BL Exam 1 (Essays)

1- George, who is driving while intoxicated, crashed into Alice. Alice was injured, and her car sustained damage. State the two types of actions that could be brought and list the differences between them.

A civil action in tort could be brought by Alice against George, and also a criminal action could be brought against George by the state. In a civil action, the plaintiff brings the action against the defendant, the burden of proof is preponderance of the evidence, and the action in this case would result in money damages. In a criminal action, the government brings the action against the defendant, the burden of proof is beyond a reasonable doubt, and the action results in a fine and/or imprisonment.

When is a court likely to pierce the corporate veil?

A court will pierce the corporate veil where the shareholders (a) have not conducted the business on a corporate basis, (b) have not provided an adequate financial basis for the business, or (c) have used the corporation to defraud.

30- What are the main provisions that should be included in a partnership agreement?

A partnership agreement should include the following: (1) names of each partner and partnership name, (2) nature of business, (3) length of time partnership is to last, (4) capital contribution of each partner, (5) how profits and losses are to be shared, (6) who is to have what authority, (7) how the partners are to be paid, (8) special restrictions on partners, if any, (9) withdrawal rights of partners, and (10) distribution upon termination.

1- Explain the concepts of "right" and "duty" as they relate to law.

A right is the capacity of a person, aided by the law, to require another person or persons to perform or refrain from performing a certain act. A duty is the obligation the law imposes upon a person to perform a certain act or to refrain from performing a certain act. Duty and right are correlatives.

6- Under the Fourth Amendment, a search warrant is not required in what situations?

A search warrant is not required in the following situations: (a) hot pursuit of a fugitive, (b) voluntary consent is given, (c) an emergency, (d) search incident to a lawful arrest, (e) evidence of a crime in plain view of a law enforcement officer, or (f) a delay which would hinder an investigation.

4- How does the Commerce Clause restrict the ability of states to regulate interstate commerce?

A state may not regulate activities if it would produce an undue burden on interstate commerce. The Supreme Court considers whether the regulation is necessary as well as the burden it would impose on interstate commerce. Note that states may not tax goods that continue to remain in the stream of commerce. Taxes may only be imposed after the movement of the goods has ceased.

5- Discuss the three basic functions of administrative agencies.

Administrative agencies exercise powers that have been allocated by the Constitution to the three separate branches of government. Agencies exercise legislative power when they make rules, executive power when they enforce the law, and judicial power when they adjudicate disputes.

30- What are the principal duties of a partner?

All partners within a partnership have a fiduciary duty to one another and to the partnership. They must operate in a loyal, fair manner demonstrating good faith in all partnership business. In addition, they have a duty of obedience, to follow the partnership agreement and other business decisions, and the duty of care.

6- Distinguish between a tort and a crime and identify the essential elements of a crime.

Both crimes and torts involve breaches of duty. In criminal law, the duty is one owed to society as a whole and punishment can be fines, imprisonment, or even death. Elements necessary in order to obtain a conviction are the actus reus, the wrongful act, and the mens rea, or criminal intent. Tort law involves a wrong committed against another individual and punishment includes injunctions or fines.

1- What are the major differences between common law systems and civil law systems?

In civil law systems, the legislatures create the laws and the judges initiate and conduct the litigation through the inquisitorial method of adjudication. In common law systems, the judges have a major role in creating the laws, the parties initiate and conduct the litigation through the adversary system, and the judges act as referees to insure that the parties follow the procedural rules.

5- Explain the process of judicial review upon the activities of administrative agencies.

In exercising judicial review of agency action, the court may either compel agency action unlawfully withheld or set aside impermissible agency action. In making these determinations, the court must review the whole record and may set aside agency action only if the error is prejudicial. The court decides all relevant questions of law, interprets constitutional and statutory provisions, and determines the meaning or applicability of the terms of an agency action.

4- Briefly explain the difference between procedural and substantive due process

Procedural due process requires that governmental decision-making be fair and impartial in those situations where an individual may be deprived of life, liberty, or property, whereas substantive due process requires a determination of whether a particular governmental action is compatible with individual liberties.

1- Define stare decisis and give a brief explanation.

Stare decisis literally means to stand by the decisions. It is a principle that courts should adhere to and rely on rules applied in prior, substantially similar cases. This principle lends stability to the law.

4- Explain the First Amendment's protection of free speech with respect to corporate political speech, commercial speech, and defamation.

The First Amendment's guarantee of free speech applies to corporations. Accordingly, corporations may not be prohibited from speaking out on political issues. Commercial speech is also protected under the First Amendment but to a lesser degree than private speech. Government regulation of false and misleading advertising is permissible under the First Amendment. Because defamation involves a communication, the protection extended to speech by the First Amendment applies. However, the Supreme Court has ruled that a public official who is defamed may not recover in an action of defamation unless the statement was made with actual malice.

6- Identify and discuss the major constitutional protections for the accused in our criminal justice system.

The Fourth, Fifth, and Sixth Amendments to the U.S. Constitution provide important protections for those accused of criminal conduct. The Fourth protects all persons against unreasonable searches and seizures, thereby protecting privacy and safeguarding against arbitrary invasions by governmental officials. The Fifth Amendment protects persons against self-discrimination, double jeopardy, and being charged with a capital or infamous crime except by grand jury indictment. The Sixth Amendment ensures that the accused shall receive a speedy and public trial by an impartial jury. All of these protections are extended to state actions by the Fourteenth Amendment.

6- State the purpose of the Racketeer Influenced and Corrupt Organizations Act (RICO).

The Racketeer Influenced and Corrupt Organizations Act (RICO) was enacted to terminate the infiltration of organized crime into legitimate business. The act subjects enterprises that engage in a pattern of racketeering to severe civil and criminal penalties.

30- What are the factors considered by a court in determining whether a partnership exists?

The court will look for three components to determine whether a partnership exists. Specifically, the court will determine whether there exists: (a) an association of two or more persons who agree to become partners, (b) a business with an intention to acquire profits and a continuous series of commercial activities, and (c) co-ownership and a sharing of profits and the right to manage and control the business.

4- Describe the factors used by the Supreme Court when deciding the extent to which state regulation may affect interstate commerce.

The court would be concerned with (1) the necessity and importance of the state regulation, (2) the burden it imposes on interstate commerce, and (3) the extent to which it discriminates against interstate commerce in favor of local concerns.

Albert, a truck driver employed by the Carryall Corporation, while on a business errand, negligently runs over Brenda, a pedestrian. Brenda sues Albert and Carryall Corporation to recover damages for her injuries. What is the result?

The doctrine of respondeat superior imposes full liability on a corporation for the torts committed by its agents and employees during the course of their employment. Because Albert was acting within the scope of employment, both Albert and Carryall Corporation are liable to Brenda for the injuries she sustained as a result of Albert's negligence.

38- What is the effect of filing a petition in bankruptcy?

Whether the filing of a petition is voluntary or involuntary, it operates as a stay against all creditors. That is, it restrains all creditors from beginning or continuing to recover claims against the debtor, or creating or enforcing liens against property of the debtor. The stay applies to both secured and unsecured creditors.

Freedlow, Inc. filed for bankruptcy. It has the following outstanding debts: Fees earned by the trustee in bankruptcy $6,000 Fees earned by attorneys of the bankruptcy estate $3,000 Unsecured claim for income tax $25,000 Claim for $50,000 secured by inventory worth $10,000 $50,000 Claim for wages of an employee earned within one month of filing the petition $1,500 In what order will these claims be paid?

(a) Claim for $50,000 secured by inventory worth $10,000 (gets $10,000 from the inventory or sale); (b) Child support in arrears ($3,000) (c) Fees earned by the attorneys of the bankruptcy estate; (d) Claim for wages of the employee earned within 180 days of filing the petition; (e) Unsecured claim for income tax; (f) Balance of claim ($40,000) that was secured by the inventory.

3- Using correct terminology, outline the process by which a civil lawsuit is begun and proceeds through the court system.

(a) Pleadings: filing of a complaint, service of a summons, and filing of an answer, reply, and/or counterclaim; (b) Possible demurrer or motion to dismiss for failure to state a claim; (c) Discovery in the form of depositions, interrogatories, requests for admission, and examinations of various sorts; (d) Pretrial conference to clarify issues and set a date for a trial; (e) Trial: consists of jury selection or voir dire, opening statements, examination and cross-examination of witnesses, closing statements, jury instructions, and verdict; (f) Motion for a new trial or executing of judgment if no appeal; and (g) Appeal.

38- Discuss the difference between voluntary and involuntary petitions in bankruptcy.

Any person who is eligible to be a debtor under a given bankruptcy proceeding may file a voluntary petition. It is not necessary to be insolvent. Once a petition is filed, an order for relief is automatic. An involuntary petition may be filed (1) by three or more creditors who have unsecured claims that total $12,300 or more, or (2) if the debtor has fewer than twelve creditors, by one or more creditors whose total unsecured claims equal $12,330 or more. Involuntary petition may be filed only under Chapter 7 or Chapter 11 and may not be filed against a farmer or a banking, insurance, or nonprofit corporation

30- Distinguish between the legal entity theory and the legal aggregate theory.

At common law, a partnership was regarded as a legal aggregate; that is, a group of individuals having no legal existence apart from its members. However, under the RUPA partnerships may be treated as a legal entity-that is as an organization having a legal existence separate from that of its members. The assets of the firm and title to real estate are but two ways the RUPA treats partnerships as a legal entity. Other ways the RUPA recognizes the legal entity theory are the fiduciary duty of partners to the partnership and the partners' roles as agents of the partnership. The UPA on the other hand, ascribes more to the legal aggregate theory. For example, the UPA holds that a partnership cannot be sued or sue in the firm name unless authorized by statute to do so.

Discuss briefly the adjustment of debt provisions in Chapter 13.

Chapter 13 applies to individuals with regular income who owe liquidated, unsecured debts of less than $307,675 and secured debts of less than $922,975. The adjustment of debt provision is intended to permit an individual to file a repayment plan with the ultimate goal of discharging her from debts. The plan must be (1) in good faith, (2) of a value such that property distributed to creditors will be not less than the amount that would be paid them under Chapter 7, (3) all secured creditors must accept the plan, (4) the debtor must be able to make all payments and comply with the plan, (5) if the debtor's net current monthly income is equal to or greater than the state median income, the plan may not provide for payments over a period longer than five years, but if the debtor's net current monthly income is less than the state median income then the plan generally may not provide for payments over a period longer than three years, and (6) the debtor must pay all domestic support obligations that became payable after the filing.

Distinguish between Chapters 7, 11, 12, and 13 bankruptcy.

Chapter 7, Liquidation, applies to most creditors and distributes equitably the debtor's nonexempt assets and thereafter discharges all dischargeable debts. Chapter 11, Reorganization, attempts to preserve the troubled entity and allow a continuation of business. Finally, Chapter 13, Adjustment of Debts of Individuals, permits an individual debtor to file a repayment plan which when all payments under the plan are paid will discharge the petitioner from most other debts.

5- Briefly discuss some limitations on administrative agencies.

Control of administrative processes comes from all three major branches of government. Legislative control comes through the passage of enabling statutes and approval of budgets. Executive control includes the president's power to appoint members of the agency, and judicial control can be found in the court's power to review a particular rule or order of an administrative agency. In addition, disclosure statutes, such as the Freedom of Information Act and the Government in the Sunshine Act, make agencies more accountable to the public.

What are the sources of corporate power?

Corporations derive their powers from three primary sources. State statutes contain a great many powers extended to properly formed corporations, including perpetual existence, the right to hold property in the corporate name, and all powers necessary or convenient to effect the corporation's purpose. The corporate charter will grant further powers to the corporation as enumerated in the articles of incorporation. Additionally, the corporation may exercise implied powers necessary or convenient to and consistent with the express powers contained in the corporate articles.

33- Indicate ways in which a corporation may be classified.

Corporations may be classified as: (1) public or private, (2) profit or nonprofit, (3) domestic or foreign, (4) publicly or closely held, (5) Subchapter S, and/or (6) professional. Any combination of these is generally possible. For example: A corporation may be private, nonprofit, domestic, and closely held.

5- Compare the formal, informal, and hybrid rulemaking processes.

In informal rulemaking, the agency must provide prior notice of a proposed rule-usually by publication in the Federal Register, an opportunity for interested parties to participate, and publication of a final draft containing a concise general statement of its basis and purpose at least 30 days before the rule's effective date. In formal rulemaking, the agency must base its rules upon consideration of the record of the trial-like agency hearing and include a statement of "findings and conclusions, and the reasons or basis therefore, on all the material issues of fact, law, or discretion presented on the record." Hybrid rulemaking results from combining the informal procedures of the APA with the additional procedures specified by the enabling statute.

3- Distinguish between in personam and in rem jurisdiction.

In personam jurisdiction is that jurisdiction based upon claims against a person in contrast to jurisdiction over that person's property, whereas in rem jurisdiction is based upon a claim against the property of a person.

3- Distinguish between "jurisdiction" and "venue."

Jurisdiction is the power or authority of a court to hear a case. Venue is the geographical location where the case should be heard when there are several courts of the same jurisdiction.

30- What are the principal rights of a partner?

Partners are provided, by law, with various rights because of their status as partners. They have rights in the partner¬ship itself. Additionally, they have a right to share in distributions, a right to participate in management, a right to choose associates, and a right of enforcement.

6- Discuss the four defenses most relevant to white-collar crimes and crimes against business.

The four defenses most relevant to white-collar crimes and crimes against business include: (1) defense of person or property which allows individuals to use reasonable force to protect themselves, others, and their property, and deadly force to protect themselves and others if they are threatened with death or serious bodily harm; (2) duress, which is coercion by threat of serious bodily injury; (3) mistake of fact which occurs if persons honestly and reasonably believe the facts to be such that their conduct would not constitute a crime; and (4) entrapment which arises when a government official induces persons to commit a crime they would not otherwise commit.

3- In a civil trial, what procedure does the judge use in deciding whether to grant or deny a motion for a directed verdict?

The judge assumes that all the evidence introduced by the non-moving party is true. The judge then decides whether this evidence, if true, would be sufficient for the jury to find in favor of the non-moving party. If the evidence of the non-moving party, assumed to be true, is not sufficient for the jury to find in favor of the non-moving party, then there is no point in requiring the moving party to try to disprove that evidence. Thus, the moving party will be entitled to a directed verdict.

3- Compare the relative advantages and disadvantages of court adjudication, arbitration, and mediation.

The major advantages of court adjudication are that it is binding, and it is based upon public norms and precedents; the major disadvantages include that it is expensive, it is time-consuming, it has limited remedies, and judges may lack special expertise. The major advantages of arbitration are that it is binding, the parties control the process, there is privacy, arbitrators have special expertise, and you can get a speedy resolution of your dispute; the major disadvantages include that there are no public norms, no precedents, and no uniformity. The major advantages of mediation are that it preserves relations, the parties control the process, and there is privacy; the major disadvantages include that it is not binding, it lacks finality, and there is neither precedent nor uniformity.

33- Identify the attributes of a corporation

The principal attributes of a corporation are: (1) it is considered to be a legal entity, (2) it provides the shareholders with limited liability, (3) ownership, represented by shares of stock, is freely transferable, (4) it is designed to have perpetual existence, and (5) its management is centralized. Additionally, it is considered for some purposes a citizen and for other purposes a person.

4- In equal protection cases, how does the rational relationship test compare with the strict scrutiny test?

The rational relationship test is applied to economic regulation. It must be conceivable that the classification used bear a rational relationship to a bona fide governmental interest the classification seeks to further. The strict scrutiny test is more stringent. It is applied to legislation affecting fundamental rights. The classification must be necessary to promote a compelling governmental interest.

5- Define the three types of rules promulgated by administrative agencies.

The three types of rules promulgated by administrative agencies include: legislative rules, interpretative rules, and procedural rules. Legislative rules are substantive rules issued by an administrative agency under the authority delegated to it by the legislature. Interpretative rules are statements issued by an administrative agency indicating its construction of its governing statute.

1- How are the Restatements of Law and the Uniform Commercial Code similar? How are they different?

They are similar in that they were both drafted by legal scholars who were concerned that legal rules be good rules that have wide applicability nationwide. They are different in that the Restatements of Law are not law in and of themselves, but are statements of what legal scholars believe the common law to be. In contrast, the UCC is statutory law in all fifty states, because the UCC has been adopted by the state legislatures. Restatements reflect the law developed by judicial decisions and by court application and interpretation of statutes in force for years.