Business Law (v3) Module 7, 10, 11, 12
Civil Rights Act of 1964 has several provisions, but the most important for businesses is
"Title VII." It applies to employers with more than 15 employees.
The UCC requires contracts for the sale of goods for
$500 or more and for the sale of securities to be in writing.
How does a C corporation differ from an S corporation?
A C corporation and its shareholders are both taxed.
What is an advantage of an LLC over a general partnership?
An LLC has limited liability. Owners of LLCs are not liable for the company debt, unlike general partners in a partnership.
Which of the following employer accommodations would be the least reasonable for employees for religious beliefs?
Closing the business on Sundays
It is expensive to start a corporation due to paperwork.
Corporations are required to follow government regulations.
novation - type of discharge by agreement.
Discharge "when both of the parties to a contract agree to substitute a third party for one of the original parties." Requires a previous legal contract, an agreement to the new contract by all parties, the discharge of the prior party by termination of old obligation, and validation of a new contract.
(1) an affirmation of a fact or promise relating to the goods, (2) a description of the goods, or (3) a sample or model
Express warranties
True or False: An offhand remark or dirty joke is likely to be considered sexual harassment in a court of law.
False: Courts are careful not to impose manners on workplaces, so an offhand remark or dirty joke is unlikely to be sexual harassment. To be considered sexual harassment, the harassment must be so severe or pervasive that it alters the conditions of the victim's employment.
In order to prove disparate treatment, the plaintiff must prove the following:
He or she belongs to a protected class under Title VII, he or she has suffered adverse employment action, and this action occurred under conditions giving rise to an inference of discrimination.
nominal damages
If the breach caused no loss, the plaintiff is nevertheless entitled to a minor sum, perhaps one dollar.
talk amongst themselves about working conditions in forming a union, handout literature, and join a union.
In organizing, workers may do the following:
Which warranty provides that the goods will be useable for the ordinary purposes for which they are used?
Merchantability
permitted in the law of torts (in most states) when the behavior is malicious or willful (reckless conduct causing physical harm, deliberate defamation of one's character, a knowingly unlawful taking of someone's property).
Punitive damages
rescission - type of discharge by agreement.
Requires both parties to make another agreement that satisfies the same legal requirements as the original contract. An offer, an acceptance, and consideration must all take place.
can choose to be taxed like a partnership or sole proprietorship
S corporation
single taxation, or flow through taxes corporation type
S corporation
Sole proprietorships unlimited liability.
Since there is no difference between the owner and the business, the owner is personally liable for all the business's debts and obligations.
flow-through tax status organizations
Sole proprietorships
The Age Discrimination in Employment Act of 1967 (ADEA) makes it illegal to discriminate against workers over the age of 40.
The ADEA applies to any employer with over 20 workers, including state governments.
There are four basic sources of contract law:
The Constitution, federal and state statutes, federal and state case law, and administrative law.
Which of the following are remedies available to a successful plaintiff under Title VII? A, hiring, reinstatement, and back pay; B, front pay, reasonable attorney fees; C, compensatory and punitive damages; D, all of the above are remedies under Title VII.
The correct answer is D, all of these are remedies available under Title VII.
Ren was standing on a ladder to reach a box of supplies. He lost his footing and fell off the ladder, injuring his knee. Ren files for workers' compensation. What will be the outcome of the claim?
The employer must pay for all of Ren's injuries, even those for which it is blameless.
There are four types of illegal activities under Title VII.
The first is disparate treatment, next is disparate impact, next is hostile environment, and the last is retaliation.
Daniel enters a contract with Anika for Anika to design and furnish Daniel's basement, starting in one month. One week after the contract is finalized, Daniel's basement floods and needs several repairs. Under which theory will this contract be discharged?
The law recognizes the impossibility of completing the contract as valid grounds for discharging a contract.
To determine a party's intent in a contract case, a court will apply which theory of contracts?
The objective theory of contracts
General partnerships are also similar to sole proprietorships in unlimited liability.
One partner may be completely innocent of any wrongdoing and still be liable for another partner's malpractice or bad acts.
Taxation of LLCs
is very flexible
case law
judicial opinion (not a state or federal law, for example) aka common law
Shareholders of a corporation enjoy
limited liability
limited partnerships
limited liability
Has both general partners and limited partners and is attractive because of its treatment of taxation and its imposition of limited liability on its limited partners
limited partnership
limited partners
no right to manage
General partnerships and limited partnerships
not taxable entities, and continuity in either may be disrupted by a life event
Unlike corporations, the profits from partnerships are
not taxed twice.
LLCs
offer the limited liability feature of corporations but the tax benefits of partnerships
Contract requires
offer, acceptance, consideration
An implied warranty is
one created by law.
electing the Board of Directors for a corporation
one of the most important things that shareholders do
special agent
one who has authority to act only in a specifically designated instance or in a specifically designated set of transactions. For example, a real estate broker is usually a ___ ___ hired to find a buyer for the principal's land.
Limited partners
only liable up to the amount of their capital contribution
Corporations may
own property, sue or be sued in court, and make contracts. Corporations are also responsible for filing
forms of intellectual property
patents, copyrights, and trademarks
general agent
possesses the authority to carry out a broad range of transactions in the name of and on behalf of the principal. The general agent may be the manager of a business or may have a more limited but nevertheless ongoing role—for example, as a purchasing agent or as a life insurance agent authorized to sign up customers for the home office.
One common form of a personal general agent is the person who holds another's used for a special purpose—for example, to sell real estate or securities in the absence of the owner
power of attorney
the primary sources of law for the three basic types of contracts are
real estate=common law; services=common law; and sale of goods=UCC
ADA Title III
requirements for public accommodations such as wheelchair ramps, elevators, and accessible restrooms for new facilities.
Currently, ___ ___ is not a protected class under Title VII.
sexual orientation
limited partners
share proportion based on interest but receive their share first
General partners
share proportion on profit distribution based on interest
Owners of companies are called
shareholders
personally liable for all debts and taxes
sole proprietorship
A general partnership is taxed just like a
sole proprietorship. Income "flows through" the business to the partners, who then pay ordinary income tax on the business income.
Flow-through businesses include
sole proprietorships, partnerships, and S corporations
the performance of a contractual duty, as ordered in cases where damages would not be adequate remedy
specific performance
sole proprietorship
terminated much more easily than a partnership, corporation, or limited liability company
a case involving a power company that implemented an IQ test and high school diploma requirement for any position outside its labor department, resulting in very few African Americans working at the power company other than in manual labor.
the Court found that the power company could not prove a business necessity for having the IQ tests or high school diploma requirement, so those practices were ruled illegal. (disparate impact)
collective bargaining
the act of negotiating contract terms between an employer and members of the union
Compensatory damages
the general category of damages awarded to make the non-breaching party whole
Since the central feature of a general partnership is an agreement to share profits and losses, once that agreement ends
the general partnership ends with it
Agency Created by Agreement
the general rules of contract law govern the law of agency. But agencies can also be created without contract, by agreement. Therefore, three contract principles are especially important: the first is the requirement for consideration, the second the requirement for a writing, and the third concerns contractual capacity.
Once the patent period is over
the invention enters the public domain.
An S corporation is formed and treated just like any other corporation;
the only difference is in tax treatment.
If a seller asserts that a product will perform in a certain manner or has certain characteristics
the seller has given an express warranty and will be held liable for damages if the warranty is breached—that is, if the goods do not live up to the warranty.
Piercing the corporate veil means
the shield of liability protecting owners has been legally invalidated
only one party makes a promise, are equally valid but depend on performance of the promise to be binding
Unilateral contracts
implied warranty
a guarantee that the product does not have design defects, manufacturing defects, or improper labels.
Statute of Frauds
a law that requires that certain contracts be in writing, and that those contracts be signed by the parties who are to be bound by the contract
independent contractor
a person who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking.
corporation
a separate legal entity, separate and distinct from its owners
Sales law
a special type of contract law in that Article 2 applies only to the sale of goods
Goods sold by a merchant-seller carry
an implied warranty of merchantability, meaning that they must possess certain characteristics, such as being of average quality for the type described and being fit for the ordinary purposes for which they are intended.
quasi contract
an obligation said to be "imposed by law" in order to avoid unjust enrichment of one person at the expense of another.
Punitive damages
awarded for the purpose of punishing a defendant in a civil action, in which criminal sanctions may be unavailable.
each pledges to do something and each is the recipient of such a pledge.
bilateral contract
The first to file the patent has priority in the application process,
but the actual inventor has a 12-month grace period in which to file before a patent will be issued to anyone else.
The agency relationship can be created in two ways:
by agreement (expressly) or by operation of law (constructively or impliedly).
Trademarks
can last forever and are not subject to the Constitution's "limited time" restriction.
S corporations
cannot have more than 100 shareholders
First, there's a campaign, followed by authorization cards, a petition, and an election.
common steps in organizing a union
Common defenses of trademark infringement include fair use, free speech, and
comparative advertising
Categories of Damages for Breach of Contract
compensatory, consequential, nominal, incidental, punitive
Common law and the UCC are different sources of
contract law
double taxation
corporation
Plant patents
covers inventions or discoveries of asexually reproduced plants (e.g., plants produced through methods such as grafting).
consequential damages
damages that flow as a foreseeable consequence of the breach. (For example, if you hire a roofer to fix a leak in your roof, and he or she does a bad job so that the interior of your house suffers water damage, the roofer is liable not only for the poor roofing job, but also for the ruined drapes, damaged flooring and walls, and so on.)
Uniform Commercial Code (UCC), Article 2
deals with the sale of goods
C corporations are taxed
differently than S corporations
disparate impact
discrimination is unintentional. Most Title VII cases fall into this category because it is so rare to find proof of the intentional discrimination required in disparate treatment cases. In a disparate impact case, the victim alleges that the defendant has adopted some form of race-neutral policy or employment practice that, when applied, has a disproportionate impact on certain protected classes.
Business policies that raise suspicions for ___ ___ include educational qualifications, written tests, intelligence or aptitude tests, height and weight requirements, credit checks, nepotism in hiring, and subjective procedures such as interviews.
disparate impact
occurs when an employer discriminates against an *entire* protected class through the effects of a seemingly neutral policy
disparate impact
the plaintiff must prove that the defendant intentionally discriminated
disparate treatment
settlement agreement, or compromise - type of discharge by agreement.
This agreement occurs when a legitimate dispute over obligations under an existing contract will be recognized at law.
The purpose of remedies in contract law is
to put the non-breaching party in the position he or she would have been in had there been no breach.
The right to prevent others from using a company's product name, slogan, or identifying design.
trademark
Corporations are
treated under the law like a person.
Quasi contract and promissory estoppel
two types of equitable remedies that a court may impose
General partnerships
unlimited liability
When union and a company engage in a collective bargaining agreement, there are certain things that they have to include. So, the issues that they have to include are
wages, hours, and other terms and conditions of the work
In the typical product-liability case, three legal doctrines may be asserted:
warranty, negligence, strict liability
promissory estoppel
when a contract is missing consideration, and only has offer and acceptance
Quasi contract
when one party will receive a benefit from the other unjustly (unjust enrichment)
The UCC embraces the law of "commercial transactions,"
which may include the making of a contract for the sale of goods, the signing of a check, the endorsement of the check, or the shipment of goods.
Mutual mistake
will void the contract; it is as if it never existed.
Title VII of the Civil Rights Act of 1964 prohibits employers (with _____ employees) from discrimination against employees on the basis of sex, race, color, national origin, and religion.
15 or more
Copyright protection lasts for ___ years after the death of the author.
70
If a company, such as a publisher, owns a copyrighted work, the copyright expires ___ years from the date of publication, or ___ years from the date of creation, whichever comes first.
95, 120
double taxation corporation type
C Corporation
Merchantability
Goods sold by a merchant are warranted to be useable for their intended purpose (for example, a dishwasher washes dishes).
Enacted in 1932, the ____ is a federal statute which stipulates that it is legal for employees to organize.
Norris LaGuardia Act
Rainbow Airlines is a new air carrier headquartered in Chicago. The company extensively studied the psychology of passengers and determined that more than 93 percent of its passengers felt most comfortable with female flight attendants between the ages of 21 and 34. To increase its profitability, the company issued a policy of hiring only such people for jobs in the air but opened all ground jobs to anyone who could otherwise qualify. The policy made no racial distinction and, in fact, nearly 30 percent of the flight attendants hired were black. What violations of federal law has Rainbow committed, if any?
Rainbow Airlines has violated Title VII of the Civil Rights Act and the Age Discrimination in Employment Act.
What is one of the main purposes of contract law?
To ensure that promises made among private parties are enforceable
There are five types of agents
general; special; subagent; agency coupled with an interest; servant
Utility patents
granted for machines, processes, articles of manufacture, compositions of matter, or for improvements to any of those items. Specific mobile phones are the subject of utility patents. This is the most common type of patent issued.
Design patents
granted for ornamental designs for articles of manufacture (manufactured items).
Civil Rights Act of 1964
has broad significance for all racial minorities, religious organizations, and women.
General partnerships
have a right to manage
Although no discussion of terms took place, an _____ _____ exists if it is clear from the conduct of both parties that they intended there be one.
implied contract
This warranty type is one created by law.
implied warranty
express contract
in which the terms are spelled out directly; the parties to express a contract, whether the contract is written or oral, are conscious that they are making an enforceable agreement.
incidental damages
include additional costs incurred by the non-breaching party after the breach in a reasonable attempt to avoid further loss, even if the attempt is unsuccessful.
Less detailed instructions reflect less control, indicating that the worker is more likely an
independent contractor.
Agency law
involves three parties—the principal, the agent, and a third party
