MGT 6440 - Business Law and Ethics

What is In Rem Jurisdiction?

"Jurisdiction in rem" is the legal term used to describe the exercise of power by a court over property (either real or personal) or a "status" against a person over whom the court does not have "in personam jurisdiction".

Traditional view: of CSR

"Ownership Theory of the Firm" Purpose is to maximize value of sareholders

Accurate definition of CSR

"Social responsibility implies bringing corporate behavior up to a level where it is in congruence with currently prevailing social norms, values, and performance expectations...(social responsibility) is simply a step ahead - before the new societal expectations are codified into legal requirements.

Contrasting view of CSR

"Stakeholder theory of the firm" Purpose is to create value for society

Small Claims Court Max including attorney fees and info

$11k, money damages only, filing fee is %65, volunteer judges , sue where defendant is NOT where offense took place, burden of proof, have to not be in military, only 30% get paid, judgment is good for 7 years

What are 2 arguments in support of CSR?

-Balances corporate power with responsibility -promotes long-term profits for business (*mproves business value & reputation, discourages govt regulation and prosecution)

Who are the internal stakeholders for CSR

-Employees -Managers -Owners

What are 4 arguments against CSR?

-Lowers economic efficiency and profit -Imposes unequal costs among competitors -Leads to greenwashing -Requires skills businesses may lack

Functions of Law?

-To keep the peace -Encouraging moral and desirable behavior that goes above and beyond not hurting each -Max individual freedom - laws providing for freedom of speech, religion and association - help facilitate planning - business law - provide a basis for compromise - 90% of lawsuits are settled w/o litigation

How is ethical conduct encouraged internally?

-Top managment commitment to ethical behavior -Ethics policies or codes -provides guidance to managers and employees on what to do when faces with an ethical dilemma just having a code or policy is insufficient, must be widely distributed and have associated training. EX: -ethical & compliance officers -ethics reporting mechanisms (purposes include providing interpretations of proper ethical behavior, avenue for reporting unethical conduct and information-sharing tool, present in over 83% of large companies recently surveyed) -ethics training programs -ethics audits

exceptions to statute fraud

-parol evidence that shows a contract is void or voidable - parol evidence that explains ambiguous language - parol evidence that concerns a prior course of dealing or course of performance between the 2 parties or a usage of trade - parol evidence that fills in gaps in a contract - parol evidence that corrects an obvious clerical or typographical error

Who are the external stake holders in CSR

-suppliers -society -government -creditors -shareholders -customers

What are the elements of a contract?

1. agreement (offer and acceptance) 2. consideration 3. Contractual capacity 4. Legality

What are the two types of illegal contracts?

1. contracts contrary to statutes - ex: parente v. Pirozzoli 2. contract contrary to public policy (contracts that have a negative impact on society or interfere with the public's safety and welfare) Illegal contracts are generally void, and the court will usually leave the parties where it finds them.

What is corporate culture?

A blend of ideas, customs, traditional practices, company values, & shared meanings that help define normal behavior for everyone who works in a company

What is a contract?

A contract is a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty. HAS TO HAVE: * agreement * consideration * contractual capacity * legality

Acceptance of a contract?

A manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the objective theory of contracts. -unless otherwise specified, acceptance may be made by any medium reasonable under the circumstances. -oferree's acceptance must be unequivocal (mirror image rule) -silence is usually not considered acceptance (exception: the offeree indicates that silence means assent) -acceptance is usually effective upon dispatch (mail box rule, applied inconsistently to e-mail)

What is enlightened self-interest?

A philosophy in ethics which states that persons who act to further the interests of others (or the interests of the group or groups to which they belong), ultimately serve their own self-interest. Economic & social goals come together in companies that practice enlightened self-interest.

What is an agreement?

A voluntary exchange of promises between 2 or more legally competent persons to do, or refrain from doing, an act. Requires mutual assent, or "a meeting of the minds" Involves offer and acceptance Fairness of an agreement -marder v. Lopez

What is a tort?

A wrongful act or an infringement of a right (other than under contract) leading to civil legal liability. only leads to punishing through financial...crime is a societal wrong punishable by loss of liberty.

What are special offers?

ADVERTISEMENTS -Generally treated as an invitation to make & offer, rather than an offer that can be accepted by a buyer. -Exception if the offer is so definite or specific that it is apparent the advertiser has the present intent to bind himself or herself to the terms REWARDS -Unilateral contract -Requires: (1) knowledge of the reward prior to completing the requested action; and (2) performance AUCTIONS -Unless otherwise stated, seller may generally refuse the highest bid and withdraw the goods for sale

Real Estate: SURVEYS

ALATA survey tells you where utilities are, easements, etc.

Pearson v. Chung

Also kwown as the pants lawsuit," is a civil case filed in 2005 by Roy L. Pearson, Jr., at the time an administrative law judge, in the District of Columbia in the United States, following a dispute with a dry cleaning company over a lost pair of trousers. Pearson filed suit against Soo Chung, Jin Nam Chung, and Ki Y. Chung, the owners of Custom Cleaners in Washington, D.C., initially demanding $67 million for inconvenience, mental anguish, and attorney's fees for representing himself, as a result of their failure, in Pearson's opinion, to live up to a "satisfaction guaranteed" sign that was displayed in the store. The case drew international attention when it went to trial in 2007, and has been held up as an example of frivolous litigation and the need for tort reform in the United States. decision On June 25, 2007, the trial ended with District of Columbia Superior Court Judge Judith Bartnoff ruling in favor of the dry cleaners, and awarding them court costs pursuant to a motion which the Chungs later withdrew. The court took judicial notice of Pearson's divorce proceedings, where he was sanctioned $12,000 by the trial court for "creating unnecessary litigation and threatening both his wife, Rhonda VanLowe, and her lawyer with disbarment."

Bilateral vs. Unilateral contracts?

Bilateral is a promise for promise and unilateral is a promise for an act

Special Business Contracts & Licensing Statutes

CONTRACTS IN RESTRAINT OF TRADE -e.g. price fixing LICENSING STATUTES -regulatory statue vs. revenue-raising statute -sturdza v. United Arab Emirates EXCULPATORY CLAUSES - may relieve 1 or both parties from tort liability for negligence -exculpatory clauses that either affect the public interest or result from superior bargaining power are usually found to be void COVENANT NOT TO COMPETE -must be reasonable with regard to 1, the line of business protected, 2, the geographical area protaected and 3 the duration of the restricition (as of may 10, 2016 non-competes in utah cannot extend past 1 yr)

Review contracts examples from class!!!!!! they're all on the flip side of card

CONTRACTS STORY PROBLEMS Agreement 1. Greg Broderik tells Shane Richards: "I'll give you $200 for your first-edition Stratego board game." Is this an offer? YES. This satisfies all three elements of an offer. 2. What if Greg asks Shane: "Are you interested in exchanging $200 for a first-edition Stratego board game?" NO. Lacks objective intent to be bound by the offer. 3. While obsessing about Stratego and other old board games, and not knowing that Shane owns a first-edition Stratego, Greg exclaims: "I'd give everything I own for a first-edition Stratego board game." Shane then gives Greg his game. Can Shane force Greg to give him everything he owns? NO. Lacks objective intent to be bound by the offer. 4. What if Greg simply says to Shane: "I'll give you money for your first-edition Stratego board game." Is this an offer? NO. Terms too vague to constitute and offer. 5. What if Greg writes a letter to Shane saying the following: "If you give me your first-edition Stratego board game, I'll give you a sweet, mint-condition pinewood derby car kit." Greg then changes his mind about the deal, but accidentally leaves the letter on Shane's desk, where he sees it. Has an offer been made? (Let's assume Greg and Shane are attending the same classroom.) MAYBE. What are the arguments for and against? 6. Brian Weller—owner of a women's clothing store—advertises the availability of 100 new blouses with a billboard that reads as follows: "Beautiful blouses starting at just $20." Does the billboard create an offer that would require Brian to sell at least one of his blouses for $20? NO. Advertisement treated as an invitation to make an offer. 7. What if the billboard were more specific: "Pink Ralph Lauren blouse covered in tiny red ponies, size medium, product number RL34298, available to the first person that brings $20 into my store. YES. Specific enough to convey and objective intent to be bound by the terms. 8. Blane Jackson takes his five kids on a hike. While Blane is tending to his two twin babies, one of his older kids runs away into the woods. When Blane returns from the hike, he puts up signs all over Price that include a picture of the lost child and the following language: "Lost child. $10,000 reward for safe return." Several days later, while Brian is arguing with a customer who saw a billboard advertising blouses for as little as $20, the missing child stumbles into Brian's clothing store in Kaysville. Brian has never seen Blane's reward signs, but he recognizes the child from an MBA mixer. Brian safely returns the child to Blane. Is Blane contractually obligated to pay Brian $10,000? NO. Offer has to be communicated to the offeree to be valid. 9. When Wesley Allred first ate balut he loved it so much that he bought 500 pounds—shipped overnight from Balut-R-Us in the Philippines for $1,000. Then someone told him what balut is. After throwing up, Wesley called Taren Powell, and offered to sell her the balut for the discounted price of $800. Taren declined, explaining that she doesn't like any of her food to touch, and certainly doesn't want her food to touch balut. A week later, however, after seeing a therapist about her food phobia, Taren reconsiders. She calls Wesley and says she will now agree to buy the balut. Has a contractual agreement been reached? NO. Rejection terminates the offer. 10. What if, instead of initially rejecting Wesley's offer, Taren responded by telling Wesley that she would purchase the balut for $500, and Wesley never responded? Would Wesley be required to sell the balut to Taren? NO. Counteroffer operates as rejection of offer. 11. What if, instead of making a counteroffer that modified the price, Taren accepted the original offer, agreed to pay $800 for the balut, but further specified that the shiptment would need to be delivered to her house on a certain day. Would Wesley be required to sell the balut to Taren then? NO. Mirror image rule requires acceptance without modification of any term. 12. What if, before Taren responds to Wesley's offer, Derek Toone fails to learn Latin for the sixth time and falls into a rage. Derek comes across the 500-pound balut shipment and throws the individual pieces at cars. The entire shipment is carried away on windshields, one balut at a time. Can Taran still accept Wesley's offer, effectively requiring Wesley to place another $1,000 balut order so that he can sell it to Taran for $800? NO. Offer terminated by destruction of the subject matter. 13. What if Taren responds to Wesley's initial offer by stating: "I'm interested. Let me think about it. If you don't hear from me by Monday, we have a deal." Taren then fails to contact Wesley before Monday. Is there a contractual agreement? YES. Silence can operate as acceptance under these circumstances. 14. What if Wesley sends the initial offer to Taren in writing as follows: "I'm selling you 500 pounds of balut for $800. I'll have it delivered to your house on Monday unless you tell me otherwise." Again, Taren does not respond to the letter by Monday. Is there a contractual agreement? NO. Silence generally does not operate as acceptance. Consideration 15. SharLynn Mueller meets Lori Witkowski, Chairman of the Executive Committee of the Tooele County Chamber of Commerce. Star struck, and for no apparent reason, SharLynn promises to give the chairman $20,000 on February 1, 2017. Lori agrees to accept the money. SharLynn subsequently realizes that she is just as big a deal as Lori Witkowski and comes to her senses. When February 1 arrives, SharLynn refuses to follow through with her promise. Has an enforceable contract been created that would require SharLynn to pay Lori? NO. Gift promises lack consideration. 16. After deciding not to follow through with her promise to pay Lori Witkowski, but before her MGT 6640 class is over, SharLynn promises to pay Cameo Edwards $20,000 on March 1, 2017, if Cameo gets an A in the class. Cameo agrees, and ultimately gets an A. Has an enforceable contract been created that would require SharLynn to pay Cameo? YES. There is a valid exchange of consideration. The act of getting an A was Cameo's consideration. 17. What if, instead of just promising to give Cameo $20,000 for getting an A, SharLynn promises to pay her $20,000 for an A at a date of SharLynn's choosing? SharLynn further specifies that she can pick any date she wants, even a date after SharLynn's death, and that no claim for the money can be made against her estate. Is this an enforceable contract? NO. Nick's promise to pay is illusory. 18. Kevin Kusuda decides to start a woodworking business and contracts with Magleby Homes to build a luxury woodshop for $900,000. While the shop is being constructed, however, Magleby realizes that it underestimated the cost of materials, and that the project will cost $1,400,000, even if they do not bill for labor. Magleby then demands an additional $1,000,000 to complete the project. Kevin agrees. After the warehouse is completed, however, Kevin only pays Magleby the originally-agreed-upon $900,000. Can Magleby successfully sue Kevin for failing to follow through with the second agreement? NO. Preexisting duty, so no valid consideration. 19. What if, instead of underestimating the costs of materials, Magleby discovers that the lot where the shop is to be built is on top of an ancient Indian burial site? To avoid breaking the law, Magleby has to pay $1,000,000 to have archeologists come and remove bones and artifacts. Like in the first example, Magleby renegotiates the original agreement with Kevin. Can Magleby legally enforce the second agreement in this case? YES. Exception to preexisting duty rule for unforeseen difficulties. 20. Several precious artifacts are removed from the building site and Kevin gets his woodshop. When Kevin tells Kirk about the discoveries on the site, and Magleby's fine craftsmanship, Kevin contracts with Magleby to build a museum, where he plans to have both the artifacts and his personal collection of pottery displayed. Kirk and Magleby agree to construction costs of $2,000,000, and this time the construction moves forward without issue. Kirk is extremely happy with how the museum turns out. He's so happy, he calls Magleby and says the following: "Because you did such a great job, I am going to pay you an extra $100,000." Soon thereafter, an earthquake hits and ruins Kirk's personal pottery collection. Kirk also learns that the artifacts uncovered at the site of Kevin's woodworking shop have been promised to the National Museum of the American Indian in Washington, D.C. Depressed, Kirk refuses to follow through with his agreement to pay Magleby an additional $100,000. He only pays the initially agreed upon $2,000,000. Does a contract exist that would require Kirk to pay Magleby the additional $100,000? NO. Past consideration. 21. Jake Taylor competed in the 2016 Olympic Trials. He did not qualify for the Olympics. But he was so charismatic that Wheaties asked him to be the new Bruce Jenner. They wrote him a check for $100M. After learning of this unexpected windfall, Jake promises his classmates in Logan that he will give each of them $1M in two weeks, as soon as his Wheaties check clears. Jake sincerely explains that be believes his luck is the result of an answered prayer, and that God wants him to share his good fortune. In anticipation of his payday, Fahmid Shah quits his job at Coriant and enters into a contract to buy a top-of-the-line RV with a driver. He plans to travel the country while watching movies. On his last day at work, confident that he no longer needs a job, Fahmid make several unflattering comments about his boss's personal hygiene. Jake subsequently converts to Scientology and learns that his luck is attributable to the Alien Xenu, rather than God. He decides not to follow through with his promises to his classmates so that he can instead give all of his money to Tom Cruise. Does a contract exist between Jake and Fahmid? NO. Gift promise lacks consideration. 22. Is there any other way that Fahmid might legally compel Jake to follow through with his promise? YES. Promissory Estoppel. Capacity 23. Lil' Pump is 17 years old. He enters into a contract to purchase a mint-condition K1000HS Hybrid Fire Freestanding Grill with Side Burner valued at $25,000 from Curt Brown, a competent adult who recently became a vegan and stopped smoking ribs. Curt believes Pump is an adult and does not ask for verification of his age. Curt delivers the grill to Pump after he receives the $25,000 payment. Over the following year, Pump uses the grill every day, so it begins to show significant signs of wear. The result is that the grill loses $10,000 in value. The day before his 18th birthday, Pump returns the grill to Curt and asks for his money back. Can Pump require Curt to return the full $25,000 in exchange for the depreciated grill? YES. Pump can disaffirm the contract and enforce a duty of restitution, with his restoration of the grill. 24. What if, instead of simply using the grill, Lil' Pump modifies it by putting fake diamonds all over it. After over smoking and basically ruining a rack of ribs, and while withdrawing from Xanax and Promethazine, he also freaks out and intentionally smashes the side burner. The result is that the grill loses $15,000 of its value. Can Pump disaffirm the contract and require Curt to return the full $25,000 in exchange for the broken grill? Probably NO. Duty of restitution may not apply if reckless conduct is involved. 25. What if Lil' Pump had waited until two weeks after he turned 18 to return the grill? Depends on whether the wait was "reasonable." What are your arguments? 26. What if, instead of selling Lil' Pump a grill, Curt sold Sam a used stove for $300? Sam is a non-celebrity 17-year-old living apart from his parents. And $300 is a fair market price for the stove. Could Sam disaffirm that contract? NO. Contract for necessaries of life cannot be disaffirmed. Legality 27. When Kyle Cook was hired by L-3 Communications, he was required to sign a contract in which he agreed that, upon departure from the company, he would not work for any other company that dealt with any other company involved in the industries L-3 is involved in, anywhere in the world, for 50 years. Is Kyle's covenant not to compete enforceable? No. Against public policy. 28. What if the contract acknowledged public policy reasons for limiting the scope of covenants not to compete, but expressly explained that Kyle voluntarily waived his right to competition? NO. You can't contract around public policy. 29. What if, instead of supplying the government with communications and intelligence systems and products, Kyle supplied marijuana users with Strawberry Cough, Purple Urkel, and Bruce Banner? (Greg Moore convinced him to switch careers.) Kyle's employer agreed to pay him $100,000 to distribute 100 pounds of marijuana in Utah. Kyle distributed the marijuana, but his employer failed to pay him. Does Kyle have any contractual legal remedy? NO. Illegal contract. 30. What if the employer did pay Kyle, and Kyle then distributed the marijuana, but kept the profits associated with the distribution himself. Does Kyle's employer have any contractual legal remedy? NO. Illegal contract. Court will leave parties where it finds them. Unconscionable Contracts 31. Brice, a sophisticated salesman with a decade of experience, sells a poor family of farmers a groundwater irrigation system to replace their currently decaying irrigation infrastructure. The system is central the farm's functioning, and to the family's livelihood. In the purchase contract, Brice includes an extended warranty agreement. The terms of the warranty require the family to pay $500 a month, for 60 months. And the fine print of the warranty reveals that it only covers costs to repair damage caused by methamphetamine addicts who happen to recklessly drive their cars into the irrigation system. All other coverage is excluded. Is there an enforceable warranty contract between Brice and the family? Probably NO. Unconscionable. Genuineness of Assent 32. David hires Jake Tolley to give him 10 guitar lessons in exchange for $5,000. David is willing to pay $500 a lesson because he believes Jake is actually Eddie Vedder, of Pearl Jam fame. Jake, while equally talented, is, of course, not Eddie Vedder. But David does not discover that fact until after the contract is executed. Is the contract for guitar lessons enforceable? YES. Unilateral Mistake. 33. What if David calls Jake "Eddie Vedder" when negotiating the contract, and specifies that he is excited to take lessons from a Rock Star? (Assume Jake knows who Eddie Vedder is.) Probably NO. Jake knew the agreement was based on a mistake. 34. Now forget the mistaken identity stuff. David knows Jake is Jake, and the two are hunting together. Jake offers to give 10 guitar lessons to David for $5,000. But, because Jake is not Eddie Vedder, David declines. Jake then looks at his shotgun and says the following: "You know, I heard the guy Dick Cheney accidentally shot was only interested guitar lessons from rock stars too." David then agrees to pay for lessons. Is the contract for guitar lessons enforceable? NO. Duress. 35. What if Jake actually tells David that he is Eddie Vedder, and offers to sell him 10 guitar lessons for $500 a pop? David believes him and agrees. Is the contract between Jake and David enforceable? NO. Fraud. 36. Jake, after reading this story problem, realizes he does look like Eddie Vedder and starts a cover band. He spends more and more time practicing Pearl Jam songs and it consumes his life. He eventually starts playing the song Jeremy over and over, non-stop, 24-hours a day. Jake's Pearl Jam obsession causes him to lose his job and get kicked out of the MBA program. His life completely upended, Jake decides to see a psychiatrist. The psychiatrist is friends with David, and, as a favor to David, he convinces Jake that his Pearl Jam obsession can only be cured by paying David $5,000 to give him 10 guitar lessons. The psychiatrist arranges for Jake and David to meet, and Jake agrees to pay David $5,000 for 10 lessons. Is that contract for guitar lessons enforceable? NO. Undue influence. Statute of Frauds 37. John decides to move to Japan full-time and orally offers to sell Marc a piece of real property. Marc thinks he can use the property as headquarters for a fake home birth photo studio that he plans to open and orally accepts John's offer. By the time of closing, however, market research has revealed limited demand for fake home birth photo studios. Marc refuses to pay. Is the contract enforceable? NO. Statute of Frauds requires a writing. 38. What if John and Marc entered into the agreement at lunch, and Marc then wrote the following on a napkin: "I, Marc, agree to pay John $500,000 in exchange for the property located at [X] address, on March 1, 2017." This writing is intended to represent our complete and final agreement." Marc then signs the napkin, but John does not. Can John enforce the contract against Marc? YES. Writing need not be formal, must be signed by person against whom enforcement is being sought. 39. What if John signed the napkin but not Marc? Can John enforce the contract? NO. Must be signed by person against whom enforcement is being sought. 40. What if, before the napkin is signed by Marc, John and Marc continue to discuss the deal and agree that Marc should pay John $550,000 dollars for the property? Because they have already written the agreement out, however, and because they are out of napkins, they do not modify the written agreement to reflect the negotiation for the additional $50,000. Marc signs a napkin documenting only the original $500,000 agreement. John later delivers the property, but Marc says he has changed his mind and refuses to pay more than $500,000. Can John rely on their oral agreement to recover the additional agreed-upon $50,000? NO. Parole evidence rule. 41. What if, instead of re-negotiating the price, Marc and John continue to talk and agree on the exact method of payment—a wire transfer to a specific account number? Marc then pays John with a check. Could that evidence be relied on in a contract dispute? Probably YES. Parole Evidence Rule allows for filling in gaps. 42. What if Marc and John orally agree that John will sell Marc his property for $500,000. There is no writing. Based on that oral agreement, Marc buys $100,000 dollars in fake home birth photo equipment and spends another $100,000 making alterations to the property to prepare for his new business. Has an enforceable contract been created between Marc and John? NO. Statute of Frauds. 43. Is there any alternative theory of enforcement? YES. Promissory Estoppel.

Venue ?

Case must be heard in the appropriate courthouse -- typically where the defendant resides or where the matter occurred.

expressed vs. implied contract?

Common sense.

Brown v Board of Education (1955)

Conclude that in the field of public education the doctrine of "separate but equal" has no place. Separate education facilities are inherently unequal. Therefore, we hold that the plaintiffs & others similarily situated from whom action have been brought are, by reason of segregation complained of, deprived of the equal protection of the laws guaranteed by the 14th amendment.

What is concurrent jurisdiction? Give examples

Concurrent jurisdiction exists where two or more courts from different systems simultaneously have jurisdiction over a specific case. Examples: -federal questions -diversity of citizenship cases

Cooper v. Smith

Court of Appeals of Ohio Case Lester Cooper suffered serious injuries requiring a lengthy hospitalization. An acquaintance of Cooper's, Julie Smith, and her mother, visited him in the hospital on numerous occasions, and Cooper and Julie developed a romantic relationship. Cooper proposed to Julie and she accepted. Cooper received a $180,000 settlement for his injuries. After being released from the hospital, Cooper moved into Julie's mother's house and lived there for several months with Julie and her mother. During that time he purchased a large number of expensive gifts for Julie, and paid off her mother's car loan. Several months later, the settlement money ran out, and Julie had not yet married Cooper. Six months after that, Cooper and Julie got into a disagreement and Cooper moved out of the house. Cooper sued Julie and her mother to recover the value of the gifts he'd given them. The magistrate judge dismissed Cooper's case, and the trial court affirmed the dismissal of the case. Cooper appealed. The Ohio Court of Appeals held that the gifts made by Cooper to Julie and her mother were irrevocable gifts that he could not recover simply because his engagement to Julie ended, and affirmed the verdict of the trial court. "Many gifts are made for reasons that sour with the passing of time. Unfortunately, the law does not allow the giver to recover/revoke a gift simply because his or her reasons for giving it have soured. Thus, the gifts are irrevocable gifts and Cooper is not entitled to their return."

What are unconscionable contracts and what are their elements?

Courts sometimes refuse to enforce otherwise valid contracts if they are unconscionable. -parties possessed severely unequal bargaining power -dominant party unreasonably used its unequal bargaining power to obtain oppressive or manifestly unfair contract terms -the adhering party had no reasonable alternative (contracts of adhesion are not generally unconscionable.)

Offer? Definition and Elements

Definition: The manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. ELEMENTS: 1. Offeror must objectively intend to be bound by the offer; evaluated using a reasonable person standard. 2. Terms of the offer must be definite or reasonably certain.. Generally must identify: (1) the parties; (2) the subject matter and quantity; (3) the consideration to be paid; & (4) the time of performance. Terms may be expressed or implied. 3. The offer must be communicated to the offeree

What is common law?

Derived from previous judicial decisions.

Trolly car thought experiment (ethical hypothetical)

Discussion

Utility - Methods of Ethical Reasoning

Does the action balance pleasure over pain? The greater good or lesser bad (Utils/Happiness as discussed in Economics) - Jeremy Bentham -John Stuart Mill LIMITATIONS: -fails to respect individual rights -not all moral goods can be translated into a single measure of value (poll, edward thorndike study)

What is exclusive federal jurisdiction? Give examples.

Exclusive jurisdiction exists where one court (federal) has the power to adjudicate a case to the exclusion of all other courts. It is the opposite situation from concurrent jurisdiction (or non exclusive jurisdiction), in which more than one court may take jurisdiction over the case. Example: -admiralty -antitrust -bankruptcy -copyright & trademarks -federal crimes -patents -suits against the US -other specified federal statutes

What is exclusive state jurisdiction?

Exclusive jurisdiction exists where one court (state) has the power to adjudicate a case to the exclusion of all other courts. -matters not subject to federal jurisdiction

Genuiness of assent - FRAUD and it's elements

Fraudulent contracts are voidable by the innocent party. ELEMENTS: -Wrongdoer made a false representation of material fact -Wrongdoer intended to deceive the innocent party -Innocent part justifiably relied on the misrepresenation -innocent party was injured example: krysa v. Payne Tlypes of Fraud -in the inception (1 party misleads the other party with regard to what they are singing -in the inducement (1 party misleads the other with regard to what they are agreeing to -by concealment (1 party takes specific actions to conceal a material fact from another party)

In consideration, what are promises that lack adequate consideration?

GIFT PROMISE - a gift cannot be legally rescinded for lack of consideration example: cooper v. smith ILLEGAL CONSIDERATION -ex: an agreement to pay $10k to someone who threatens to burn down your store. ILLUSORY PROMISE -a contract that allows one of the parties to choose not to perform PREEXISTING DUTY -ex: a police officer's promise to patrol your neighborhood is not valid consideration -exception: unforeseen difficulties in contract completion

What is Uniform Commercial Code?

Generally applies common law principles to transactions involving the sale and lease of goods. ( so basically common law for business) -adopted by almost every state, including utah

Interactive Gift Express v. Compuserve Inc.

Home can be a place where costumers can make point of sale.

Real Estate: ENTITLEMENTS

How you can use your property. (Someone bought land near an airport and could only build 1 house per 5 acres NOT 3 houses per acre. They also had some acres which couldn't be developed and some acres where the houses had to be more soundproofed etc.)

Individual Rights - Methods of Ethical Reasoning

Is my action consistent w/ the inherent right of others? - libertarianisim -Kantian Ethics -Rawl' Social Justice theory

Virtue - Methods of Ethical Reasoning

Is my action consistent w/ virtuous character traits? The right thing to do is what a virtuous person would do which is based on race, religion, upbringing. *aristotle

An implied-in-fact contract?

It is implied from the conduct of the parties and requires the following 3 elements: 1. Plaintiff provided property or services to the defendant 2. Plantiff expected to be paid by the defendant for the property or services 3. Defendant was given an opportunity to reject the property or services provided by the plaintiff but failed to do so. ex: Wrench LLC v Taco Bell

What was International Shoe v. State of Washington & why was it important?

It was a was a landmark decision of the Supreme Court of the United States in which the Court held that a party, particularly a corporation, may be subject to the jurisdiction of a state court if it has "minimum contacts" with that state. The ruling has important consequences for corporations involved in interstate commerce, their payments to state unemployment compensation funds, limits on the power of states imposed by the Due Process Clause of the Fourteenth Amendment, the sufficiency of service of process, and, especially, personal jurisdiction. ( LONG ARM EXAMPLE ) Was a landmark case that set precedent for establishing the right for government to use the long-arm statute to bring an action against a defendant corporation.

State courts have exclusive jurisdiction over disputes involving state laws unless...

It's called diversity of citizenship and can occur when: -lawsuit must involve citizens of different states OR -$ amount of controversy must exceed $75k

Rawl's social justice theory - Methods of Ethical Reasoning

Justice should be determined behind a theoretical veil of ignorance, Rawl's Social Justice Theory - Justice should be determined from behind the veil of ignorance "If we were unborn and about to enter a society, what would we want society to look like... if it were a lottery where we go." Rules ensuring liberty Rules ensuring equal opportunity - rawls believed people would agree to: 1.Rules ensuring liberty -freedoms of conscience, association, and expression as well as democratic rights 2.Rules ensuring equal opportunity -difference principle (inequalities should work to the benefit of the worst-off)

What is law?

Law in generic sense is a body of rule of action or conduction prescribed by controlling authority. BOOK: That which must be obeyed and followed by citizens, subject to sanctions or legal consequences; a body of rules of actions or conduct prescribed by controlling authority and having binding legal force.

transaction vs litigation attorney

Litigation is to fight to find a resolution to an issue that happened. Transactional attorneys write up contracts/agreements (BEFORE issues happen/to prevent issues).

What are Long Arm Statues?

Long-arm statute refers to the jurisdiction a court has over out-of-state defendant corporations. International Shoe v. State of Washington was a landmark case that set precedent for establishing the right for government to use the long-arm statute to bring an action against a defendant corporation. -Minimum Contracts (committed torts within the state, entered into a contract either in the state or that affects the state,transacted other business in the state, etc.)

An implied-in-law contract? (quasi-contract)

May be created when: one person confers a benefit on another, who retains the benefit and it would be unjust not to require the person to pay for the benefit required. ex: ambulance

What is mediation?

Neutral third party assists the disputing party in reaching a settlement instead of litigation.

Parente v. Pirozzoli

Parente has a criminal record. He and Pirozzoli write up a contract saying they are 50/50 on a bar in Connecticut. But in CT persons with criminal records can't get liquor licenses, so Pirozzoli incorporates using only his name, and applies for the license. Six years later, he tells Parente to get out, and Parente sues. The court initially awarded Parente money, but the appellate court overturned it, saying their little agreement was a void contract, attempting to circumvent the law

What is arbitration?

Parties choose neutral party to hear and decide dispute instead of litigation.

What is promissory estoppel in contract consideration? (exceptions)

Permits a court to offer enforcement of a contract that lacks consideration where a party has detrimentally relied on the promise. ELEMENTS 1. promisor made a promise 2. promisor should have reasonably expected to induce the promisee to rely on the promise 3. promisee actually relied on the promise and engaged in an action or forbearance of right of definite and substantial nature 4. it would be unjust to decline to enforce the promise.

What is in personam jurisdiction?

Personal jurisdiction is the court's authority to determine personal rights and liabilities of the parties before it. Under personal jurisdiction the court has the power to decide matters of a particular defendant (in personam jurisdiction) or an item of property (in rem jurisdiction). -established over plaintiff when a lawsuit is field -established over a defendant through service of a summons on that person within the territorial boundaries of the state.

What are Restatement (Second) of Contracts?

Prepared by the American Law Institute -book prepared by american law institute with a bunch of contracts, they review all these jurisdiction and try to reconcile them into a set of rules. It isn't controlling law but because of the expertise it is very persuasive and is pretty followed

How is ethical conduct encouraged externally?

Professional codes of conduct -AICPA -CFA -AMA -ACM

Libertarianism - Methods of Ethical Reasoning

Right to self-ownership "Life, liberty, and the pursuit of happiness" -John Locke - Inalienable right to life, liberty, and the pursuit of happiness -Robert Nozick - Taxation = slavery Limitation of some rights may be justified by consent

What is consideration in contracts?

Something of legal value given in exchange for a promise. ex: Money, property, performance of an act, forbearance of a legal right, forbearance of a certain act - In re Matter of Wirth

Sources of Law

Source of law in US -Constitution (state level and federal) "Supreme law of the land" -English common law - judicial decisions in our company, -Federal and state statutes - written by state legislator or congress (e.g. civil rights act of 1964, utah state code, congressional hearing) -Executive ordinances, -Treaties - treaties are by 2/3 of Senate -Ordinances- state legislatures may delegate lawmaking authority to local governments (Example: Salt Lake City ordinances) -Executive Orders -Regulations and orders of administrative agencies -Judicial decisions - stare decisis: meaning let the decision stand

How can offers be terminated? (2 ways)

TERMINATION BY THE ACTS OF THE PARTIES - Revocation of the offer (1. offeror can generally revoke an offer at any time prior to acceptance 2. revocation may be communicated by express statement or an act that is inconsistent with the offer) -Rejection of the offer (includes counteroffers) TERMINATION BY OPERATION OF LAW -Destruction of the subject matter; death or incompetency of the offeror or offeree, supervening illegality; lapse of time

Wells Fargo credit corporation v. martin

The guy made a clerical mistake and sold it for WAYYYY less than he was suppose to. The question is: does wells fargo's unilateral mistake constitute grounds for setting aside the judicial sale? the mistake did not entitle it to relief from the judicial sale

CSR definition

The idea that businesses should interact with the organization's stakeholders for social good while they pursue economic goals

Genuiness of assent?

The law allows for recission of some contracts made by mistake. -unilateral mistake (usually cannot be rescinded (possible exceptions, one party makes a mistake and the other party knew or should have known that a mistake was made, a unilateral mistake occurs because of clerical or mathematical error that was not the result of gross negligence, mistake is so serious that enforcing the contract would be unconscionable) Wells Fargo credit corporation v. martin -Mutual mistake of material fact (usually can be rescinded as there has been no "meeting of the minds" & therefore no agreement) - exception: mutual mistakes of value -Duress - ie treats to commit an illegal act -undue influence occurs when 1 - a fiduciary or confidential relationship exists between the parties & 2- dominant party unduly uses his or her influence to persuade the servient party to enter into a contract. -

Ethical climate?

The unspoken understanding among employees of what is & is not acceptable behavior

Marder v. Lopez

U.S. Court of Appeals for the Ninth Circuit case The movie Flashdance was based on the life story of Maureen Marder, a female construction worker who performed at night as an exotic dancer Paramount movie studio paid Marder $2,300 for her story, and Marder signed a general release contract waiving any and all claims against Paramount that she might possible have Flashdance grossed more than $150 million in theaters Marder sued Paramount claiming that she was a coauthor of the movie's screenplay and so was a coowner of its copyright (along withi Paramount) The U.S. District Court dismissed her claims and she appealed. The Ninth Circuit Court of Appeals held that the general release Marder signed was an enforceable contract, and affirmed the judgment of the district court "The Release language is exceptionally broad and we hold that it is fatal to each of Marder's claims against Paramount. Accordingly, the law imputes to Marder an intention corresponding to the reasonable meaning of her words and acts. Though in hindsight the agreement appears to be unfair to Marder - she only received $2,300 in exchange for a release of all claims relating to a movie that grossed over $150 million - there is simply no evidence that her consent was obtained by fraud, decpetion, misrepresentation, duress, or undue influence."

Why is marijuana so interesting

Usually federal laws trump state laws but marijuana medical and recreational use is allowed by state verdict.. at least right now.

Wrench LLC v Taco Bell

Wrench LLC created the "Psycho Chihuahua" character. Taco Bell employees met with Wrench LLC employees at a trade show and took sample designs of the character back to Taco Bell headquarters. Taco Bell later asked Wrench to create designs incorporating the character and Taco Bell's branding, which Wrench did. Taco Bell did not enter into an express contract with Wrench. Taco Bell later gave Wrench's materials to its advertising agency Chiat Day, which later proposed using a chihuahua in Taco Bell commercials and said it came up with the idea by itself. Chiat Day's chihuahua commercials for Taco Bell were a big hit and became the central part of Taco Bell's advertising. Taco Bell paid nothing to Wrench, which sued Taco Bell to recover damages for breach of an implied-in-fact contract. The U.S. District Court agreed with Wrench that Wrench had stated a case of breach of implied-in-fact contract and said the case could proceed to trial. The U.S. Court of Appeals for the Sixth Circuit agreed, and sent the case back to the U.S. District Court for trial. Wrench LLC v. Taco Bell Corp., 256 F.3d 446 (2001) In 2003, the U.S. District Court jury ordered Taco Bell to pay Wrench $30 million for stealing their idea for the Psycho Chihuahua character. Later, the court also awarded Wrench $11.8 million in prejudgment interest, bringing the total awarded to nearly $42 million.

Personal Jursidiction

a court mus have personal jursidiction over the parites in the cases. examples: -in personam jurisdiction -long arm statues -in rem jursidiction

What is a plaintiff?

a person who brings a case against another in a court of law.

Merger Doctorine

after agreement is signed for real estat, only the deed matters. Stands for the proposition that the contract for the conveyance of property merges into the deed of conveyance; therefore, any guarantees made in the contract that are not reflected in the deed are extinguished when the deed is conveyed to the buyer of the property.

Real estate: TITLE

anything that is recorded in the county clerk's office (deeds, easements, CCNRs, (covenants, conditions, and restrictions), Example of a covenant - you can't use the property after midnight Easement - maybe for telephone or utilities... it is the right for someone else to cross/use that piece of your property. Title Insurance - they can list exclusions of things they don't cover

impure comparative fault

defendant must have more liability than the plaintiff or no payout

eggshell plaintiff

defendant takes plaintiff as is **bone disease

GM ignition switch (ethics hypothetical)

discussion

What is the role of the corporation in society?

discussion

trump taxes (ethics hypothetical)

discussion

planned parenthood (ethics hypothetical)

disucssion

Sturdza v. United Arab Emirates

facts the United Arab Emirates held a competition for the design of a new embassy in Washington DC, Elena Sturdza (Not licensed in DC) won, they worked on it for 2 years and then they stopped contacting her, she discovered they had contract w/ DC architect Demetriou, she sued, UAE won, she appealed issue Does Sturdza's lack of a District of Columbia's architects license bar her from recovering damages from the UAE? rule a contract made in violation of a licensing statute that is designed to protect the public will usually be considered void and unenforceable analysis since she has no DC license, her contract is void and unenforceable even though it is an international competition conclusion the court agreed with the earlier summary judgment and said Sturdza couldn't recover damages

In re Matter of Wirth?

guy tried to pledge money to university to make scholarship fund. he died and his estate tried to back out of it but the court said their was consideration. worth was that he would have it named after him.

Krysa v. payne

laintiffs wanted to buy a truck to pull their 18-foot trailer. A salesman at Payne's car dealership told them a Ford F-350 truck would pull the trailer, would "make it to 400,000 miles," and was a one-owner trade-in. Plaintiffs purchased the truck. Over the next few days, plaintiffs discovered a number of serious problems with the truck. Plaintiff then obtained a CARFAX report, which showed that the truck had 13 prior owners. In fact, the truck was actually two halves of different trucks that had been welded together. Plaintiffs were told by an expert not to drive the truck because it was unsafe. Payne's dealership refused to refund plaintiff's money and take the truck back. Plaintiffs sued Payne for fraudulent nondisclosure and fraudulent misrepresentation. At trial, the jury ruled in favor of plaintiffs and awarded them $18,449 in compensatory damages and $500,000 in punitive damages. Payne appealed the award of punitive damages. The court of appeals agreed that Payne's fraudulent concealment, fraudulent misrepresentation, and reckless disregard for the safety of plaintiffs and the public justified the $500,000 in punitive damages.

Enviornmental (natural resources

mineral rights (most likely in deed) and water rights

Kantian Ethics - Methods of Ethical Reasoning

o Protects people's right to CHOOSE to live in an ethical code o the rightness or wrongness of actions does not depend on their consequences but on whether they fulfill our duty. o You can tell if something is right or wrong by universalizing - not situational based, but categorical based (i.e. stealing - doesn't matter if you are starving, we cannot allow stealing to be acceptable universally, thus it is not ethical) o People have the right not to be treated as a means to the end o Motive Immanuel Kant - people owe ethical duties to 1 another based on universal rules, that can be developed thru reason. Ethical action found in motive. - Categorail imperative - we have an ethical duty not to act in a way that would result in a logical contradiction if the act was univeralized (rational beings should never be treated as a means to an end, but rather the end in themselves)

contractual capacity -

see pic

Seaman's District Buying Service, Inc v. Standard Oil Company

standard oil kept suing them back for things that weren't real to drain their funds to close down the seaman's lawsuit.

what are the 2 types of court?

state and federal

Statute of Frauds

statute that requires certain contracts be in writing. Common contracts covered by the statute of frauds. Applies to executary contracts, but not executed contracts. writing: Does not need to be formal but must be signed by the party against whome enforecment is sought. *Yarde Metal, Inc. v. New England Patriots Limited Partnership* Parol evidence rule -prior or contemporaneous oral or written statements that alter, contradict, are in addition to the terms of writing intended to be a final statement of the parties agreement are inadmissible in court proceedings involving the contract

PRIORITY OF LAW (fyi info) us constitution & treaties -> federal statutes -> federal regulations federal law -> conflicting state or local law state constitution -> state statutes -> state regulations -> local laws

that was fyi info

stare decisis

the legal principle of determining points in litigation according to precedent. "let the decision stand"

Standing

the plaintiff must have some stake in the outcome of the lawsuit. You can't sue for someone else.

What is litigation?

the process of bringing, maintaining, and defending a lawsuit. A.so referred to as judicial dispute resolution.

What is Alternative Dispute Resolution (ADR) - where are some resources?

the use of methods such as negotiation, mediation, and arbitration to resolve a dispute instead of litigation. -Utah State Court ADR Roster ( 40 hr training, 20 hr experience, ethics and background check, annual requalification) - Utah Dispute resolution -Utah ADR Services

Yankee Candle Co., Inc. v. Bridgewater Candle Co. Inc.

trying to put little guy out of business...it worked?

Valid, void, and voidable contracts?

valid needs all 6 elements, void doesn't have all elements and does not actually exist. Voidable is in the middle but minor party has ability to disinterment, it is a valid contract which may be either affirmed or rejected at the option of one of the parties. watch video for more: https://study.com/academy/lesson/valid-void-voidable-and-unenforceable-contracts.html

fyi - an award only counts if yo aware of the award so if you don't know about it than it is not enforceable.

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