ARM 55B

Implied contract

A contract whose terms and intentions are indicated by the actions of the parties to the contract and the surrounding circumstances. Ex. customer takes car for repair and asks owner to fix it.

Injunction

A court-ordered equitable remedy requiring a party to act or refrain from acting. (Ex. A court can prevent a firm from burning waste because of noxious fumes making others ill.)

Specific performance

A court-ordered equitable remedy requiring a party to perform a certain act, often, but not always, as a result of breach of a contract.

Immunity

A defense that, in certain instances, shields organizations or persons from liability.

Last clear chance doctrine

A defense to negligence that holds the party who has the last clear chance to avoid harm and fails to do so solely responsible for the harm.

(ERISA) Employee Retirement Income Security Act

A federal law that governs all types and sizes of employee benefit plans.

Special damages

A form of compensatory damages that awards a sum of money for specific, identifiable expenses associated with the injured person's loss, such as medical expenses or lost wages.

Common-law legal system

A judge interprets the facts case, examines precedents and makes a decision based on the facts in the current case.

Public international law

A law that concerns the interrelation of nation states and that is governed by treaties and other international agreements.

Private international law

A law that involves disputes between individuals or corporations in different countries.

Derivative suits

A lawsuit brought by one or more shareholders in the name of the corporation. Any damages recovered go to the corporation.

Business judgement rule

A legal rule that provides that a director will not be personally liable for a decision involving business judgment, provided the director made an informed decision and acted in good faith.

General damages

A monetary award to compensate a victim for losses, such as pain and suffering, that do not involve specific, measurable expenses.

Punitive damages (exemplary damages)

A payment awarded by a court to punish a defendant for a reckless, malicious, or deceitful act to deter similar conduct; the award need not bear any relation to a party's actual damages.

Compensatory damages

A payment awarded by a court to reimburse a victim for actual harm.

Trade secret

A practice, method, process, design or other information used confidentially by an organization to maintain a competitive advantage.

Human factors engineering

A process that applies the knowledge of human behavior to design equipment people use on and off the job.

Biomechanics

A process that views people at work as special kinds of machines functioning within environments filled with other machines.

Reverse engineering

A process used to discover trade secrets by taking them apart.

Privilege

A rule of law allowing a person tor effuse to disclose confidential communications.

Work for hire

A term that applies to two exceptions to the copyright ownership rule: 1. Works created in the course of the author's employment. 2. Works created on commission.

Servicemark

A way that an organization can differentiate its services from those of its competitors.

Arbitrary mark

A work or phrase that appears to have been used randomly. They are considered memorable because of their random nature. Ex. Hush Puppies - name has NO attachment to shoes

Fanciful mark

A work or phrase that conjures up an image that is imaginative. Ex. "Pillow walker" as a type of shoe

Tort

A wrongful act or an omission, other than a crime or a breach of contract, that invades a legally protected right.

Who, other than the fiduciary, can be held liable for breaches of fiduciary duty?

An employer may be held vicariously liable for breaches of fiduciary duty committed by its employees or agents.

Reputation

An intangible asset, a key determinant of future business prospects, resulting from a collection of perceptions and opinions, past and present, about an organization that resides in the consciousness of its stakeholders.

Reputation risk

An intangible asset. It is a key determinant of future business prospects - resulting from a collection of perceptions and opinions, past and present, about an organization that resides in the consciousness of its stakeholders.

Explain the importance of accurately valued intellectual property when an organization is faced with unauthorized use of its intellectual property.

An organization must QUANTIFY the resulting damage in order to recover. The property's monetary value is a necessary part of such quantification and any related litigation.

Restrictive covenant

Any provision, clause or agreement that, on termination of employment or contract, restricts the post-termination activities of the employee or contracting party.

Who qualifies as an employee benefit plan fiduciary under ERISA?

Anyone whose role in employee benefits involves discretionary control or judgment in the design, administration, funding, or management of a benefit plan or in the management of its assets.

Criminal law

Applies to acts that society deems so harmful to the public welfare that government is responsible for prosecuting and punishing the perpetrators.

Civil law

Applies to legal matters not governed by criminal law and that protects rights and provides remedies for breaches of duties owed to others.

Injury

Are caused by an external physical force exerting stress on the human body: laceration, fracture, contusion, amputation.

The cost approach in intellectual property valuation

Assigns a value based on the amount the organization invested in its creation and development. This method assumes that no other entity would pay more for the intellectual property that it would cost to create it.

The fair market value approach in intellectual property valuation

Assigns a value that it would have on the open market were it to change hands between a buyer + seller = market value

Ergonomics

The science of designing work space and equipment based on the needs of the people who use the work space and equipment.

Why is protecting an organization's intellectual property challenging?

The essence of intellectual property is information and ideas.

Intellectual property

The product of human intelligence that has economic value.

Risk control measures used for trademark and service mark loss exposures

1. Notice 2. Registration 3. Searches and watches 4. Licensing agreements 5. Restrictive covenants 6. Enforcement of rights

Express contract

A contract whose terms and intentions are explicitly stated. Ex. customer take car for repair and owner gives written estimated cost.

4 major types of employment practices liability (EPL) claims

1. Discrimination claims 2. Wrongful termination claims 3. Sexual harassment claims 4. Retaliation claims

Consequences of criminal acts

1. Incarceration for a specified period or time 2. Monetary consequences

Enforceable contract requirements

1. Agreement - one party makes an offer that the other party accepts. 2. Consideration - each party gives up something of value. 3. Capacity to contract - the parties must have the legal ability (age, sanity, sobriety) to enter into contract. 4. Legal purpose - the contract must have a legal purpose and not be opposed to public policy.

Premises and operations liability loss exposure

1. An accident that occurs on an organization's owned, leased or rented premises. 2. An accident that arises out of the organization's ongoing operations but occurs away from the premises.

4 categories of risk control techniques that may be applied to work-related injury and illness.

1. Avoidance 2. Loss prevention 3. Loss reduction 4. Separation and duplication

3 features shared by trademarks, servicemarks and trade dress

1. Categories 2. Creation 3. Duration

Two major legal systems

1. Civil-law system 2. Common-law system

Situations in which an employer might be sued by an employee for work-related injury.

1. Claims for employee injury caused intentionally by the employer. 2. Claims by the employee's spouse for loss of consortium as a result of employee injury caused by the employers' negligence or other torts. 3. Claims for injury resulting from the employer's negligence or torts while acting in some capacity other than employer.

Type of monetary damages that may be awarded in a civil suits

1. Compensatory damages 2. Punitive damages

Methods organizations use to safeguard intellectual property

1. Copyright 2. Trademark 3. Patent 4. Trade secret protection

The 3 important features of a copyright

1. Creation 2. Ownership 3. Duration

Risk control measures used to ensure information confidentiality.

1. Disclose the information only to those employees who need to know the information to perform their jobs. 2. Require a sign-in or similar security measure to gain access to the area where the secret information is used or maintained. 3. Control any documentation regarding the secret by using a safe, a "confidential" stamp, or a burn bag. 4. Require employees to sign a restrictive covenant in the form of a nondisclosure or confidentiality agreement.

The 4 fiduciary duties of the directors and officers of a corporation

1. Duty of care - act in good faith for the corporation's best interest and discharge their responsibilities with informed judgment and care. 2. Duty of loyalty - cannot usurp business opportunities that belong to the corporation or own businesses that compete with the corporation. 3. Duty of disclosure - they must disclose material facts to all persons who have the right to know such facts. 4. Duty of obedience - they are required to perform their duties according to federal and state law as well as the terms of the corporate charter.

Importance of determining whether an organization or an organization's employee own the copyright on a work the employee creates.

1. Establish the values exposed to loss 2. To ensure the organization owns what it believes it owns.

Function of the Board of Directors

1. Establishes corporate policy 2. Makes major business and financial decisions 3. Appoints the corporation's executive officers

Measures to reduce the likelihood of contractual liability

1. Have all contracts reviewed by counsel before signing. 2. Written contracts, not oral.

Factors that affect an organization's human resource potential.

1. Health and education of the general population. 2. Proper personnel selection procedures. 3. Preservation of employees' existing productive capabilities. 4. Rehabilitation of injured or ill employees 5. Retention of productive employees

5 Key areas risk control measures can be used for work-place violence

1. Hiring process 2. Supervisor training 3. Written policies 4. Procedural safeguards 5. Termination process

Questions courts answer to determine trade secret status.

1. How well is the secret known outside the business that owns the secret? 2. How much of the secret is disclosed to employees of the business that owns the secret? 3. What steps are taken to guard the secret? 4. What is the secret's commercial value? 5. How difficult would it be for someone else to acquire or duplicate the secret?

Risk management principles used for reputation risk

1. Identify, prioritize and evaluate reputation risks 2. Develop and implement risk responses 3. Monitor and report

What exceptions to "employment at will" would make it difficult to discharge employees w/out adverse consequences?

1. Implied contract - an employers oral or written representations to employees regarding job security or disciplinary procedures are held to create a contract of employment even though no written contract exists. 2. That it is subject to a covenant of good faith, thus requiring just cause for firing an employee.

Benefits associated with registering a copyright

1. It provides reasonable, if not indisputable, evidence of ownership rights. 2. It allows the copyright owner to collect statutory damages (up to $100,000 and attorneys fees) w/out having to prove actual monetary harm.

Example of organization risks that can threaten reputation

1. Legal and regulatory non-compliance 2. Unethical behavior (by the board or senior mgmt.) 3. Filing of major lawsuits

5 defenses used in the litigation process

1. Legal privilege 2. Immunity 3. Comparative negligence 4. Last clear chance doctrine 5. Assumption of risk

Physical activities associated with manual materials handling

1. Lifting 2. Pulling 3. Dragging 4. Pushing 5. Transferring objects or materials by human power

Worksite causes of loss likely to produce disabling illnesses

1. Long-term chemical exposures 2. Noise levels 3. Ergonomic stress 4. Radiation 5. Temperature extremes 6. Poor air quality

Fiduciary duties of an employee benefit plan fiduciary

1. Loyalty - they must be solely in the best interests of the plan and all of its participants and beneficiaries. 2. Prudence - they must carry out his or her duties with care, skill, prudence and diligence of a prudent person familiar with such matters. 3. Diversification - they must ensure that the plan's investments are sufficiently diversified to minimize the risk of large losses. 4. Adherence - they must act according to the plan documents and applicable law.

Work-related injuries in manufacturing and retail

1. Machinery and equipment use 2. Materials handling 3. Vehicle fleet operation 4. Physical conditions on premises

Loss prevention techniques associated with PHYSICAL causes of loss

1. Materials substitution 2. Isolation 3. Wet methods 4. Guarding 5. Ventilation 6. Maintenance 7. Housekeeping 8. PPE

What information is provided to risk managers when reviewing an organization's loss history?

1. Mortality or disability rates 2. Retirement trends 3. Voluntary and involuntary employee separation histories.

What two insurance industry sources of information are useful in assessing an organization's potential personnel losses from death or disability?

1. Mortality tables = length of life 2. Morbidity tables = health data

Wrongful acts that constitute torts

1. Negligence - an unintentional tort. The wrongdoer did not intend the action or the consequences. 2. Intentional torts - actions or omissions that the tortfeasor intended. 3. Strict liability torts - an organization engages in certain activities that are considered ultra-hazardous or that involve product liability cases.

3 characteristics that an invention must have to be eligible for a patent in the U.S.

1. New 2. Useful 3. Non-obvious

Risk control measures used for patent loss exposures

1. Notice 2. Licensing agreements 3. Restrictive covenants 4. Freedom to operate search

Risk control measures for copyright loss exposures

1. Notice 2. Registration 3. Restrictive covenants 4. Responses to anticipated defenses 5. Licensing agreements

Premises and operations risk exposures

1. Parking lots 2. Building entrances and exits 3. Walking surfaces 4. Merchandise displays and counters 5. Escalators, elevators and stairways

Examples of legal interests that can be violated by Intentional Torts:

1. Physical safety of one's person (Ex. assault & battery) 2. Personal freedom of movement (Ex. false imprisonment) 3. Protection of property (Ex. Trespass, Nuisance or Conversion) 4. Security of reputation (Ex. Libel or slander) 5. Personal privacy (Ex. Invasion of privacy) 6. Economic freedom (Ex. False advertising, harassing or intimidating competitors)

3 stages of a civil-law case

1. Preliminary stage - it involves submission of pleading and appointment of a hearing judge. 2. Evidence stage - a hearing judge take evidence and prepares a written summary of the proceedings. 3. Decision stage - the presiding judge decides the case based on the record provided by the hearing judge, the counsel's briefs and arguments.

Preservation of employee's existing productive capabilities

1. Preventing or reducing disabling injuries and illness on or off the job. 2. Preventing or reducing dissatisfaction with the job. 3. Preventing or reducing dissatisfaction with work related violence.

Loss prevention techniques associated with PROCEDURAL causes of loss.

1. Process change 2. Education and training 3. Standard operating procedures (SOP's) 4. Proper supervision 5. Medical controls 6. Job rotation

Ways to treat the negative aspects of legal and regulatory risk

1. Risk avoidance 2. Modifying the likelihood of an event 3. Modifying the consequences of an event

EPL offenses in which the law recognizes claims of a hostile work environment

1. Sexual harassment 2. Discrimination because of race 3. Discrimination because of disability

Examples of external stakeholders

1. Shareholders 2. Customers 3. Suppliers 4. Regulators 5. Governmental entities

What defense could be used by an organization to modify the consequences of statutory liability?

1. Statute was unconstitutional 2. Statute was too vague 3. Statute was too ambiguous (more than one interpretation) to be enforceable

Risk control measures used to address risk associated with the termination process

1. Termination meeting with HR and supervisor. 2. Termination letter/package 3. Escort from the building 4. Other security precautions = returning keys and badges

Courts in international cases must determine whether they have jurisdiction over:

1. The person or entity 2. The subject matter 3. If they have jurisdiction to render the particular judgement in a case.

3 elements a plaintiff must prove in a products liability suit

1. The product was defective when it left the manufacturer's or supplier's custody or control. 2. The defective condition made the product unreasonably dangerous. 3. The defective product was the proximate cause of the plaintiff's injury.

The 3 criteria a work must meet to be considered copyrighted

1. The work must be original. 2. The work must be fixed on a tangible medium of expression that is permanently recorded. 3. The work must have some degree of creativity.

Major bases of legal and regulatory risk

1. Torts 2. Contracts 3. Statutes and regulations

3 types of patents

1. Utility 2. Design 3. Plant

Physical injuries that may result from improperly laid out workstations.

1. Vision difficulties 2. Spinal strain 3. Poor posture

Clauses that can be added to remove or limit liability

1. Waivers - a right that can be voluntarily relinquished. 2. Hold-harmless agreements - one party agrees to assume the liability of a second party. 3. Exculpatory agreements - enable a party to avoid liability for negligence or a wrongful act. 4. Unilateral notices - notices that are posted so that they are physically apparent, expressed in language the other party understands and reasonable in extent.

Two primary types of work-related violence

1. Workplace violence 2. Kidnapping and ransom

Unenforceable contract

A contract that is a valid contract but that because of a technical defect, cannot be enforced. Ex. An oral contract to sell land, because the law requires ALL real estate contracts to be in writing.

Valid contract

A contract that meets all of the requirements to be enforceable.

Voidable contract

A contract that one of the parties can reject (avoid) based on some circumstances surrounding its execution. Ex. A contract involving fraud or material misrepresentations.

Comparative negligence

A common-law principle that requires both parties to a loss to share the financial burden of the bodily injury of fault.

Hazard

A condition that increases the frequency or severity of a loss.

Void contract

An agreement that, despite the parties' intentions, never reaches contract status and is therefore not legally enforceable or binding. Ex. a contract that lacks one or more of these: agreement, consideration, capacity to contract or legal purpose

Ultra vires

An act of a corporation that exceeds its chartered powers.

Why is reputation a key asset to an organization?

Because of its intrinsic, intangible value (goodwill) and because of its potential to generate (or erode) future value.

How can hazard control be used to modify the likelihood of legal risk?

By implementing risk control measures that eliminate or reduce hazards.

HIPAA

Calls for the protection of employee medical information and subjects the employer and fiduciaries to penalties for failure to comply.

Methods intellectual property owners historically have used to enforce their rights

Civil suits and criminal suits

Separation of loss exposures

Involves arranging an organization's activities and resources so that no single event can cause simultaneous losses to all of them.

Verbal threshold

Defines the seriousness of the injuries beyond which the right to sue is allowed.

Illness

Develops more slowly as the result of some organic or inorganic agent being absorbed, digested, inhaled or injected that impairs a function of the body.

What is the correlation between a population's physical and mental health and its human resource potential?

If a population enjoys good physical and mental health and tends to live a long time, and is well educated, an organization is more likely to be able to select employees with promising human resource potential than is the population as a whole does not have those positive characteristics.

How can unilateral notices limit the likelihood of tort liability?

If they are posted so that they are physically apparent, expressed in language the other party understands and reasonable in extent.

How can legal liability arise from contracts?

Individuals and businesses can become liable based on the contract's terms or based on terms that can be inferred from the contract, known as IMPLIED WARRANTIES.

What determines the extent of productivity loss when an employee retires or resigns?

It depends on how quickly the employee can be replaced.

Intellectual property value

It derives its value from the right of its owner to exclude others from using it.

How does the legal doctrine of "employment at will" affect the employment relationship between employers and employees?

It has allowed employers or employees to terminate the private employment relationship with or without cause at any time.

How does a corporate code of conduct reduce the likelihood of statutory liability?

It provides all employees with the organization's mission and commitment to ethical behavior and outlines applicable policies and the importance of regulatory compliance.

Non-derivative suits

Lawsuit not made in the name of the corporation. Customers, competitors, employees, creditors, governmental entities or other persons outside the corporation may initiate such lawsuits. Stockholders may also initiate such lawsuits.

Class action lawsuit

One in which one person or a small group of people represent the interests or an entire class of people in litigation. (Ex. The corporation's public statements contained material misrepresentations and omissions.)

When can avoidance be used as a risk treatment technique?

Only in high probability-high severity situations. (Ex. A manufacturer that stopped making a defective product is still liable for losses caused by the products it manufactured and distributed in the past.)

Monetary damages threshold

Sets a dollar limit that, if exceeded, allows auto accident victims to sue.

Strengths and weakness of using risk assessment questionnaires in identifying personnel loss exposures.

Strength - the questions are universally relevant. Weakness - they can't be expected to uncover all the loss exposures characteristic of a given industry, let alone those unique to a given organization.

Fiduciary duty

The duty to act in the best interest of another.

The most obvious loss exposure associated with trade secrets.

That another entity might honestly recreate an organization's secret invention, process or method and get it patented.

Paris Convention to intellectual property rights

The first major international treaty designed to help people of one country obtain protection in other countries for their intellectual creations in the form of industrial property rights.

Trademark

The legal right granted by a governmental entity to an organization to exclusively own and control a distinctive design or set of words that legally identifies a product or service as belonging to that organization.

Laches

The legal term for waiting TOO long to assert a legal right.

The income approach in intellectual property valuation

The most prevalent valuation method; it assigns a current value to a piece of intellectual property based on the discounted cash flows the property would generate over its useful life.

Systematic approach to managing reputation risk

The organization is considered w/in the context of a complex combination of available resources. Stakeholders have expectations regarding how these resources should be managed. The organization must work to gain the trust of stakeholders and assure them that resources are being integrated and optimized.

What must a plaintiff show to establish an auto owner's liability for negligent entrustment?

The plaintiff must show that the party entrusting the vehicle knew or should have known of the driver's incompetence, inexperience or reckless tendencies.

Comity (as it relates to private international law)

The practice by which one country recognizes, within its own territory or in it courts, another country's institutions.

Rehabilitation

The process of restoring an injured or disabled person to his or her highest attainable level of functioning and independence in self-care, vocational and recreational activities.

Trade dress

The total image of a product or service that allows the product or service to be distinguished from its competition in the marketplace.

Why is the distinction between injury and illness relevant in workplace settings?

The types of risk controls often applied to reducing the frequency or severity of particular disabilities depend on whether those disabilities arise from sudden external events (injuries) or from prolonged exposure to harmful conditions or from a sudden harmful condition that does not immediately manifest itself (illness).

Infringement

The unauthorized use of an individual's intellectual property.

Basic type of claim that constitutes fiduciary liability loss exposures.

They arise mainly out of the possibility that beneficiaries of an employee benefit plan may make a claim against the plan officials for breach of their fiduciary duties.

Contrast public and private international law

Those resolving international disputes between individuals or corporations first apply any applicable public international law, such as an international treaty, that governs the dispute, If no international treaty applies, then any relevant laws of the involved countries are applied to the dispute in accordance with the principles of private international law.

Purpose of a trademark

To differentiate an organization's products from their competitors.

What are the advantages of kidnap, ransom and extortion insurance policies?

To pay a ransom and provide access to experts who can advise company officials during a kidnapping and who will negotiate with the kidnappers on the company's behalf.

What is the most effective way to control a kidnap and ransom loss?

To prevent it

Role of monitoring firms in the patent application process

To protect their own patents or to object to a patent application.

What is the goal of rehabilitation of injured or ill employees?

To speed their recovery time, restoring as fully as possible their pre-injury or illness physical, intellectual, social and interpersonal skills.

Starting point courts use to determine whether an invention, idea, or process qualifies as a trade secret.

Whether the information has value and whether the information has really been treated as a secret.

Describe common law and statutory law approaches to imposing auto liability solely on the basis of auto ownership.

Under common law, ownership of an auto does not in itself make the owner liable for injury or damage caused by someone else's negligent operation of the vehicle. Several states have passed laws making an auto owner liable for damages arising from any person's operation of the auto with the owner's express or implied permission.

Concept of biomechanics

Views people as a system of skeletal levers and muscular motors that exert force to achieve given results.

Duplication of loss exposures

involves creating backup facilities or assets to be used only if the primary activity or asset suffers a loss.