Business Law 8, 9, 10

assault

A civil wrong that occurs when one person intentionally and voluntarily places another in fear or apprehension of an immediate, offensive physical harm. Assault does not require actual contact.

compensatory damages

Money awarded to a plaintiff as reimbursement for her or his losses; based on the amount of actual damage or harm to property, lost wages or profits, pain and suffering, medical expenses, disability, etc

actual cause

The determination that the defendant's breach of duty resulted directly in the plaintiff's injury.

fair-use doctrine

The doctrine which provides for the lawful use of a limited portion of another's work for purposes of criticism, comment, news reporting, teaching, scholarship, or research.

agency

The fiduciary relationship that arises when one person consents to have another act on his behalf and subject to his control and the other consents to do so.

Legal Principle: Agency relationships cannot be created to conduct illegal activities.

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warranty

(1) An assurance, either express or implied, by one party that the other party can rely on its representations of fact. (2) In sales, a binding promise regarding a product in the event that the product does not meet the manufacturer's or seller's promises.

constructive trust

(1) An implied trust in which a party is named to hold the trust for its rightful owner. (2) An equitable trust imposed on someone who wrongfully obtains or holds legal right to property he or she should not possess.

fraudulent misrepresentation

(1) The tort that occurs when a misrepresentation is made with intent to facilitate personal gain and with the knowledge that it is false. (2) In contracts, a false representation of a material fact that is consciously false and is intended to mislead the other party. Also called intentional misrepresentation.

Disparagement by computer

(1) erroneous information from a computer about a business's credit standing or reputation impairs the business's ability to obtain credit and (2) the computer information's owner fails to correct the incorrect information in a timely manner.

Intentional Torts against persons:

• Assault is the placing of another in fear or apprehension of an immediate, offensive bodily contact. • Battery is an intentional, unwanted, offensive bodily contact. • Defamation is the intentional publication (or communication to a third party) of a false statement harmful to an individual's reputation. • Public disclosure of private facts is the publicizing of a private fact about another that a reasonable person would find highly offensive. • False light is the creation of an impression that is not valid, such as attributing to a person characteristics or beliefs he or she does not hold. • Appropriation for commercial gain is the use of another person's name, likeness, voice, or other identifying characteristic for commercial gain without that person's permission. • Intrusion on an individual's affairs or seclusion is the invasion of a person's solitude, seclusion, or personal affairs when the person has the right to expect privacy. • False imprisonment is confining or restraining a person against his or her will for an appreciable period of time. • Intentional infliction of emotional distress is engaging in outrageous, intentional conduct that is likely to cause extreme emotional distress to another part. • Misuse of legal procedure is the misuse of a legal procedure to achieve a goal other than the one for which the process was intended to be used. Intentional torts against property: • Trespass to realty is the temporary exertion of control over another's personal property or interference with the owner's right to use it. • Private nuisance is the use of one's property in an unreasonable manner that harms a neighbor's use or enjoyment of his property. • Trespass to personalty occurs when one person deprives another of the temporary possession of his personal property. • Conversion is the permanent removal of personal property from the owner's possession. Intentional torts against economic interest: • Disparagement is the publishing of a false statement of a material fact about a business's product or service that results in a loss of sales. • Intentional interference with a contract occurs when a valid and enforceable contract between two parties exists; the perpetrator knows of the existence of the contract and its terms; the perpetrator intentionally undertakes steps to cause one of the parties to breach the contract; and the other party is injured as a result of the breach. • Unfair competition occurs when a business enters an industry with the sole intent of driving another firm out of business. • Misappropriation is the use of another person's name, likeness, voice, or other identifying characteristic for commercial gain without that person's permission. • Fraudulent misrepresentation is the intentional use of a false statement to deceive another who reasonably relies on the deception to facilitate personal gain.

Types of Marks

1. Service mark: A mark used in conjunction with a service, such as the name "AT&T" painted on a vehicle that provides repair services for AT&T phone users. 2. Product trademark: A mark affixed to a good, its packaging, or its labeling, such as the Nike "swoosh." 3. Collective mark: A mark identifying the producers as belonging to a larger group, such as a trade union. 4. Certification mark: A mark licensed by a group that has established certain criteria for use of the mark, such as "U.L. Tested" or "Good Housekeeping Seal of Approval."

trademark

A distinctive mark, word, design, picture, or arrangement that is used by a producer in conjunction with a product and tends to cause consumers to identify the product with the producer.

negligence per se

A doctrine that allows a judge or jury to infer duty and breach of duty from the fact that a defendant violated a statute that was designed to prevent the type of harm that the plaintiff incurred.

intrusion on an individual's affairs or seclusion

A physical, electronic, or mechanical intrusion that invades someone's solitude, seclusion, or personal affairs when he or she has the right to expect privacy. The tort occurs at the time of the intrusion; no publication is necessary.

duty to compensate

A principal's obligation to pay an agent for his or her services.

Trademarks

A trademark is a distinctive mark, word, design, picture, or arrangement that is used by a producer in conjunction with a product and that tends to cause the consumer to identify the product with the producer. Trademarks used in interstate commerce can be protected under the Lanham Act.

tort

A violation of another person's rights or a civil wrongdoing that does not arise out of a contract or statute; primary types are intentional, negligent, and strict-liability torts.

gross negligence

An act committed with extreme reckless disregard for the property or life of another person.

implied warranty of fitness for a particular purpose

An assurance, inferred in any UCC sale, that when a seller/ lessor knows or has reason to know (1) why the buyer/lessee is purchasing/leasing the goods and (2) that the buyer/ lessee is relying on him or her to make the selection, the buyer/ lessee has an enforceable warranty if such assurance is false.

implied warranty of merchantability

An assurance, inferred in every sale unless clearly disclaimed, that merchantable goods will conform to a reasonable performance expectation. The purchaser must have purchased or leased the good from a merchant.

cross-licensing

An illegal contractual arrangement in which two or more parties license each other to use their specified intellectual property only on the condition that neither licenses anyone else to use the property without the other's consent.

negligence

Behavior that creates an unreasonable risk of harm to others.

punitive damages

Compensation awarded to a plaintiff that goes beyond reimbursement for actual losses and is imposed to punish the defendant and deter such conduct in the future. Also called exemplary damages.

Defenses to Negligence

Contributory negligence: A defense that allows the defendant to entirely escape liability by demonstrating any degree of negligence on the part of the plaintiff that contributed to the plaintiff's harm. Comparative negligence: A defense that allows the liability to be apportioned between plaintiff and defendant in accordance with the degree of responsibility each bears for the harm suffered by the plaintiff. Assumption of the risk: A defense that allows the defendant to escape liability by establishing that the plaintiff engaged in an activity fully aware that the type of harm he or she suffered was a possible consequence of engaging in that activity.

Elements of Negligence

Duty: The standard of care that the defendant (i.e., a reasonable person) owes the plaintiff. Breach of duty: The defendant's lack of maintaining the standard of care a reasonable person would owe the plaintiff. Causation: The defendant's conduct (breach of duty) that led to the plaintiff's injury. Damages: Compensable injuries suffered by the plaintiff.

tying arrangement

Illegal agreement in which the sale of one product is tied to the sale of another.

modified comparative negligence

In some states, a defense whereby the defendant is not liable for the percentage of harm that he or she proves can be attributed to the plaintiff's own negligence if the plaintiff's negligence is responsible for less than 50 percent of the harm. If the defendant establishes that the plaintiff's negligence caused more than 50 percent of the harm, the defendant has no liability.

intellectual property

Intellectual Property is property that is the result of one's intellectual and creative efforts, rather than physical efforts.

Classification of Torts

Intentional torts occur when the defendant takes an action intending that certain consequences will result or knowing they are likely to result. Negligent torts occur when the defendant fails to act in a responsible way and thereby subjects other people to an unreasonable risk of harm. Strict-liability torts occur when the defendant takes an action that is inherently dangerous and cannot be undertaken safely.

Theories of Liability For Defective Products

Negligence: Plaintiff must show that (1) the defendant manufacturer or seller owed a duty of care to the plaintiff; (2) the defendant breached that duty of care by supplying a defective product; (3) this breach of duty caused the plaintiff's injury; and (4) the plaintiff suffered actual injury. Strict product liability: Plaintiff must show that (1) the product was defective when sold; (2) the product was so defective that the product was unreasonably dangerous; and (3) the product was the cause of the plaintiff's injury. Express warranty: The plaintiff must show that (1) the representation was the basis of the bargain and (2) there was a breach of the representation. Implied warranty of merchantability: The plaintiff must show that the goods are fit for the purpose for which they are sold and used. Implied warranty of fitness for a particular purpose: The plaintiff must show that the customer purchased a product for a particular purpose and the seller was aware of this purpose.

Plaintiff's Doctrines

Res ipsa loquitur: Doctrine that permits the judge or jury to infer that the defendant's negligence was the cause of the plaintiff's harm in cases in which there is no direct evidence of the defendant's lack of due care. Negligence per se: Doctrine that permits a plaintiff to prove negligence by offering evidence of the defendant's violation of a statute that has been enacted to prevent a certain type of harm.

false imprisonment

The unlawful restraint of another against the person's will.

trademark dilution

The use of a distinctive or famous trademark, such as "McDonald's," in a manner that diminishes the value of the mark.

Introduction to Tort Law

Tort: A civil wrong giving the injured party the right to bring a lawsuit against the wrongdoer to recover compensation for injuries. Goals of tort law: 1. Compensate innocent persons who are injured. 2. Prevent private retaliation by injured parties. 3. Reinforce a vision of a just society. 4. Deter future wrongs.

strict product liability

Under this, courts may hold the manufacturer, distributor, or retailer liable for any reasonably foreseeable injured party.

Introduction to Negligence and Strict Liability

When an individual fails to maintain a duty of care to protect other individuals, negligence and strict liability may occur.

ratification to be effective

3. The principal must have complete knowledge of all material facts regarding the contract. 4. The principal must ratify the entirety of the agent's act. (The principal cannot accept certain parts of the agent's act and reject others.)

Legal Priniciple: A copyright will be granted when a work is set out in a tangible medium of expression, is original, and is creative.

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An assault occurs when a person is placed in fear or apprehension of an offensive bodily contact; if the contact actually occurs, it constitutes a battery.

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public disclosure of private facts

A privacy tort that occurs when a person publishes a highly offensive private fact, such as information about one's sex life or failure to pay debts, about someone who did not waive his or her right to privacy.

dram shop acts

A regulation under which bartenders can be held liable for injuries caused by individuals who become intoxicated in their bars.

Trespass to Realty

A tort that occurs when someone goes on another's property without permission or places something on another's property without permission.,

expressed agency

An agency created in a written or oral agreement. Also called agency by agreement.

conversion

Permanent interference with another's use and enjoyment of his or her personal property.

proximate cause

The extent to which, as a matter of policy, a defendant may be held liable for the consequences of his or her actions. In the majority of states, proximate cause requires that the plaintiff and the type of injury suffered by the plaintiff were foreseeable at the time of the accident. In the minority of states, proximate cause exists if the defendant's actions led to the plaintiff's harm.

trade dress

The overall appearance and image of a product.

Legal Priniciple: It is unlawful for a patent holder to enter into a tying arrangement, whereby the holder issues a license to use the patented object only if the licensee agrees to buy some nonpatented product from the holder, or to engage in cross-licensing, which occurs when two patent holders license each other to use their patents only on the condition that neither licenses anyone else to use his or her patent without the other's consent.

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agency by ratification

1. An individual must misrepresent himself or herself as an agent for another party. 2. The principal must accept or ratify the unauthorized act.

tortfeasor

A person who commits an intentional or through-negligence tort that causes a harm or loss for which a civil remedy may be sought.

false light

A privacy tort that occurs when highly offensive information is published about an individual that is not valid or places the person in a false light.

appropriation for commercial gain

A privacy tort that occurs when someone uses a person's name, likeness, voice, identity, or other identifying characteristics for commercial gain without that person's permission.

apparent agency

An agency relationship created by operation of law when one party, by her actions, causes a third party to believe someone is her agent even though that person actually has no authority to act as her agent. Also called agency by estoppel.

duty of loyalty

An agent's obligation to act in the interest of the principal.

duty of notification

An agent's obligation to inform the principal of the agent's actions on the principal's behalf and of all relevant information.

Trade Secrets

An alternative to using a patent is to protect information as a trade secret. This allows the holder of the trade secret to sue one who illegally takes the trade secret if the owner of the secret can prove that: 1. A trade secret actually existed. 2. The defendant acquired it through unlawful means, such as breaking into the plaintiff's business and stealing it or securing it through misuse of a confidential relationship with the plaintiff or one of the plaintiff's present or former employees. 3. The defendant used the trade secret without the plaintiff's permission.

Damages Available in Tort Cases

Compensatory damages are an award that puts the plaintiff in the position he or she would have been in had the tort not occurred. Nominal damages are a minimal amount that signifies the defendant's behavior was wrongful but caused no harm. Punitive damages are damages that punish the defendant and deter such conduct in the future.

actual malice

In defamation, either a person's knowledge that his or her statement or published material is false or the person's reckless disregard for whether it was false.

nominal damages

Monetary damages awarded to a plaintiff in a very small amount, typically $1 to $5, to signify that the plaintiff has been wronged by the defendant even though the plaintiff suffered no compensable harm.

strict liability

Persons who engage in activities that are so inherently dangerous that no amount of due care can make them safe are strictly liable, regardless of the degree of care they used when undertaking the activity.

patent

Protection that grants the holder the exclusive right to produce, sell, and use the patented object for 20 years; can be obtained for a product, process, invention, or machine or a plant produced by asexual reproduction

unfair competition

The act of competing with another not to make a profit but for the sole purpose of driving that other out of business.

agency relationship

The association between one party and an agent who acts on behalf of that party.

Market Share Liability

When plaintiffs cannot trace a product to any particular manufacturer and a number of manufacturers produced the same product, a court may use the theory of market share liability to impose a portion of fault on a number of manufacturers.

defamation

A false statement or an action that harms the reputation or character of an individual, business, product, group, government, or nation.

reasonable person standard

A measurement of the way members of society expect an individual to act in a given situation.

private nuisance

A nuisance that affects only a single individual or a very limited number of individuals.

design defect

A defect that is found in all products of a particular design and renders them dangerous..

trade secret

A process, product, method of operation, or compilation of information that gives a businessperson an advantage over his or her competitors.

food disparagement

A tort that provides ranchers and farmers with a cause of action when someone spreads false information about the safety of a food product

fails to provide adequate warnings

A defect in which the product is not labeled to indicate that it can be dangerous.

International Protection of Intellectual Property

Intellectual property is protected internationally primarily by the use of treaties. Such treaties include the Universal Copyright Convention, the Berne Convention, the Paris Convention of 1883, and the TRIPP agreement.

Privacy Torts

The fact that truth is an absolute defense to a defamation action does not mean people are free to reveal everything they know. Four distinct torts, collectively called invasion of privacy, protect the individual's right to keep certain things out of public view even if they are true. The four privacy torts are (1) false light, (2) public disclosure of private facts, (3) appropriation for commercial gain, and (4) intrusion on an individual's affairs or seclusion.

abuse of process.

The malicious and deliberate misuse or perversion of a legal procedure

trespass to personalty

The temporary interference with a person's use or enjoyment of his or her personal property.

intentional infliction of emotional distress

The tort that occurs when someone intentionally engages in outrageous conduct that is likely to cause extreme emotional distress to another person.

intentional interference with contract

The tort that occurs when someone intentionally takes an action that will cause a person to breach a contract that he or she has with another.

pure comparative negligence

A defense accepted in some states whereby the defendant is not liable for the percentage of harm that he or she can prove can be attributed to the plaintiff's own negligence.

market share theory

A firm's fractional share of the relevant market.

Intentional torts are divided into (1) torts against persons, (2) torts against property, and (3) torts against economic interests.

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Legal Principal: Agency by implied authority cannot conflict with any express authority.

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Legal Principle: A product liability case based on the theory of strict product liability may be brought when a person is injured by a product with a manufacturing defect that caused that product to be unreasonably dangerous.

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Legal Principle: A trademark is a nonfunctional design, shape, color, symbol, or word that has come to identify the product with its producer.

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Legal Principle: Employees are agents of an employer.

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Legal Principle: If the court finds that (1) the plaintiff's conduct fell below the standard of care needed to prevent unreasonable risk of harm and (2) the plaintiff's failure was a contributing cause to the plaintiff's injury, the defendant will not be liable for the plaintiff's injuries unless the plaintiff can prove that the defendant had the last opportunity to avoid the accident.

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Legal Principle: If the plaintiff voluntarily and unreasonably encountered the risk of the actual harm the defendant caused, the defendant may raise the defense of assumption of the risk to avoid liability.

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Legal Principle: In general, in deciding whether to strike down a punitive-damage award as unconstitutional, the court will look at (1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damage award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.

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Legal Principle: Independent contractors cannot enter into contracts on behalf of the principal unless the contractor possesses authority from the principal.

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Legal Principle: Proximate cause is defined in the majority of states as foreseeability of both the plaintiff and his or her injury, whereas in the minority of states proximate cause is the same as actual cause.

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Legal Principle: The plaintiff in a product liability case may recover compensatory damages, designed to provide compensation for provable losses; and punitive damages, an amount awarded to punish the defendant.

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Legal Principle: The principal owes specific duties to the agent. Failure to fulfill these rights provides the basis for a tort or contract action against he principal.

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Legal Principle: Trade dress, the overall appearance and image of a product that have acquired secondary meaning, is entitled to the same legal protection as a trademark.

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Legal Principle: Two key differences between trademark dilution and trademark infringement are that (1) dilution additionally requires that the mark be famous and (2) dilution does not require a showing of consumer confusion, as required by infringement.

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Legal Principle: When a person temporarily deprives another of the use and enjoyment of his personal property, a trespass to property occurs; if that deprivation becomes permanent, conversion has occurred.

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Legal Principle: When an agent breaches his or her duties to the principal, the principal can terminate the agency relationship and seek remedies.

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Legal Principle: When an agent fails to fulfill his duties to the principal, that failure provides the basis for a contract or tort action against the agent.

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copyrights

A Copyright protects the fixed form of the expression of an original, creative idea. The most common defense to an allegation of copyright infringement is the fair-use doctrine, which provides that a portion of a copyrighted work may be reproduced for purposes of "criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, and research."

Patents

A Patent protects a product, process, invention, machine, or plant that is produced by asexual reproduction and that meets the criteria of being novel, useful, and nonobvious. Obtaining a patent under the Lanham Act allows the holder to license the use of his or her patented idea for royalties as long as the holder does not enter into a tying arrangement or engage in cross-licensing.

disparagement

A business tort that occurs when a statement is intentionally used to defame a business product or service

trade libel

A business tort that occurs when false printed statements criticize a business product or service and result in a loss of sales.

slander of title

A business tort that occurs when false published statements are related to the ownership of the business property.

slander of quality

A business tort that occurs when false spoken statements criticize a business product or service and result in a loss of sales.

Intentional torts

A civil wrong resulting from an intentional act committed on the person, property, or economic interest of another. Intentional torts include assault, battery, conversion, false imprisonment, intentional infliction of emotional distress, trespass to land, and trespass to chattels.

strict-liability torts

A civil wrong that occurs when a defendant takes an action that is inherently dangerous and cannot ever be undertaken safely, no matter what precautions the defendant takes. The defendant is liable for the plaintiff's damages without any requirement that the plaintiff prove that the defendant was negligent.

battery

A civil wrong that occurs when one person intentionally and voluntarily brings about a nonconsented harmful or offensive contact with a person or something closely associated with him or her. Battery requires an actual contact.

negligent torts

A civil wrong that occurs when the defendant acts in a way that subjects other people to an unreasonable risk of harm (i.e., the defendant is careless, to someone else's detriment). Negligence claims are usually used to achieve compensation for accidents and injuries.

manufacturing defect

A defect in an individual product that makes the product more dangerous than other, identical products.

contributory negligence

A defense to negligence whereby the defendant can escape all liability by proving that the plaintiff failed to act in a way that would have protected him or her from an unreasonable risk of harm and that the plaintiff's negligent behavior contributed in some way to the plaintiff's accident.

assumption of the risk

A defense whereby the defendant must prove that the plaintiff voluntarily assumed the risk that the defendant caused.

res ipsa loquitur

A doctrine that allows a judge or jury to infer that, more likely than not, the defendant's negligence was the cause of the plaintiff's harm even though there is no direct evidence of the defendant's lack of due care.

last-clear-chance doctrine

A doctrine used by a plaintiff when the defendant establishes contributory negligence. If the plaintiff can establish that the defendant had the last opportunity to avoid the accident, the plaintiff may still recover, despite being contributorily negligent.

public figure privilege

A special right, immunity, or permission that allows people to make any statement about public figures, typically politicians and entertainers, without being held liable for defamation as long as false statements were not made with malice.

absolute privilege

A special right, immunity, permission, or benefit given to certain individuals that allows them to make any statements about someone without being held liable for defamation for any false statement made, regardless of intent or knowledge of the falsity of the claim.

conditional privilege

A special right, immunity, permission, or benefit given to certain individuals that allows them to make any statements about someone without being held liable for defamation for any false statements made without actual malice.

good samaritan statutes

A statute that exempts from liability a person, such as a physician passerby, who voluntarily renders aid to an injured person but negligently, but not unreasonably negligently, causes injury while rendering the aid.

malicious prosecution

A tort in which one person wrongfully subjects another to criminal or civil litigation for the sole purpose of causing problems for that other person, often in retaliation for previous litigation between the two.

wrongful civil proceedings

A tort in which one person wrongfully subjects another to criminal or civil litigation that has no justifiable basis.

unfortunate accident

An incident that simply could not be avoided, even with reasonable care.

express warranty

Any description of a good's physical nature or its use, either in general or specific circumstances, that becomes part of a contract.