FIN 26074- Lecture 8 notes (10/28)
FIN 26074- Lecture 8 notes (10/28) FIN - 26074 - 001
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This 6 page Class Notes was uploaded by Olivia Zemanek on Thursday October 29, 2015. The Class Notes belongs to FIN - 26074 - 001 at Kent State University taught by Timothy D Ludick (P) in Summer 2015. Since its upload, it has received 81 views. For similar materials see LEGAL ENVIRONMENT OF BUSINESS in Finance at Kent State University.
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Date Created: 10/29/15
FIN 26074001 THE LEGAL ENVIRONMENT OF BUSINESS Lecture 8 Notes 1028 Exam 2 is next week November 4 Will be posting study guide soon Third parties continued I Novation when there is a contract and then one party wants to assign it to someone else All three parties have to agree The assigner will step out and the assignee will step in The party that assigned is no longer liable 0 Third party beneficiary 3 types 1 Creditor beneficiary when there is an existing debt and a contract is entered in to Creditor of that existing debt has a right in the contract that is being made 2 Donee there is no preexisting debt There is a desire to confirm a gift The donor enters to facilitate the future gift The donee intended beneficiary of contract I Typical example life insurance upon my death give money here donating their money after they die to a cause or giving to someone in particular 3 Incidental beneficiary no rights in the contract No intent for benefit upon them They don t have any rights in this situation Other things in contract law 0 Performance there doesn t have to be perfect performance only has to be substantial performace 0 If there is a unique or specialpersonal skill then ACTUAL satisfaction is required I Conditions 0 Concurrent conditions contract law presumes that when one party performs obligation for other party to perform too Perform and pay 0 Condition precedent when contract presumes a FUTURE event When and ONLY when that occurs is there an obligation to perform Initiates obligation to perform I When a lawyer tells someone I will represent you when you get a DUI So when and only if that does happen then the lawyer will represent perform 0 Condition subsequent cut off point for performance When no longer need to perform Stops obligation to perform I When someone is tutoring you for a math test and then you take the test and pass the tutor no longer needs to tutor you for that test I Remedies 0 Contemporary damages court has to figure out consequence from breach in monetary consequence 0 Monetary award contemplates a future lossbreach written contract Remedy is that court gives liquidated damages They only become liable for a certain amount 0 Punitive damages punishment The purpose of this remedy is to punish the wrongdoer In Ohio and most other states this is not awardable in contract cases and is not considered a remedy 0 Another concept under remedies is the concept of mitigation I This concept obligates an innocent party to act as a reasonable person would to minimize or lessen their damagesconsequences If they don t mitigate then the court may not award them Torts Tort means a civil wrong Tort law is about civil wrongs that result in damage to someone s property andor result to physical injury There are 5 tort theories 1 First theory Intentional tortsintent to cause damage or harm to someone or their property The desire to purposefully do an act Types of intentional torts 0 Intentional tort of ASSAULT intentional act to cause someone else to have fear that they or an immediate family member will be harmed If ANY kind of fear APPREHENSION is caused then it is considered an assault It doesn t have to be with the use of a weapon 0 If someone holds you at gunpoint you are afraid that is assault If someone who looks threatening to you holds a fist up to you that is assault They are intending you to feel fear but do not actually pull the trigger 0 Battery different from assault Battery is unpermitted physical contact with someone else that causes injury or discomfort It doesn t necessarily have to be Violent It is ANY unpermitted physical contact 0 Guys groping a girl at a bar considered battery if the women feels uncomfortable If you were going in for a surgery to have something removed but they removed something else by accident that is considered battery because you signed to have a specific part removed You didn t give permission for something else 0 Intention of mental distress intends to cause someone psychological trauma Psychological or emotional upset Some conduct that causes an emotional response 0 Invasion of privacy 3 circumstances 0 1 Intrusion upon a person s solitude If something you expect to have privacy with is intruded upon Invasion can happen directly or electronically O 2 Public disclosure of a private fact All of us have secrets or things that have happened in past that we don t want the world to know about Even though it may be true it s an invasion of privacy In the medical field must be very careful with patient records That is all private 0 3 Appropriating one s name for financial gain without consent Someone can t just use your name or someone else s name to advertise Even if it were Lebron James or someone famous Must have consent False arrest or false imprisonment 0 Neither of these require an arrest or putting someone in jail 0 If someone s freedom has been taken away Locking the doors and not allowing anyone to leave Malicious prosecution there is a criminal charge that has been improperly prosecuted Purposely used justice system to get at someone Prosecuted without probable cause and with malice Abusive process concept related to malicious prosecution when a party files a civil lawsuit that has no merit Trespass intentional entering or remaining on someone s real estateproperty without permission Conversion retaining someone s personal property without permission stealing or keeping something too long that was rented out Defamation 2 types I Slander oral defamation I Libel written or electronic defamation o In either case communication has occurred about someone else that is FALSE Causes a third party to change their minds about that person It is an attack on a person about their character 0 Special rules regarding defamation I Public or government officials the public is allowed to know about them They want to know who they are voting for for example The media is not liable for defamatory untruths they print about them unless the person can prove that the untruths were published with malice the deliberate intent to injure or bring down evil I public figures celebrity status Media is not liable unless proved to be published with reckless disregard for the truth I Private citizens like me and you we have the most protection under law If something is communicated false it is libel because negligence and carelessness Fraud induces someone to enter into a contract under false pretenses Business intentional torts o Trademark infringement companies have names and logos that cannot be translated by anyone This law is a registration Register the name or logo to protect it so that other people cannot use it Examples include something like the Nike swoosh 0 Patent infringements protects the owner or inventor The person is registered that it is their invention When properly registered the inventor has 20 year protection on their invention I If an invention occurs during company time with the company s materials the employer has the right to use it 0 Copyright infringement protects people like authors artists media creators books movies songwriters etc This protects the unique creation for the rest of the creator s life plus 70 years after their death Fair use can occur when someone uses it for an educational purpose not for money or their own personal gain 0 Trade secrets secret formulas or recipes customer lists or other business secrets they don t want competitors to have 0 Luxurious falsehood modern day defamation of a business 0 Contractual interference contract that someone has interfered with 0 Defenses to intentional torts O Selfdefense applicable in some of intentional torts If they believe that themselves or a family member is in harm s way 0 Stand your ground defense only in some states Ohio has stand your ground CASTLE defense for residence or motor vehicle I If you are in your home or car and someone intrudes or trespasses and you believe that you or a family are at risk of harm or death then you have the right to use force Any force even very strong deadly force It is called the CASTLE defense because it doesn t work on property it s only in your home your castle or car I The stand your ground rule in some other states apply this law anywhere like if the trespasser is in your yard you CAN use force 0 Shopkeepers arrest if person commits offense This is when a store or shopkeeper can detain a thief and call the cops and then let the cops take it from there The cops have to get there within a certain time though Second theory Strict liability torts unlike intentional torts we don t care about intent here at all This is by state States have defined certain kinds of conduct that are ultra hazardous which triggers automatic liability In Ohio 0 Explosives no matter how careful someone is if someone or property is harmed there is liability to whoever was setting off the explosives This applies to fireworks as well 0 Nuclear chemicals in earth or waste Anytime dealing with nuclear material If there is a spill there is automatic liability to anyone who was in process of getting rid of them 0 Dram shop law if a liquor establishment sells liquor to someone who is already intoxicated and that person harms themselves or someone else when they are intoxicated the establishment is liable Simple rule is Don t serve a drunk 0 Wild animals if you have a wild animal and they get out and they harm someone else you are liable In Ohio this applies to our pets our domesticated cats and dogs 0 Respondeat superior when an employee injures someone else negligently employer is liable because worker is working for them 0 Example pizza delivery guy hits someone while delivering a pizza automatic liability goes to employer 3 Third theory Negligence law applies to careless or negligent behavior that causes harm to someone else or someone else s property This theory does NOT require ultra hazardous conduct it does not look at intent When something happens accidentally Most common type is a car accident This law seeks to compensate someone because of carelessness of someone else 0 4 elements of negligence O Duty Requires party to act in a careful manner A private citizen does not have an obligation to save or rescue someone But a lifeguard or paramedic for example does have that obligation when they are on the clock whatever the risk is I A police officer has an obligation to enforce the law at all times though even off the clock 0 Breach of duty Showing that some standard of conduct has not been met Besides showing violation of a specific law just unreasonable behavior for Uses the reasonable person test would a reasonable person do this I Establishing liability injury to someone who is injured on someone else s real estate Even if owner of real estate is not aware of risk a Business invitee Example if a jar shatters at a grocery store and no employee knows about it and someone else ends up falling and cutting themselves on the glass the store is still liable It is the store s job to find out about the jar b Social guest when someone has a guest at their house they need to be warned about any risks in the house c Trespasser only liable for artificial traps For example you need to act as a reasonable person and put a fence around the pool so someone doesn t drown in the pool because they didn t know it was there 0 Proximate cause requires that there be approximation in fact They have to show that harm was a foreseeable harm from conduct Showing that this is the kind of risk that could happen from harm O Damages compensate person for loss Money is really the only alternative for a death or injury since you cannot change it 4 Fourth Theory strict product liability 0 Whenever someone is in the business of buying making or selling in the market place and there is a defect that causes harm when there is a defect in the marketplace Like the recent car company and their recalls in the cars Liability in company 0 Defenses 39 Contributory negligence if the person was using the product carelessly I Defense of statement of state of art if the item was made back in the day in the 80 s for example they ask what the engineering was like then They don t look at it in today s time 39 Comparative negligence compare faults of both parties 5 Fifth Theory No fault tort theory that doesn t require fault 0 Like complex insurance systems All parties paid in advance In Ohio examples include things like unemployment money workers compensation disability Invest money so that when there is a loss they can pay up
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