Legal Final Exam Study Guide

Limited liability Company

(LLC) A type of business organization that has characteristics of both a partnership and a corporation. The owners of an LLC are called members, and their personal liability is limited to their capital contributions. The LLC, as an organization, is not a taxable entity.

Contributory negligence

(Plaintiff's fault) (Doctrine of comparative responsibility) Absolutely barred the plaintiff from recovery if the plaintiff's own fault contributed to the injury "in any degree", however slight.

Express and implied-in-fact contracts

- A contract in which parties show their agreement in words. - A legally enforceable agreement inferred from the circumstances and conduct of the parties.

Bilateral and unilateral contracts

- An agreement that contains mutual promises, with each party being both a promisor and a promisee. Most contracts are bilateral. - A contract in which the promisor doesn't receive a promise as consideration; an agreement whereby one makes a promise to do, or refrain from doing, something in return for a performance, not a promise.

Whistleblower Protection

- Audit committees must adopt procedures for whistle-blowing. - Whistleblowers can recover damages for retaliation and request reinstatement. - Whistleblowers include contractors as well as employees.

Financial Statements and Controls

- CEO and CFO must certify accuracy of financial statements. - Also must certify existence of internal financial controls. - Internal financial controls are subject to audit, just like financial statements. - When restatement is made, executives must return any bonuses paid on incorrect financial statements.

Minors

- Cannot be legally bound to contractual promises with exceptions for necessaries of life - Contract is voidable at the election of the minor

Intoxicated or mentally incompetent persons

- Contracts are voidable depending on the person's capability to understand the contract's nature and purpose

Vassilkovska v. Woodfield Nissan, Inc.

- Contracts require consideration for both promises. Care must be taken in limiting one's obligations, particularly if the result is no legal detriment at all. - The amount of consideration is generally not an issue, but it must be more substantial than simply an acknowledgement or statement.

Accounting Reforms

- Creates the Public Company Accounting Oversight Board - Oversight of auditing of public companies - Requires separation of auditing and consulting functions within accounting firms

Montz v. Pilgrim Films & Television, Inc. 649 F.3d 975 (9th Cir. 2011)

- Enforcing implied-in-fact agreements is an important means of ensuring that one party does not get the benefit of a contract without compensating to the other party. - Implied-in-fact agreements must contain the same elements as express contracts, including acceptance and consideration. - When an agreement concerns an expressive idea like a story, picture or writing, courts must differentiate a copyright claim from a contract claim.

Major Provisions of of Dodd-Frank Wall Street Reform and Consumer Protection Act

- Enhances Consumer Protection - Ends policy on "Too Big to Fail" bailouts - Reforms Federal Reserve - Creates mortgage reforms - Regulates trading or derivatives - Regulates hedge funds - Regulates credit rating agencies - Controls executive compensation and corporate governance - Reforms regulations of banks and thrifts - Regulates insurance industry - Limits credit card interchange fees - Reforms SEC and investor protections - Regulates securitizations - Regulates municipal securities - Provides financial assistance to overcome mortgage crisis - Disclosures to SEC of payments to U.S. or foreign governments related to commercial development of oil, natural gas, or minerals. - Disclosures to SEC concerning manufacturing of products derived from minerals from the Congo - Limits U.S. loans to foreign governments unlikely to repay.

Commerce Clause Cont.

- Impact on interstate commerce • Federal government holds the power to regulate persons engaged in and activities affecting interstate commerce - Limitation on authority depends on: • Unstated restrictions within the clause • Areas of regulation of commerce that require the federal government to defer to the states or local governments

Corporate Governance

- Increases independence of auditors. - Requires audit committees to be independent with at least one member being a financial expert. - Audit partner must rotate off engagement after 5 years. - Auditors must preserve audit records for 7 years. - Majority of directors must meet the definition of independent. - Audit, compensation, and nominating committees are comprised of independent directors only - Audit, compensation, and nominating committees are comprised of independent directors only.

Section 10(b) of 1934 Act

- It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange--- - (b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [SEC] may prescribe.

Increased Authority to SEC

- Mandates budgetary increases for SEC - Increases power of SEC over many governance matters. - Since 2002, SEC enforcement is much more active.

Implied-in-law or quasi-contracts

- Often referred to as an implied-law-contract, is not a true contract. It is a legal fiction that the courts use to prevent unjust enrichment and wrongdoing. Courts permit the person who conferred a benefit to recover the reasonable value of that benefit. Nonetheless, the elements of a true contract are not present.

Reasons for Agencies

- Provide Specificity - Provide Expertise - Provide Protection - Provide Regulation - Provide Services

Strict products liability

- Seller who sells an unjustly dangerous faulty product that causes injury to a user of the product is strictly liable. Applies only to "commercial" sellers. Commercial sellers= Someone who sells items regularly.

Case 4.1 - Mayer v. Belichick

- Standing to Sue at Issue - 605 F.3d 223 (3rd Cir.) - United States District Court for District of New Jersey • Issue - Videotaping the New York Jets coaches and players on the field with the purpose of illegally recording, capturing and stealing the New York Jets signals and visual coaching instructions by the Patriots Key Points: - To maintain a lawsuit, a plaintiff must have standing or a legally recognizable claim. - The Third Circuit found that, because the plaintiff did not have a legally protected right arising out of the alleged "dishonest" videotaping program, he did not state an actionable injury. - Accordingly, the defendant's motions to dismiss were granted.

Gottlieb & CO, INC v. Alps South Corporation

- The court found that Gottlieb's term (the consequential damages limitation) was included in the contract even though it appeared only on Gottlieb's forms and was not specifically discussed by the parties. - Alps' failure to read Gottlieb's forms was irrelevant, according to the court. This is generally true as a contract law principle; - If Alps foresaw the likelihood of certain outcomes, like consequential damages from customer complaints, it should have addressed it with Gottlieb.

Judicial Restraint

- Those who believe thta the power should not be used except in unsual cases are said to believe judicial restraint. • Philosophy is sometimes referred to as strict constructionism or judicial abstention • Followers favor a very limited role for the courts in system of government • Belief that change in society should result from the political process - Believe in using precedent more

Judicial Activism

- Those who think that the power should be used whenever the needs of society justify its use believe in judicial activism. • Supporters favora more expansive role for the courts in system of government • Activists are value oriented and policy directed • Courts are more result conscious and place less reliance on precedent - Activists tend to be innovative and less dependent on precedent for their decisions.

Rhodes v Davis

- When a contract involves unique subject matter, courts may award specific performance because there is no market equivalent. - Rhodes and Davis had a good understanding of their value for the transaction, and there was no reason for the court to substitute its own reasoning.

Iannelli v. Burger KingCorp.

-A restaurant has a duty of reasonable care to those who are eating in the restaurant, but protecting them from assault does not normally fall within the duty owed to diners at a restaurant. -When warning signs indicate that individuals eating in the restaurant may not be safe, the manager of the restaurant has a duty to take action to try to prevent injury.

Food and Drug Administration v. Brown and Williamson Tobacco Corporation

-Although a core objective of the FDCA is to ensure that products regulated by the FDA are safe for their intended use, Congress has established policies for balancing the economic and health implications of tobacco products with more specific legislative enactments. -This is a relatively rare case in which the Court cannot give deference to an a administrative agency's interpretation of the law it is responsible for administering. The Court noted that tobacco has a "unique political history." - An administrative agency's ability to enforce laws through the executive branch must derive its authority from Congress. In this case, Congress has chosen to control tobacco products separately from other similar products within the FDA's purview.

Managerial Control of Decision

-Concerns of who is managing the business organization.

East Capitol View Community Development Corp v. Robinson

-Courts are reluctant to excuse performance due to impossibility or impracticability. - The court specifically distinguishes between objective impossibility and personal impossibility. Only the former excuses performance. - Contracting parties have the ability to allocate known risks in the contract. For that reason, impossibility must be an unexpected occurrence.

Continuity of the Organization

-Factor to consider when selecting the best organizational form for a business activity. -The stability or durability of the organization.

Health Insurance Portability and Accountability Act (HIPAA)/Affordable Care Act

-Forbids group plans and issuers from excluding an employee from insurance coverage or requiring different premiums based on the employee's health status, medical condition or history, genetic information, or disability.

Owner Liability

-Generally, business people wan to limit their personal liability.

Harper v. Winston County

-Harper was not physically injured, but she still can claim battery if she was touched in an offensive or hostile way, like being "grabbed" and "pulled." -The trial court ruled that Wright was touching merely to gain control of Harper. However, there is no legal exception for offensive touching to gain control of an employee, like there may be for a merchant detaining a shoplifter. -The appeals court ruling in favor of Harper does not mean that she prevailed on her battery claim. The case can go back to a trial court so that Harper has an opportunity to prove her claim of battery at trial.

Defenses to Contract Enforcement

-IMPROPER FORM when a writing is required -No true MEETING OF THE MINDS due to fraud or mistake.

Securities Enforcement Remedies Act of 1990

-Increases civil fine's for violations of securities laws -Prohibits an individual's service as an officer or director

Taxation

-Most critical factor in the selecting the form of business organization. -How is the income earned by the business taxed? -How is the money distributed to the business owners taxed? -Is it possible that owners may have to pay taxes on money that is attributed to them an income but which they have not actually received?

Ricci v. Destefano

-New Haven, Connecticut (City), administered a test to firefighters to determine who qualified for promotion. The results showed that white and Hispanic candidates outperformed minority candidates. -Some minority firefighters argued that the test should be disregarded as discriminatory and that it had a disparate impact on minority firefighters. -Firefighters who passes the test argued that the City's failure to certify the test resulted in disparate-treatment discrimination. - As a practical matter, the City of New Haven believed that, based on the arguments form both sides, it would be sued if it did or if it did not certify the test results. -The supreme court held that because the examinations were job related and consistent with business necessity, and there was no strong evidence of a disparate-impact violation, the City should have certified the test results.

Requirements for an Enforceable Contract

-OFFER to enter contract -ACCEPTANCE of the offer -CONSIDERATION for each promise -CAPACITY of each party to enter into a binding agreement -LEGALITY of subject matter

American with Disabilities Act (ADA)

-Passed in 1990 by Congress - Prohibits Employers from requiring preemployment medical examination or asking questions about the job applicant's medical history. Only after a job offer has been extended can the employer condition employment on the employee's responses to job-related medical questions. Prohibits employer discrimination against job applicants or employees based on (1) their having a disability, (2) their having a disability in the past, or (3) their being "regarded" as having a disability.

Genetic Information Nondiscrimination Act (GINA)

-Passed in 2009 - Prohibits covered employers from firing, refusing to hire, or otherwise discriminating against individuals on the basis of their genetic information, and from discriminating against employees and applicants on the basis of a family member's genetic information. Genetic information includes information about an individual's genetic tests; genetic information about genetic tests of an individual's family members; information about he manifestation of a disease or disorder in an individual's family history; request for or receipt of genetic services; and genetic information of a fetus and the genetic information of any embryo held by the individual or a family member.

Riley v. California

-Police must obtain a warrant to search a cell phone - In cases involving exigent circumstances, such as when there is an immediate risk to public safety or a risk of loss of evidence, police may be able to act without a warrant.

Age Discrimination in Employment Act (ADEA)

-Prohibits employment discrimination against employees 40 and older, and it prohibits the mandatory retirement of these employees. -Specifically, "bona fide" executives and high level policy makers age 65 and older who are entitled to recieve annual retirement benefits of at least 44,000 a year are subject to manadatory retirement policies. -Applies to employers with 20 or more employees

Insider Trading and Securities Fraud Enforcement Act of 1988

-Provides for recovery of triple damages in civil actions against user of nonpublic of information -Increases criminal sanctions for use of nonpublic information.

Insider

-Section 16 of the Securities Exchange Act of 1934 concerns this type of transaction. A person who: -Owns more than 10% of any security -Is a director or an officer of the issuer of the security

Halliburton CO. v. Erica P. John Fund Inc.

-The "fraud-on-the market" theory holds that the price of shares that are traded on developed markets reflect all publicly available information about the corporation, including any material misrepresentations made by the corporation. -The Basic Inc. v. Levinson decision permitted plaintiffs to utilize the "fraud-on-the-market" theory to show a link between a misrepresentation by a corporation and the required reliance on that misrepresentation to bring a Rule 10(b)-5 action. -The Basic presumption makes it easier for plaintiffs to address a potential Rule 10(b)-5 violation as a class action. -The Halliburton decision maintains the use of the Basic presumption of reliance on material misrepresentations.However, it clarifies that defendants should have an opportunity to present evidence that the misrepresentation did not affect the market price of the stock. Defeating the presumption, if successful, would make it difficult for plaintiffs to obtain class-action certification.

United States v. O'Hagan

-The "traditional" or "classical theory" of insider is complemented by the "misappropriation theory" because each targets different sources that undermine the integrity of the purchase or sale of securities. -The misappropriation theory is focused on the deception of a person with nonpublic information obtained from others using that information to his or her own benefit. -Liability is based on secretly using the information. The trader must offer full disclosure of his or her intention to no longer keep the information confidential. -Those who misappropriate nonpublic information to gain an advantage in trading over other traders undermine participation in securities markets.

Skilling v. United States

-The Supreme Court rejected Skilling's claim that the did not recieve fair trial because he did no establish that presumption of juror prejudice against him arose that any actual bias infected the jury in the case. -The Court did, however, find in Skilling's favor on the issue of honest services. The Court concluded that 18 US. C. 1346 covers only bribery and kickback schemes and does not extend to honest services. As such, it vacated that aspect of Skilling's conviction.

Morrison v. National Australia Bank

-The court addresses whether Australian investors can utilize Section 10(b) to sue an Australian bank that owns a Florida corporation. -The Court concludes that Section 10(b) does not include extraterritorial application in light of the limited provision for such jurisdiction in the Exchange Act. -The investors' contention that they were misled by financial models HomeSlide's officers created in their Florida offices is not sufficient to establish jurisdiction for a cause of action under Section 10(b). -Section 10(b) seeks to regulate deceptive securities transactions, and not all conduct relates closely to these transactions.

Semoon v. The Wooster School Corp. 2010 Conn. Super. Lexis 1816

-The court determines that the bailment is one of mutual benefit because both parties gained from the transaction. The school received the cultural enhancement of the sculpture, and the artist received the exposure. -In a mutual benefit context the bailee owes reasonable care to the bailor. A presumption arises against the bailee if the property is damaged in its care.

Branham v. Ford Motor Co.

-The court reviewed the two major tests used by state courts to determine if a design defect made a product unreasonably dangerous: the consumer expectations test and the risk-utility test. - Branham used expert testimony to show that Ford could have used the "McPherson suspension" system to significantly increase the Bronco II's handling and stability. This alternative suspension would not result in increased costs or comprised the sport utility features of the Bronco II. - The court determined that, in South Carolina, the risk utility test is now the standard for all product design defect cases because it focuses on the design of the product rather than the consumer of the product. In addition to using the risk utility standard, the plaintiff must present evidence of a reasonable alternative design that considers the cost, safety, and functionality of the product.

Cost of Creation

-The legal steps necessary to form a particular business organization. -The most significant creation-related issues are how long it will take to create a particular organization and how much paperwork is involved.

Ehling v. Monmouth-Ocean Hospital Service Corp.

-The social norms around privacy change and are dependent on what is objectively reasonable, not what a plaintiff alone thinks is reasonable or what he or she may believe is private. -There is generally no expectation of privacy on unprotected websites that are publicly accessible but password-protected online communication may have a reasonable expectation of privacy. -Courts determine what is reasonable privacy based on the facts of each case. Disclosure to one or more people does not mean that a plaintiff has forfeited privacy rights.

Classifications of Law

1. Common Law and Civil Law 2. Public and Private Law 3. Civil Law and Criminal Law 4. Substantial Law and Procedural Law

Sanctions/Remedies for Breach of Contract

1. Compensatory Damages: Suit for dollar damages. Awarded to make the victim of the breach"whole" in the economic sense. 2. Specific Performance: An order by the court commanding the other party actually to perform a bargain as agreed. - Largest number of lawsuits today, especially in federal courts, involves one business suing another business for breach of contract.

Levels of Performance

1. Complete Performance 2. Substantial Performance 3. Material Breach

Lawyers

1. Counselor 2. Advocate 3. Public Servant

Sanctions/Punishments for Criminal Conduct

1. Crime: A public wrong against society. - Death - Imprisonment - Fine - Removal from office - Disqualification from holding any office and from voting

3 Type of Discrimination cases

1. Disparate treatment 2. Disparate Impact 3. Retaliation

Common Law and Civil Law

1. Emphasizes the role of judges in determining the meaning of laws and how they apply. Are able to follow "precedents" in this system. 2. Relies more on legislation than judicial decisions for law. Doesn't follow or use "precedents".

Sources of Law

1. Federal Law 2. State Law 3. Judicial Decisions or Case Law

First Amendment Protections

1. Freedom of Religion 2. Freedom of Speech

First 14 amendments of the U.S. constitution

1. Freedom of Speech, Press, Religion, and Petition 2. Right to Keep and Bear Arms 3. Conditions for the Quarters of Soldiers 4. Right to Search and Seizure 5 Provisions Regarding Prosecution 6. Right to Speed Trial, Witnesses, etc. 7. Right to a Trial by Jury 8. Excessive Bail and Cruel Punishment 9. Rule of Construction and the Constitution 10. Right of States 11. State Sovereign Immunity 12. Electoral College 13. Abolishment of Slavery and Involuntary Servitude 14. Due Process and Equal Protection

Categories of Torts

1. Intentional 2. Negligence 3. Strict Liability

Court Personnel

1. Judges and Justices 2. Jurors 3. Lawyers Others?

Trademarks

1. Marks on what is produced to represent the origin of goods & services 2. Recognizability or distinctiveness 3. Protection against confusion

LEGAL SANCTIONS and REMEDY

1. Methods used by law enforcement officials and courts to encourage obedience of or force compliance with the law 2. Remedy: Right of an individual to take another person's resources as that person failed to meet the requirements of the law

Typical Pretrial Motions

1. Motion dismiss, including for Statute of Limitations 2. Motion for Judgement on the Pleadings 3. Motion for Summary Judgement 4. Motion: Frivolous Litigation/Rule 11 5. Motion to Compel Discovery 6. Motion in Limine (excluding evidence from trial).

PRETRIAL PROCEDURES

1. Plaintiff Files complaint 2. Complaints and summons are served on defendant 3. Defendant files motion or answer with possible counterclaim and defenses 4. Court rules on motions 5. Plaintiff files reply to answer 6. Attorneys conduct discovery procedures 7. Parties may file motions for summary judgement or judgement on pleadings 8. Court conducts pretrial conference

Sanctions/Remedies for Tortious Conduct

1. Punitive damages/Exemplary Damages: Civil punishment for intentional or extremely negligent wrongdoing. The damages compensate injured plaintiffs for medical expenses, lost wages or earning power, pain and suffering, and damages to other owned goods and land.

Two Divisions of Property

1. Real Property: Law applies ownership to land and interests in land such as mining rights or leases. 2. Personal Property: Applies to movable resources, those things that people do not annex to the land.

State Law

1. State Constitution 2. Statutes or acts adopted by the State Legislature 3. Regulatory Law of the State Administrative Agencies 4. Law in Counties and Cities called Ordinances. 5. Case Law

Typical State Court System

1. Supreme Court (7-9 Justices)->>2. Intermediate Reviewing Courts(3-5 Justices)->>3. Trial Court, General Jurisdiction

Georgia's Appellate Courts

1. Supreme Court: - Highest Court - Handles all cases involving death penalty - 7 Justices elected to 6 year terms - Chief Justice is chosen by other judges - No witnesses or Juries 2. Appellate Courts 3. Court of Appeals: - Handles appeals involving civil and trial cases from the Superior, State, and Juvenile courts - Judges elected for 6 years - No Juries

Holding and Dicta

1. The precise legal response in an opinion by an appellate court on an issue of law raised on appeal. 2. Statements made in a judicial opinion that are not essential to the decision of the case.

Two defenses to a claim of defamation

1. Truth 2. Privileged communications.

Federal Law

1. U.S. Constitution 2. Legislation passed by congress called "acts" or "statutes". Collections of legislation are called codes. All federal law prevails over state law. And any federal or state law that conflicts with the Constitution is said to be void and has no legal effect.

Types of Patents

1. Utility Patent: New, non-obvious, useful processes, machines, compositions of matter or improvements thereof. Term: 20 years from filing date. 2. Design Patent: New, original and ornamental design for an article of manufacture. Term: 14 years from issue date. 3. Plant Patent: New variety of plant that can be reproduced asexually. Term: 20 years from filing date.

Trial Steps

1. Voir dire-- Parties and their attorneys select jury 2. Attorneys present opening statements 3. Plaintiff presents evidence through witnesses 4. Defendant moves for directed verdict/judgement as a matter of law 5. Defendant presents evidence through witnesses 6. Attorneys present closing arguments 7. Court instructs jury on the law 8. Jury delierates and makes decision (verdict) 9. Judge enters judgement on verdict 10. Losing party files post-trial motion.

Classification of Contracts

1.Bilateral and unilateral contracts 2.Express and implied-in-fact contracts 3.Implied-in-law or quasi-contracts

Organizational Chart of Typical Agency, Board, or Commission

1.Chairperson(5-7 members) 2.Secretary and Advisory Counsels 3.General Counsel Director of Operations->>> Bureaus, Investigations Advisory Opinions, Litigation Executive Director for Administration: Accounting, Budgeting, Congressional Liaison, EEO, Personnel, Planning, Public Information, Research Administrative Law Judges 4. Regional Offices: -Northeast -Southeast -Midwest -Rocky Mountain -Southwest -Northwest

Obtaining a Patent

1.File application 2.Filing fee 3.Explain invention 4.Show difference from prior art 5. Describe patenable aspects 6. Evaluation by Patent Examiner

Property is a "Legal Fence"

3 Types: 1. Public 2. Private 3. Common

Corporate Managerial Control

3 groups: 1. Shareholders: elect the members of board of directors. 2. Directors: set the objectives or goals of the corporation, and they appoint the officers. 3. Officers: Such as the president, vice president, secretary, and treasurer, are charged with managing the daily operations of the corporation in an attempt to achieve the stated organizational objectives or goals.

Invasion of Privacy

3 principal invasions: 1. Appropriation of the plaintiff's name or likeness for his or her own use. --------Example: Advertisers and marketers have been required to pay damages to individuals when pictures of them have been used without authorization to promote products, or when their names and identities have been used without permission for promotional purposes. 2. Defendant's intrusion upon the plaintiff's physical solitude. Illegal searches or invasions of home or possessions, illegal wiretapping, and persistent and unwanted telephoning can provide the basis for this invasion-of-privacy tort. 3. The defendant's public disclosure of highly objectionable, private information about the plaintiff. A showcasing of such acts can be the basis for a cause of action, even if the information is true.

Appellate Courts

>>Appellate Courts: Review the results of the lower courts ------->Some states have one appellate court ------->Certain states have two levels of review -------------->Courts of Appeal: Intermediate Courts -------------->Supreme Court: Highest Court ------->Writ of certorari: Procedure for requesting a second review

Private Securities Litigation Reform Act (PSLRA)

A 1995 federal statute that limits recovery for securities violations against third parties who are not directly responsible for the violation. For example, only the SEC can pursue these claims. This law also requires lead plaintiffs in class-action suits and restricts recovery of damages and attorney's fees.

Foreign Corrupt Practices of Act (FCPA)

A U.S. law that seeks to ban the payment of bribes to foreign officials in order to obtain business.

Deeds of Trust

A borrower signs a note, which shows the borrower's debt to the lender, and then signs a deed of trust, which grants the lender a security interest in the building and land put up to secure the loan.

Property

A bundle of private, exclusive rights in people to acquire, possess, use, and transfer scarce resources.

What is a Corporation?

A business charted by the state to do business as a legal person in a certain form of organization. - Owned by shareholders who have stock in the business - Shareholders vote to elect a board of directors who legally run the business but who often hire managers to be in charge of day-to-day operations.

Domestic Corporation

A business organization created by the issuance of a state charter that operates in the state that issued the charter.

Foreign Corporation

A business organization, created by the issuance of a state charter, that operates in states other than the one issuing the charter.

Tort

A civil wrong other than a breach of contract.

Al Minor&Associates, Inc. v. Martin

A client can serve as a trade secret because it provides value to the owner. The court found that even information that was memorized and not written down can be subject to trade secret protection. It is important to understand that all information used within a company is not necessarily a trade secret.

Conspiracy

A combination or agreement between two or more persons for the commission of a criminal act.

Exhaustion of remedies

A concept used in administrative in law that requires any party to an administrative proceeding to give the administrative agency every opportunity to resolve the dispute before appealing to the court system.

Double Jeopardy

A constitutional doctrine that prohibits an individual form being prosecuted twice by the same governing body based on the same factual.

Enforceable contracts

A contract that can be enforced in court

Unenforceable contracts

A contract that cannot be enforced in court.

Valid contracts

A contract that contains all of the proper elements of a contract.

Void contracts

A contract that is empty, having no legal force; ineffectual, unenforceable.

Option

A contractual arrangement under which one party has for a specified time the right to buy certain property from or sell certain property to the other party. It is essentially a contract to not revoke an offer.

Offer

A contractual communication that contains a specific promise and a specific demand. The offer initiates the process of making a contract.

Rescission

A contractual remedy that cancels the agreement and returns the consideration exchanged to each party.

Benefit Corporation

A corporate form that requires directors to ensure that the corporation meets explicit social goals (i.e. confers a public benefit) in addition to producing shareholder profits.

Alien Corporation

A corporation created under the authority of a foreign country.

Search warrant

A court order required by the Fourth Amendment of the U.S. Constitution to obtained sentences given to similar criminals committing similar crimes.

Appellate Courts

A court that decides whether a trial judge has made a mistake of law.

Racketeering

A crime under RICO involving a pattern of actions that are indictable under state or federal laws.

Obstruction of Justice

A criminal act involving the interference of the administration of the laws during the investigations and conduct of trials.

Endangerment of Workers

A criminal act that involves placing employees at risk with respect to their health and safety in the work environment.

Aiding and abetting

A criminal action that arises from association with and from assistance rendered to a person guilty of another criminal act.

Due diligence defense

A defense that experts may assert in a 1933 Securities Act case involving the failure to register securities or the failure to provide accurate documents. The expert utilizing this defense attempts to prove his or her reasonable investigation into all available information.

Impossibility of Performance

A defense to contractual nonperformance based on special circumstances that render the performance illegal, physically impossible, or so difficult as to violate every reasonable expectation the parties have regarding performance.

Double Tax

A disadvantage of a corporate form of organization in that the corporation must pay a tax on the money earned and the shareholder pays a second tax on the dividends distributed.

Primary Jurisdiction

A doctrine used by reviewing courts to determine whether a case is properly before the courts or whether it should be heard by an administrative agency first since such an agency might have expertise superior to the courts'.

Indictment

A document issued a by a grand jury formally charging a person with a felony.

Fraud

A false representation of fact made with the intent to deceive another that is justifiably relied upon to the injury of that person.

Limited Liability Partnership

A hybrid business partnership.

Derivative Suit

A lawsuit filed by one or more shareholders of a corporation against that organization's management. This suit is brought to benefit the corporation directly and its shareholders indirectly.

Intent

A legal doctrine indicating that parties meant to do what they did.

Quasi-Strict Scrunity

A legal test used by courts to test the validity of governmental action, such as legislation, under the equal protection clause of the U.S. Constitution. To satisfy this test, the government needs to demonstrate that the purpose of the action is substantially related to an important governmental objective.

Strict Scrutiny

A legal test used by courts to test the validity of governmental action, such as legislation, under the equal protection clause of the U.S. constitution. To satisfy this test, the government needs to demonstrate that there is a compelling state interest justifying the government's action.

Minimum Rationality

A legal test used courts to test the validity of governmental action, such as legislation, under the equal protection clause of the U.S. Constitution. To satisfy this test, the governmental needs to demonstrate that there is a good reason for the government's action.

Material Breach

A level of performance below what is reasonably acceptable. A substantial failure, without excuse, to perform a promise that constitutes the whole or part of a contract. A party who has materially breached a cannot sue the other party for performance and is liable for damages.

Tippee

A person who learns of nonpublic information from an insider. -Is liable for the use of nonpublic information because an insider should not be allowed to do indirectly what he or she cannot do directly. In other words, a tippee is liable for trading or passing on information that is nonpublic.

Scheme to defraud

A plan to misrepresent a material fact in order to obtain something, usually money, from another

Nolo Contendere

A plea entered by the defendant in a criminal case that neither admits nor denies the crime allegedly committed but, if accepted by the court, permits the judge to treat the defendant as guilty.

Equal Protection

A provision in the Fourteenth Amendment of the U.S. constitution that requires all citizens to be treated in a similar manner by the government unless there is a sufficient justification for the unequal treatment.

Bona fide Occupational Qualifications (BFOQs)

A qualification that permits discriminatory practices in employment if a person's sex, religion, or national origin is reasonably related to the normal operation of a particular business.

Mutual Mistake

A situation in which parties to a contract reach a bargain on the basis of an incorrect assumption common to both parties.

Disparate Impact

A term of employment litigation that refers to the disproportionate impact of a policy neutral on its face on some protected class (e.g.,race or sex). A plaintiff must prove that the employer's practices or policies had a discriminatory effect on a group protected by Title VII.

Disparate Treatment

A term of employment litigation that refers to the illegal discriminatory treatment of an individual in some protected class (e.g., race or sex). The plaintiff must convince the court that the employer intentionally discriminated against the plaintiff and that any alleged legitimate reasons for such treatment are a mere pretext for discrimination.

Accessory

A term used at the state level that is similar to "aiding and abetting." Accessory to a crime generally is either before the criminal act or after it.

Assignee

A third party, who is not an original contracting party, to whom contractual rights or duties or both are transferred. This party may enforce the original contract.

Assignment

A transfer of contractual rights.

Unreasonable Searches and Seizures

A violation of the Fourth Amendment of the U. S. constitution that occurs when a valid search warrant is not obtained or when the scope of a valid warrant is exceeded.

Information

A written accusation by the prosecutor presented in court charging an accused person with a crime.

Duress or undue influence

Action by a person that compels another to do what he or she would not otherwise do. It is a recognized defense to any act that must be voluntary in order to create liability in the actor.

Environmental Protection Agency (EPA)

Administers all laws relating to the environment, including laws on water pollution, air pollution, solid wastes, pesticides, toxic substances, etc.

Food and Drug Administration (FDA)

Administers laws to prohibit distribution of adulterated, misbranded, or unsafe food and drugs.

Quasi-Judicial

Administrative actions involving factual determinations and the discretionary application of rules and regulations.

Sentencing guidelines

Adopted by the U.S. Sentencing Commission as a means of standardizing the sentences given to similar criminals committing similar crimes.

Reliance on Case Law

Advantages: Stare Decisis Disadvantages: - Volume of Cases - Conflicting Precedents - Dicta - Rejection of precedent - Conflicts of Law

Defenses to Negligence

Affirmative defenses: 1. Contributory negligence 2. Assumption of risk

Partnerships

Agreement between two or more persons to share a common interest in a commercial endeavor.

Fifth Amendment - Eminent Domain

Allows the government to take private property for public use after paying just compensation

Food and Drug Administration v. Brown & Williamson Tobacco Corporation

Although a core objective of the FDCA is to ensure that products regulated by the FDA are safe for their intended use, Congress has established policies for balancing the economic and health implications of tobacco products with more specific legislative enactments. This is a relatively rare case in which the Court cannot give deference to an administrative agency's interpretation of the law it is responsible for administering. The Court noted that tobacco has "unique political history." An administrative agency's ability to enforce laws through the executive branch must derive its authority from Congress. In this case, Congress has chosen to control tobacco products separately from other similar products within the FDA's purview.

Bankruptcy crimes

An action involving the falsification of documents filed in a bankruptcy case.

Tombstone Ads

An advertisement announcing the public offering of securities; these usually run during the waiting period.

Business Necessity Defense

An affirmative defense under the Title VII of the Civil Rights Act. It is raised to disparate impact claims and asserts that a facially neutral buy discriminatory policy is job related. This defense requires that the employer prove that the practices or policies used are job related and consistent with a business necessity.

Proxy

An agent appointed by a shareholder for the purpose of voting the shares.

Covenants not to compete

An agreement in which one party agrees to not compete directly with the business of the other party; may be limited by geography or length of time.

Corporation

An artificial, but legal, person created by state law. As a business organization, the corporation's separation of owners and managers gives it a high level of flexibility.

Consideration

An essential element in the creation of a contract obligation that creates a detriment to the promisee or a benefit to the promisor.

Overt Act

An essential element of a crime. Without this action by a party, the intent to engage in criminal activity is not wrongful.

Judicial Admission

An exception under the statute of frauds allowing courts to enforce oral contracts when a party acknowledges the oral promise in a formal judicial/court environment.

Waiver

An express or implied relinquishment of a right.

Willful and Wanton Negligence

An extreme lack of due care. -----Negligent injuries inflicted by drunk drivers show willful and wanton negligence. Injured plaintiff can recover punitive damages as well as actual damages.

General Counsel

An individual who is responsible for coordinating all law-related issues, such as the quasi-judicial hearings in administrative agencies. This term is also used to describe the principal lawyer of a company.

Concealment

An intentional misrepresentation of a material fact occurring through the silence of a party.

Counteroffer

An offer made in response to another's offer. Usually made in place of an acceptance. A counteroffer usually terminates an offer.

Assignor

An original contracting party who assigns or transfers contractual rights or duties or both to a third party.

Dissolution

Any change in the ownership of an organization that changes the legal existence of the organization.

Consent Order

Any court or regulatory order to which the opposing party agrees; a contract of the parties entered upon the record with the approval and sanction of a court.

White‐collar crime

Any illegal offense that occurs in a business or professional setting - Committed to harm the business or for personal gains

Disability

Any physical or mental impairment that substantially limits one or more an individual's major life activities. Major life activities include: Caring for oneself, performing manual tasks, seeing, hearing, eating sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, etc.

Intent to Defraud

Applies to an individual who knowingly and willfully makes a misrepresentation of a material fact that is relied on and thereby causes injury or harm.

Public Property

Applies to pubic resources owned by the government (or state) like roads, public buildings, public lands, and monuments.

Common Property

Applies to resources like land that more than one individual owns jointly.

Private Property

Applies to resources that you own as an individual.

Product Defects

Arise when products are not manufactured to a manufacturer's own standards. Example: Defective Brakes on a new car are a good example.

Unilateral mistake

Arises when only one of the parties to a contract is wrong about a material fact. It is not usually a basis for rescinding a contract.

Prefiling Period

As is relates to an initial public offering of securities, this is that period of time prior to the filing of a registration statement with the SEC.

Waiting Period

As it relates to a initial public offering of securities, this is the period of time that follows the filing of documents with the SEC and that precedes when the securities can be sold. Unless the SEC objects and extends this period of time, the waiting period lasts only 20 days.

Posteffective Period

As it relates to an initial public offering of securities, this is the period during which the securities may be sold. This period usually follows a 20-day waiting period.

Natural Law

Asserts that law contains universal moral principles. These principles are observable in nature, and we can determine them through human reason.

Punitive Damages

Awarded by courts to punish defendants for committing intentional torts and for negligent behavior considered "gross" or "willful and wanton". Key to the award of these damages is the defendant's motive. Motive must be malicious, fraudulent, or evil. • Arise from intentional torts or extreme willful and wanton negligence • Awarded for risky negligent conduct

Infliction of Mental Distress

Battery to the emotions. ---Arises from outrageous, intentional conduct that carries a strong probability of causing mental distress to a person at whom it is directed. ----Must prove that the defendant's outrageous behavior caused by not only mental distress, but also physical symptoms (headaches, sleeplessness). Most commonly comes from: employees who have been discriminated against or fired.

Positive Law

Belief that law is simply the commands of the state backed up by force and punishments. It is contrary to the philosophy of natural law.

Historical Law

Belief that law should focus on legal principles that have withstood the test of time in a nation. Believes that law reflects the cultural traditions of a people and recognizes that different nations may have different traditions and, consequently different laws.

Kraft Foods Group Brands LLC. v. Cracker Barrel Old Country Store, Inc.

Both Kraft and Cracker Barrel restaurants have legitimate trademarks. Their use in the same location is what creates the problem. Even though Kraft and Cracker Barrel may not use identical marks on identical products, a likelihood of confusion can still exist, according to the court. The court suggests that sophisticated consumers for luxury products would look more closely at labels.

General Sense of Corporate Governance

Broadly, corporate governance includes the legal property relations that large businesses have with each other, with their customers, and with society.

voidable contracts

Capable of being declared a nullity, though otherwise valid.

Chapter 1

Chapter 1

Chapter 10

Chapter 10

Chapter 11

Chapter 11

Chapter 13

Chapter 13

Chapter 14

Chapter 14

Chapter 15

Chapter 15

Chapter 17

Chapter 17

Chapter 20

Chapter 20

Chapter 3

Chapter 3

Chapter 4

Chapter 4

Chapter 6

Chapter 6

Chapter 7

Chapter 7

Chapter 8

Chapter 8

Chapter 9

Chapter 9

Compensatory Damages

Compensate plaintiff for injuries suffered Purpose of damages is to make the plaintiff whole again, at least financially. • Past and future medical expenses • Past and future economic loss • Past and future pain and suffering

Types of Damages

Compensatory damages Punitive damages

Conditions of Performance

Condition Precedent Condition Subsequent Express Conditions Implied Conditions Concurrent Condition

National Labor Relations Board (NLRB)

Conducts union certification elections and holds hearings on unfair labor practice complaints.

Sources of Contract Law

Contract law comes from either: 1. Legislation •Uniform Commercial Code •Contracts for goods 2. Common Law •Judges' decisions •Contracts for other than goods

Specific Sense of Corporate Governance

Corporate governance rules protect the property interest that the owners have in corporations

Promissory Estoppel

Court enforcement of an otherwise unbinding promise if injustice can be avoided only by enforcement of the promise. A substitute for consideration.

Injunction

Court order for a party to do something or refrain from doing something. Often employed when a license to property or intellectual property is at issue.

Specific Performance

Court-ordered remedy when subject matter of the contract is unique. Parties are compelled to perform their promised acts.

Supremacy Clause

Courts may be called upon to decide if a state law is invalid because it conflicts with a federal law.

Remedies for Breach of Contract

Damages- Default remedy for breach 1. Compensatory Damages 2. Consequential Damages 3. Liquidated Damages Equitable Relief- If damages are not adequate (no adequate remedy at law) 1. Specific Performance 2. Rescission 3. Injunction

Procedural Law

Deals with the method and means by which substantive law is made and administered. Provides the machinery for enforcing rights and duties.

Res Judicata

Decision of the court is final and conclusive on all issues between the parties.

Substantive Law

Defines the legal relationship of people withe other people or between them and the state. Thus, the rules of law governing the creation or enforcement of a contractual promise are substantive by nature. Define rights and duties.

Complete Performance

Degree of performance of recognizing that each contracting party has performed every duty required by the contract

Substantial Performance

Degree of performance recognizing that a contracting party has honestly attempted to perform but has fallen short. One who has substantially performed is entitled to the price promised by the other less that party's damages

Contractual Enforcement Terminology

Enforceable Unenforceable Valid Void Voidable

Occupational Safety and Health Administration

Ensures all workers a safe and healthy work environment.

Tort Law

Establishes rules for compensation when an owner's legal boundaries are wrongfully crossed by another. Often but not always requires actual injury to the owner's resources.

Condition Subsequent

Excuses contractual performance if some future event takes place

Contractual Performance Terminology

Executed contract Executory contract

Express Conditions

Explicitly mentioned in the contract governing performance

Classification of Crime

Felonies Misdemeanors

Geographic Boundaries

Georgia, Alabama, and Florida use the 11th circuit court of Appeals.

Seniority Systems

Give priority to those employees who have worked longer for a particular employer or in a particular line of employment of the employer. Employers may institute seniority systems on their own, but in a union shop they are usually the result of collective bargaining. - As a result of seniority, the last hired or usually the first fired.

Adverse Possession

Gives you ownership of land under state statute when the possession is as follows: - Open and notorious. The possessor must occupy the land in such a way as to put the true owner of the land on notice. - Actual and exclusive. The possessor must physically occupy the land. However, the building of a fence around the land of construction of a building on it constitutes physical occupation. - Continuous. Possession must not be interrupted. - Wrongful. The possessor must not have the owner's permission to be on the land. - For a prescribed period of time. Most states specify an adverse possession of between 10 and 20 years before the possessor becomes the new owner.

Legal Realism

Goes beyond just the words of law to examine what police, administrators, prosecutors, and judges are actually doing as they enforce, interpret, and apply laws.

Pleas in Criminal Cases

Guilty Not Guilty Nolo Contendere ("no contest") Criminal conviction may be basis for civil damages suit

Rules of Interpretation

Handwritten terms->control->TYPED terms->control->Pre-printed terms/forms.

Good Faith

Honestly in dealing; innocence; without fraud or deceit.

Sociological Jurisprudence

Idea that law can and should change to meet new developments in society.

Intentional Interference with contractual relations

If employees are under contract to an employer for a period of time, another employee cannot induce them to break their contracts.

Condition Precedent

If something must take place in the future, before a party has a duty to perform

Battery

Illegal touching of another. ----Touching is done without justification and without the consent of the person touched. Includes: being pulled and grabbed. ----There is no legal exception for offensive touching to gain control of an employee, like there may be for a merchant detaining a shoplifter.

Robbery

Illegally taking something by force.

Strict Liability Torts

Impose legal responsibility for injury even though a liable party neither intentionally nor negligently causes the injury.

Cause in fact

In a negligence suit the plaintiff must prove that the defendant actually caused the injury. ------Courts leave questions of cause in fact almost entirely to juries as long as the evidence reveals that a defendant's alleged carelessness could have been a substantial, material factor in bringing about an injury.

Seller

In commercial law, a person who sells or contracts to sell goods.

Public Law

Includes matters that involve the regulation of society as opposed to individuals interacting. Main types of Public Law Include: 1. Constitutional Law 2. Administrative Law 3. Criminal Law

Fraud

Intentional misrepresentation of a material fact that is justifiably relied upon by someone to his or her injury.

Intentional Torts

Involve deliberate actions that cause injury. Done with intent or on purpose.

Negligence Torts

Involve injury following a failure to use reasonable care. Being careless.

Procedural due process

Involve whether proper notice has been given and a proper hearing has been conducted.

Constitutional Law

Involves the interpretation and application of either the federal or state constitutions.

Property Law

Involves the recognition of exclusive right in both tangible (physically touchable) and intangible resources.

Law

Is made up of rules. Rules are laid down by the state and backed up by enforcement. First Known written set of laws was the Code of Hammurabi named after the Babylonian king of the eighteenth century BC.

Kelo v. City Of New London, Connecticut

Issue: Whether New London Development Corporation (NLDC), in taking property from private owners for the purpose of economic development, satisfy the public use requirement of the Fifth Amendment? Key Points: - The Supreme Court considered the scope of the "public use" requirement in connection with the taking of private property. The specific consideration was whether a city's development plan serves "public purpose." - The court concluded that the city of New London designed its plan to provide significant benefits to the community, including new jobs and increased tax revenue. - Accordingly, the Court held that the public use requirement of the takings clause was satisfied because the development plan serves a public purpose. - In his dissenting opinion, Justice Thomas declined to view "economic development" takings as "public use" and expressed concern about the ramifications of the Majority opinion.

Rule 10b-5 adopted by the SEC in 1942

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange, (a) to employ any device, scheme, or artifice to defraud, (b) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon my person, in connection with the purchase or sale of any security.

Comparable Worth

Jobs that, although different, produce substantially equal value for the employer.

Free Enterprise Fund v. Public Company Accounting Oversight Board

Key Points -The president not only has the constitutional power to appoint individuals to help execute laws, but most necessarily, then, have the power to remove individuals from their positions. -Individuals appointed to office must have accountability to the president. The PCAOB protected Board members from removal except when a good cause standard was met, but those officers who make the good cause determination were not in control of the president. The court characterizes this as a "novel structure." -The court ruled the process of removal created by the Sarbanes-Oxley Act for the PCAOB unconstitutional -The entire Sarbanes-Oxley Act was not deemed unconstitutional; rather, the Court "severed" the unconstitutional PCOAB process and allowed the rest of the law to remain in force.

Case 7.3 Cook v. Sullivan 829 A.2d 1059 (N.H. Sup. Ct. 2003)

Key Points: - The Sullivans transformed their property to support a new house, but this had the effect of unreasonably and substantially harming the Cooks' property. They did not internalize the costs of their behavior. - The water that flooded the Cooks' property did not necessarily flow from the Sulivans' property. If it had, the water might have constituted a trespass rather than a nuisance. - If the Sullivans had provided the court with another option other than moving their house, the balance of hardships might have come out differently.

Thompson v. North American Stainless, LP

Key Points: -Eric Thompson and his fiance Miriam Regalado worked for the same employer, NAS. After Regalado filed a Title VII claim with the EEOC, NAS fired Thompson. -The Supreme Court was asked to determine if firing Thompson constituted unlawful retaliation and, if so, whether he had a cause of action under Title VII. -The court held that an employee of NAS, Thompson was within the zone of interests of Title VII and, as such, the statute's antiretaliation provisions protected him. As such, he has standing to bring a claim against NAS.

Federal Communications Commission v. AT&T Inc.

Key Points: -Even though a corporation is treated the same as an individual under most aspects of the law, there are some rights that only individuals possess. -The court determined that corporations do not have personal privacy rights, at least in the way intended by Congress.

Alli v. U.S.

Key Points: Dr.Alli and his wife claimed that the corporate structure shielded them from decisions made in the name of the corporation. The court concluded that Dr.Alli and his wife did not act as though the corporation was independent from their personal assets. The court also found that the corporate form had been used to commit a wrong by failing to adhere to obligations to keep BSA's properties in a decent and safe condition for tenants.

Stoneridge Investment Partners, LLC, Petitioner v. Scientific-Atlanta, Inc. et al.

Key Points: Scientific-Atlanta and Motorola both supplied Charter Communications with digital boxes, a transaction that was fraudulently manipulated to show an increase in cash flow on Charter's financial statements, when in reality there was no economic impact. When sued under Section 10(b), Scientific-Atlanta and Motorola contended that neither entity's deceptive statements or acts were relied upon by charter's investors to constitute a violation under the section 10(b) private right of action. The Supreme Court held that Charter was responsible for misleading financial statements and that is suppliers did not have a duty to Charter's investors to disclose the deception and their involvement was not directly related to the harm suffered by Charter's investors This ruling does not mean that businesses or actors assisting others in Section 10(b) violations are not held responsible through other enforcement actions, including state securities laws, but that Congress has not extended this provision of the 1934 Securities Exchange Act to hold these aiders and abettors accountable.

Case 6.1 Snyder v. Phelps 131 S.CT. 1207 (2011)

Key Points: - The Supreme Court held that the First Amendment protected the picketing because a pertained to a matter of "public concern." Although many may consider the messages problematic, the Court found that they address a range of issues, including political and moral conduct, which pertain to broad public issues. - The Court declined to expand the captive audience doctrine to a situation such as this, in which the protesters stayed in the authorized location, away from the memorial service, and there was no facts that suggested that the picketing disrupted the funeral service. - This decision underscores a level of protection afforded to the First Amendment. In his dissenting opinion, Justice Alito expresses a very different stance.

St.Louis Produce Market v. Hughes

Key points: - The failure of a condition precedent can excuse a party's performance, even if it is minor. Similarly, the existence of a minor condition subsequent can cut off a party's obligation to perform. - Parties often use conditions to ensure that a transaction occurs under favorable and anticipated circumstances. - Parties should carefully consider whether conditions are necessary and understand that they may, at times, provide hold-up power to one side.

Trade Secret

Knowledge Or Info 1. Kept Secret (reasonable measures taken) 2. Economic Value Uniform Trade Secrets Act

Typical Alignment

LEFT -Ginsburg -Breyer -Sotomayor -Kagan SWING -Kennedy RIGHT -Roberts -Scalia -Thomas -Alito

Administrative Law

Legal principles that apply to government agencies, bureaus, boards, or commissions.

Private Law

Legal problems and issues that concern your private resource relationships with other people. Main Types Include: 1. Property Law 2. Contract Law 3. Tort Law

Delivery

Legal term referring to transfer of possession from the seller to the buyer

Federal Question Cases

Litigation involving the application or interpretation of the Federal Constitution, federal statutes, federal treaties, or federal administrative agencies. The federal court system has subject matter jurisdiction over these issues.

Long-Arm Statute

Long-Arm Statue is allowed if the defendant: 1. Has committed a tort within that state 2. Owns property within the state that is the subject matter of the lawsuit 3. Has entered into a contract within the state or transacted business that is the subject matter of the lawsuit within the state.

Dram Shop Acts

Majority of states impose strict liability upon tavern owners for injuries to third parties caused by their intoxicated patrons.

Capacity

Mental ability to make a rational decision that includes the ability to perceive and appreciate all relevant facts. A required element of a contract.

Copyright

Monopoly: 1. Copying and marketing 2. Limited period of time 3. Original expression

National Federation of Independent Business v. Sebelius, 567 U.S. __, 132 S. Ct. 2566 (2012)

National Federation of Independent Business v. Sebelius, 567 U.S. __, 132 S. Ct. 2566 (2012) Issue: - Plaintiffs challenged the constitutionality of individual mandate and Medicaid expansion of the Affordable Care Act Key Points: - Supreme court upheld individual mandate as it was enacted pursuant to its Constitutional power to tax. Most Americans are now required to purchase and maintain health insurance with minimum essential coverage or to pay a penalty - Congress exceeded its authority by attempting to coerce states into participating in the Medicaid Expansion, the Supreme Court held that the provision in the Affordable Care Act that would have allowed the federal government to withhold all medicaid funds from states not participating in the mandated expansion of Medicaid coverage is unconstitutional. - All other portions of the Affordable Care Act were left in force.

Implied Conditions

Not explicitly mentioned but can be read into the parties' obligations to perform

Design Defects

Occur when a product is manufactured according to the manufacturer's standards, but the product is injures a user due to its unsafe design. -----Lawsuits based on design defects are common, but often very controversial.

Discharged

Occurs when the party is relieved from all further responsibility of performance

Tender performance

Offer to perform

Duty

One is not liable for another's injury unless he or she has a ____________ toward the person injured.

Alter-ego theory

One method used by courts to pierce the corporate veil when a shareholder fails to treat the corporate organization as a separate legal entity.

Slander

Oral defamation.

Publicly held

Organizations owned by hundreds, if not thousands, of people.

Closely Held

Organizations that are owned by only a few people.

Exceptions to the Writing Requirement

Part performance Judicial admission Rules involving goods

Concurrent Condition

Parties have a simultaneous duty of performance

Accord and satisfaction

Payment of money, or other thing of value, usually less than the amount demanded, in exchange for cancellation of a debt that is uncertain in amount.

Kickbacks

Payments made to a person who has facilitated a transaction.

Duty of performance

Performance required by the other party as promised in the contract

Third-party beneficiaries

Persons who are recognized as having enforceable rights created for them by a contract to which they are not parties and for which they have given no consideration.

JURISPRUDENCE

Philosophies that explain origin of law and its justification: 1. Natural Law 2. Positive Law 3. Historical School 4. Sociolgical Jurisprudence 5. Legal Realism

Assault

Placing of another in immediate apprehension for his or her physical safety. ----Expectation that one is about to be physically injured

Assumption of risk

Plaintiff's knowing and willing undertaking of an activity) The plaintiff's knowing and willing undertaking an activity made dangerous by the negligence of another.

Affirmative Action

Positive Steps taken in order to alleviate conditions resulting from past discrimination or from violations of a law. Program: Designed to promote actively the position of minority workers with regard to hiring and advancement.

Presumption of innocence

Presuming that an indicted person is innocent until found guilty by a petit jury

Federal Energy Regulatory Commission (FERC)

Promotes dependable, affordable energy through sustained competitive markets.

Wheel of Property

Property: The legal right to exclude others from various resources. Also called "ownership". 1. Criminal Law: Provides public protection for private resources and punishes those who harm them. 2. Tort Law: Protects and compensates owners through private civil lawsuits when their resources, including those they have in themselves, are wrongfully harmed by the actions of others. 3. Law of Business Organizations: Identifies how individuals can own and use resources in groups. Includes corporate governance. 4. Contract Law: Determines how resources, including labor, are exchanged between owners. 5. Constitutional Law: Establishes the framework of the state whose purpose is to protect property in its broadest sense. 6. Administrative and Regulatory Law: Concerns public laws that protect, tax, regulate, or redistribute an owner's resources.

Consumer Product Safety Commission (CPSC)

Protects the public against unreasonable risks of injury associated with consumer products.

Federal Trade Commission (FTC)

Protects the public from anticompetitive behavior and unfair and deceptive business practices.

Section 1981

Provides that all persons shall have the same right to make and enforce contracts. Two Advantages to the plaintiff that files a suit based on Section 1981: 1. There are no procedural requirements for bringing such a suit, whereas there are number of fairly complex requirements plaintiffs must follow before bringing a private suit under Title VII. By using Section 1981, a plaintiff alleging race discrimination can immediately sue an employer in federal court without first going through the EEOC. 2. Under Section 1981 courts can award unlimited compensatory and punitive damages. There are no capped limits as there are under Title VII. As a practical matter, parties alleging racial discrimination usually sue under both Section 1981 and Title VII.

Injurious Falsehood

Publication of untrue statements that disparage the business owner's product or its quality. Usually applies to a product or business rather than character or reputation.

Federal Aviation Administration (FAA) (part of the Department of Transportation)

Regulates civil aviation to provide safe and efficient use of airspace.

Federal Communications Commission (FCC)

Regulates interstate and foreign communications by means of radio, television, wire, cable, and satellite.

Federal Reserve Board (FRB)

Regulates the availability and cost of money and credit; the nation's central bank.

Proximate Cause (Legal Cause)

Represents the proposition that those engaged in activity are legally liable only for the foreseeable risk that they cause. ------Example: It is reasonable to expect that a collapsing hotel walkway should injure those on or under it. But many courts would rule as unforeseeable that someone a block away, startled upon hearing the loud crash of the walkway, should trip and stumble into the path of an oncoming car.

Strict liability Tort

Require the plaintiff to prove only that the defendant has injured something proper to the plaintiff.

Intentional Tort

Require the plaintiff to prove the defendant intended to cross the boundaries protecting the plaintiff. Include: - Assault - Battery - Conversion - Trepassing

Rescission

Requires each party to return the consideration given the other. Often used in fraud, misrepresentation or mistake cases. May be coupled with restitution, which requires a party to compensate for something that cannot be returned.

Negligence Tort

Requires the plaintiff to show that the defendant injured what was proper to the plaintiff through unreasonable behavior.

Contract Law

Rules of how owners transfer resources by exchanging them. Involve enforceable promises to exchange resources in the future.

Conflicts of Law

Rules of law the courts use to determine that substantive law applies when there is an inconsistency between laws of different states or countries.

Liability under the Securities Exchange Act of 1934

Section 10(B) -Purpose: Creates liability for use of mail or any instrumentality of interstate commerce to defraud any person in connection with the purchase or sale of any security. -Plaintiff's case: Proof of defendant's intent to deceive through use of false information or nondisclosure of truthful information; plaintiff's reliance on fraudulent documents; and damages. -Defendant's defenses: No actual fraud was involved: only aided or abetted fraud; information was not material. -Civil liability: Person in violation of 10(b) is liable for actual damages, court costs, and reasonable attorney fees. Section 16(b) -Purpose: Creates strict liability for any insider making a profit on issuer's securities during any six-month period. -Plaintiff's case: Proof of the short-swing nature of the profitable transaction. -Defendant's defenses: Proof of no short-swing transaction; good faith (lack of intent) is no defense. -Civil fines: Up to three times the illegal profits; ban from service as director or officer. Section 18 -Purpose: Imposes liability for fraudulently filing false or misleading documents with the SEC or any exchange. -Plaintiff's case: Proof of defendant's intent to make false or misleading documents filed; plaintiff's reliance on documents filed; and damages. Defendant's defenses: Freedom from fraud; good faith---no intent to defraud; no reliance by plaintiff on documents filed. Criminal liability: -For securities fraud: Up to 25 years in Prison. -For false or misleading documents filed: $5,000,000 fine or 20 years in prison or both per individual; $25,000,000 fine per organization. -For trading nonpublic information: $1 million fine or 10 years in prison or both per individual; $10 million fine per organization.

Liability under the Securities Act of 1933

Section 11: -Purpose: Creates liability for false or misleading registration statements. -Plaintiff's Case: Not required to prove defendant's intent or plaintiff's reliance on documents. -Defendant's defenses: Proof of no false or misleading information; proof that plaintiff knew of false or misleading nature of information; except for issuers, proof of reliance on an expert (attorney or accountant). Section 12: -Purpose: (1) Creates liability for failing to file a required registration statement; (2) creates liability for false or misleading prospectus. -Plaintiff's case: Not required to prove defendant's intent to deceive or plaintiff's reliance on documents. - Defendant's defenses: For (1), plaintiff equally at fault for failing to file a registration statement; for (2), same as Section 11 defenses. Section 17: -Purpose: In an interstate transaction, it is unlawful to (1) employ any device, scheme, or artifice of fraud; (2) obtain money or property by untrue statement or omission of material fact; (3) engage in events that operate or would operate as fraud or deceit. -Plaintiff's case: For (1), required to prove defendant's intent to deceive; for (2) and (3), not required to prove intent to deceive. -Defendant's defenses: For (1), proof of no intent to deceive and proof of good faith; for (2), proof of no material misstatement or omission; for (3), proof of no involvement in unlawful activities. Criminal Liability - $10,000 fine or 5 years in prison or both.

Equal Employment Opportunity Commission (EEOC)

Seeks to prevent discrimination in employment based on race, color, religion, sex, or national origin and other unlawful employment practices.

Miranda Warning

Set forth in Miranda v. Arizona (1966). You must be read your "Miranda Rights". 1. You have the right to remain silent and refuse to answer questions. Do you understand? 2. Anything you do say may be used against you in a court of law. Do you understand? 3. You have the right to consult an attorney before speaking to police and to have an attorney present during questioning now or in future. Do you understand? 4. If you cannot afford an attorney, one will be appointed for you before any questioning if you wish. Do you understand? 5. If you decide to answer questions now without an attorney present you will still have the right to stop answering at any until you talk to an attorney. Do you understand? 6. Knowing and understanding your rights as I have explained them to you, are you willing to answer my questions without an attorney present?

Preemption

Sometimes a federal law is said to preempt an area of law, if a federal law preempts a subject, then any state law that attempts to regulate the same activity is unconstitutional under the supremacy clause.

Criminal Law

Specifies various offenses against the proper order of the state.

Commercial Impracticability

Speech that has a business-oriented purpose. This speech is protected under the First Amendment, but this protection is not as great as that afforded to noncommercial speech.

Originalism

Stands for the idea that courts should interpret the Constitution according to the intentions of those who wrote it.

Immunity

Status of exemption from lawsuits or other legal obligations.

Retaliation

Striking back against someone for what they did to you. Used in labor law, employment discrimination cases, and whistle-blowing as part of a doctrine prohibiting an employer form firing or taking other adverse actions against employees for reporting the employer to federal agencies for violating various laws. It is illegal for employers to retaliate against employees for opposing discrimination, filing a charge of discrimination, giving testimony in a discrimination case, or in any way participating in a discrimination investigation.

Federal Court System

Supreme Court (9 justices)->> United States Court of Appeals (12 circuits)-> - Tax Court - Administrative Agencies - United States District Courts (with federal and local jurisdiction - United States District Courts (with federal jurisdiction only) - United States Bankruptcy Courts ---->>> - Court of Appeals for Federal Circuit - State Courts

Goods

Tangible, movable items of personal property.

Stare Decisis

The Doctrine that traditionally indicates that a court should follow prior decisions in all cases based on substantially similar facts.

Freedom of Religion

The First Amendment states that Congress shall make no law "respecting an establishment of religion" (the establishment clause) "or prohibiting the free exercise thereof" (the free exercise clause).

RICO

The Racketeer Influenced and Corrupt Organizations Act.

Rules involving goods

The UCC creates a number of situations that allow the enforcement of oral agreements involving the sale of goods. In essence, the law strives to facilitate transactions involving goods as long as the parties cannot be deceive the judge who is asked to determine a contract's validity.

Consequential Damages

The amount of money awarded in a breach-of-contract case to the non-breaching party to pay for the special damages that exceed the normal compensatory damages. Lost opportunities may create consequential damages if the breaching party was aware of the special nature of the contract.

Mirror Image Rule

The common law rule that the terms of an acceptance offer must mirror exactly the terms of the offer. Any variation of terms would make the attempted acceptance a counteroffer.

Acceptance

The contractual communication of agreeing to another's offer. The acceptance of an offer creates a contract.

Revocation

The contractual communication of withdrawing an offer.

Mailbox Rule (Deposited acceptance rule)

The contractual doctrine that a binding acceptance of an offer occurs when a mailed acceptance is irrevocably placed with the postal service.

Part performance

The contractual doctrine that says when a buyer of land has made valuable improvements in it or has paid part or all of the purchase price, the statute of frauds does not apply to prevent an oral land sales contract from being enforceable.

Association for Molecular Pathology v. Myriad Genetics. Inc.

The court determined that naturally occurring sequences of DNA isolated from the human body are not patent eligible. However, nonnaturally occurring or manufactured DNA sequences can be patented. The Court's decision retroactively affects existing patent claims covering natural DNA---they are now invalid. Patent law is intended to reward invention, not investment per se.

Ultrahazardous Activity

The courts impose strict liability for this. ----Transporting and using explosives and poisons fall under this category.

Intent

The desire to bring about certain results. Results that are "substantially likely" to result from an action.

Exculpatory no

The doctrine that merely denying guilt is not a criminal lie in response to a question from an agency of the federal government. This doctrine is no longer valid.

Articles of organization

The document used to create a limited liability company. Its purpose corresponds to the purpose of the articles of partnership and the articles of incorporation.

Expectation of privacy

The expectation that one will not be observed by that state.

Expectation of Privacy

The expectation that one will not be observed by the state.

Rule of Law

The general and equal application of laws, even to lawmakers.

Constitutional Relativity

The idea that constitutional interpretation is relative to the time in which the Constitution is being interpreted.

Administrative law judges

The individual employed by an administrative agency who is in charge of hearing the initial presentations in a quasi-judicial case.

Members

The individuals or business entities that belong to a limited liability company.

False imprisonment

The intentional unjustified confinement of a non-consenting person. Most states have statues that permit merchants or their employees to detain customers suspected of shoplifting, this detention must be a reasonable one. -----The unnecessary use of force, lack of reasonable suspicion of shoplifting, or an unreasonable length confinement can cause the merchant to lose the statutory privilege. The improperly detained customer is then able to sue for false imprisonment.

Misappropriation Theory

The legal doctrine supported by the Securities and Exchange Commission (SEC) and the courts that any person who shares nonpublic information with another party or who trades on the information violates the securities law if f that information was intended to be kept confidential.

Piercing the corporate veil

The legal doctrine used by courts to disregard the existence of a corporation, thereby holding the shareholders personally liable for the organization's debts.

Charter

The legal document issued by a state when creating a new corporation.

Registration Statement

The legal document required to be filed with the Securities and Exchange Commission (SEC) prior to securities being offered for sale to the public.

Prospectus

The legal document required y the 1933 Securities Act to be made available to potential purchasers of securities.

Jointly and Severally liable

The legal principle that makes two or more people, usually partners, liable for an entire debt as individuals or in any proportional combination.

Administrative Law

The legal principles involved in the workings of administrative agencies within the regulatory process.

Trial Courts

The level of any court system that initially resolves the dispute of litigants. Frequently, but not always, a jury serves as a fact-finding body while the judge issues rulings on the applicable law.

Uniform Commercial Code

The most successful attempt to have states adopt a uniform law. This code's purpose is to simplify, clarify, and modernize the laws governing commercial transactions. Article 2 of the UCC covers the sale of goods. Every state has adopted some version of Article 2

General Partners

The owner of a limited partnership that enjoys the control of the partnership's operation. This type of partner is personally liable for the debts of the limited partnership.

Land sales contract

The owner of land sells it by contract subject to the condition that the seller retains the title to the land until the buyer pays the purchase price. Until that time, the buyer has the legal right to possess and use the land and is responsible for paying taxes and insurance.

Organizers

The parties responsible for bringing a limited liability company into existence. These parties correspond to the functions of incorporators with respect to corporations

Underwriter

The party that, in securities law, guarantees the issuer that the securities offered for sale will be sold.

Controlling Person

The person who has the control of, or is controlled by, the issuer of securities in securities laws.

Diversity Of Citizenship

The plaintiffs filing a lawsuit must be from states different from those of the defendants. This requirement, along with over $75,000 at stake, is one method a federal court gains jurisdiction over the subject matter of a lawsuit.

Short-swing profits

The proceeds gained by an insider buying and selling, or vice versa, securities within a six-month period. Such profits are considered to be illegal.

Reasonable Accommodation

The process of adjusting a job or work environment to fit the needs of disabled employees.

Defamation

The publication of untrue statements about another that hold up the individual's character or reputation to contempt and ridicule. The Untruth must be known to third parties.

Probable Cause

The reasonable basis on which law enforcement officials convince a judge that criminal activity has occurred. This is the basis that must be satisfied before a judge will issue a criminal research.

Rejection

The refusal of an offer. A rejection terminates an offer.

Release

The relinquishment of a right or claim against another party.

Cease and desist order

The sanction that may be issued by an administrative agency to prevent a party from violating the law.

Novation

The substitution of a new contract in place of an old one.

Issuer

The term in securities law for an individual or business organization offering a security for sale to the public.

Limited Personal liability

The term is used to describe the exposure of business owners to pay the debts of their businesses when such exposure does not exceed the owner's investment in the business.

Larceny

The unlawful taking of personal property with the intent to deprive the right owner of this property.

Mail or wire fraud

The use of the U.S. Postal Service or any interstate carrier to conduct fraudulent activities with the intent to deprive an owner of property

Burglary

Theft by breaking and entering.

Caused

There is usually no liability for injury unless one has __________ the injury.

Limited Partners

These owners of a limited partnership who forgo control of the organization's operation in return for their liability being limited to the amount of their investment.

Enron: The Smartest Guys in the Room documentary

This documentary explores the fall of the Enron Corporation, arguably the most shocking example of modern corporate corruption. The company is linked with several illegal schemes, including instigating the California energy crisis as a way to drive up utility prices at the expense of the average American. In a hyper-competitive environment, Enron traders resort to all kinds of underhanded dealings in order to make money at any cost and keep their high-paying jobs. The film begins with a profile of Kenneth Lay, who founded Enron in 1985. Two years after its founding, the company becomes embroiled in scandal after two traders begin betting on the oil markets, resulting in suspiciously consistent profits. One of the traders, Louis Borget, is also discovered to be diverting company money to offshore accounts. After auditors uncover their schemes, Lay encourages them to "keep making us millions". However, the traders are fired after it is revealed that they gambled away Enron's reserves; the company is narrowly saved from bankruptcy by the timely intervention of executive Mike Muckleroy, who managed to bluff the market long enough to recover Borget's trading losses and prevent a margin call. After these facts are brought to light, Lay denies having any knowledge of wrongdoing. Lay hires Jeffrey Skilling, a visionary who joins Enron on the condition that they use mark-to-market accounting, allowing the company to record potential profits on certain projects immediately after contracts were signed, regardless of the actual profits that the deal would generate. This gives Enron the ability to subjectively give the appearance of being a profitable company even if it isn't. With the vision of transforming Enron from an energy supplier to an energy trader, Skilling imposes his interpretation of Darwinian worldview on Enron by establishing a review committee that grades employees and annually fires the bottom fifteen percent, a process nicknamed within the company as "rank and yank". This creates a highly competitive and brutal working environment. Skilling hires lieutenants who enforce his directives inside Enron, known as the "guys with spikes." They include J. Clifford Baxter, an intelligent but manic-depressive executive; and Lou Pai, the CEO of Enron Energy Services, who is notorious for using shareholder money to feed his obsessive habit of visiting strip clubs. Pai abruptly resigns from EES with $250 million, soon after selling his stock. Despite the amount of money Pai has made, the divisions he formerly ran lost $1 billion, a fact covered up by Enron. Pai uses his money to buy a large ranch in Colorado, becoming the second-largest landowner in the state. With its success in the bull market brought on by the dot-com bubble, Enron seeks to beguile stock market analysts by meeting their projections. Executives push up their stock prices and then cash in their multi-million-dollar options, a process known as "pump and dump". Enron also mounts a PR campaign to portray itself a profitable, prosperous and innovative company, even though its worldwide operations are performing poorly. Elsewhere, Enron begins ambitious initiatives such as attempts to use broadband technology to deliver movies on demand, and "trade weather" like a commodity; both initiatives fail. However, using mark-to-market accounting, Enron records non-existent profits for these ventures. CFO Andrew Fastow creates a network of shell companies designed solely to do business with Enron, for the ostensible dual purposes of sending Enron money and hiding its increasing debt. However, Fastow has a vested financial stake in these ventures, using them to defraud Enron of tens of millions of dollars. Fastow also takes advantage of the greed of Wall Street investment banks, pressuring them into investing in his shell entities and, in effect, conduct business deals with himself. All of this done with the permission of Enron's accounting firm Arthur Andersen and the corporate board. Most of these deals were leveraged with Enron stock, meaning that a significant decline in Enron's stock price could cause Fastow's network of shell companies to fall apart. During this time, Enron's executives encourage the company's employees to invest their savings and retirement funds into Enron stock while they are selling off their shares for millions. Enron's successes continue as it became one of the few Internet-related companies to survive the dot-com bubble burst in 2000, and is named as the "most admired" corporation by Fortune magazine for the sixth year running. However, Jim Chanos, an Enron investor, and Bethany McLean, a Fortune reporter, question irregularities about the company's financial statements and stock value. Skilling responds by calling McLean "unethical", and accusing Fortune of publishing her reporting to counteract a positive BusinessWeek piece on Enron. Three Enron executives meet with McLean and her Fortune editor to explain the company's finances. However, Enron found its positive public image destroyed due to its role in the California energy crisis; Enron traders exploited the shaky foundation of the state's newly deregulated energy market by shutting down power plants and exporting power out of the state to create artificial shortages that would drive up the cost of electricity and thus bring massive profits into Enron; Enron would make $2 billion off of the crisis. The film plays tape recorded conversations between Enron traders who seemed to derive enjoyment from their exploitation of the crisis and then cites the Milgram experiment as a means of explaining as to why they were behaving in such a manner. It also points out the strong ties Ken Lay and Enron had to the administrations of George H. W. Bush and his son George W. Bush, and suggests that Enron's actions during the California energy crisis could have been intended as a means of hurting the political standing of California governor Gray Davis, who was seen as a strong potential Democratic challenger to Bush in the 2004 Presidential election. Indeed, Davis would be recalled in 2003, which effectively ended his political career. Skilling, who by then had succeeded Lay as Enron's CEO, blames California's energy laws for the crisis and denies that Enron is acting inappropriately, infamously stating on a 2001 episode of Frontline, "We are the good guys; we are on the side of angels." While the Bush administration refuses to intervene, which the film suggests could have been a result of Enron's influence, the Democratic-majority Senate ends the crisis by imposing price controls. Meanwhile, throughout 2001 much more scrutiny is brought upon Enron's balance sheet and this agitates CEO Skilling, who the film claims was quickly approaching a nervous breakdown upon the realization that the company was now in such a deep hole that it was headed for certain collapse. He begins to engage in all kinds of odd and irrational behavior - such as calling an investor an "*******" during a conference call when asked why Enron doesn't produce a balance sheet and a cash flow statement like its competitors - which culminates in his abrupt resignation as CEO in August 2001 in which Ken Lay retakes the position. Skilling's odd behavior serves as a red flag to investors who begin to question how financially healthy the company really is; Enron's stock price begins to rapidly decline. Immediately after Skilling's departure, whistleblower Sherron Watkins, who had just recently discovered the fraud in Enron's books, alerts Lay and tells him that the company is headed to certain collapse unless he acts immediately. Like in 1987, Lay largely ignores Watkins' warnings and assures employees and the public that Skilling left for personal reasons and that the company was financially solid. At the same time, the board fires CFO Fastow after discovering that he had embezzled more than $30 million from the company through his shell companies. With Fastow gone, Enron's accountants issue a series of restatements that erase a majority of the company's profits from 1997 through 2000, adds nearly $1 billion of debt to the company's balance sheet, and removes over $1 billion of shareholder equity as a means of writing down the losses from Fastow's shell companies. Despite Lay's continued assurances that Enron is in good shape and will pull through, the company's stock price tanks as its investors and customers lose all confidence in it and Enron is forced to file for Chapter 11 bankruptcy protection in November 2001. As a result of Enron's bankruptcy, many of its employees lose their pensions and life savings, while investors lose over $11 billion in shareholder value. Congressional hearings are held into the scandal, where Ken Lay and Andrew Fastow plead the fifth. Fastow eventually pleads guilty in a deal that he will testify against his former coworkers in exchange for a reduced sentence, while Lay and Skilling plea innocent and spend tens of millions of dollars on defense attorneys.

Quasi-legislative

This term describes the rule-making functions of administrative agencies.

Ownership

This term refers to the exclusive legal right to possess, transfer, and use resources.

Incorporators

Those individuals who are responsible for bringing a corporation into being.

Qualified Disabled

Those with a disability who, with or without reasonable accommodation, can perform essential functions of a particular job position. Employers must make reasonable accommodation only for the qualified disabled.

Trespass

To enter another's land without consent or to remain there after being asked to leave. -----Variation: Arises when something (such as particles of pollution) is placed on another's land without consent. Is a crime as well as a tort.

Mitigate

To lessen the consequences of. Usually used to refer to the contractual duty to lessen damages following breach of contract.

Marks Protected by the Lanham Act of 1946

Trademark Service mark Certification mark Collective mark Trade dress

Georgia's Trial Courts

Trial Court Types: 1. Probate Court 2. Juvenile Court 3. Magistrate Court 4. Superior Court 5. State Court

Organization of the Court System

Trial Courts->Appellate Courts->Supreme Courts

Petit jury

Trial jury that returns a verdict in criminal and civil cases • Consist of 12 persons - Smaller juries are acceptable • Decision must be unanimous - Exceptions in some states

Hostile Work Environment

Type of sexual harassment cases in which co-workers make offensive sexual comments or propositions, engage in suggestive touching, show nude pictures, or draw sexual graffiti.

Review of Hierarchy

U.S. Constitution and Amendments Statutes of Congress Federal administration regulation State constitutions State statutes State administrative regulation Local ordinances Case law

Pattern of Racketeering

Under RICO, two or more similar acts of organized crime in a ten-year period.

Sexual Harrassment

Under Title VII, for an employer or workplace supervisor to promise benefits or threaten loss if an employee does not give sexual favors. Also called a Quid Pro Quo (this for that) case.

Comparative Responsibility

Under comparative principles, the plaintiff's contributory negligence does not bar recovery. It merely compares the plaintiff's fault with the defendant's and reduces the damage award proportionately.

Compensatory Damages

Usually awarded in breach-of-contract cases to pay for a party's to pay for a party's losses that are a direct and foreseeable result of the other party's breach. The award of these damages is designed to place the non-breaching party in the same position as if the contract had been performed.

Case 4.2 Wal-Mart Stores, INC. v Dukes 564 U.S.__(2011)

Walmart was claimed to discriminate against women. Key Points: - "Commonality", which requires a plaintiff to show that there are "questions of law or fact common to the class," is an essential element to establish a class action. - Because the plaintiffs were unable to demonstrate commonality, class certification was denied. - Even though class certification was denied, women in the potential class can still bring claims if they can demonstrate discrimination.

Subject matter illegality

When a change in the law renders the agreement illegal, acceptance is no longer possible.

Reverse Discrimination

When minorities or women with lower qualifications or less seniority than white males are given preference in employment or training. Even though such programs are intended to remedy the effects of present or past discrimination or other barriers to equal employment opportunity, white males have argued that the law does not permit employers to discriminate against them on the basis of race or sex any more than it allows discrimination against minorities or women.

Breach of Contract

When one party fails to do what he or she agreed to do.

Liquidated Damages

When real damages for breach of contract likely to be uncertain, parties may specify in the contract what the damages would be. Courts will enforce unless they appear to penalize instead of compensating for uncertain losses.

Subject matter destruction

When the object of the contract is destroyed or legally eliminated.

Lapse of time

When the offeree fails to accept by a deadline defined in the offer or after a reasonable period of time.

Offeror death or insanity

When the offeror no longer has the capacity to make the offer.

Indefiniteness

When the terms of an agreement are not sufficiently specific, the agreement does not rise to the level of a contract because of the doctrine of indefiniteness.

Willfully/Knowingly

With intent to defraud or deceive.

Scienter

With knowledge, particularly, guilty knowledge.

Libel

Written defamation, or defamation published over radio or television.

Conversion

Wrongful exercise of dominion(power) and control over the personal(non-land) resources that belong to another. Deprives owners of their lawful right to exclude others from such resources. May be either temporary or permanent, but it must constitute a serious invasion of the owner's legal right.

Misdemeanors

punishable by a fine or jail sentence of less than one year

Felonies

punishable by fine or imprisonment in a penitentiary for a period of one year or more

Functions of Agencies

‐ Rule making ‐ Adjudicating ‐ Advising ‐Investigating

Appellate Courts

• 12 Courts of Appeal • Court of Appeals for Federal Circuit--court of appeals that hears appeals from o Special courts o Administrative decisions • Appellate courts have also been created, such as CAAF, to handle special subject matter

Sanctions for Violating Statutes & Regulations

• A variety of sanctions can be imposed and are often similar to those imposed in criminal conduct, breach of contract, or tortious conduct. - Fines, damage awards Sanctions for violating statutes or regs are important for enforcing a property‐based legal system.

Acquiring Resources Through Accession

• Accession: Something that is added • Law of accession - When people apply efforts to any raw materials and change its nature into finished products, they own the finished products

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

• Addresses many issues of financial reform • Congress authorized the creation of new administrative agencies to achieve the goals of Dodd‐Frank Act - Financial Stability Oversight Council (FSOC) - Federal Insurance Office (FIO) - Office of Housing Counseling(HUD) - Office of Credit Ratings (SEC) - Investment Advisory Committee (SEC) - Office of Investor Advocate (SEC)

Influencing Agencies

• Agencies give public notice of proposed rules and hold public hearings • Interested parties present evidence in support or opposition to the regulation • Agencies react to the force of public opinion • Each branch of government has control over the administrative process

What is a Security?

• Any interest or instrument that offers the right to subscribe to or purchase stock, bond, or any certificate of interest • Security includes more than corporate stock

Sarbanes-Oxley Act (SOX) of 2002

• Applies to all public companies in the U.S. and international companies registered with the SEC • Revitalization of SEC - Increased power over governance issues - Increased the SEC budget - Congress empowered the SEC to increase corporate accountability 1. Increased Authority to SEC 2. Accounting Reforms 3. Corporate Governance 4. Financial statements and controls 5. Whistleblower protection

Title VII of the Civil Rights Act of 1964

• Applies to employers with 15 or more employees •Purpose: To eliminate job discrimination based on race, color, religion, sex, or national origin • Discrimination prohibited in the following employer actions: - Discharge - Refusal to hire - Compensation - Promotion - Terms, conditions, or privileges of employment • Allows discrimination on the basis of bona fide occupational qualifications

Corporations

• Artificial and intangible entity created under the authority of a state's law • Types -Domestic -Foreign -Alien

Intentional Torts

• Assault • Battery • Infliction of mental distress • Invasion of privacy • False imprisonment • Malicious prosecution • Trespass • Conversion • Defamation • Fraud • Interference with business relations

Forms of Business Organizations

• Basic -Sole proprietorships -Partnerships -Corporations • Hybrid -Limited partnerships -S corporations -Limited liability companies -Limited liability partnerships

Amendments and Basic Protections

• Basic constitutional rights are not absolute • Extent of a limitation on a constitutional guarantee depends on the nature of the competing public policy • Constitutional guarantees exist to protect the minority from the majority • Constitutional rights vary from time to time

Third Parties' Rights

• Beneficiaries • Assignment of Contracts • Novations

Administrative Agencies

• Boards, bureaus, commissions, and organizations that make up the governmental bureaucracy • Types of regulatory authority - Quasi‐legislative - Quasi‐judicial • Create and enforce laws constituting the legal environment of business

Other Important Antidiscrimination Laws

• Civil Rights Act of 1866 • Section 1981 • Age Discrimination in Employment Act (ADEA) • Americans with Disabilities Act (ADA) • Genetic Information Nondiscrimination Act (GINA) • Health Insurance Portability and Accountability Act (HIPAA)/Affordable Care Act

Jury Selection

• Clerk of Court will have assembled a pool of potential jurors • Voir dire: Selected jurors are called into jury box and questioned • Peremptory challenge: No cause or reason needs to be given to excuse a prospective juror

Law & Regulations are Fundamental Foundations for Business

• Companies in the U.S. must: - Be aware of the legal and regulatory landscape - Take steps to ensure full compliance with the law to avoid civil and criminal liability • Lawyers play a positive role in corporate boards

Establishing the Existence of a Trade Secret

• Conduct a trade secret audit to identify confidential knowledge‐based resources • Preserve secrecy - Lock written material - Secure computer-stored knowledge with firewalls and encryption - Impose confidentiality restrictions - Regulate visitors - Ask employees, customers, and business partners to sign nondisclosure agreements

Organization of Agencies

• Consist of five to seven members - One member is appointed as chairperson • Appointments require Senate confirmation • Appointees are not permitted to engage in other employment during the terms • Agencies have distinctive organizational structure to meet its responsibilities

Acquiring Resources Through Exchange

• Contractrules: Control the way owners make agreements to exchange resources in the property‐based legal system - Allow owners to commit legally to future exchange of resources - Enable an owner to sue another if agreements in the future are broken by one of the owners

Lawful Purpose

• Contracts that require commission of a crime or tort or violate accepted standards of behavior are void • Courts typically do not take action on such contracts

Copyright Ownership

• Copyright law grants property in certain creative expressions & prohibits others from reproducing it w/o permission • Criteria for copyright protection: - Work must be original - Must be fixed in a tangible medium of expression - Must show creative expression

Factors to Consider When Selecting a Business's Organizational Form

• Cost of creation • Continuity of the organization • Managerial control of decision • Owner liability • Taxation

Appellate Procedures

• Courts of appeal deal with the record of the proceedings in lower court • Courts of appeal study the issues, testimony, and proceedings to determine: - Whether prejudicial errors occurred or whether the lower court reached an erroneous result • Brief: Short description of the case by each party to the trial • Oral argument: Specified amount of time given to attorneys to explain orally to the court their position in the case

Freedom of Speech

• Covers verbal and written communication • Protects symbolic speech -Symbolic Speech: Nonverbal expression • Unprotected speech - Fighting words - Obscenity: Unprotected speech. • Overbreadth doctrine: A principle udes by the courts to invalidate legislation that is broader in scope thna is necessary to regulate an activity. This doctrine may be utlized to protect constitutional rights, such as freedom of speech, against a wide sweep of some governmental action. - Governmental restrictions on expression must be narrowly drafted

Burden of Proof

• Criminal cases - Beyond a reasonable doubt • Civil cases ‐Subject to two standards - Preponderance of evidence - Clear and convincing proof

Scope of Discovery

• Discovery procedures are intended to be used freely by parties without court's supervision • Judges provide a liberal interpretation of the degree of discoverable information • Abuse of Discovery: - Impeding the discovery process can lead to sanctions

Acquiring Resources Through Gift

• Donor who owns something gives it to a donee, who becomes the new owner • Gift does not take place until the donor: - Intends to make the gift - Delivers the gift by physical transfer to the donee • Testamentary gift ‐Made through a will

Performance

• Duty of performance • Discharged

Specialty Applications of Property

• Easements: right to cross over land • Bailments: goods placed into another's possession to be returned in the future - Bailor: Owner of the object - Bailee: Possessor of the object

Enforcement of Civil Rights Act of 1964

• Equal Employment Opportunity Commission (EEOC) - Possess authority to: • Hold hearings • Obtain evidence • Subpoena and examine witnesses under oath • 1991 Amendments ‐Allow the recovery of compensatory and punitive damages - Employee must file charges of illegal discrimination within 180 days after notice of unlawful practice

Enforcement of Judgments and Decrees

• Execution: When a court official seizes some property of the debtor, sells it at public auction, and applies the proceeds to the creditor's claim • Garnishment: Involves having a portion of the debtor's wages paid to the court, which in turn pays the creditor

Jurors

• Fact‐finding body • Trial by jury is guaranteed by the Bill of Rights

Trademark Dilution

• Federal Trademark Dilution Act, 1995 - Prohibits the usage of a mark same as or similar to another's trademark to dilute its significance, reputation, and goodwill • Types: - Blurring ‐When usage of a mark blurs distinctiveness of a famous mark - Tarnishment‐When usage of a mark creates a negative impression about the famous company

Separation of Powers

• Federalism is the separation of powers between federal and state/local governments • Federal government recognizes that states have sovereignty • State governments may not limit the federal government's exercise of powers

Types of Ownership

• Fee simple: Represents the maximum estate allowed under law •Fee Simple Absolute: involves no limitations or conditions attached •Fee Simple Defeasible: may have a condition attached to its transfer •Life estate: grants ownership in land for the lifetime of a specified person • Leasehold estate: property rights granted to tenants by a landlord • Concurrent Ownership: more than one person can own the same property

Grand Jury

• Fifth Amendment to the U.S. Constitution -Before a trial for capital or infamous crime, there must be presentment or an indictment by a grand jury • Comprised of 23 citizens Presumption of innocence • Serve as an investigative body • Functioning depends upon the secrecy of the proceedings

When a "meeting of the minds" is Lacking

• Fraud • Mistake - Mutual mistake - Unilateral mistake • Duress • Undue influence

Specific Crimes

• Fraud • Securities Fraud • Health Care Fraud • Counterfeiting • Bankruptcy Fraud • Conspiracy • Obstruction of Justice • False Statement to a Bank or Federal Agency • Larceny • RICO • Cyber Crime • Endangering Workers • Aiding and Abetting • Bribery and Kickbacks

Commercial Speech

• Freedom of speech protects corporations and individuals - Protects the listener and the speaker • Not as extensive as individual rights - Government can limit commercial speech only when a state interest is at stake

Oral Contracts

• Generally as enforceable as written agreements • Informal • Everyday examples: - Buying fast food - Vending machines

Jumpstart Our Business Startups (JOBS) Act of 2012

• Goals - Ease burdensome federal regulations - Allow individuals to invest in start‐ups through relaxed rules • Title II - Allows companies to advertise that they are seeking investments • Title III - Allows a company to raise up to $1 million by selling securities

Personal Jurisdiction

• Having authority over the parties to the case on the part of the court • Personal jurisdiction over the defendant obtained by: - Summons: notice to appear in court - Service of process • Long‐arm statutes: Provision for the service of process or summons beyond the boundaries of the state • Extradition: Voluntary turning in of prisoner from one state to another by the presiding governors

Intellectual Property

• Importance • Justification • Competition

Excuses for Nonperformance

• Impossibility of Performance • Commercial Impracticability • Waiver • Release

Limited Partnerships

• Includes all the attributes of a partnership • Limited partners: Not responsible for the debts of the business organization • General partners: Personally liable for the organization's debts

Copyright Fair Use

• Includes copying for: - Criticism - Comment - News reporting - Teaching - Scholarship - Research • Factors for "fair use" considered on case‐by‐case basis

Judges & Justices

• Individuals Who Operate Courts • Judges—trial court - Facts and law • Justices—appellate (reviewing) courts - Law

Strict Liability Torts

• Injury‐causing behavior that is neither intentional nor negligent Many types of Strict Liability Torts

Methods to Discovery

• Interrogatories: Series of written questions presented to the opposing parties • Request for production of documents: Either party asking the other to produce specific documents • Depositions: Lawyer orally asks questions of the possible witness • Request for an admission: Requesting the other party to admit that certain issues presented in the pleadings are no longer in dispute.

Secured Transactions

• Involves a creditor who has made a loan to a debtor wh o agrees to give the creditor a security interest in a collateral - Collateral: Valuable object • Article 9 of the Uniform Commercial Code - Set of laws that controls security interests • Attachment: Occurs when: - Secured party holds given value - Debtor owns the collateral - Security agreement is provided • Perfection: Arises when a security interest is attached and creditor has taken all proper steps required by Article 9 • Financing statement: Filed to perfect a security interest under Article 9

Power of Judicial Review

• Judicial review: Ultimate power to invalidate actions by the president or the Congress • Judicial restraint: Power should not be used except in unusual cases • Judicial activism: Power should be used when the needs of society justify its use - Chief Justice John Marshall in Marbury v. Madison (1803), announced the power of judicial review.

Property Boundaries in the Physical World

• Land ownership consists of more than surface of the property • Air rights: Owner of real property also possesses the air above the land to the extent that the owner can occupy or use it in connection with the land. • Subsurface rights: A landowner may also owns the liquids, gases and minerals beneath the land. Like air rights, an owner may be able to seperate subsurface rights and sell them. • Fixtures on land: A fixture is an object of personal property that has become an object of real property (1) by physical annexation (attachment) to the land or its buildings or (2) because its use has become closely associated with the use to which the land is put. Unless and sellers and buyers agree differently when they sell land, the fixtures go with the land to the buyers.

Three Concepts for Functioning Market

• Law • Rule of Law • Property

Trademark Enforcement

• Law protects the owner from unauthorized use of the mark • Infringement: Civil violation of a trademark - Remedies include damages and injunctions and orders to destroy infringing products • Generic marks cannot be protected • Manufacturing and trafficking counterfeit trademarked products is a criminal violation

Sole Proprietorships

• Least expensive business organization to create • Proprietorship's continuity is tied directly to the will of the owner • Sole proprietor is in total control of the business's goals and operations • Owner has unlimited liability for the obligations of the business organization • Not taxed as an organization

Pleadings

• Legal documents that are filed with a court to begin the litigation process - Complaint: Pleading filed by plaintiff with the court clerk - Answer: Response in the form of written pleading by defendant - Counterclaims:Causes of action defendant has against the plaintiff. - Reply: Plaintiff admits or denies each allegation of the defendant's counterclaims Default: If the defendant does not respond in any way, the court may enter an order of default and grant the plaintiff the relief sought by the complaint.

Statute of Frauds

• Legal requirement that certain contracts be in writing • Business contracts required in writing - Sale of an interest in land - Collateral promise to pay another's debt - Contracts that cannot be performed in a year - Sale of goods of $500 or more - Other contracts based on state statutes

Property

• Legal right to exclude others from resources that are originally possessed or are acquired without force, theft, or fraud • Absolute but not infinite • Boundaries can be ambiguous • Foundation of the free market

Limited Liability Organizations

• Limited liability company (LLC) -Treated as nontaxableentities -Owners have more flexibility compared with S corporation • Limited liability partnership (LLP) -Variation of the LLC -Have characteristics of both a partnership and a corporation

POSTTRIAL ISSUES

• Losing parties have the right to appeal the case to a higher court.

Deciding on Organizational Form

• Making the Decision on the Form • Trends in Management of the Organization

Capacity of Parties

• Minors • Intoxicated or mentally incompetent persons

Demonstrating Misappropriation

• Misappropriation occurs when one improperly acquires or discloses secret information • Independent creation and reverse engineering are exempted • Employee mobility and trade secrets - Confidentiality contracts forbid employees from disclosing the knowledge obtained in workplace - Employers can enforce agreements not to compete only when there is a valid business purpose for the contract

THE TRIAL

• Next step when pretrial motions and negotiations have failed • Presentation of evidence to a jury to determine facts in dispute • Judge explains the applicable law to the jury

Acquiring Resources Through Confusion

• Occurs when fungible goods are mixed together • Owners hold a proportional share of the confused goods if the confusion occurs by honest mistake • Doctrine of confusion illustrates importance of boundaries to the concept of property

Class-Action Suits

• One or more plaintiffs file suit on their own behalf and on behalf of all other persons who may have a similar claim • Involve matters in which no one member of the class has sufficient financial interest to warrant litigation

Second Amendment

• One's right to possess guns • Few SCOTUS opinions involving 2nd Amendment • District of Columbia v. Heller, 554 US 570 (2008)‐addressed the meaning of 2nd Amendment as it applies to maintenance of a militia versus an individual's right to possess and use guns in their homes.

Other Steps During a Trial

• Opening Statements: Lawyers give the jury a preview of the facts and witnesses to come • Plaintiff introduces evidence to establish truth of allegations made in the complaint • Directed verdict: Motion by defendant • Closing Statements:Lawyers summarize the evidence • Jury instructions: Judge informs the jury about the law applicable to the case

Property, Use of Resources, and Equal Right of Others

• Owners can make use of their resources in several ways • Property system protects the equal right of all to their resources • Laws prevent owners from using their resources to injure the resources of others

Executory contract

• Parties have not yet performed their agreement

Executed contract

• Parties have performed their promises

Patent Enforcement

• Patent owner can sue against infringement for injunction and damages • Inventions can cover methods and articles that can overlap • Overlapping rights provide an opportunity for firms to purchase patent rights and sue companies • Patent trolls

Standing to Sue

• Plaintiff establishing that he or she is entitled to have the court decide the dispute • To establish standing, plaintiff must allege: - Litigation involves a case or controversy - Personal stake in the resolution of the controversy. This element of standing prevents any individual from asserting the rights of the general public or of a group of which he or she is not a member.

Parties

• Plaintiff: Party who files a civil action • Defendant: Party sued by the plaintiff OR person against whom a criminal charge is filed by state • Third‐party defendant: Parties brought in by the defendant to complete the determination of a controversy • Counterplaintiff/counterdefendent: Parties to a counterclaim (filed by defendant to sue plaintiff)

Subject Matter Jurisdiction

• Power over the issues involved in the case • Jurisdiction can be limited to a subject matter or area in which the parties live

Due Process of Law

• Prevents governmental bodies from acting in a manner that is arbitrary, capricious, or unreasonable • Procedural due process involve cases regarding whether: - Proper notice was given - Proper hearing was conducted • Incorporation doctrine - Due process clause has been used to incorporate the Bill of Rights and make provisions applicable to states

Deciding the Case

• Principal job of the jury is to determine what the facts are and to apply the law to these facts as instructed by the judge - Verdict: Decision by the jury announced in the courtroom when jury's deliberations are over • Judgment: Judge deciding whether to accept the verdict or not

LITIGATION

• Process helps the business community resolve actual disputes • Effective business leaders should develop an understanding of the process • Any lawsuit is an immense drain of time, money, and energy on everyone involved

Parol Evidence Rule

• Prohibits testimony about the oral negotiation that results in a written contract • Applies to evidence of oral agreements made at the time of or prior to the written contract • Exception allows evidence of oral agreement that explains the meaning of written terms without changing the terms

Contracts

• Promises that are enforceable with predictable consequences for performance failures • Enable buyers and sellers to account for future risks or have confidence in exchanging valuables • Contract need not be a formal, written document • Contract law enables private agreements to be legally enforceable • Provides flexibility and precision in business dealings

Fourth Amendment

• Protects individuals and corporations from unreasonable searches and seizures by the government - Requires the police to obtain a search warrant • Expectation of privacy - Warrantless inspection: • Commercial premises is reasonable • Presenting oneself at an airport checkpoint

Fifth Amendment

• Protects the accused from being compelled to testify against self • Does not protect: - Against being required to produce physical evidence - A person who is required to produce business records - Corporations • Exception ‐Sole proprietorship business

Commerce Clause

• Provides federal government the power to regulate business activity - Regulation of foreign commerce • State and local governments may regulate such activities if they are conducted entirely within the state's boundaries - Regulation of interstate commerce •States cannot impede interstate commerce as decided by the Supreme Court

Sixth Amendment

• Provides multiple protections that offer the right to: - Speedy and public trial - Trial by jury - Be informed of the charge against oneself - Confront the accuser - Subpoena witnesses in one's favor - Have the assistance of an attorney

The Basics of the US Constitution

• Provides the legal framework of our federal government • Gives authority to regulate business activities • 7 Articles • 27 Amendments

Nuisance and Zoning

• Public nuisance: Arises from use of land that causes inconvenience or damage to the public • Private nuisance: Unreasonable use of one's property to cause substantial interference with the use of another's land • Zoning ordinances: Laws that divide counties into use districts designated residential, commercial, or industrial

Title VII of the Civil Rights Act of 1964 prohibits discriminatory employment practices based on:

• Race or Color • National Origin • Religion • Sex - Sexual Harassment - Pregnancy Discrimination Act - Equal Pay Act - Sexual Orientation Discrimination

Security Interests in Land

• Recording statutes - Mortgages and deeds of trust must be registered in a recording office - Provide notice of the security interest to potential buyers and lenders of the land • Foreclosure: Creditor must go through the court system to ensure that procedures are properly followed • Deficiency: Balance owed by the debtor to the creditor‐mortgagee • Right of redemption: Allows mortgagor to get back land upon payment of the full amount of the debt

Securities Exchange Act of 1934

• Regulates transfers of securities after the initial sale • Created the Securities and Exchange Commission (SEC) • Illegal to sell unregistered securities on national exchange • Registration requires filing prescribed forms with stock exchange and SEC

Criticisms of Administrative Agencies

• Relating to personnel - Difficulty in hiring and retaining the best‐qualified people - Difficult to discharge unsatisfactory employees Personnel in top positions are selected for political reasons • Relating to procedures - Delay in the decision‐making process Administrative process is overwhelmed with paperwork and meetings - Rules and regulations are written in complex legal language - Dictatorial in nature • Relating to substance - Rules and regulations overlap and conflict Actions for illegal conduct end only with consent orders - Enforcement of laws varies over time

Securities Act of 1933

• Requires the disclosure of information to the potential investors • Applies to the initial sale of the security • Information must not be untrue or misleading • Sanctions for violations - Criminal punishment - Civil liability - Equitable remedy of an injunction

Securities and Exchange Commission (SEC)

• Responsible for administering the federal securities laws • Consists of five commissioners • Possess quasi‐legislative and quasi‐judicial powers

Decisions by the U.S. Supreme Court

• Review by the U.S. Supreme Court requires a petition for a writ of certiorari • Supreme Court resolves cases involving major constitutional issues or interpretation of federal law • Final judgments of the highest state court are reviewed only by the Supreme Court of the U.S.

Acquiring Resources Through Possession

• Rule of first possession: First person to reduce previously unowned things to possession becomes their owner • Lost Items vs. Mislaid Items • Adverse Possession: provides ownership of land under state statute when possession is: - Open and notorious - Actual and exclusive - Continuous - Wrongful - For a prescribed period of time

Private Securities Litigation Reform Act (PSLRA) of 1995

• SEC can pursue claims against third parties not directly responsible for the securities law violation • Requires private plaintiff to allege with specificity when filing a claim under Section 10(b) and Rule 10b‐5 • Securities Litigation Uniform Standards Act of 1998 (SLUSA) - Prevents abusive securities fraud litigation in state courts

Property and Security Interests

• Security Interests: Two principal types are mortgages and secured transactions • Security Interests in Land: - Mortgage - Deeds of Trust - Land Sales Contract

S Corporations

• Shareholders of certain corporations unanimously elect to have the organization treated like a partnership for income tax purposes • Has all legal features of a corporation • Shareholders have to account on their individual income tax returns for shares of profits or losses • Shareholders avoid having a tax assessed on the corporate income • Cannot have more than 100 shareholders

Judicial Review of Agency Decisions

• Standing to Sue - Reviewability - Aggrieved Party • Review of Rule Making - Is delegation valid? - Authority exceeded? • Procedural Aspects - Exhaustion of Remedies - Primary Jurisdiction • Review of Factual Determinations

State Blue Sky Laws

• State regulations regarding securities laws • Protect the potential investor from buying risky securities without financial and other information • Apply to securities subject to federal laws and securities exempt from federal statutes • Uniform Securities Act, 1956 - Provides a model for blue sky laws

Contract Clause

• States cannot enact laws that impact rights and duties under existing contracts • Does not apply to federal government • State laws passed during emergency situations can be approved

Fourteenth Amendment

• States that no state shall make or enforce any law which shall: - Abridge the privileges or immunities of citizens of the United States - Deprive any person of life, liberty or property, without due process of law - Deny to any person within its jurisdiction the equal protection of the laws

Motions

• Statute of limitations: Move to dismiss a suit when a matter of law prevents the plaintiff from winning the suit • Judgment on the pleadings: Motions which asks the judge to decide the case based only on the complaint and its answer • Summary judgment: Motion asking the judge to base a decision on the pleadings and on other evidence - Affidavits: Evidence in the form of sworn statements

Employment Practices That May be Challenged

• Testing and educational requirements Employers must be extremely careful not to use recruitment tools that are illegally discriminate • Height and weight requirements Minimum or maximum job requirements must apply equally to all applicants • Appearance requirements - No clarity with regard to its legality • Affirmative action Federally contracting employers must recruit members of minority groups being underused in the workforce Private employers voluntarily adopt affirmative action or agree to it with unions • Seniority systems Giving priority to employees who have worked longer for a particular employer but not unlawful if the differences are not the result of an intention to discriminate

Copyright Infringement

• The owner has to establish that defendant violated his or her exclusive rights of: - Reproduction - Creation of derivative works - Distribution - Performance - Display

Freedom of the Press

• The press is accountable for what is printed • Construed to prohibit prior restraints on publications • Libel is used to recover damages as a result of printed defamation of character

Discovery

• The reason that surprises do not occur in litigation • Ensures that the results of lawsuits are based on the merits of the controversy and not on the ability or skill of counsel • Narrows the issues disputed by the parties • Can encourages the settlement of the lawsuit

State Courts

• Three sources that create and govern state court systems: - State constitution - State legislature (adds body to framework) - Other legislation (rules of procedure) • Two types: o Trial Courts o Appellate Courts

Title and Property Registration

• Title: Ownership represented by a physical document registered with the state for certain resources • Deed: Document of title that transfers ownership of land

District Courts

• Trial Court • At least one district court in every state and the District of Columbia

Trademark Registration

• Usage of mark in interstate commerce is required for registration with PTO • PTO places the mark in the Official Gazette • Registered on the Principal Register if the mark is acceptable • If listed on the Supplemental Register for five years and acquires a secondary meaning, a name or descriptive term can acquire full trademark status

Citations

• Used to locate prior precedents in a library or electronic research (Westlaw/Lexis) • See Bluebook

Judicial Decisions aka Case Law

• Voluminous! (see law library) • Even after reviewing federal and state law, case law must be consulted. • Opinions: Decisions made by judges on legal issues • Reporters: Collection of opinions published in book volumes • Precedents: Opinions become precedents for future cases involving similar facts and legal issues.

Crimes

• Wrongs against society - Criminal law punishes wrongdoers who affect the ownership of property - Federal and state penal codes define criminal acts and omissions

Federal Courts

•Article III Of Constitution provides that Judicial Power be vested in the supreme court and such lower courts as Congress may create. Power extends to matters such as: - Questions of Federal Law (federal question cases) - The United States as a party - Controversies among states - Certain suits between citizens of different states (diversity of citizenship)

Common Law

•Judges' decisions •Contracts for other than goods

Legislation

•Uniform Commercial Code •Contracts for goods