BMGT380 - Business Law Examination n. 2
Negligence law considers (1) the personal characteristics of the defendant and (2) the context in which the defendant acted.
(1) Ex., children are generally required to act as would a reasonable person of similar age, intelligence, and experience. A person who is physically disabled must act as would a reasonable person with the same disability. > Mental deficiencies, however, ordinarily do not relieve a person from the duty to conform to the usual reasonable person standard * the same is true of voluntary and negligent intoxication. (2) Ex., someone confronted with an emergency requiring rapid decisions and action need not employ the same level of caution and deliberation as someone in circumstances allowing for calm reflection and deliberate action.
Special Rules
(1) persons who are negligent "take their victims as they find them." *meaning that a negligent defendant is liable for the fill extent of her victim's injuries if those injures are aggravated by some preexisting physical susceptibility of the victims - even though this susceptibility could not have been foreseen (2) negligent defendants normally are liable for diseases contracted by their victims while in a weakened state caused by their injuries. (3) negligent defendants typically are jointly liable - along with medical personnel - for negligent medical care that their victims receive for their injuries.
Acceptance
= "a manifestation of assent to the terms [of the offer] made by the offeree in the manner invited or required by the offer" > An offeree accepted an offer and in effect, created a contract if: (1) the offeree intended to enter the contract (2) the offeree accepted on the terms proposed by the offeror (3) the offeree communicated his acceptance of the offeror
Quasi-Contract
= (also called unjust enrichment or contract implied in law) represents an obligation imposed by law to avoid injustice, not a contractual obligation created by voluntary consent. > In general, liability is imposed when one part confers a benefit on another who knowingly accepts it and retains it under circumstances that make it unjust to do so without paying for it.
Comparative negligence
= (under either statute or by judicial decision) when courts seek to determine the relative negligence of the parties and award damages in proportion to the degrees of negligence determined. > The formula is: Plaintiff's recovery = Defendant's percentage share of the negligence causing the injury × Plaintiff's proven damages > There are two types of comparative negligence systems: (1) pure - courts apply the preceding formula regardless of the plaintiff's and dependent's percentage share of the negligence (2) mixed - the formula operates only when the defendant's share of the negligence is greater than (or, in some states, greater than or equal to) 50 percent. *if the plaintiff's share of the negligence exceeds 50 percent, mixed systems provide that the defendant has a complete defense against liability. *in such states, therefore, Porter would lose the case.
Executed contract
= a contract is executed when all of the parties have fully performed their contractual duties.
Executory contracts
= a contract is executory until all contractual duties have been fully performed.
Unconscionability
= a contract that is grossly unfair or one-sided
Exculpatory clauses
= a contract that purports to relieve the defendant of a duty of care he would otherwise owe to the plaintiff. > Limitation: (1) the plaintiff has knowledge of the exculpatory clause (which often boils sown to a question of its conspicuousness), and that the plaintiff must accept it voluntarily (which does not happen when the defendant has greatly superior bargaining power)
Contract
= a legally enforceable promise or set of promises. > The contracting party harmed by a breach of the contract is entitled to obtain legal remedies against the breaching party. > Contracts facilitate the planning that is necessary in a modern and industrialized society. > Lets us create a type of private law that governs our dealings with others > Can be either written or oral (oral contracts are as legally enforceable as a written one, of course, having a written contract may often be desirable)
Strict liability
= a liability without fault, or perhaps more precisely, irrespective of fault. > Means that the defendant is liable even though he did not intend to cause the harm and did not bring it about through recklessness or negligence. > Examples of activities: (1) owners or trespassing livestock and keepers of naturally dangerous wild animals. (2) abnormally dangerous (or ultrahazardous) activities and the manufacture or sale of defective and unreasonably dangerous products
Merchants
= a person that regularly deals in the kind of goods being sold, or pretends to have some knowledge about the goods or employed an agent in the sale who fits either of these two descriptions, that person is a merchant for the purposes of the contract in question *FOR EX., if you buy a used car from a used-car dealer, the dealer is a merchant for the purposes of your contract. But, if you buy a refrigerator from a used-car dealer, the dealer is not a merchant.
Promissory Estoppel
= a promise that the promisor should foresee is likely to induce reliance, reliance on the promise by the promise, and injustice as a result of that reliance.
Options
= a separate contract in which an offeror agrees not to revoke her offer for a stated time in exchange for some valuable consideration. *the offeree has no obligation under an option to accept an offeror's offer. In effect, she has merely purchased the right to consider the offer for the stated time without fear that the offeror will revoke it. > A rejection does not terminate an option contract. The offeree who rejects still has the power to accept the offer later, so long as the acceptance is effective within the option period
Duties to Persons on Property
= a set of special duties that runs from possessors of real estate (land and buildings) to those who enter that property > Negligence cases that address these duties are often called premises liability cases > Traditionally, the duties owed by the possessor has depended on the classification into which the entering party fits. The three classifications are: (1) Invitees (2) Licensees (3) Trespassers
Duty of Reasonable Care: Reasonable person of ordinary prudence
= a standard for assessing conduct, often called the "reasonable person" test or the "reasonable care" standard > In most cases, the duty to exercise care serves as the relevant duty for purposes of negligence claims first element.
Abnormally Dangerous Activities
= abnormally dangerous (or haphazardous) activities are those necessarily involving a risk of harm that cannot be eliminated by the exercise of reasonable care. *FOR EX., stunt flying > Assumption of risk has been a traditional defense.
Types of Injury and Damages: (1) Personal injury
= also called "physical" or "bodily" injury - is harm to the plaintiff's body > Plaintiffs who experienced personal injury and have proven all elements of a negligence claim are entitled to recover compensatory damages > These damages include not only amounts for losses such as medical expenses or lost of wages but also sums for pain and suffering *the rationale is that the plaintiff's pain and suffering is a distinct harm resulting from the defendant's failure to use reasonable care, and merely totaling up the amounts of the plaintiff's medical bills and lost wages would not compensate the plaintiff for the full effects of the defendants wrongful behavior
The Uniform Commercial Code (UCC) - Article 2
= applies only to contracts for the sale of goods > Defines goods as tangible, movable personal property *FOR EX., the sale of such items as motor vehicles, books, appliances, and clothing. > Does not apply to service contacts > A court that applies the Code is more likely to find that the parties had a contract than a court that applies the common law of contracts
Bilateral contract
= both parties exchange promises and the contract is formed as soon as the promises are exchanged
Negligence
= conduct that falls below the level of reasonably necessary to protect others against significant risk of harm > The elements of _______ (1) that the defendant owed a duty of care to the plaintiff, (2) that the defendant committed a breach of this duty, and (3) that this breach was the actual and proximate cause of injury experienced by the plaintiff > (1) Duty, (2) Breach, (3) Causation, (4) Damages > In order to win a _______ case, the plaintiff must prove each of these elements.
Duties to Persons on Property: (3) Trespassers
= enters the land without the possessor's consent and without other privilege. > A possessor of land owe _________ no duty to exercise reasonable care for their safety > There is only a duty not to willfully and wantonly injure ________ once their presence is known
Duties to Persons on Property: (2) Licensees
= enters the property for her own purposes, not for a purpose connected with the possessor's business. > Does however, enter with the possessor's consent > In some states, social guests are licensees, though today they are commonly classified as invitees. > Ex., door-to-door salespeople, solicitors of money for charity, and sometimes persons taking shortcuts across the property > Consent to enter the property is often implied > The possessor usually is obligated only to worn licensees of dangerous on-premise conditions that are unlikely to discover
The Uniform Commercial Code (UCC)
= establishes a uniform set of rules to govern commercial transactions, which are often conducted across state lines.
Common Law of Contracts
= governs contracts for the sale of real estate, services, and intangibles such as stocks and bonds
Types of Injury and Damages: (2) Property damage
= harm to the plaintiff's real estate or personal property items such as a car > Another recognized type of injury for which compensatory damages are recoverable in negligence litigation
Res Ipsa Loquitur
= when the defendant has superior knowledge of the circumstances surrounding the plaintiff's injury > applies when (1) the defendant has exclusive control of the instrumentality of harm (and therefore probable knowledge of, and responsibility for, the cause of harm); (2) the harms that occurred would not ordinarily occur in the absence of negligence; and (3) the plaintiff was in no way responsible for his own injury *most courts hold that when these three elements are satisfied, a presumption of breach of duty and causation arises. *the defendant then runs a significant risk of losing the case if he does not produce evidence to rebut this presumption
Was the duty breached? : Reasonable Foreseeability of harm
= helps determine not only whether the defendant owed the plaintiff duty but also what the defendant's duty of reasonable care entitled in the case at hand. *FOR EX., suppose that Donald falls asleep at the wheel and causes a car accident in which another motorist , Peter, is injured. Falling asleep at the wheel involves a foreseeable risk of harm to others, so a reasonable person would remain awake while driving. Because Donald's conduct fell short of this behavioral standard, he has breached a duty to Peter. However, this probably would not be true if Donald's loss of awareness resulted from a sudden severe and foreseeable blackout. On the other hand, there probably would be a breach of duty if Donald was driving and had a blackout which a doctor had warned him has subject. > In determining the reasonableness of the risk, courts consider other factors besides the foreseeability of harm. Such factors as (1) the seriousness or magnitude of the foreseeable harm (2) the social utility of the defendant's actions (3) the ease or difficulty of avoiding the risk
good faith
= honesty in fact
Comparative Fault
= in a comparative fault state, the fact-finder determines the plaintiff's and defendant's relative shares of the fault - including assumption of risk - that caused the plaintiff's injury.
Duties to Persons on Property: (1) Invitees
= invitees of two general types, (1) the first of which is the "business visitor" who is invited to enter the party for the a purpose connected with the possessor's business. Ex., customers, patrons, and delivery persons (2) the second type of invitees consist of "public invitees" who are invited to enter property that is held open to the public Ex., persons using government or municipal facilities such as parks, swimming pools, and public offices, attendees or free lecturers and church services; and people responding to advertisements that sometimes will be given away {the entry, however, must be for the purpose for which the property is held} > A possessor of property must exercise reasonable care for the safety of his invitees *he must take appropriate steps to protect an invitee against dangerous on-premise conditions that he knows about, or reasonably should discover and that the invitee is unlikely to discover
Offer
= is the critically important first step in the contract formation process. > To distinguish an offer, courts look for three requirements: (1) an objective indication of a present intent to contract on the part of the offeror (2) specificity, or definiteness, in terms of the alleged offer (3) whether the alleged offer has been communicated to the offeree
Firm offer
= like an option, a firm offer is irrevocable for a period of time. In contrast to an option, however, a frim offer does not require consideration to be given in exchange for the offeror's promise to keep the offer open. > Not all offers to buy or sell goods qualify as firm offers. To be a firm offer, an offer must: (1) be made by an offeror who is a merchant (2) be contained in a signed writing (3) give assurance that the offer will be kept open
Unilateral contracts
= only one party makes a promise
Economic loss
= out-of-pocket expenses, lost profits, or similar financial harms that resulted from the defendant's breach of duty but have no connection to personal injury or property damages. > Compensatory damages are available for losses of this nature in appropriate cases.
Duty of Reasonable Care
= rest on the premise that members of society normally should behave in ways that avoid the creation of unreasonable risk of harm to others. > As a general role, negligence law contemplates that each person must act as a reasonable person of ordinary prudence would under the same or similar circumstances.
Negligence per se
= the defendant's violation of statutes, ordinances, and administrative regulations that determine how a reasonable person would behave, that may create a breach of duty and may allow the plaintiff to win the case if the plaintiff (1) was within the class of persons intended to be protected by the statute or other law, and (2) suffered harm of a sort that the state or other law was intended to protect against
Freedom of Contract
= the idea the contracts should be enforced because they are the products of the free wills of their creators, who should, within broad limits, be free to determine the extent of their obligations
Intent to Contract
= the intent to enter the contract upon acceptance. > It signifies that the offeror is not joking, haggling, or equivocating. > Offeror's intent is judged by an objective standard - that is what his (1) words, (2) acts, and (3) the circumstances signify
Contributory negligence
= the plaintiff's failure to exercise reasonable care for her own safety *FOR EX. if Preston steps into the path of Doyle's speeding car without first checking to see whether any cars are coming, Preston would be denied any recovery against Doyle, in view of the clear casual relationship between Preston's injury and his failure to exercise reasonable care for his own safety.
Assumption of risk
= the plaintiff's voluntary consent to a known danger. > Voluntariness means that the plaintiff accepted the risk of her own free will; knowledge means that the plaintiff was aware of the nature and extent of the risk > Can be inferred (implied) from the facts or expressly assumed.
Respondeat Superior
= under this doctrine, an employee is liable for an employee's tort if the tort was committed within the scope of employment. > Provides a basis for an employer to be held for an employee's tort
Implied contract (Implied in fact)
= when a contract is demonstrated by the conduct of the parties. > When the surrounding facts and circumstances (prior dealings) indicate that an agreement has in fact been reached
Communication to Offeree
= when an offeror communicates the terms of an offer to an offeree, he objectively indicates an intent to be bound by those terms
Intervening causes
= when the later act, force, or event that contributes to the plaintiff's injury was foreseeable; instead the court holds that the an intervening cause absolves the defendant of liability for harms that resulted directly from the intervening cause.
Express contract
= when the parties have directly stated the terms of their contracts orally or in writing at the rime of the contract was formed
Bids
> Advertisements for bids are generally treated as invitations to offer. > According to general contract principles, bidders can withdraw their bids at anytime prior to acceptance by the offeree inviting the bids and offeree is free to accept or reject any bid > However, if the advertisement for bids unconditionally states that the contract will be awarded to the lowest responsible bidder, this will be treated as an offer that is accepted by the lowest bidder
Advertisements
> Advertisements for the sale of goods at specified prices are not considered offers. > Except for those ads that limit the power of acceptance to an offeree or a small number of offerees, are highly specific about the nature and number of items offered for sale and what is requested in return, and they leave nothing further to be negotiated
Rewards
> Advertisements offering rewards for lost property, for information, or for the capture of criminals are generally treated as offers for unilateral contracts.
Was the duty breached? : Reasonable Foreseeability of harm Factor (1) seriousness or magnitude of the foreseeable harm
> As the seriousness of the harm increases, so does the need to take action to avoid it.
Was the duty breached?
> Assuming that the defendant owed the plaintiff a duty of reasonable care, whether the defendant satisfied or instead breached that duty depends on the application of the reasonable person test. *when applying this objective yet flexible standard to specific cases, courts must consider and balance various factors. > The most important factor is the reasonable foreseeability of harm. > Negligence law does not require that we protect others against all foreseeable risk of harm. Instead the risk created by the defendant's conduct need only be an unreasonable one.
Proximate cause
> Courts typically say a negligent defendant is liable only for the proximate results of his breach *proximate cause, concerns the required degree of proximity or closeness between the defendant's breach and the injury it actually caused > A significant number of courts have adopted a test under which a defendant who has breached a duty of care is liable only for the "natural and probable consequences of his actions" > Other courts have limited a breaching defendant's liability for unforeseeable harms by stating that he is liable only to plaintiffs who were within the "scope of the foreseeable risk."
Existence of a contract
> In determining whether a contract exists, courts scrutinize the parties' communications and conduct in light of the extent in which the parties interacted and prior dealings
Later Acts, Forces, or Events
> In some cases, an act, force, or event occurring after a defendant's breach of duty may play a significant role in bringing about or worsening the plaintiff's injury if the later act, force, or event was foreseeable, it would not relieve the defendant of liability
Was the duty breached? : Reasonable Foreseeability of harm Factor (3) ease or difficulty of avoiding the risk
> Negligence law normally does not require that the defendant make superhero efforts to avoid harm to others. *instead the defendant should take economically feasible security measures that are required to prevent the foreseeable harm
Causation of Injury
> Proof that the defendant breached a duty does not guarantee that the plaintiff will win a negligence case. > The plaintiff must also prove that the defendant's breach caused her to experience injury. > The components of this requirement includes: (1) personal injury (2) property damage
Breach of Duty: Reasonable person of ordinary prudence
> Requires the plaintiff to establish that the defendant failed to act as a reasonable person would have acted. > This test is objective in two senses (1) it compares the defendant's actions with those that a hypothetical person would ordinary prudence and sensibilities would have taken (or not taken) under the circumstances. (2) the test focuses on the defendant's behavior rather then the defendant's subjective mental state
Auctions
> Sellers at auctions are generally treated as making an invitation to offer > Those who bid on offered goods are, therefore, treated as making offers that the owner of the goods may accept or reject > However, when an auction is advertised as being "without reserve," the seller is treated as having made an offer to sell the goods to the highest bidder and the goods cannot be withdrawn after a call for bids has been made unless no bids are made within a reasonable time.
Injury that is emotional in nature
> Some courts allow recovery for foreseeable emotional harm that stand alone. > Other courts still require either physical injury or impact as a general rule when emotional distress damages are sought. *many recognize exceptions to that general rule where emotional harm seems especially likely to occur and especially likely to be severe.
Revocation
> The general common law rule on revocations is that offerors may revoke their offers at any time prior to acceptance, even if they have promised to hold the offer open for a stated period of time. > Exceptions: (1) Options (2) Offers for unilateral contracts (3) Promissory estoppel (4) Firm offers for the sale of goods
Was the duty breached? : Reasonable Foreseeability of harm Factor (2) social utility of the defendant's conduct
> The more valuable that conduct, the less likely that it will be regarded as a breach of duty
What Terminates Offers?
> Their own terms > Lapse of time > Revocation > Rejection > Death or insanity of offeror or offeree > Destruction of subject matter > Intervening illegality
Was the duty owed?
> There could not have been a breach of duty if the defendant did not owe the plaintiff a duty in the first place. > Courts typically hold that the defendant owed the plaintiff a duty of reasonable care if the plaintiff was among those who would foreseeably be at risk of harm stemming from the defendant's activities or conduct, or if a special relationship logically calling for such a duty existed between the parties > A duty of reasonable care is held to run from the defendant to the plaintiff in a high percentage of negligence cases - meaning that the outcomes of the case will hinge on whether the defendant breached the duty or on whether the requisite causation link between the defendant's breach and the plaintiff's injury is established.
Actual Cause
> To determine the existence of actual cause, courts often employ a "but-for" test. *this test provides that the defendant's conduct is the actual cause of the plaintiff's injury when the plaintiff would not have been hurt but for (i.e., if not for) the defendant's breach of duty. >In some cases, courts apply a different test by asking whether each defendant's conduct was a substantial factor in bringing about the plaintiff's injury.
Basic Elements of a Contract
> To qualify as a contract, a set of promises must be based on a voluntary agreement, which is made up of an (1) offer and an (2) acceptance of that offer > In addition, there usually must be (3) consideration to support each part's promise. > The contract must be between parties who have the (4) capacity to contract, and the objective and performance of the contract must be (5) legal.
The causation Link:
Both actual and proximate causes are necessary for negligence recovery
Special Duties
In some situations, courts have fashioned particular negligence duties to suppliment the general reasonable duties. > For ex., professionals such as doctors, lawyers, and accountants generally must exercise the knowledge, skill, and care ordinarily possessed and employed by members of the professions
