure and process for how to amend the constitution 0 Article six Supremacy clause federal constitution and its laws are the supreme laws of the land Authorizes national debt 0 Article seven States that constitution will be established when nine 1 states ratify it Economic Regulation o Commerce clause 0 This gives government authority to regulate business Interstate Commerce a Commerce among two or more states Intrastate commerce n Within one state States can have control over there intrastate commerce but it s difficult Easier for federal govt to do it o Federal Govt 0 Heart of Atlanta Motel Used power and authority to open public accommodation among all people Hotel tried to not allow African Americans 0 Intrastate California passed a law that made the medical use of marijuana legal 0 Limitations Lopez not too important a Kid in Arizona who brought gun to school violated a govt act charged federally Supreme Court ruled he cannot be charged federally Morrison a Woman attacked Supreme Court says it is best left to states to regulate this o State Govt 0 Police power State s power to pass laws that promote the public welfare and protect public health and safety Have a little control over intrastate commerce try to pass laws to control interstate commerce but rarely works Bill of Rights o Intro 0 lstAmendment Religion n Establishment o Congress shall make no law establishing a national religion a Free exercise clause o Government cannot control how we worship Speech a Government cannot regulate the content of our speech a Can control context Commercial speech a University Speech Codes 0 2nd Amendment 0 4th Amendment 0 5th Amendment Takings Clause n Eminent Domain n Govt can take your private property for public use roads airports etc a Physical n Regulatory MGT 340 Chapter 1 notes 1132011 60500 PM I Law Intro A Law is a form of order Law is the body of rules of society governing individuals and their relationships B In theory we believe 1 Free market regulation 2 Self regulation 3 Government intervention in the form of regulatory laws as last resort II Classifications A Public v Private 1Public law codified law statutes law by government body a Individual v Government b Deals with relationship bw a gov and its citizens 2 Private law rules created by individuals for their contracts tenancy and employment a Individual v Individual b Deals with the legal relationship bw individuals B Civil v Criminal 1 Civil law laws regulating harms ampcarrying damage remedies a Addresses the rights amp duties bw individuals entities or even the government i Individual v Individual c Typically not seeking a punishment nojail time d Typically after a remedy monetary injunctive relief 2 Criminal law laws regulating wrongful conduct amp carrying jail sentences and fines a Government brings on criminal law actions i State of Kentucky v Individual b Some type of punishment is being sought c Crimes wrongs committed against society d Crimes can be broken down into 4 categories 1 Violation punishable by a fine 2 Misdemeanor punishable by up to 12 months of incarceration petty offenses 3 Felony punishable by 1 year or more of incarceration more serious offenses 4 Treason giving aid to US enemies federal offense 3 Burden of proof a Criminal case beyond a reasonable doubt i Close to 100 all 12 jurors must reach same verdict ii Brought by the governmentprosecutor b Civil case by a preponderance of the evidence i Somewhat higher than 50 9 of 12 jurors must agree ii Brought by the plaintiff iii Easier to prevail in a civil case than a criminal one C Substantive v Procedural 1 Substantive laws laws giving rights amp responsibilities a Defines creates and regulates our rights amp obligations b ex Federal Civil Rights Act 2 Procedural laws laws that provide enforcement rights a housekeeping laws that focus on the processadministrative aspect b Set forth the methods of enforcing those rights amp obligations which are established by the substantive laws D Common v Statutory 1 Common law law developed historically amp by judicial precedent a Judge made law handed down through decisions 2 Statutory law codified law a Typically passed by some gov body and is in written form b Legislative branch sets forth statutes at the federal amp state level E Law v Equity 1 Equity a body of law that attempts to do justice when the law does not provide a remedy or when the remedy is inadequate or when the application of the law is terribly unfair a Originated in England because the technicalities of common law often resulted in unresolved disputes or unfair resolutions b Courts of equity issued orders known as injunctions prohibiting conduct or ordering certain acts 2 Our current day court system is a blend of both law ampequity III Purposes A Law helps maintain order amp create structure 1 Laws carry some form of penalty for their violation B Law helps influence our conduct C Law helps us be able to honor our expectations 1 Laws allow prior planning based on the protections inherent in the law D Law helps us to promote equality E Law acts as the great compromiser 1 Law serves to mesh different views into one united view so that all parties are at least partially satisfied IV Characteristics A Flexibility laws need to be able to adapt to changes in society B Consistency although the law must be flexible it still must be predictable C Pervasiveness the law must cover all areas but at the same time cannot infringe individual freedoms or become so complex that it is difficult to enforce V Sources A Constitutions law of the people and are changed only by lengthier amp more demanding procedures than those used to repeal statutes 1 Federal US Constitution 2 State Constitutions B Statutes written laws enacted by some governmental body with the proper authority amp published and made available for public use and knowledge 1 Federal statutes all same at the fed level a laws passed by Congress become United States Code USC 2 State statutes vary at state level Kentucky Revised Statutes K RS C Administrative regulations 1 Federal agencies IRS FDA EPA 2 State agencies Kentucky Bar Association D Executive orders laws of the executive branch of the federal government 1 President 2 Governors E Case law 1 Judge madecommon law that is handed down through court decisions 2 Important because it sets a precedent amp essentially becomes the law 3 Helps interpret statutes amp other sources of law a ex Green v Purple 347 SW 2quotd 716 Ky 1998 H A vol pg F Private law 1 contract law so long as it s a legal contract it is binding VI International Law A Custom boundaries for allowable behavior unwritten but recognized laws 1 Develops over time amp through repeated conduct B Treaty an agreement between or among nations on a subject of international law signed by leaders of the nations amp ratified by the nations governing bodies 1 Bilateral treaties between 2 nations 2 Multilateral treaties made among several nations 3 Universal treaties recognized by almost all nations a ex Geneva Convention Vienna Convention C Private law used in contracts for international business transactions 1 Party autonomy allows firms to operate uniformly throughout the world if their contracts are recognized as valid in most countries D Trade lawpolicies the importance of trade laws tariffs and policies has increased directly with increases in international business 1 ex GA I I NAFI39A E Uniformity some groups are pushing for uniform international contract laws MGT 340 Chapter 2 notes 1132011 60500 PM 1 Ethics A Intro B Questions 11 What is Ethics A Examples 1 Waiting your turn is not an ordinance a statute or even a federal regulation a It is an expected but unwritten behavior that plays a critical role in an orderly society B The generally accepted rules of conduct that govern society normative standards of philosophy 1 Standards ethical standards are not the standards of the law b In fact they are a higher standardethics consist of standards amp norms for our behavior that are beyond laws and legal rights i Ethics is more than common or normative standards of behavior ethics is honesty fairness and justice 2 Rules ethical rules are both standards amp expectations for behavior 111 Business Ethics A The 3 layers 1 Basic values being honest keeping promises not stealing 2 Notions of fairness how we treat other people 3 How business interacts with the community environment amp its neighbors also known as social responsibility B Use 1 Business ethics involve the study of fairness amp moral standards amidst the pressure of earning a profit amp providing returns to all stakeholders C Business dilemmas 1 Moral standards parameters that guide our everyday behavior a Can be derived from different sources 2 Managers D Sources of moral standards 1 Actual or Positive law ethical decisions are based on whether an activity is legal or not a Establishes the standard for ethical behavior but compliance w positive law is not always ethical 2 Natural law moral standards are derived form a higher source amp are considered to be universal a Supports the notion that some standards do not exist because of the law amp indeed may exist despite the law 3 Moral relativism establishes moral standards that vary according to the situation in which the dilemma is faced AKA situational ethics 4 Religious beliefs or divine revelation IV Categories of Ethical Dilemmas A TAKING THINGS THAT DON T BELONG TO YOU B SAYING THINGS THAT YOU KNOW ARE NOT TRUE C GIVING OR ALLOWING FALSE IMPRESSIONS D BUYING INFLUENCE OR ENGAGING IN CONFLICT OF INTEREST E HIDING OR DIVULGING PROPRIETARY INFORMATION F TAKING UNFAIR ADVANTAGE G COMMI39I39I39ING ACTS OF PERSONAL DECADENCE 1 Personal conduct outside a job can influence a company s performance amp reputation H PERPETRATING INTERPERSONAL ABUSE I PERMI39I39I39ING ORGANIZATIONAL ABUSE J VIOLATING RULES K CONDONING UNETHICAL ACTIONS 1 The wrong results from the failure to report the wrong L BALANCING ETHICAL DILEMMAS V Resolution Of Ethical Dilemmas analysis of the situation is my important A Blanchard amp Peale 3 questions managers should ponder in resolving an ethical dilemma 1 Is it legal a If not for business purposes your ethical analysis is over 2 Is it balanced a Requires a manager to step back amp view a problem from other perspectives those of other parties or the community 3 How does it make me feel a Requires a manager to do a self examination of the comfort level of a decision B The frontpageofthenewspaper Test asks decision maker to envision how a reporter would describe a decision on the front page of a newspaper o 1 Warren Buffett is a big fan of this approach C Laura Nash amp Perspective series of questions that managers should ask themselves as they evaluate their ethical dilemmas 1 How would I View the issue if I stood on the other side of the fence 2 Am I able to discuss my decision with my family and friends 3 What am I trying to accomplish with my decision 4 Will I feel as comfortable about my decision over time as I do today D The Wall Street Journal Model consists of compliance contribution amp consequences 1 First any proposed conduct must first be in compliance with the law 2 Next step requires an evaluation of a decision s contributions to all stakeholders involved 3 Finally managers are asked to envision the consequences of a decision E Other models much simpler models for making ethical business decisions are available 1 Immanuel Kant s categorical imperative similar to the Golden Rule do unto others as you would have them do unto you VI Rationalizations A EVERYBODY ELSE DOES IT B IF WE DON T DO IT SOMEONE ELSE WILL C THAT S THE WAY IT S ALWAYS BEEN DONE D WE LL WAIT UNTIL THE LAWYERS TELL US IT S WRONG E IT DOESNquot39 REALLY HURT ANYONE F THE SYSTEM IS UNFAIR G I WAS JUST FOLLOWING ORDERS H YOU THINK THIS IS BAD YOU SHOULDVE SEEN I IT S A GREY AREA VII Social Responsibility 3rd layer of business ethics A Relationships in conflict shareholders employees consumers amp the community 1 Know the difference bw shareholder amp stakeholder B Ethical postures amp business practice 1 2 questions a Whose interest should a corporation serve b To whom should a corporation be responsive in order to best serve that interest what is the best way to serve that interest i Answer to both Q s could be shareholders only or the larger society C Inherence managers answer only to shareholders amp act only with shareholders interests in mind very much revolved around capitalism 1 This type of manager would not become involved in any political or social issues unless it was in the shareholders best interest to do so wo costing the firm its sales a Milton Friedman s philosophy is an example of inherence D Enlightened SelfInterest the manager is responsible to the shareholders but serves them best by being responsive to the larger society 1 Based on the view that in the long run business value is enhanced if business is responsive to the needs of society 2 Managers can speak out on societal issues wo the constraint of offending someone a Businesses would anticipate social changesneeds amp be advocates for change E The Invisible Hand business ought to serve the larger society and it does this best when it serves the shareholders only opposite of enlightened selfinterest 1 Businesses follow the standards amp recommendations set forth by the government 2 This school of thought holds that it is best for society to govern itself amp that businesses work best when they serve shareholders win those constraints F Social Responsibility the role of business is to serve the larger society through their responsiveness to the larger society 1 These businesses ad here to the belief that their sense of social responsibility contributes to their long term success VIII Why Business Ethics A Personal accountability amp comfort the choices we make in our business lives must still feel personally comfortable B Ethics as a strategy ethical behavior not only increases long term profits it also enables businesses to anticipate amp plan for social needs and cultural changes fosters sense of goodwill C The value of a good reputation once a company makes poor ethical choices it carries the baggage of those choices despite successful amp sincere efforts to reform IX Creating an Ethical Culture in Business A Tone at the top employees need to see the rig ht tone at the top meaning ethical conduct is rewarded amp and unethical conduct is punished wak the talk B Code of ethics educate employees about the written rules of conduct so that they understand each rule amp know the rules will be enforced uniformly C Anonymous ethics line most companies have either an ombudsperson or a hotline to which employees can anonymously report ethical violations D Recognize pressures amp signals these types of signals create a pressured environment in which employees fall into ethical lapses that often lead to illegal behavior X Ethical Issues in International Business A Moral standards vary across different countries amp cultures B Know what foreign businesses are expecting from you C Educate amp prepare yourself on any differences MGT 340 Chapter 3 notes 1132011 60500 PM 1 Intro A Statutory law comes from legislative branch small part of the law black letter law B Case law bulk of our law can help interpret statutory law amp applies to common law 11 Types of Courts A Trial court lower court place in the judicial system where the facts of a case are presented amp the first decision in the case is made either by judge orjury 1 Jury trial case presented to a jury jury fact finders judge interpreter of law 2 Bench trial case presented to a judge judge fact finder amp interpreter of law B Appellate court reviews a trial court decision to check the conduct of the judge the trial the lawyers amp the jury 1 No new trial appellate court just reviewing to make sure the lower court applied the law correctly amp followed the rules of procedure a Briefs oral arguments questions 2 This is where the majority of case law comes from decisions of appellate courts are often published so they may be reviewed amp applied in future cases 111 Making Decisions A Judicial review process by which the appellate court determines whether the trial court made an error in applying the substantive or procedural law in the case B Error 1 Reversible error one that might have affected the outcome of the case or influenced the decision made a Reversible error made 9 appellate court reverses the lower court s decision b Appellate court can also remand the case meaning the case is sent back to the trial court for further work 2 Affirm NO ERROR is shown 9 appellate court affirms the decision of the lower court a An affirmed decision does not mean no mistakes were made it means none of the mistakes was a reversible error b Court can also My the decision of the lower court the full case is neither reversed nor affirmed amp instead a portion of the case is reversed or modified C Statutory interpretation appellate courts render interpretations of statutes IV Stare Decisis Let the decision stand A Setting precedent process of looking back at what s been done in past cases to help consistently apply the law to a current situation doctrine ofstare Decisis B Quality origin of case influences its application of precedent best to examine cases that are win your own group if no precedent is set 9 look at what other courts have done 1 In federal courts precedent from other federal courts is strongest when the case involves federal statutes C Purpose same as purpose of the law offers assurance of consistency amp reliability while still incorporating the need for flexibility D Interpretation analysis is just as important as the end product Sometimes we don t follow precedent 9 circumstances are different opinion is not from our controlling court we don t like the given outcome V Parties A Plaintiffs 1391 initiate a lawsuit amp are seeking some type of recovery AKA petitioners B Defendants A ones from whom the plaintiffs want recovery charged with some violation of the civil rights of the plaintiff AKA respondents C Lawyers each of the parties in a court case is represented by a lawyer litigators 1 Transactional lawyers offer preventive services draft contracts wills etc 2 Attorney client privilege keeps the relationship between attorney amp client confidential and assures that others have limited access to lawyer client conversations D Judges control the proceedings in a case amp sometimes the outcome bench trial 1 Judges are selected in various ways throughout the country a KY judges are elected to office term depends on type of judge b Fed judges are appointed by the President w Senate approval lifetime term VI KY Courts A District court trial court jurybench court of limited jurisdiction each county has one Judges are elected to of ce for 4 yr terms of judges depends on county size 1 Civil cases involve an amount of 4000 or less individual v individual a Small claims court cases involve an amount of1500 or less i People usually represent themselves 2 Probate wills name changes guardian appointments 3 Traffic 4 Criminal misdemeanors punishable by up to 12 months in jail a All misdemeanors are tried in district court unless coupled w a felony amp then they go straight to circuit court Forcible detainers rent issues amp evictions 6 Paternity child support cases for children born out of wedlock 7 D A amp N dependency abuse amp neglect cases 8 Juvenile runaways amp truants 9 Domestic violence a If your county has a family court issues 6 9 are dealt w there instead B Circuit court trial court jurybench court of general jurisdiction Judges are elected to of ce for 8 yr terms 1 Civil cases involve an amount over 4000 individual v individual 2 Criminal felonies punishable by 1 year or more in jail Appeals circuit court acts an appellate court only to district court cases 4 Family divorce cases adoptions termination of parental rights C Family court 1 family w 1 judge hearing all of the issues Considered a circuit court w judges elected to 8 yr terms who only hear family cases Came about in KYin 2002 KYis national model 1 Divorces A Adoptions amp termination of parental rights 3 Paternity D A amp N Juvenile Domestic violence D KY Court of Appeals ls true appellate court 1 14 judges elected 7 districts w 2 judges from each district 2 Review cases from the lower courts district amp circuit a Panels of 3 judges hear each case E KY Supreme Court final interpreter of KY state law 1 7 judges elected 1 judge from each district a establish ethical codes amp rules of procedure for KY attorneys 2 Serious felony cases can automatically come here 3 Only place to go from here is US Supreme Court VII Federal Court System A US District Court trial court at least 1 in every stateterritory decisions of the US District Court will be published as case law B Specialty courts trial courts created by Congress with limited jurisdiction only deal w special cases created due to the high volume of cases ex tax or bankruptcy courts C US Court of Appeals 1st appellate court 11 judicial circuits amp DC has their own no retrials review lower court decisions districtspecialty D US Supreme Court court of last resort appellate court for the most part consists of 9 justices appointed by the Pres 1 Many cases are appealed but not all are heard at this level a Usually heard if US Court of Appeals opinions differ on same case 2 This court can also act as a trial court Constitutional issues conflicts bw states VIII Jurisdiction A Def a court s power amp authority to hear a case need m SMJ amp personal jurisdiction IX Subject Matter Jurisdiction limits type of case a court can hear set forth in statutes amp the constitution A Federal Court amp SMJ 1 If it s a federal question talking a out a specific piece of federal law 2 If the US is a party to the case US is prosecuting a federal crime 3 If you have diversity jurisdiction a Citizens of different states b Amount amp controversy over 75000 B Concurrent jurisdiction either a state or federal court has SMJ over a case C Exclusive jurisdiction only 1 court has the authority to hear a case 1 EX can t prosecute a federal crime in state court D Federal preference Why would you want to go to federal court 1 Many feel the federal judiciary system is more serious judges appointed on merit 2 To eliminate statelocal 3 Federal court has better resources X Personal Jurisdiction authority over the person actual defendant A Three ways to acquire personal jurisdiction 1 In Rem jurisdiction if a person owns property in the state 2 Volunteerjurisdiction where a person agrees to the jurisdiction of the court 3 Presence in a state obtained in 3 ways a Defendant resides in the state or physically located for majority of time b Minimum contacts w the state uses standard of fairness c Long Arm statutes states have these to help get jurisdiction over someone XI Venue A Def geographic location where case is heard usually where it most convenient to hear it 1 Can move to change venue due to pre trial publicity or case strategy XII Standing to Sue A Def a litigant usually the plaintiff needs to show that heshe has a sufficient interest in the outcome of the case trying to show currentfuture suffering on plaintiff s behalf XIII International Courts People agree to be there A Int l Court of Justice established in 1920 15 judges render decisions amp publish some B Other courts C Jurisdiction jurisdictional issues can arise D Conflicts court systems are going to vary amp substantive laws can be different 1 Have parties involved in the transaction agree upfront what court they want to be subjected to and what law they want to apply MGT 340 Chapter 4 notes I ADR alternative A Def litigation 1132011 60500 PM dispute resolution offers parties alternative means of resolving their differences outside actual courtroom B ADR can be formal or informal C Many alternatives are handled privately D ADR can be used in place of court and in addition to court 11 Types of ADR A Arbitration resolution of disputes in a less formal setting than a trial H m ewzv gt101 00 Oldest form of ADR Many contracts have arbitration clauses in them Usually parties have attorneys amp it somewhat parallels a trial format Binding arbitration the decision of the arbitrators is final a Appeals of the decision are limited Nonbinding arbitration preliminary step to litigation a If one of the parties is not satisfied with the result in arbitration the case may still be litigated Courts usually enforce the decisions of the arbitrators Advantages a Decision is binding b Quicker means of resolution Disadvantages a Can still be costly b Some arbitrators have no legal training B Mediation process in which both parties meet with a neutral mediator who listens to each side explain its position 1 7 9999quot Unlike an arbitrator the mediator does not issue a decision Role of the mediator try to get parties to agree on a solution facilitator Mediators are trained Mediation is completely confidential Less expensive than arbitration amp parties usually do not bring lawyers Not binding unless the parties have agreed to be bound by the decision Popular form of resolution among B2B e commerce co s like Amazon amp E Bay Courts will not give a trial date until you at least attempt mediation III Litigation v ADR A Speed amp cost ADR is less expensive amp faster than litigation B Protection of privacy ADR cases are kept private unlike traditional public court cases C Creative remedies Without constraints of court jurisdiction amp legal boundaries a creative remedy can be crafted to help both sides ADR D Judge ampjury unknowns Unknowns are judges ampjuries and their perceptions amp abilities In ADR parties are able to select the mediatorarbitrator E Absence of technicalities Under ADR parties have the opportunity to tell their stories ADR is more of a search for the truth than battle process IV Litigation civil law point of view A Lawsuits filed when people feel someone has violated their rights based on feelings 1 People begin lawsuits role of the judicial system is to determine whether those rights have been violated B Basis only restriction on the filing of a suit is that the plaintiff s claim is based on some law C Process 1 Pleading documents filed by the parties with the court a Only things filed in court records are the pleadings 2 Complaint general statement of the plaintiff s claim of rights a 1St pleading filed by the plaintiff against the defendant starts the lawsuit b 4 parts of a complaint 1 name of the parties 2 statement ofjurisdiction subject matter 3 basis of the action statement of alleged facts 4 prayer for relief what you want c Filed w the clerk of the appropriate court the one with SMJ 3 Summons legal document that tells the defendant of the suit ampexplains the defendant s rights under the law a 2quotd step in a law suit is serving the defendant w a copy of the complaint amp a summons b In KY we favor personal service hand delivery of the complaint amp summons to the defendant by an officer of the court c Worst thing you can do when given a summons is NOTHING 1 After 20 days of service the plaintiff can ask for a default judgment meaning the plaintiff is awarded what they asked for in the complaint 4 Answer the defendant s position is found in the answer another pleading in a case The answer must be filed w the clerk of the court amp a copy sent to the plaintiff a Counterclaim occurs when the defendant sues the plaintiff b Cross claims occurs when you have multiple defendants in a law suit 9 defendant 1 sues defendant 2 c Thirdparty complaint occurs when a 3rd party is brought in who has not already been named in the lawsuit d Defenses occurs when the defendant asserts any defenses he might have 5 Motions requests to the court to take certain action a Usually made in writing amp often cite precedent in support of the motion b Where we ask the court for help from the time we file our complaint to the time our trial ends 6 Discovery court supervised process of gathering evidence a primary information gathering state of the trial way parties prepare amp move toward a trial free flow of info bw parties b Methods 1 Depositions oral testimony of the parties or witnesses that are taken under oath but outside the courtroom amp before trial a answer oral questions under oath which are recorded by the court reporter or videotaped 2 Interrogatories answer written questions under oath 3 Request for documents give any type of records requested 4 Admissions ask somebody to admitdeny a fact 5 Examinations defendants can require the plaintiff to be examined by the defendant s own doctor c Benefits 1 Preserves testimony taken closer in time to preserve for trial 2 Reduces the likelihood of perjury questions answered under oath 3 Promotes settlement among parties 4 Helps narrow the issues the more everyone agrees on facts the less issues you have to dispute in trial 5 Concludes a case if parties agree there are no issues of fact in dispute then the case becomes an issue of the law amp can be interpreted and decided upon by a judge 6 Prevents surprises at trial want cases tried on merit not because someone hid a piece of information discovery helps eliminate that 7 Pre Trial conference with the court amp attorneys to get the trial started usually during the discovery phase of the law suit 8 Civil Trial a Bench trial b Jury trial Voir Dire questioning the jury goal is to get a fair amp impartial jury Judge asks preliminary Q s amp attorneys ask more specific Q s 1 Strikes challenges a Strike for cause get rid of potential juror because they re not fair or impartial b Peremptory challenges get rid of potential juror because attorney sees someone they don t want on the jury i Cannot be discriminatory toward race or gender ii Have a limited of peremptory challenges c Opening statements statement about what you hope to prove 1 plaintiff goes 1 then defendant d Proof by a preponderance of the evidence in civil cases e Closing statements f Deliberations ampverdict g Post trial h Appeals MGT 340 Chapter 5 notes 1132011 60500 PM 1 Intro A History 11 Structure amp Purpose A The Preamble the goals of our constitution MEMORIZE 1 To form a more perfect union amongst the states 2 To establish justice 3 To ensure domestic tranquility peace 4 To provide for a common defense against outsiders 5 To promote the general welfare of our citizens 6 To secure the blessings of liberty individual rights amp freedoms B Roles of the Constitution 1 To establish a national federal government 2 To control the relationship between the federal gov amp the gov of the states 3 To de ne amp preserve our personal liberties 1 10 amendments 4 To enable the government to perpetuate itself to continue on C Protection the Constitution provides for the protection of citizens from the government state local or federal NOT protection from private entities 1 Government is held to a higher legal standard because of this D Separation of Powers each of the 3 branches of government has specific powers that the other 2 branches do not have E Checks 81 Balances describes that our system of government is set up so that the 3 branches of government can curb each other s actions No single branch is more powerful than the other in theory F Articles of the Constitution 1 Article One creates the Legislative branch Congress a House of Representatives b Senate 2 Article Two creates the Executive branch 3 Article Three creates the Judiciary branch 4 Article Four A Full Faith amp Credit Clause a state needs to respect amp uphold the laws and judicial decisions of other states B Privileges amp Immunities Clause states need to treat citizens of other states the same as they treat citizens of their own state 5 Article Five how to amend the Constitution 6 Article Six A Supremacy Clause the Federal Constitution and its laws are the supreme law of the land tie breaker provision 7 Article Seven the Constitution shall be established when 9 states ratify it 111 Constitutional Limitations on Economic Regulation A Foundation 1 Commerce Clause article 1 section 8 a Established that Congress can regulate business activity b Congress has exclusive authority to regulate foreign commerce 2 Police Power b States have the authority to regulate the people amp property within their jurisdiction geographic boundaries in the name of promoting the public health safety amp welfare of their people 3 Interstate v Intrastate a Interstate commerce amongst several states at least 2 a Regulated by the Federal government b Intrastate commerce within one state s boundaries hard to find in reality a Regulated by the State governments B Commerce Clause ampthe Federal Government 1 General rule Federal government has the power to regulate interstate commerce 2 Heart of Atlanta Motel great analysis amp wonderful interpretation of the Commerce Clause 1960 a Congress used its authority under the Commerce Clause to open hotel accommodations to all people regardless of race b Supreme court supported Congress by saying the Heart of Atlanta Motel was in violation of the Civil Rights Act 3 Limitations a Lopez a kid brought a gun to school which is against federal law 1990 s 1 Supreme court deemed it a non economic activity and told the federal government that the issue should be regulated by the state government b Morrison filed a civil law suit in federal court against her perpetrators 1 Supreme court agreed this non economic violent crime was the state s responsibility and said the federal government had no authority C States amp Police Power 1 Intrastate no impact on interstate commerce exclusively regulated by the states 2 Interstate a state can pass laws that affect interstate commerce so long as they are not a Too discriminatory purely for an economic advantage discriminates against other states to give their state an advantage b Too burdensome if there is another way to achieve the same result that wouldn t burden interstate commerce that way should be used D Taxes 1 Federal government has the authority to tax its citizens 2 A state can tax but they have to be reasonable with it amp fairly apportion that tax IV Supremacy Clause A All else being equal when federal and state law conflict the federal law always trumps V Bill of Rights 1 ten amendments A Intro these rights amp freedoms are not without restriction B 1st Amendment 1 Religion designed to protect our religious beliefs a Establishment Clause the government cannot establish an official religion separation of church amp state b Free Exercise Clause the government cannot prohibit the free exercise of religion and religious beliefs 2 Individual Speech individual speech gets the upmost protection a The government cannot regulate the content of our speech thoughts ideas words substance of what you re saying b But the government may regulate the context of our speech when where how we give our speech time amp place restrictions 1 Allows the government to maintain public safety 3 CommercialBusiness Speech a Businesses have 1St amendment rights to the protection of speech but they are not nearly as protected as individuals C 2quotd Amendment 1 The right to have a well regulated militia 2 The right to keep amp bear arms D 4 quot Amendment 1 The right of people to be free from government intrusion from their homes and unjust personal searches E 5th Amendment 1 Eminent Domain The Takings Clause nor shall private property be taken for public use without just compensation F 6th Amendment 1 The right to a speedy amp public trial 2 The right to confront your accuser amp the rig ht to legal counsel G 8quot Amendment 1 Prevents excessive bails amp fines 2 Prohibition against cruel amp unusual punishment H 10quot Amendment 1 Power given to the federal government is specifically stated in the Constitution a Everything else is going to be left to the states unless it is expressly forbidden VI 14th Amendment A Makes the Constitution and its protection apply to state amp local government 1 We have constitutional protection from federal as well as state amp local government VII Due Process A Procedural Due Process entitles a person to notice amp a fair hearing anytime the government takes action that affects one s life liberty or property 1 Depends on the nature of the circumstances B Substantive Due Process the right to have laws that do not deprive us of our basic rights unless there is some kind ofjustification or reason VII Equal Protection A The government is not to treat one person or group differently without a rational basis for doing so IX International Constitutions A Laws differ at the international level B The US Constitution is theme based we rely on customs amp traditions 1 We don t try to account for every possible outcome MGT 340 Chapter 6 notes 1132011 60500 PM 1 Administrative Agencies A Agency any governmental unit other than the legislature and the courts B The 3 Types federal level 1 Regulatom agencies IRS SEC OSHA FDA EPA a Have the ability to pass laws that we have to follow 2 Executive departments dept of defense dept of education a Extension of the executive branch 3 Nonregulatom welfare agencies public health administration a Do not pass laws amp regulations that we have to follow 0 History 11 Roles Specialization know a lot about the particular subject matter Protection for small businessesindividuals Provide faster relief help expedite investigations etc Due Process must still provide notice amp a fair hearing W909 Social goals 111 Laws 9 Creation amp Control 1 Congress creates agencies through what is known as Enabling Legislation a Allows the agency to act on behalf of Cong ress Cong ress delegates their authority to the particular agencies b The President appoints the head of the agency Administrative Procedure Act APA 1 Establishes uniform rules of procedures for agencies to follow when they are setting 03 forth laws 0 Federal Register Act 1 Oversees the publication of federal agency information 2 3 Publications a US Government Manual lists all federal agencies amp their regional offices b Code of Federal Regulations compilation of regulations from all of federal agencies c Federal Register daily update on changes in federal regulations supplement to the Code of Federal Regulations IV Functions agencies act like mini governments A Legislative 1 3 Types of Rules a Procedural rules set for the agency s internal operating structure b Interpretive rules they don t really have the effect of law usually offer the agency s viewpoint on it s own regulations c Legislative rules have the force of law traditional rules amp regulations substantive laws rules that get businesses attention 2 Rule Making Process agencies must put a notice of proposed rule in the Federal Register a Informal approach the agency has to allow written comments on the proposed rule receive and review comments b Formal approach the agency ends up having a public hearing about the proposed rule hear testimony c The rule in it s final form goes back into the Federal Register amp will end up in the Code of Federal Regulations B Executive 1 Implement laws amp enforce them 2 Investigate collect data issue a citations etc C Judicial agencies can conduct hearings 1 Rulemaking hearing can affect the entire industry that the agency polices 2 Adjudication this type of hearing only affects the parties involved a Consent decreeorder Company X will agree to fix the problem amp do better but they don t admit any guilt b If Company X does not want to sign a consent order there is a full blown adjudication hearing 1 No jury the hearing will take place in front of an ALJ Bench trial 2 Company X may ultimately end up in a state or federal court but they must first Exhaust Administrative Remedies A If there is an appeals process to go to within the administrative agency Company X has to do that first and if they are still not satisfied then they can go to state or federal court and ask them to appeal what the agency has done D Control 1 Congress can give life to an agency but they can also take it away a Can restrictincrease an agency s power 2 Congress also has influence on agencies budgets 3 President gets to appoint the head of the agency amp has influence over the budge 4 Threat of j udicial review is probably the biggest constraint on an agency s power a If a court overturns an agency s decision it has immediate effect b Courts typically do not overturn agencies decisions however 1 Time constraints 2 Agencies are usually run by experts E Functions 1 Cons disadvantages when it comes to competing in international markets limits innovation amp potential economic growth sometimes requires employing people to deal with all the red tape bureaucratic agendas costs time amp money 2 Pros increased public safety protection of social issues FI39C in particular is in place to make sure firms do not engage in anticompetitive practices some agencies promoteprotect the free market V International Perspective A American businesses are less competitive at the international level still bound by U S administrative agencies requirements B Other countries look at the U S administrative agencies as a model for their own country MGT 340 Chapter 20 notes 1132011 60500 PM 1 Business Legal Structure A Factors 1 Cost cost to legally create the business Continuim how long can the business survive Is it tied to the life of the owner Control who is going to be in charge of the company Liability who is going to be personally responsible for the debts of the business 2 3 4 5 Taxes some business structures have better tax consequences than others 6 Funding where to get the money to start up the business 7 Transferabilig of interest some business structures have ownership units that are easier to transfer than others B Traditional Forms 1 Sole Proprietorship 2 Partnership 3 Corporation 11 Sole Proprietorship A Sole Proprietorship a venture undertaken by a single individual 1 Make up the majority in over 213 of businesses in the US take this form 2 Generate only about of all business revenue 3 American dream to own your own business B Factors 1 Cost there essentially are no legal costs to create the sole proprietorship advantage 2 Continuim the life of the sole proprietorship is tied to the life of the proprietor not a separate legal entity disadvantage 3 Control owner is independent amp the sole decision maker advantage 4 Liability owner is personally responsible for the debts of the business disadvantage 5 Taxes taxed at the individual level business itself pays no taxes advantage 6 Funding owner has to bear the responsibility of finding initial funding disadvantage III Partnerships A Partnership two or more people carrying on as co owners of a business for profit 1 Partnerships can form by implication 2 About 8 of all businesses are partnerships 3 Generate about of all business revenue B Pship Agreement do not have to have a written partnership agreement can be implied but it is a good idea to have a written agreement C Uniform Partnership Act UPA in the absence of a written partnership agreement or if the partnership doesn t speak to a certain issue courts can handle things using the UPA essentially a roadmap for the court to go by in dealing w these issues 1 All partners are considered equal share equally in decision making amp profitlosses 2 Can contract around anything you don39t like in the UPA within your P ship Agreement D Factors 1 Cost minimal costs to legally create a partnership advantage 2 Continuim continuity is still non existent w a partnership disadvantage 3 Control must share your control with someone else disadvantage 4 Liability all partners are personally liable for debt s of the partnership disadvantage 5 Taxes partners will individually report any profitslosses on their own returns no separate taxes paid by the partnership itself advantage 6 Funding share the responsibility of finding initial funding w all partners advantage E Fiduciary Duties elevated trust bw partners act in good faith amp act with M 1 Serve the partnership put the partnership first 2 Disclose material information to your partners 3 Act with reasonable skill amp prudence 4 Don t compete with the partnership F Third Parties know who you re going into business with the act of one partner within the scope of partnership business combines the rest of the partners G Pship Interest transferability of interest is very difficult to do but you can assign your partnership interest 1 Transferability of interest is very difficult to do 2 You can assign your partnership interest simply give someone the right to person X s share of profit H Dissolution 81 Termination winding up of affairs liquidate assets pay off debts wrap up any unfinished business 1 Creditor Priority a Outside creditors b Inside creditors partner creditors c If any money is left over refund partner contributions d d Pro t divided equally among partners or per the p ship agreement terms 111 Limited P ship 15t type of hybrid A Classes 1 At least one limited partner a Do not get to participate in management ampcontrol b Do possess limited liability the most they stand to lose is the amount of their investment in the partnership 2 At least one general partner a Very much resembles a partner in a regular partnership b Do get to participate in management amp control c But are subjected to unlimited liability B Factors 1 Cost does have some costs associated with it disadvantage 2 Continuim nonexistent resembles a regular partnership disadvantage 3 Control control is split between partners can be goodbad depending on how much control you are looking for 4 Taxes taxed like a regular partnership no double taxation advantage V Corporations make up the majority of business revenue in the US A Organize the person who organizes a corporation is called a promoter develops the idea of the business can enter into contracts does the footwork of building the company B Legal Entity corporations are an artificial legal entity they are created mostly by state law able to do some of the same things that we as people can do C Articles of Incorporation corporations file these with the state regulatory body Secretary of State s office in KY must pay a filing fee amp then the Secretary of State will issue a certificate of incorporation birth certificate of the company Name of your corporation Number of authorized shares of stock Name 8 address your registered agent accept service of process on behalf of corp Duration of your corporation WFWF Purpose of your corporation 9 Name amp address of your incorporators ones who initially funded the business D Annual Filings every year there are some filings requirements to keep the corporation s records updated and corp must also pay an annual filing fee E Factors 1 Cost pay to file the Articles of Inc amp pay annual fee disadvantage 2 Continuim pretty much perpetual life of the shareholders is not tied to the life of the corporation advantage 3 Control control is separate from the owners for the most part can be goodbad depending on how much control you are looking for 4 Liability limited liability the most the shareholders tends to lose is the amount they paid for the stock advantage can have a piercing of the corporate veil if there is a scandal involved however 5 Taxes double taxation corporation is taxed amp shareholders are also taxed disadvantage Biggest downfall of corporations 6 Transferabilig of interest no law that restricts the transfer of stock easy to transfer ownership interest in a corporation advantage F Operation 1 Shareholders owners of the corporation shares of stock represent ownership in a corporation a Shareholder Rights 1 shareholders can amend the articles of incorporation 2 most shareholders get to vote on fundamental changes that might affect the structure of the corporation 3 shareholders can inspect the corporation s books amp records 4 preemptive rights which allow a shareholder to purchase their proportionate fraction of newly issued stock 5 rig ht to file a derivative law suit shareholders can file a law suit on behalf of the corporation saying that the officers are violating their fiduciary duties to the corporation 2 Directors provide expertise to the company try to see the big picture strategic planning setting corporate policy appointed or removed by the shareholders I Use a lot of committees directors determine how much they aet paid a Inside directors made up of senior executivesofficers come from within the corporation b Outside directors come from outside the corporation not employed by the company 3 Officers appointed or removed by the directors directors also determine how much officers get paid officers run the day to day of the business carry out the big picture plans formed by the directors of cers are aaents of the I 39 officers are the ones who bind the agency to contact terms a Executives president vice president etc G Fiduciary Duties both officers amp directors owe fiduciary duties to the corporation 1 Have the duty to act in good faith amp to act reasonablyiprudently be m 2 Business judgment rule prohibits a court from second guessing corporate decision makers unless there is a showing of bad faith fraud or other fiduciary breach H Respondeat Superior let the master answer a corporation is going to be responsible for the negligent or wrongful acts committed by their employees if committed within the scope of their employment 1 A person may want to sue the corporation instead of the individual because it has more money to pay settlements I Dissolution 1 Voluntary dissolution shareholders vote amp agree to dissolve the company liquidate assets pay off debts file Articles of Dissolution 2 Involuntary dissolution can occur through court order if the shareholders are deadlocked can also occur through an administrative dissolution by a regulatory body if they don t pay their annual filing fees or keep their records updated J Capital Structure how does a corporation raise money 1 Take on debt tax advantages to taking on debt at the corp level 2 Issue equity or stock ownership a Common stock have voting rights b Preferred stock do not have voting rights but have preferential treatment when it comes to getting dividends or when the corp s assets are liquidated c 3 property rights when owning stock 1 the rig ht to participate in earnings dividends 2 the rig ht to participate in control voting 3 the rig ht to participate in assets upon liguidation VI S Corporation very popular hybrid best of both worlds A Enjoy single taxation only shareholders are going to be taxed on their personal returns B Offers limited liability the most shareholders stand to lose is the amount of their investment C Limitations can have no more than 100 shareholders can only have one class of stock must get approval from the IRS to become an S Corporation VII LLC limited liability company Fastest growing type of hybrid A Taxed like a partnership no double taxation taxes flow down to the owners advantage B Also limited liability most the owner tends to lose is hisher contribution advantage C Owners of an LLC are called members D Must file Articles of Organization VIII LLP limited liability partnership A Used mostly by professionals B Taxed like a regular partnership no double taxation taxed only at individual level B Also limited liability partners are going to be shielded from liability for the negligence or wrongful acts of the other partners nonresponsible partner will not be held responsible There are filing requirements to legally create all hybrids costs associated with them but they have many advantages many hybrids are designed for smaller businesses IX International 1 Sometimes companies form joint ventures temporary partnerships bw two companies located in different countries 2 The US has lessened restrictions on joint ventures in recent years MGT 340 Chapter 21 notes 1132011 60500 PM 1 Intro A Capital B History 11 Initial Public Offering 1P0 A When a corporation sells a new security in the open market 1 Intrastate o erings state law applies 2 Interstate offerings federal law applies 111 Security A Howie Test SEC v Howie 1 An investment of money 2 In a common enterprise 3 With the expectation of profit 4 Generated by the efforts of others B Importance if you are dealing with a security that meets this definition then you have to make sure you are in compliance with federal and state securities laws C Examples shares of stock warrant limited partnership LLP IV Securities Act of 33 federal law that governs IPQ39s Wou may not make an interstate offering of a new security until you file a Ie sl raiion statement with the SEC amp the SEC approves that registration statement A SEC Does not intend to guarantee the economic merits of an investment What they are trying to do is to make sure that potential investors can make informed rational decisions amp to eliminate as much fraud as possible by having these disclosures B Registration Statement 1 Prospectus goes to potential investors a General information a general industry information business plan product quality etc b Risk assessment a disclose any pending legal issues political instability issues c Audited financial statements a balance sheet statement of cash flows income statement a must conform w GAAP amp not be intentionally misleading u must be signed off by an auditor 2 Supplemental Information stays w the SEC C Registration Process 1 Prefling Period no solicitation or sales my occur 2 Waiting Period between the time you file amp the time you get SEC approval no sales may occur but you may engage in limited solicitation Tombstone Ad lets the public know you are waiting on SEC approval but that you hope somewhere in the near future you are going to be selling the newly advertised stock p 732 Red Herring Prospectus can send to interested potential investors kind of like a regular prospectus but it lets everyone know that you are still waiting on SEC approval 3 Post Affective Period after SEC approval may engage in sales 8 solicitation so long as potential investors get a copy of the final prospectus D Exemptions 1 Exempt Securities not every security is going to mandate that you have to go through the registration process doesn t really affect the private sector 2 Exempt Transactions intrastate offerings minorsmall offering etc V Secondary Market A Securities Exchange Act of 34 federal law that governs the resale of securities 1llants to promote full discowns of all material information to make sure that potential investors can make inforn39ietl rational decisions it to eliminate as much fraud as possible by having these disclosures 1 If your company s securities are traded on the national exchange OR 2 If your company has more than 10 million in assets amp more than 500 shareholders B Disclosures 10K 10Q 8K VI Violations A Civil Liabilities Acts 33 amp 34 have provisions that allow for civil lawsuits to help injured plaintiffs investors to recover B SEC Securities amp Exchange commission Federal Regulatory Agency 0 Can suspend trading of a company s stock 0 Can limit your ability to be an officer or director of a company 0 Ill gotten gains can be mandated to be given back C Insider Trading Information You are not supposed to trade on inside information 0 Either disclose the information amp make it public or refrain from trading completely D Criminal Prosecutions intent to deceive willful fraud VII State Laws A Blue Sky Laws state securities laws to protect people from unwise fraudulent excessively speculative investment same theme as federal securities laws VIII International Issues The SEC is considered the model for other countries when they are trying to create their own watchdogs for the financial institutions Uniform international securities laws would be tough to implement because of accounting standards differences between countries MGT 340 Chapter 8 notes 1132011 60500 PM 1 Business Crimes A What 1 Crimes committed against a company 2 Crimes committed on behalf of a company B Why 0 To meet expectations amp to make the company s books look healthier to appear as a better employee could be personal financial issues any kind of internal pressures C Who is liable 1 Company employee who committed the crime 2 Company s middle management 3 Officers of the company 11 Penalties A Reform in response to increased business scandals amp problems when trying to fit the punishment to the crime companies v individuals more prosecution of officers amp mgt B Sentencing Guidelines set by the Federal government 0 Did the company accept responsibility for what it did 0 Have they begun to pay restitution 0 Does the company have a code of ethics amp is it used appropriatelyeffectively If these circumstances are met the company could earn a more lenient sentence III Elements of a Crime A Actus Reus the physical aspect of a crime specific conduct B Mens Rea the mental aspect of a crime required state of mind intent to commit the act IV Examples of Economic Crimes A Theft stealing from a stranger B Embezzlement stealing from a friend employer etc C Obstruction of justice destroying or altering documents that are subject to a supina or related to an investigation Also encouraging others to do the same thing D Computer crimes theft of software intentionally spreading computer viruses SPAM E Internet crimes identity theft hard to prosecute because perpetrator remains anonymous amp there is usually a time delay in collecting evidence V Procedural Rights A Fourth Amendment The right of people to be free from government intrusion from their homes and unjust personal searches 1 Individuals amp Corporations both have protection 2 Protection a Did the defendant have an expectation of privacy in the thing being searched or seized b Was the expectation reasonable u If the answer to these questions are yes then the 4quotquot amendment applies 3 Warrants If the 4th amendment is implicated the government must obtain a search warrant based on probable cause to search or seize needs to specifically state what the police are after ampwhere they are going to be searching 4 Exceptions a b an e Hot Pursuit exception Exten uating Circumstances exception Consent exception Plain View exception Search Incident to Arrest exception protective sweep only 5 Exclusionary Rule Fruit of the Poisonous Tree 4th amendment violation per the court the government has somehow messed up ampthe wrongly taken evidence is thrown out charges are dismissed amp guilty people potentially walk 6 Circumstances No one single case is going to be the same very hard to apply the law to each given situation best to go on a case to case basis Justices struggle when interpreting the 4th amendment to figure out what is okay and what is not B Fifth Amendment Confessions 1 Voluntariness ota confession was the confession willingly and knowingly made Was it the product of a free mind Judge will determine whether a confession was voluntarily made a If the judge determines that the statement was not voluntary it will not be admissible in court a If it is admissible the court will hear the statement but the defense can explain the circumstances surrounding the confession a Totality of Circumstances case bycase basis 1 Physical amp psychological factors Physical comforts intelligence level prior experience w the police Just because some of these factors exist doesn t necessarily mean the confession was coerced 2 Police interrogation tactics Violence or threats of violence trickerydeceit psychological pressures promises of leniency length amp manner of interrogation Just because some of these factors are present it isn t enough to deem the confession involuntaiy 2 Miranda rights given when a triggering event happens a Once they are placed in custody and are interrogated 0 Everybody is entitled to Miranda rights 0 Designed to prevent improper police interrogation tactics 0 Can wave or evoke Miranda rights at any time Right to council before judicial proceedings begin 3 Privilege against Selfincriminatian we cannot be compelled to be a witness against ourselves a Applies to natural peopleI individuals not corp s or businesses b Protects you from anything that could expose you to criminal prosecution not threat of civil liability 4 Due Process procedural safeguards The right to a fair amp public jury trial The rig ht to confront your accusers C Sixth Amendment 1 Guarantees us the right to a speedy trial 2 Contains the right to council Once judicial proceedings have started you have the right to council any time the policeprosecution want to talk to you VI Process A Charge initiated in 2 ways 1 Somebody files a complaint 2 When the police make an arrest B Preliminary Hearing is there probable cause to continue to detain somebody o Happens in open court in front of a judge o Prosecution amp defense council both present C Grand Jury decides whetheror not to issue an inditement o Is there enough evidence to justify having a trial o Takes place behind closed doors just prosecution shows up no judge D Arraignment somebody s first official appearance in court 0 Officially told the charges pending against you 0 Appointed an attorney if you cannot afford one o 2 choices as far as entering the plea guilty v not guilty Most everyone will plead not guilty at the arraignment E Discovery time from when the arraignment occurs up until trial 0 Exchange of information between prosecution amp defense F Motionsv anytime between the arraignment 8 trial you may file a motion w the court 0 File motion to have court hold a hearing about whether or not there was a constitutional violation heard by a judge no jury o If there was a violation the case might end up in dismissal o If court makes a ruling that there was no violation most defendants will then enter a guilty plea 0 Or the case can end up going to trial to be heard in front of a jury G Plea Dismiss H Trial 1 Jury hears the case 2 Burden of proof beyond a reasonable doubt 12 out of 12 jurors must agree 3 Verdict separated into 2 phases a Guilt Phase jury is going to determine whether John Doe is guilty of committing theft b Sentencing Phase If the jury finds John Doe guilty of theft they are then going to deliberate on a recommendation of a sentence to give John Doe as punishment 1 Sentencing Court judge issues the FINAL sentence 0 Jury simply recommends a particular sentence A lot of courts will issue what the jury recommends Some cases are eligible for probation J Appeals Process takes place after the trial 0 Appellate court can review the lower cou rt s decision amp decide whether there was any error made on behalf of the trial court 0 This process can take a long time Crime 9 Arraignment 9 Discoverymotions 9 Trial 9 Appeals Process MGT 340 Chapter 9 notes 1132011 60500 PM 1 Intro A Tort some type of interference with someone or someone else s property that results in injury to that person or their property 0 Usually a Civil wrong nor arising out of a contract They are initiated by individuals private setting individual v individual 0 Goai of tort law is to make the injured party Whoe again Usually with some kind of monetary reward B Tort Categories 1 Intentional torts involving some type of deliberate action or voluntary act that harms a protected interest somebody means to do something 2 Negligence make up most of tort cases harm caused by accident carelessness 3 Strict liability absolute liability quotno fault concept make somebody responsible for harm caused without proof of carelessness II Intentional Torts A Defamation an untrue statement made by one party to another party about a third party 1 Elements a Untrue statement about a person s integrity character reputation b Publication com orienl publishing actual telling of the untrue statement can be written or verbally expressed 1 Slander spoken defamation 2 Liable written defamation C Untrue ne WIS to be directed at or about a particular person d Must have some type of 39 inilli V a Product disparagement lost profits 2 Defenses The truth is always going to a defense in a defamation suit Somebody s opinion that is part of their particular analysis Privileged speech depending on the circumstances B Contractual Interference occurs when someone intentionally persuades another to break a contract already in existence intentionally messing up an existing contract C False Imprisonment intentionally detaining a person against his or her will for any period of time comes up in shopkeeper situations if someone is shoplifting 0 Did he shopkeeper act reasonably Do it discreetly do not use physical force don t question them or make accusations in public call the police consider the environmental circumstances be very careful with children who are under the legal age D Intentional Infliction of Emotional Distress IIED impose liability for conduct that goes beyond all bounds of decency 0 Usually dealing with the way somebody is being treated The one who has been injured some type of emotional distress E Invasion of Privacy 1 Intrusion into the plaintiff s private affairs 2 Public disclosure of private facts 3 Appropriation of another s name likeness or image for commercial advantage Must have the person s permission before you take it F Civil Battery intentionally touching another in a harmful or offensive manner without consent or legal justification 0 Example punching someone in the face for no reason 0 Can have criminal amp civil proceedings at the same time G Civil Assault intentionally causing another to believe they are about to be the victim of a battery needs to be more than just wort5 o Incomplete battery 0 Can have criminal amp civil proceedings at the same time 111 Negligence Somebody s conduct did not live up to a certain minimum standard of care A Elements 1 Dug of care we must all act like an ordinary reasonable amp prudent person Circumstances surrounding a situation will always dictate how we need to act Sometime standards of care are defined for us in the statutes 2 Breach of care if we fall below the minimum standard of care Could be the act we commit or even our failure to act 3 Causation we are trying to find some kind of connection that would justify imposing liability against the wrongdoer for the plaintiff s injury But for Test But for the defendant s act of failure to act the plaintiff would not have been injured 4 Damages As a plaintiff you will have to prove this case by the burden of proof for a civil case beyond a preponderance of the evidence a If you fail to have damages you have NO claim for negligence b Punitive damages a way in which we punish people in civil court a They go above amp beyond your actualcompensatory damages Most plaintiffs will not place a claim for punitive damages the jury usually issues those for conduct that is really bad beyond carelessness Assault amp battery usually justify punitive damages B Defenses 1 Contributom negligence negligence on the part of the injured party plaintiff that was part of the cause of the accident ie plaintiff was possibly responsible because Most jurisdiction don t recognize it anymore 2 Comparative negligence weighing of the negligence between the two parties jury will determine which portion of fault should go to the defendant amp which portion should go to the plaintiff Plaintiff s damage reward will be reduced by the percentage that they found to be responsible for their own injury a This is the way today s system works Comparative negligence is still rooted in carelessness 3 Assumption of the risk the defendant must prove the injured party plaintiff knew of a potential risk of injury in the conduct the plaintiff undertook but the plaintiff decided to go forward anyway Pai ntr39ff assumed the risk was completey aware of the risk amp proceeded anyway Assumption of the risk is based on consent C Tort Reform 0 Groups funded by big businesses are moving toward tort reform 9 trying to put a cap on the dollar amount that a jury can hand down as far as a verdict to the injured party The US remains the most plaintiff friendly jurisdiction in the world D Strict LiaIJiiity no fault concept 1 Big feat is for the injured party to convince the court that the defendant was dealing with an unreasonably dangerous activityproduct This would grant the plaintiff strict liability status MGT 340 Chapter 10 notes 1132011 60500 PM 1 Intro A Products Liability the branch of law governing litigation of harm caused by defective products includes property damage personal physical injury etc 11 History A Caveat Emptor Let the buyer bewarequot sellers were not responsible for defects in their products It was the buyer s responsibility to be on alert for defective products amp to take any appropriate actions Pro businessAnti consumer philosophy B Privity very limiting doctrine requires direct relationship no longer require privity 111 Advertising A Express Warranties an express promise oral or written by a seller as to the quality ability or performance of a product Warranties get their basis in contract 13W 0 Express warranties can come about through advertising use of a samplemodel etc 0 Warranty statement by the seller that becomes a basis of the bargain Seller is setting forth a veri able material fact that would affect the buyer s decision about whether or not to by a product a Opinionssales puffing is not enough to create an express warranty When couid somebody39s opinion create an express warranty a When the opinion is that of an expert Because of their status as an expert their opinion could indeed create an express warranty B Federal Trade Commission FTC Federal administrative agency designed to prevent unfair amp deceptive trade practices 1 Content amp Control Want to regulate the accuracy of ads as they relate to pri This would prevent prices from being inflated to cover a markdown Ads must accurately depict the product as it exists Must disclose any delivery terms 2 Performance Claims If you re going to say certain things about your product s ability you need to have the research amp statistics to back it up 3 Celebrity Endorsements 1980 s Celebrities were advertising products which they had no idea about Celebrities must be able to back up their claim about the product they are endorsing with some kind of personal knowledge a If they have no personal knowledge of the product they need to disclose what the source of that knowledge is doctors research etc 4 Bait amp Switch Considered a deceptive trade practice by the PFC A store will lure a customer into their store by advertising a particular product at a really low price bait Once the buyer takes the bait amp enters the store the seller switches the buyer s attention to a higher priced item switch 5 Comparisons Comparisons made between products are encouraged by the PFC because they promote competition If you are going to make a comparative statement about your product you have to be able to justify it If you are going to conduct a product preference test to compare different products you must administer it fairly u Usualy your competition will complain about these violations as opposed to the other categories Where consumers would t ucaly place complaints 6 Remedies Monetary fines require the running of corrective advertising injunctive relief stop running of the ad altogether require consumer reimbursements C Food amp Drug Administration FDA regulate prescription medicine amp cosmetics D Professional Ads advertising by professionals architects accountants attorneys etc 0 States will regulate the types of ads that can be run by professionals 0 Limitations on professional ads by individuals will run into the 3 amendment protection of businesscommercial speech IV Implied Warranties Automatically accompany a sale of goods don t really have to say anything to them A Implied Warranty of Merchantability given with every sale of goods by a merchant 0 Not all sellers of goods are merchants all merchants are sellers 0 Merchant is promising that the sold goods are fit for ordinary purposes The goods are of fairaverage quality B Implied Warranty of Fitness for a Particular Purpose every time we purchase goods from a seller of goods this warranty could very well accompany that transaction 1 Seller has some kind of skilljudgment in the use of the goods in question 2 Buyer is relying on that seller s skiII j udgment 3 Seller knows or has reason to know of the buyer s reliance 4 Seller makes a recommendation for the buyer s use amp purpose C Disclaimers How do we negate those warranties 0 You cannot disclaim an express warranty 0 You can disclaim implied warranties through language like as is or with all fault D Privity most people who enter into a contract are in privity with each other 0 Over the years we have expanded privity in the area of contract law V Negligence quotE A company s failure to exercise reasonable care in producing its productsi A Elements 1 Duty 2 Breach 3 Causation 4 Damages VI Strict Liability Focus on the condition of the product unreasonably dangerous NOT on the conduct of the parties VII Products Liability Claims A Design Defects need to design products with all foreseeable uses in mind even product misuse 0 Following government standards to reduce liability B Lack of Warnings companies have a duty to warn buyers of a foreseeably dangerous use of a product Companies also have a duty to supplement warn us once they discover there is a problem 9 product recalls Companies have a duty to instruct us how to properly use the product 0 Lots cheaper for companies to warn buyers than to face potential liability claims C Manufacturing Defects how we package a product or fail to package a product can bring about product liability claims as well VIII Defenses to Products Liability A Misuse of a Product if the consumer has been instructed on the proper use of the product and then do so something differently Use the product for an unintended use B Comparative Negligence relative weighing of the responsibility between the injured consumer amp the company Focuses on the conduct of the parties 0 Never a defense to a strict liability case w SL we don t care about conduct of parties C Assumption of the Risk based on consent Plaintiff is aware of the danger associated with the product but go ahead and use it anyway IX Consumer Product Safety Commission CPSC Federai administrative agency designed to reguiate safety standards for consumer pi oductsi A Primary objective is to protect the public 0 Develop safety standards that products need to conform to 0 Try to inform consumers of potential dangersrisks associated with certain products Summary Products liability 9 harm caused by a defective product contract claim expressedimplied warranty file a suit based on negligence recover under theory of strict liability MGT 340 Chapter 11 notes 1132011 60500 PM 1 Intro A Impact environment has a global impact B Decisions companies face major decisions about environmental issues C Issues most companies have switched to online catalogs 11 Market A Failure pollution is considered a negative externality o The cost of pollution falls upon everyone in society 0 Can t really rely on self regulation completely because not all companies would take the necessary steps 9 therefore we have to rely on government regulation B Ethics we are seeing more amp more businesses behave environmentally responsible because It brings in more customers 0 If price ampquality are the same we might be more apt to purchase from an environmentally friendly company helps company image saves expenses in long run C Government Regulation EPA regulates the private business sector other pieces of law in place to police the government when they take action that might affect the environment 111 LawsRegulations A Concepts 1 Costlbenefit Analysis cost of protecting the environment can be expensive Is protecting the environment financially worth it 2 Impact on the Future if you pass a lawregulation how will that end up impacting the future What will happen if you don t pass it 3 Proving Causation what we think is a problem today amp what we think is causing that problem may be proved over time to not be what we were trying to regulate 4 Who will pay for Protection consumers employees investors landowners 5 Politics philosophy of the people in charge will always play into the lawsregulations you see administrations set forth IV Common Law judge made law A Nuisances exists when the activity of one landowner interferes with the use and enjoyment of the property of another landowner ex bad smells ongoing noise polluted air 1 Seeking some kind of injunctive relief not monetary reward B Not In My Back Yard NIMBY environmental activists that protestchallenge the placement of a Wal Mart or power plant in a community 0 Rely on nuisance laws or environmental zoning regulations V Statutory Laws via EPA A 3 Categories 1 Air Pollution 2 Water Pollution 3 Solid Waste Disposal B Air Pollution 1 Clean Air Act primary piece of legislation dealing with air quality standards Set by the EPA Goal is to reduce airborne pollutants Penalties assoaated w Vloiatingi Clean Air Act 9 civil penalties such as fines criminal sanctions such as willful repeated violations 15 yrs ofjail amp 1M fine a People who report violations of the Clean Air Act can be given monetary incentives C Water Pollution 1 Clean Water Act EPA sets the range of things that may be dumped into our waterways Companies must get a permit amp EPA sets permit requirements a States used to regulate but they didn t do a good job 2 Safe Drinking Water Act EPA will set the standards for contaminate levels in our drinking water States will be primarily responsible for enforcing these minimum standards 3 Oil Pollution Act piece of legislation that came about after the big oil tanker spills Puts the federal government in charge of oil spill cleanups If the one responsible doesn t have the money to pay for the cleanup we have this oil spill cleanup fund to cover the expenses Civil amp criminal penalties associated w violating this act D Solid Waste Disposal E Environmental Quality Regulation EPA polices the private sector 1 quot 39 39 quot 39 Policv Act of 1969 NEPA the federal government s general commitment to a clean amp healthy environment Required the federal government any time they passed legislation or engaged in conduct that would significantly impact the environment they would have to file an environmental impact statement 2 Ellvil 39 Impact Eli created by the NEPA to regulate the government a Contents explain the impact on the environment F State Law 0 In recent years most states have started getting more interested in the environment State laws are paralleling federal laws MGT 340 Chapter 12 notes 1132011 60500 PM 1 Intro to Contracts A Contract law is an area of private law 9 we control the terms bw the parties B Restatement defines a contract as a promise or a set of promises for breach of which the law gives us a remedy C American Law Institute defines a contract as a set of voluntary promises that the law will enforce for private parties 0 Promise isn t always a contract 11 Sources of Contract Law A Common IawJudgemade law 0 Derived from English common law pretty rigid amp structured 0 Contracts dealing w land services 0 Common law varies by jurisdiction B Uniform Commercial Code UCC 0 States got together to try to uniform the laws specifically dealing with the sale of goods 0 Wanted the goods to be able to move around unencumbered o Goods movable tangible things 0 A little more flexible than common law III Types of Contracts A Bilateral v Unilateral 1 Bi atera both parties make a promise a promise for a promise Ex My dad promises to give me 10 ifI promise to wash his truck 2 Unilateral one party makes a promise amp other party acts in response to that promise a promise for an act Ex My dad promises to give me 10 if I wash his truck B Express v Implied 1 Express cpmract where the parties overtly and expressly manifest their intent to enter into an agreement Parties are sitting down amp talking about what s expected of the other May be oral or written 2 Implied in Fact contract a contract that is inferred by the behavior of the parties or maybe even the circumstances Ex going to the dentist s office 3 lmpliedinLaw contract Qausiquot contract court can treat the situation as if there is a contract even though there might not be one If you are given a benefit amp you know about the benefit and it s not a gift you need to pay for it C Void v Voidable 1 Void contract not a contract at all one of the legal requirements is missing 2 Voidable contract where we have a contract that s enforceable but it could be cancelled by one of the parties EX contract w minors 9 minor can enforce contract but they can also get out it D Unenforceable Contract all contractual requirements are present but your contract is faulty because of some other piece of law E Executory v Executed 1 Executory contract a contract is labeled as executory until all the parties fully perform as required by the agreement 2 Executed contract a contract is labeled as executed when all the parties have completed their performances as required by the agreement IV Formation A Legally Enforceable 1 Agreement 9 meeting of the minds per the objective evidence Somebody makes an offer Somebody accepts that offer Court evaluates things using an objective standard 2 Consideration 9 bargain for a legal value What somebody gives up in exchange for something else Consideration element is what distinguishes a contract from a gift u Usually minimal consideration is enough a Sometimes consideration is a right we give up u EX buyer s consideration money seller s consideration sweater 3 Capacity 9 somebody s mental capacity Did they understand enough to be able to protect their own rights and interests Were the parties sane sober and of age a Minors have the option to get out of a contract 4 Genuineness of Assent 9 did the parties knowingly agree on the same thing Per the object evidence what would a reasonable person have thought 5 Legality of Purpose 9 court will not enforce a contract for an illegal purpose Could be things that violate public policy B The Agreement The Offer A promise to do something or a promise to refrain from doing something 1 3 Elements of 3 Valid Offer a Present intent to enter into a contract a More than just a joke a More than just an invitation to do business Advertisements are not considered a valid offer b Reasonany define the terms of the offer a Identify the parties subject matter price quantity delivery terms etc a Little bit more leeway with the UCC as opposed to common law c Communication of the offer to the Offeree u Offeree one who has the option to accept the offer 2 Duration how long does the valid offer remain on the table a The offer may be revoked taken off the table anytime prior to acceptance b Sometimes actual length of duration will be set forth in the terms of the offer c If the offer is silent about the length of the duration the duration must be reasonable with consideration to the parties involved d Option Contract Let me give you a dollar and you can give me 7 days to make my decision about whether or not I want to buy the radio C The Agreement The Acceptance The offeree39s positive response to the offeror s proposed contract 1 Mirror Image Rule acceptance terms must reflect the offer terms Only the Offeree may accept the offer The offeror controls the method of acceptance 2 Mailbox Rule acceptance is effective went sent even if it s not received Acceptance is effective when the letter is dropped in the mailbox not when the offeror receives that letter D Consideration bargain for a legal value that one party agrees to pay or provide to secure the promise of another 0 Lot of time it s money but it doesn t have to be 0 What distinguishes a contract from a gift 0 Courts don t really get into the idea of consideration as long as something was given 0 Preexisting Lgal Duty Rule if you are already obligated to do something you do not have valid consideration E Contract Form contracts may be Lal or written 1 Statute of Frauds some contracts have to be in writing to be legally enforceable Ex contracts for the sale of land amp goods over 500 prenuptial agreements 2 Parol Evidence Rule when a contract has been reduced to a writing with the intent that the writing represents the agreement neither party can introduce oral or written evidence to prove or disprove the written contract Court will not look beyond the 4 corners of the contract document when intelpreting the evidence a There are exceptions to this rule such as fraud if contract is ambiguous MGT 340 Chapter 13 notes 1132011 60500 PM I Defenses A Capacity if you do not have requisite capacity to enter into a contract that can be a defense 1 Age capacity requires both parties to be adults 2 Mental capacity one s mental condition amp maturity level must be such that the agreement was entered into with understanding and in recognition of one s own interest B Genuinenas of Assent do not have an agreement because of a number of issues that caused the parties to unknowingly not agree on the same thing 1 Misrepresentation usually comes about because of a mistakeaccident Can be corrected unlike fraud which is intentional 2 Duress occurs when one party is physically forced into a contract or deprived of a meaningful choice when deciding whether to enter into a contract EX economic duress factory only has 1 supplier to choose from 3 Undue Influence occurs when one party uses a close personal relationship with another party to gain contractual benefits Usually some kind of trustreliance between the parties Must show that somebody abusedmanipulated that relationship C Legality of Purpose courts will not help enforce something that is not legal 1 Unconscionable contract one that is so oppressive amp one sided that it actually shocks the conscience Court can strike down a provision of the contract or the entire contract Usually these contracts have many clauses amp use fine print 2 Noncompete clause things that don t make sense and violate public policy may be struck down by the court EX may not practice law win a 300 mile radius of Lexington II Remedies A Law general idea is to put the parties in the position they would have been in had the contract been completed 0 Remedies in law usually deal with monetary rewards Compensatory damages consequential damages B Equity general idea is to bring justice to the parties 1 Sometimes my is not enough in these cases Typically asking for some type of equitable remedy a Specific performance asking the court to order the seller to do what they were supposed to have done EX turn over that piece of art a Injunctive relief asking the court to tell somebody to do something or not to do something MGT 340 Chapter 14 notes 1132011 60500 PM I Credit Contracts A Requirements 5 normal requirements to have a valid contract plus 0 How much is being financed o The rate of interest 0 Payment information o Penalties for late payments General rule of thumb is to disclose everything II Statutory Provisions A State Usury Laws 1 Usury charging an interest rate higher than the maximum permitted by law Maximum interest rate will vary by jurisdiction depending on the law Maximum interest rate will also vary depending on the nature of the transaction u Penalties will vary depending on jurisdiction as well Some states say it will automatically void the contract Other states say they have to give up the interest principal Still other states will revoke the interest beyond the maximum Other states issue a flat monetary fine B Subprime Lending Market Predatory Lending Market 1 Loans where people are charged high rates of interest because they do not have good credit history These people are lured to believe they can afford a larger loan than they really can C Equal Credit Opportunity Act ECOA primarily came about in response to gender discrimination in lending practices covers gender race religious preference ALL TYPES OF DISCRIMINATION 1 Purpose to insure that credit is either going to rewarded or denied based upon the applicants merits and not any other reason Merits their ability to afford the loan FI39C amp US Attorney General s Office help enforce ECOA Can also file private law suits based on ECOA Some provisions of the act even allow for punitive damages D Truth in Lending Act TILA 1 Purpose to make sure debtors are treated fairly through the adequate disclosure of credit terms 2 4 things must occur for the TILA to apply Debtor must be a natural person The item being financed must be for personal or home use CreditorLender must be in the business of regularly extending credit The amount being financed must be subject to some kind of charge or cost a Must be more than a free loan 3 Under TItA the creditor must tell the debtor all costs associated with the financing E Military active duty military are given extra protection when it comes to credit F Ads amp Disclosure if you are advertising that you re offering financing you need to make sure that disclose all the terms to that financing 1 The most we as consumers will be responsible for when we have an unauthorized use lost stolen of a credit card is 50 Most of the time the credit card companies don t even collect the 50 2 We are not supposed to be given a credit card unless we specifically ask for it G Fair Credit Billing Act 1 Allows debtors the opportunity to challenge figures on monthly statements mostly applies to our credit cards We have the responsibility of looking through our statements and making sure there are no errors H Fair Credit Report Act 1 Designed to give debtors protection regarding credit information that is held by third parties applies to consumer credit reporting agencies not commercial If we find something that looks suspicious on our credit report we must take the action to notify the reporting agency 1 Consumer Leasing Act 1 An amendment to the Truth in Lending Act that provides disclosure requirements for consumers that lease goods III Enforcement A Collateral a security interest gives lender extra protection 1 Gives the lender a property right to the item being financed 2 Security agreement written document that creates the security interest Signed by the parties Sets forth the details surrounding the collateral B Fair Debt Collections Practices Act 1 3rd party collections agencies are governed by this act Cannot use physical force to collect a debt Cannot intimidate a debtor Cannot use abusive language Cannot call during inconvenient hours 9 pm 8 am Cannot show up at inconvenient places ex rotary club church work C Lawsuits 1 If you don t have a security interest in the item you sold ampfinanced you can try to get a judgment through a law suit Usually see judgments when there is no collateral or no security interest 2 Judgment piece of paper that says that the debtor owes money amp the collector is entitled to that money Not all is lost if you do not have a security interest IV Bankruptcy A Intro not always the mismanagement of money that can lead someone into bankruptcy o Sickness healthcare costs loss ofa high paying job divorce Bankruptcy laws were originally created to give the debtor a fresh start Bankruptcy is federal law taken care of in Federal court Specialty court created by Congress only hear bankruptcy cases Bankruptcy has been constantly under reform and probably always will be B 3 Forms of Bankruptcy 1 Chapter 7 liquidation petition or straight bankruptcy Individuals or businesses may file a Ch 7 Ch 7 can be voluntary brought about by the debtor debtor files petition or involuntary forced upon by the cred itors creditor files petition a Once bankruptcy petition is filed the debtor gets the protection of their assets through the bankruptcy court a Once the court starts with the liquidation the trustee will take inventory of all the assets inventory of all the cred itors liquidate assets and start paying off all the creditors Not everything is taken when you file bankruptcy u Once the bankruptcy court does the liquidation the petition becomes what s known as the order for reliefquot o Problem with bankruptcy is that we usually don t have enough assets to cover all the debt 0 Debts that you cannot pay afford are usually discharged 2 Chapter 11 reorganization Individuals or businesses biggest users may file a Ch 11 Ch 11 can be voluntary or involuntary u Businesses are allowed to continue the operation of their business while the court restructures their debt and hopefully they will get their debts paid off 3 Chapter 13 wage earner petition Only individuals who have a steady stream of income w limited debt may file a Self employed will probably not count Ch 13 is only voluntary u Once Ch 13 is filed protection is given to the debtor Usually can pay off their debt win 3 5 years C Creditor Priority o Secured creditor have a security interest in the financed item 0 Priority creditor have a better status 0 General creditor typically lose out D Nondischargeable Debts in Bankruptcy 0 Government taxes student loans child support alimonyspousal support MGT 340 Chapter 17 notes 1132011 60500 PM 1 Agency A Intro B Agency relationship one in which one party acts on behalf of another 0 Agent typicaly acts on behalf of the principal 0 Power of attorney most common principal agent relationship Can be very specific or pretty general 0 Agency is a consensual relationship Each side owes duties amp responsibilities to the other 0 Employee agent acts on behalf of the employer principal C Principals the ones who grant the authority to the agents D Agents the ones who are typically hired by the principal to do a specific task or to act on behalf of the principal extension of the principa o All employees are agents but not all employees are agents E MasterServant relationship one in which the principal master exercises a great deal of control over the agent servant o The servant can bind the master amp make him liable if the master has a high level of control over the servant employer employee relationship 0 Respondeat Superior Let the master answer 1 Factors u The level of supervision over the servant u The level of control n The nature of the agent s work a The regularity of hours amp pay a The length of the relationship F Independent Contractors a person who is hired by another to perform a task but they are not under the direct control of the hiring party 0 Ex give 500 to dig a ditch in their own manner Principal has less control over the independent contractor G Law 1 Agency law has a strong foundation in common law judge made law H 3 Parts 1 Creation of the agency relationship 2 Principalagent relationship 3 Liability issues when dealing with 3rd parties 11 Creation A Express Authority comes from an express contract or an express agreement 0 Agreement is going to specify limitations on what the agent can do Does not have to be a written agreement but it is advrsable 0 Ex employment contract B Implied Authority an extension of express authority 0 Comes about by custom or tradition what we would expect C Apparent Authority authority that is created by appearance 0 Focusing on how the principal has held himself out to a 3rd party as having an agent III PA Relationship Fiduciary relationship agent needs to act in the best interest of the principal A Agent s Duties 1 Duty of loyalty Agent is required to act only to the benefit of the principal not to anyone else Agent typically only represents one of the principals 2 Duty of obedience Agent is to obey the reasonable instructions of the principal Agent needs to do what the principal says 3 Duty of care Where the agent must act reasonably responsibly and prudently Must act this way anytime the agent is acting on behalf of the principal B Principal s RightsDuties 0 Chief My of the principal is to paycompensate the agent 0 Principal has the riqm to expect that the agent will perform as prescribed do what they are supposed to do IV Liability Focus is on how did the 3 party understand the situation A Contract P 9 A 9 3rd party B Disclosed Principal the 3rd party knows that there is a principal amp they know the identity of the principal 0 Only the principal is liable to the 3rd party agent is just the go between o If the agent exceeded their authority they could be responsible to the 3rd party C Partially Disclosed Principal the 3rd party knows that a principal exists but they do not know the identity of the principal o The 3rd party can go after the principal or the agent Agent is taking on more personal liability D Undisclosed Principal the agent is acting without disclosing the existence of the principal and certainly not the identity of the principal 3rd party has no idea the principal exists 0 The agent is fully liable to the 3rd party E Torts Negligence is most common 0 The principal is going to be liable for torts committed by their servant employee The careless act must have been committed in the scope of employment 0 Independent contractors typically do not expose the principal to liability V Termination A As a principal you have to be aware of 0 Look at it through the eyes of the 3rd party 0 Principal must notify anyone who knew about the principal agent relationship that it has been terminated VI At Will Employment A Contract employee 0 Contract will dictate the nature of the relationship bw the employer and the employee Hire date termination date etc o If either side breaches the contract they will be held responsible B A Will employee 0 Serve at the pleasure of their employer Employer can be firelet go for any reason so long as it is not illegal Employee can quit at any time wout the fear of breach of contract MGT 340 Chapter 18 notes 1132011 60500 PM 1 Intro A Lawsuits increase in the amount of lawsuits in the area of employment law B Causes 0 More causes of actionprotection for injured employees 0 Volatile economy 0 Decreased loyalty 11 Employee Selection A Traditional employees B Nontraditional increase in amount of non traditional workers over traditional employees 0 Decreased liability for independent contractorsfreelancerstemporary workers 0 Non traditional workers typically hired for a specific purpose or specific duration temporary in nature will not be there permanently can help avoid downsizing 0 Usually we spend less money on non traditional workers no benefits taxes etc C Liability employees pose more liability for a company than non traditional workers 111 Fair Labor Standards Act FLSA A Covers minimum wage requirements 8 overtime regulations 0 Employees should be paid at least the minimum wage o If you work over 40 hrs a week you should be paid time and a half 0 Less protection for professionals amp executives because they are salaried employees B Child labor regulation laws 0 Designed to protect amp keep children in school 0 Once you are 18 you can do hazardous labor or 0 Generally with 16 amp 17 not supposed to engage in hazardous labor activity Most violations occur with 16 amp 17 yr olds operating hazardous equipment 0 14 amp 15 not supposed to work in the evenings certainly no hazardous equipment C Equal pay for equal work 0 Regardless of any discriminations o Merit systems are allowed as long as they are reasonable IV Occupational Safety amp Health Administration OSHA A Fed administrative agency designed to deal with issues regarding workplace safety 0 Also covers illnesses amp pretty much the whole working environment B As only one entity how effective can OSHA be 0 Generally doing a pretty good job except increased injuries with illegal immigrants 0 Target particular industries more than others V Benefits A Examples health insurance life insurance pension benefits for retirement fund parking gym memberships professional dues B Social Security the idea that those who can work can support those who cannot work 0 Some older people get their retirement benefits through social security 0 Employers amp employees are both responsible to contribute to the social security program C Private Retirement Funds the government has started encouraging employers to start offering private funds because of the fear that social security could run out o Employers get tax incentives for offering these private retirement funds D Federal Medical Leave Act designed to provide employees with up to 12 weeks of unpaid leave so you can take time off of work to be with your family 0 Most employers who are required to offer this will require that you have already depleted all of your sickvacation days 0 After the 12 weeks is up you should be given either the same or an equivalent job E COBRA offers continued health care coverage for exiting employees 0 If you leave an employer amp they have provided you insurance up to that point you are entitled to purchase insurance through your old employer Good news is you get the group rate which is usually a little cheaper F Unemployment Compensation designed to give us a source of income while we are between jobs usually lasts for up to 26 weeks 0 You must be involuntarily terminated to receive unemployment compensation 0 Must meet with a case worker VI Workers Compensation A Intro B Historical employee could sue the employer 0 Laws were anti employee chances of recovering were slim to none Contributory negligence assumption of the risk fellow servant rule C General Rule if you are injured on the job you can recover under workers compensation for your injuries kinder to employees 0 No fault concept 9 we don t care whose fault it was that brought about your injury If you are injured on the job you may recover D Coverage Employers are required to have insurance to cover these workers compensation claims 3 types of insurance coverage options 0 Contribute to a state managed fund 0 Purchase a private policy 0 Self insured E Benefits typically get anywhere from one half to two thirds of your regular wages 0 Length of time you receive those benefits depends on the type of injury