L201 - Final Exam Study Guide

-fruad: intentional misrepresentation, lying about a material fact -Misrepresentation: accidental lie, only differs from fraud based on it being accidental

Reasons to Void a Contract

-also called Dormant Commerce Clause -power provided by Commerce Clause -says that police powers refer to laws that deal with safety and welfare of the people -if one state passes a police power law that affects how people operate outside of the state, then it is unconstitutional. Courts really only rule on how much of an inconvenience the law creates

Limitation on State Police Powers

-most recent -just like S corp with a few differences -no limit to number of shareholders or type (doesn't have to be just people) -Usually cannot be publicly traded -get the choice of being taxed like a partnership or a corporation -must register with the government

Limited Liability Company (LLC)

-Ease of Creation: different from regular partnership; must register w the government -Managerial Control: same as regular partnership: -Continuity: same as regular partnership -Liability: general partners are liable; limited partners are not held liable; must identify who is limited and who is general -Taxation: same as regular partnership (pass-through)

Limited Partnerships

-specified in contract how much a breach would cost for the breaching party

Liquidated Damages

-rules enforced for local areas or counties -example: speed limits for local street

Local Ordinances

-property that had been owned by someone, but the owner inadvertently loses the property -if original owner doesn't come to claim it within a timely manner (typically 30-60 days), then the person who finds it now claims possession -Mislaid: setting it down and forgetting to grab it (owner of premise gets possession) -Lost: actually losing it by not setting it down, dropping it (person who finds it claims possession)

Lost/Mislaid Property

-Ease of Creation: relatively cheap, only file paperwork if name of the company isn't the owner's last names; should write partnership agreement -Managerial Control: partners decide who controls what percentage of the company -Continuity: if any of the partners leave, the partnership dissolves and a new entity must be established -Liability: partners are personally liable for their share of the debts; if something happens to one of the partners, the remaining partners are required to pay the debts of the partner who left -Taxation: pass through entity

Partnership

-civil only -triple damages

Patent Enforcement

-an owner of invention receives a patent -you get a 20 year monopoly for the invention when you obtain a patent -you receive triple damages if someone has infringed on your patent -get a patent if it has a short term life (get a trade secret if it has a long term life)

Patents

-just like corporation w a few differences -number of owners is limited to 100 people or less; must be actual people and not other companies -taxed like a partnership -cannot be publicly traded on a stock exchange

S Corporations

-technically there is a line whether they are going to arrest you for a crime or not. -if the police believe you have committed a crime, they can detain you and then pat you down and search your body for anything

Search Following Arrest/Detainment

regulates collusion by two or more companies (most common) -Price Fixing -Territory Allocation Agreement

Section One of Sherman Act

-deals w monopolies -monopolies are not necessarily illegal

Section Two of Sherman Act

law created that says government can bring criminal or civil cases against companies if they violate antitrust laws

Sherman Act of 1890

-Ease of Creation: Easy, cheap, no paperwork -Managerial Control: owner has complete and direct control -Continuity: company will end when owner leaves; need new contracts even if you sell business -Liability: owner is personally liable for all debts/liabilities of the company -Taxation: pass through taxation; profits/losses are considered to be part of owner's personal income

Sole Proprietorship

-common law -Uniform Commercial Code

Sources of Contract Law

Was the the injury reasonably foreseeable? (is the breach of duty going to be a likely outcome of someone's injury/harm)?

Proximate Causation

-court order to make breaching party do what was promised in contract -rarely used in US -only used for contracts where no replacements aren't available (unique good)

Specific Performance

-tend to be more substantive compared to federal law -enforces things like taxes, setting up businesses, etc.

State Constitutions

-What happened factually between the two parties

Question of Fact

-How does the law apply to this case? -Whatever I was doing did not run afoul of the law

Question of Law

the jury

Question of fact is determined by...

the judge

Question of law is determined by...

-contract must be signed and written in order for the contract to be enforceable

Statue of Frauds

-laws created and passed by elected representatives -either federal or state

Statutes

1. Contracts involving an interest in land (sale/purchase) 2. Contracts to pay the debt of another 3. contracts that cannot be performed within one year 4. contracts for the sale of goods of $500 or more

Statutes that allow Court to Void Oral Contract

-comes up with defective products -if you are a manufacturer of a product, you become completely responsible for any injuries related to your product because it was defective -3 Types of Defects: design defect, production defect, and marketing defect/failure to warn

Strict Products Liability

1. By revocation (offer is taken back) 2. By provision in the offer (clause is place in contract that would terminate contract) 3. By rejection or counteroffer 4. Death/insanity of offeror 5. Lapse of reasonable period of time 6. Destruction of subject matter of the offer 7. For legality (government has law that prohibits subject matter of offer)

Termination of an Offer

agreeing to not compete in certain regions of the country with other companies -Example: coke agrees to sell only in the south, pepsi takes the north, other company takes the west, etc.

Territory Allocation Agreements

-power provided by commerce clause -activities between two or more states -intrastate activity is also regulated starting back in the 1930s or 40s -intrastate activity no longer exists, its all interstate which shows power of supremacy law -advantage of interstate: increases chances that Congress can pass a law dealing w all 50 states

regulation of interstate commerce

-Initial term of 6 years -after initial term, must file a "recognition of use" -Renewal + 10 years (potentially forever) -General idea must be that trademark is distinctive -if it is not distinctive anymore it is classified as generic and you cannot renew trademark

Trademark Duration

-Civil: owner directly sues perpetrator -Criminal: narrow, case brought by government, usually counterfeit goods, sellers may tweak trademark to avoid criminal punishment

Trademark Enforcement

-trademark does not count for everywhere but rather a specific field that was listed when one was applying for trademark -logos, slogans, designs that are attached to a product/service (business) -"customers have a general association with a business"

Trademarks

-lowest level of courts -judge decides question of law

Trial Courts

1. Jury Selection 2. Opening Statement 3. Presentation of Evidence 4. Closing Argument 5. Jury Instructions 6. Jury Verdict

Trial Process Order

mediation and arbitration

Types of Alternative Dispute Resolution

-Sole proprietorship -partnership -corporation -Limited Partnerships -S Corporations -Limited Liability Companies (LLC)

Types of Business Entities

-Trade Secrets -Patents -Trade Marks -Copyrights

Types of Intellectual Property

-Real Property: land, fixtures (attached to the land) -Personal Property: any movable resource, anything that is not tied to the ground. can be tangible (cars, clothes) or intangible (bitcoin, stocks, patents)

Types of Property

-highest law of the land -supremacy clause: federal law reigns over state law -limits power of the federal government

US Constitution

-applies predominately to sales of goods/leases

Uniform Commercial Code (UCC)

-voluntary arbitration usually arise through contracts. Example: most accounts you sign up for (Google, Amazon) concede to this -mandatory arbitration are usually statutes. they force parties to arbitration based on certain disputes. Example: employers force employees to sign a contract that says they can't go to court when a dispute occurs over a specific thing and must be settled through arbitration

Voluntary vs. Mandatory Arbitration

-protection of Freedom of Speech, Freedom of Press, Freedom of Religion, Freedom of Establishment, and Freedom of Assembly -doesn't apply to protection against private companies and entities

1st Amendment

Officers and Directors have a legal obligation to always put the shareholder's interests first. -Duty of Care: need to make informed, good decisions -Duty of Loyalty: must make decision that is best for the shareholders/company not for yourself

Fiduciary Duty

-limits the extent to which the government can conduct searches and seize property -search in this context can be construed broadly. -It involves the techniques in which policemen or whoever can search your body, premises, or search your possession

Fourth Amendment

-intentionally getting someone to get into a contract with you through lying or giving misinformation -you sue for fraud in tort law if there were any additional damages done to you in addition to the contract that was broken

Fraud

-protection under First Amendment -guarantees the media the right to be censored -not absolute, just limited -no prior restraint

Freedom of Press

-establishment clause says you can't be forced to conform to a national religion -free exercise clause protects individual rights to practice any religion

Freedom of Religion

-protection under First Amendment -does not apply to corporations/private entities. A job can fire you for saying something controversial -commercial speech is protected unless it is determined to be a compelling government interest. example: false advertisement, cigarettes, and consumption of alcohol

Freedom of Speech

-send a request to U.S. Patent Trade Office

Obtaining a Patent

-a specific promise/demand -need a sufficient offer cannot just be a random valuation -ads are not considered offers unless extremely detailed

Offer

-2nd step in trial process -A statement made to the jury at the beginning of a trial by a party's attorney -might include a preview of the evidence

Opening Statement

-power provided by commerce clause -can limit trade -can impose tariffs on imports of foreign countries

-regulation of foreign commerce

-knowingly assisting someone once a crime is committed -example: roommate robs a bank and tells you about it and then asks you to pick him up to get away -you must know that the person you helped actually committed a crime -should have a reasonable assumption that they had committed any type of crime (friend had blood on his clothes when you drove him away)

Aiding and Abetting

-the current lawful owner relinquishes their ownership and has abandoned it -the first person to claim the resource now becomes the lawful owner -abandonment is measured by the intent of the original owner...Do I want to keep it?

Abandonment

any reasonable affirmation of intent of offeree to enter contract -mirror image rule -mailbox rule

Acceptance

-only comes up with personal property -when you have two pieces of property that look exactly the same -if there is confusion between the two owners and they can't determine which property is theirs, each original can acquire half of the confused possessions

Acquisition Through Confusion

-trading, bartering, exchange of different properties. Most common exchange is using money to purchase something. 98% of all exchanges are done through giving money for an item

Acquisition Through Exchange

-You become legal owner of a piece of property when someone lawfully gives you something -Requirements: the original owner must intend to make it a gift and the gift must be physically/constructively delivered -Testamentary Gift: a gift that has been placed in the owner's will when they die

Acquisition Through Gift

-Theoretical rule that states whoever is currently holding the physical item, then you possess it -Types: rule of first possession, abandonment, Lost/Mislaid, and Adverse Possession

Acquisition Through Possession

-someone is the owner of a piece of property, either real or personal, and another person comes in and improves or adds on to the piece of property -the owner of the property becomes owner of the improvement or additions unless you have agreed otherwise beforehand -usually applies to something more permanent like adding a deck to a house

Acquisition through Accession

-both state and federal -regulations that come from government agencies (FDA, EPA, etc.) -most numerous source of law -greatest impact on businesses

Administrative Regulations

-if i stay on your land unlawfully for a long enough time, I may be able to legally take it -law was made to punish awful land owners who let their land go to waste -can prove this by showing proof of paying bills -property dispute (fence example) is more common nowadays for adverse possession

Adverse Possession

-second level of court system -once a decision has been made in a trial court, an appeal can be made for this level of court to review the decisions of the trial court -reviews decision made by trial court judge

Appellate Courts

-settling a dispute by agreeing to accept the decision of a 3rd party -must see it to the end unless both parties agree -can be voluntary or mandatory -decision is typically binding

Arbitration

must include... -corporation name -indication that the corporation is incorporated (Inc., Co., Corp.) -purpose of the corporation -all original owners of the business -how much stock is issued

Articles of Incorporation

-conspiracy -aiding and abetting

Associated Crimes

-protects artistic possession (software code) -can protect expression and not underlying ideas

Copyright

-individual (lifetime + 70 years) -corporations (95 years from creation)

Copyright Duration

-criminal: willful/intentional wrongdoing -civil: opposite of criminal (unintentional)

Copyright Enforcement

Ease of Creation: very difficult; requires much more paperwork; must file articles of incorporation to state government -Managerial Control: owners (called shareholders) do not directly control the business; board of directors and officers are selected to conduct the business (directors run big picture; officers run day-to-day operations) -Continuity: corporation does NOT end with change of owners; happens all the time especially through stock exchange -Liability: personal liability is limited for the owners -Taxation: subject to double-taxation; must pay corporate taxes and then additional money that is received from dividends is taxed as well

Corporations

-mediator acts as settler -arbitrator acts as judge -arbitration determines winner and loser -mediation reaches a settlement between the two -arbitration is binding while mediation is not

Differences Between Mediation and Arbitration

-2nd step in Pre-Trial Process -contains Interrogatories, requests for Production of Documents, Depositions, and Requests for Admission

Discovery

-For sale of goods, when multiple contracts are switching hands, small changes in detail are considered accepted -new/additional terms are proposals -if both parties are merchants, the new terms are part of the contract unless they fundamentally alter the deal, the offeror objects in reasonable period of time, or the original offer expressly prohibits changes

Battle of the Forms

95-100% sure

Beyond a Reasonable doubt requires the jury to be at least...

the victim must prove that the other party did not take reasonable care to prevent this injury/harm

Breach of Duty

-document sent to Appellate Court explaining why their trial court case decision should be affirmed or reversed

Brief

-Beyond a Reasonable Doubt (Criminal Case Only), -Preponderance of the Evidence (civil cases only) -Clear and Convincing Proof (civil cases only)

Burdens of Proof

-if you start a corporation in Delaware, you are considered a domestic corporation in Delaware. -You must file additional paperwork to conduct business as a foreign corporation to operate in all other states

Domestic Corporation vs. Foreign Corporation

forever until the secret becomes publicly known

Duration of a Trade secret is...

Did I have a legal responsibility to protect you or not?

Duty of Care

-exception to fourth amendment -police ask you to search your home or whatever and you say "yes" -police don't have to be specific in what they are asking to search for

Consent

-Both sides must give up something of value under contract -does not have to be fair -past consideration: modifications to an existing contract would make the existing contract a new contract. both sides must receive something new

Consideration

-when a group of people get together and decide to commit a crime -you are responsible for anything that your co-conspirators do

Conspiracy

1. Offer 2. Acceptance 3. Consideration 4. Capacity 5. Lawful Purpose

Contract Formation

-mental understanding/ability to enter binding contracts -three categories that don't have capacity: minors, intoxicated persons, and mentally impaired persons

Capacity

-if police have probable cause that you have done something illegal on top of getting pulled over, then they have the right to search your car -example: you get pulled over for speeding and your car smells like pot and police can then search your car for that reason

Car w/ Probable Cause

Did the breach of duty cause the injury/harm?

Causation in Fact

70% sure

Clear and Convincing Proof requires the jury to be at least...

-4th step in trial process -final statement made by lawyer telling the jury why they should rule in favor of their client

Closing Argument

-most important piece for business -regulation of foreign commerce (federal, not state) -regulation of interstate commerce -limitation on state police powers

Commerce Clause

-originally from england -employment contracts -real estate

Common Law (contracts)

-used in the United States -system came from England -Power is placed in judges to interpret, apply, and create the law

Common Law System

-most common remedy -"How much did B cost A for failing to complete the contract?"

Compensatory Damages

-production is manufactured/designed in a dangerous way -not on purpose but the manufacturer did not realize it at first

Design Defect

-telling lies about someone or some company that hurts their reputation and additionally causes them any financial harm in the future. -this information must be false -can be either slander (spoken) or libel (written)

Defamation

-in-person and usually recorded questions and answers -can last up to 8 hours -can use the video in court

Deposition

-instances where no search warrant is obtained/needed 1. Consent 2. Car w/ Probable Cause 3. Search Following Arrest/Detainment 4. Evidence Likely to be Destroyed 5. No Reasonable expectation of privacy

Exceptions to the Fourth Amendment

1. Duty of Care 2. Breach of Duty 3. Causation in Fact 4. Proximate Causation 5. Injury

Elements of Negligence

1. Complaint 2. Answer 3. Response 4. Default Judgement 5. Interrogatory 6. Request for Production of Documents 7. Deposition 8. Request for Admission

Entire Pre-Trial Process Order

-police can convince a judge that they did not have enough time to obtain a search warrant before the evidence was destroyed. -after the fact, the judge must be convinced that they absolutely needed to follow and search the suspect

Evidence Likely to Be Destroyed

1. US Constitution 2. Federal Statutes 3. Federal Administrative Regulations 4. State Constitutions 5. State Statutes 6. State Administrative Regulations 7. Local Ordinances 8. Judicial Decisions

Hierarchy of Sources of Law

-section one cases can either by horizontal or vertical -horizontal is collusion with direct competitors in the same industry (much more problematic) -vertical occurs when two or more companies agree to work together that aren't in the same industry and don't do the same thing

Horizontal vs Vertical agreements

-only comes up in a business context -a false statement that hurts the party being told about -a lie about the quality or safety of a business competitor's service/product -MUST be about the quality or safety

Injurious Falsehood

the plaintiff must prove that they are actually injured or hurt in any way either physically/emotional/psychological

Injury

-selling/purchasing stocks when you have private or confidential information

Insider Trading

-comes up in a business context -in a normal contract (Party A and Party B), Party B breaks contract with Party A because Party C persuaded Party B to do so. -For it to be intentional interference, it must be intentional and Party C must know about the pre-existing contract between A and B -Party C does not have to benefit from new contract but most likely will

Intentional Interference with Contractual Relations

-written questions and answers (usually open-ended) -who, what, where, when and how -Defendants' attorneys ask the plaintiff and vice versa -must respond in 30 days

Interrogatory

-a source of law -court decisions are decided based off prior judge decisions -a lower court cannot overturn a higher court

Judicial Decisions

-5th step in trial process -judge tells jury what the law is and why they have to decide on

Jury Instructions

-1st step of trial process -also called "Voir Dire" -Both sides can ask questions for potential jury members -challenge for cause: determining who might have any bias in the case -peremptory challenge: attorney can usually eliminate up to 3 people they don't want as a jury member, cannot be based off race or gender

Jury Selection

-6th and final step of trial process -jury decides on case and makes a verdict (either guilty or not guilty)

Jury Verdict

-whatever we agree to must be legal

Lawful Purpose

1. District Courts (Trial Courts) 2. Court of Appeals 3. U.S. Supreme Court

Levels of Federal Courts

1. State Circuit Courts (Trial Courts) 2. State Court of Appeals 3. State Supreme Court

Levels of State Courts

-What happens when the offeror changes his mind during delays of communication due to mailing? -Acceptance is judged from the position of the offeree -matters when offeree hears offer

Mailbox Rule

-product is not necessarily defective, but the marketing material that goes with it might impose a danger -these include things like instruction manual lacking enough warning to its customers in order to avoid possible injuries and liability

Marketing Defect/Failure to Warn

-parties go to a third party to help decide the case -mediator tries to help end dispute by bringing two parties together and trying to get them to reach a settlement -end goal is a settlement agreement -won't have to worry about going to court -if one party breaks the mediation agreement, the other can can sue

Mediation

-"My acceptance is identical to what you offered" -I can't change any detail, no matter how minor the detail is -I completely accept the offer

Mirror Image Rule

-most common form of unintentional torts -failing to act reasonably to protect someone from injury/harm -must prove all 5 elements of negligence

Negligence

-exception to 4th amendment -if you have an open window and anyone walking by down the sidewalk can clearly see you dealing drugs, police are free to come into your home and search your house if they can see it in plain sight

No reasonable expectation of privacy

-if police can see any illegal activity in plain sight, they are allowed to search your premises -businesses have lower levels of protection against privacy compared to residents -policemen are free to walk around anywhere in the business that is open to the public and if they find any evidence they are allowed to use that

Plain sight rule

-1st step in Pre-trial process -Complaint: plaintiff states why they are suing the defendant and what they want -Answer: Defendant responds to each accusation made, defendant can put in a counterclaim (suing the plaintiff back) -Reply: only necessary when there is a counterclaim made by defendant -Default Judgement: if the defendant doesn't send an answer in 21 days, they automatically lose the case

Pleadings

1. Pleadings 2. Discovery

Pre-Trial Process Order

-purposely selling products at a low cost forcing other companies to match those prices to stay in business -once other companies go out of business because they were selling products for too cheap, company A then drastically raises their price

Predatory Pricing

51% sure

Preponderance of the Evidence requires the jury to be at least...

-3rd step in trial process -witnesses are presented and cross examinations occur -evidence is presented

Presentation of Evidence

deliberately colluding with another competitor to set the same prices -Example: coke and pepsi agree to to not compete and both charge $2 for a can of soda so consumers are forced to pay that price -ways to get caught include governments detecting similar patterns of pricing or someone may be likely to rat out the rest of the company to gain immunity

Price Fixing

-most products are okay, but there may be 1 out 10000 products that is a defect -impossible to predict the defect -still holds manufacturer liable for any injuries the defective product creates -creates incentive for companies to perfect the way they produce items

Production Defect

-exception to the rule of consideration -if i promise you a gift and you reasonably rely on that promise, then that promise can be held legally enforceable

Promissory Estoppel

-Compensatory Damages -Liquidated Damages -Specific Performance -Rescission

Remedies

-written questions and answers -different from interrogatories because they are very specific and very "yes" or "no" questions

Requests for Admission

-any bill, form, record, or document, that can serve some purpose in the trial can be requested to have -Example: maintenance bills for a car, notes, medical records, etc.

Requests for Production of Documents

1. must be Copyrightable subject matter 2. fixed in a tangible medium (need proof of what actually was created) 3. Creative and original -you obtain a copyright automatically if you fulfill these requirements

Requirements for Copyrights

1. owner had taken reasonable steps to protect the knowledge/information 2. the knowledge/information has economic value from not being publicly known

Requirements for a Trade Secret

1. must be open and notorious (can't hide from owner) 2. must be actual and exclusive (make actual use of the land) 3. must be continuous (can't leave for extended time and come back) 4. must be wrongful (w/o official permission) 5. must fulfill time period (typically 10-20 years of stay, Indiana is 10)

Requirements of Adverse Possession

1. there must be a plan or agreement 2. defendant voluntarily joins the conspiracy 3. one conspirator commits overt act (doing something physical that helps further along the plan) 4. act must be for purposes of furthering the conspiracy

Requirements of Conspiracy

1. must be patentable subject matter (must be a machine, process, composition of matter, Improvement on above) 2. must be Nonobvious, Novel, and Useful

Requirements of Patents

-the unmaking of a contract between parties. -the unwinding of a transaction -this is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract

Rescission

if no one has ever owned a particular resources/item, then the first person to discover and physically possess the item now has possession of it

Rule of First Possession

before ruling on the legality of certain business practices, a court examines why they were undertaken and what effect they have on market competition -compares benefits and burdens of the collusion -if good outweigh bad, then courts will dismiss case and vice versa

Rule of Reason

-under the supreme court laws, there must be some sort of benefit involved in the deal -a benefit is considered pretty broadly -benefits include being paid money for the information, giving a gift, or being friends with the other party -if caught, penalties will be 3 times as much as you made from the deal

Rules for Insider Trading

1. Monopoly power in a relevant market ("power" meaning the ability to raise prices without hurting sales; "relevant market" meaning exactly what do they have a monopoly over) 2. Barriers of Entry (how easy is it for new competitors to enter the industry; if easy, then not a monopoly) 3. Exclusionary Conduct/Intent (did company have intent of creating a monopoly; must try to force other companies out; not exactly a monopoly if company sells the best product at the lowest price)

Rules that determine a monopoly

-same industry, I make my product very similar to another's trademark which would confuse the public

Trade Dress

-Criminal: unlawful intrusion (possible years in jail or fines) or government files suit -Civil: owner sues perpetrator (paid in damages)

Trade Secret Enforcement

-knowledge or information that is secret and as a result it generates value for the owner -Example: coca-cola recipe, customer lists, manufacturing processes, advertising campaigns

Trade Secrets

-something done similar to original trademark that still diminishes original trademark -not a direct copy

Trademark Dilution

1. Through exchange 2. Through Possession 3. Through Confusion 4. Through Accession 5. Through Gift

Ways to Acquire Property

-trading based upon confidential information that you should not have access to -if you are an accountant at a company that is struggling but the public doesn't know that and then you sell your stocks

examples of insider trading

-government can press charges (criminal) -companies can sue other company for antitrust violations (civil); rewards are 3 times as the amount of what the original damage did

violation of sherman act