Business Law Final

Respondeat Superior

"Let the master answer" an employer is vicariously liable for the behavior of an employee working within his or her scope of employment Ex: if a delivery driver, John, causes an accident while working for ABC Courier Company, the company may be held liable for John's negligence, as making deliveries falls within the scope of his employment. This doctrine emphasizes the employer's responsibility for the actions of employees during job-related activities.

causation: Proximate or Foreseeable Cause

- In a tort case, a defendant is only legally responsible for harm to the plaintiff that could have been reasonably anticipated arising from the defendant's actions. Ex: Tom owns a grocery store, and one day he negligently leaves a banana peel on the floor near the entrance without cleaning it up. Jane, a customer, unknowingly steps on the banana peel, slips, and falls, sustaining injuries. The injuries suffered by Jane were a reasonably foreseeable consequence of Tom's negligence in leaving the hazardous condition. It is foreseeable that someone could slip on a banana peel left on the floor, leading to injury.

existence of a duty of care

-When someone is acting: duty to act reasonably -When someone is not acting: no duty to take affirmative action, unless there is a special relationship Ex: Sarah owed a duty of care to other road users, including Alex, to operate her vehicle safely and obey traffic laws.

Products Liability (Negligence)

1) Duty—reasonable care owed to any foreseeable P by commercial manufacturer/distributor/retailer/seller 2) Breach—failure to exercise reasonable care in inspection/sale of product (i.e., defect would have been discovered if D wasn't negligent) 3. Causation—factual & proximate 3) Damages—actual injury/property damage, not pure economic loss 4) Defenses—contributory/comparative negligence and A/R

partnership

A business in which two or more persons combine their assets and skills; multiple entities, no legal formalities, personal liability for each partner, optional: create a partnership agreement, advantage: flexibility, income is treated as personal income

Sole Proprietorship

A business owned by one person, no legal formalities, single entity, personal liability, advantage: flexibility, the income of the business is treated as personal income

Corporation

A business that is owned by many investors; entity as itself, income taxed to corporation, ownership by shares, no personal liability, open or closed, formalities for creation

Mirror Image Rule

A common law rule that requires that the terms of the offeree's acceptance adhere exactly to the terms of the offeror's offer for a valid contract to be formed. Ex: Company A sends an offer to Company B to purchase 100 units of a particular product for $10,000. The offer specifies the quantity, price, and other terms. If Company B agrees to the offer but includes additional conditions or changes the terms, such as offering to purchase 90 units for $9,000 or adding different delivery terms, this would not constitute acceptance under the mirror image rule. Instead, it's considered a counteroffer.

condition precedent

A condition in a contract that must be met before a party's promise becomes absolute. Ex: In a contract for the sale of goods, a condition precedent may be included requiring the buyer to obtain satisfactory financing before being obligated to proceed with the purchase. If the buyer fails to secure financing on acceptable terms, the contract becomes null and void, releasing both parties from further obligations.

condition subsequent

A condition in a contract that, if it occurs, operates to terminate a party's absolute promise to perform. Ex: In a construction contract, Party A agrees to pay Party B for renovating a building within six months. A condition subsequent is included: if the building passes inspection within seven months, Party A must make the final payment. Party B completes the renovation on time, and the building passes inspection. The condition subsequent is fulfilled, and Party A is discharged from the obligation to make the final payment. If Party A refuses to pay, Party B may seek legal remedies for breach of contract. The successful occurrence of the condition subsequent alters the contractual obligations, leading to the discharge of certain duties.

Unilateral Contract

A contract that results when an offer can be accepted only by the offeree's performance. Ex: , Party A's promise to pay the reward is contingent upon the completion of a specific act by Party B, which is finding and returning the lost dog. Until Party B performs the act, there is no binding contract. Once the act is performed, the contract is formed, and Party A is legally obligated to fulfill their promise.

offer

A contractual communication that contains a specific promise and a specific demand. It initiates the process of making a contract. Ex: "I am willing to sell my 2018 Honda Accord to you for $15,000. The offer is valid until the end of this week. If you accept these terms, we can proceed with the sale."

Misrepresentation

A false statement or lie that can render the contract void; relied on specific facts that weren't true Ex: Imagine that Alice is selling her used car, and Bob is interested in buying it. Alice knows that the car has a history of significant engine problems, but she deliberately tells Bob that the car is in excellent condition, with no major issues. Relying on this false information, Bob decides to purchase the car from Alice. Later, after the sale has taken place and Bob discovers the undisclosed engine problems, he learns that Alice misrepresented the condition of the car.

disparate-treatment discrimination

A form of employment discrimination that results when an employer intentionally discriminates against employees who are members of protected classes. Ex: if a company hires a less-qualified candidate over an equally qualified one based solely on gender,

protected class

A group of persons protected by specific laws because of the group's defining characteristics, including race, color, religion, national origin, gender, age, and disability. Ex: Discrimination against individuals in these categories is prohibited by various anti-discrimination laws, such as the Civil Rights Act of 1964 in the United States. Employers cannot make employment decisions, such as hiring, promotion, or termination, based on these protected characteristics.

agreement

A mutual understanding or meeting of the minds between two or more individuals regarding the terms of a contract. Ex: a person offers to sell a car to another individual, and the second individual accepts the offer under certain conditions.

agent

A person who agrees to perform the task: EX: In a real estate transaction, the homeowner (principal) hires a real estate agent (agent) to sell their property. The agent is authorized to advertise, negotiate, and finalize the sale on behalf of the homeowner, establishing a legal relationship through a listing agreement.

Nominal Damages

A small monetary award (often one dollar) granted to a plaintiff when no actual damage was suffered. Ex: In a contract for the sale of a unique antique item, if the seller breaches the agreement by failing to deliver, and the buyer's financial loss is minimal or difficult to quantify, the court may award nominal damages. This symbolic amount, often as low as $1, recognizes the legal injury without requiring substantial proof of financial harm. Nominal damages uphold the principle of honoring contractual agreements and provide a legal remedy even when the actual losses are negligible.

Statute of Frauds

A state statute under which certain types of contracts must be in writing to be enforceable; sale of land, contract that cannot be performed within 1 year, agreement for indemnification Ex: Alice agrees to sell her house to Bob for $200,000. If this agreement is purely verbal and not put into writing, it might be unenforceable under the Statute of Frauds. If, however, they sign a written contract detailing the terms of the sale, including the price, description of the property, and other relevant terms, it becomes enforceable.

Parol Evidence Rule

A substantive rule of contracts under which a court will not receive into evidence the parties' prior negotiations, prior agreements, or contemporaneous oral agreements if that evidence contradicts or varies the terms of the parties' written contract. Only written terms are enforced Ex: In court, Sarah tries to introduce statements made during the negotiation phase as evidence that Tom agreed to fix any visible damages. However, the court applies the Parol Evidence Rule, which prohibits the introduction of such external evidence that contradicts the clear terms of the written contract.

Bilateral Contract

A type of contract where both parties were mistaken Ex: both parties are bound by their promises. If either party fails to fulfill their promise (e.g., Party A fails to deliver the record player or Party B fails to pay the agreed-upon amount), the other party may have legal remedies for breach of contract.

defamation

Act of harming or ruining another's reputation through publication (libel or slander) of untrue statements about another. which tend to hold persons character up to ridicule or scorn, damages must be proven as an element if statements are spoken Ex: Mark spreads false information that Sally, a local business owner, has a history of fraud, damaging her reputation in the community.

Defenses to a contract

Age, Illegality, Duress, Mental Incapacity, Undue Influence, Misrepresentation, Mistake

Liquidated Damages

An amount, stipulated in the contract, that the parties to a contract believe to be a reasonable estimation of the damages that will occur in the event of a breach. Ex: In a construction contract between ABC Builders and XYZ Developers, a liquidated damages clause is established to compensate for delays. If ABC Builders exceeds the agreed-upon 12-month deadline, they must pay XYZ Developers $1,000 for each day of delay. Suppose the project is completed 20 days late; then, ABC Builders owes $20,000 as predetermined compensation. This clause ensures a clear and certain remedy for delays, avoiding disputes over quantifying actual damages in court

Specific Performance

An equitable remedy requiring the breaching party to perform as promised under the contract; usually granted only when money damages would be an inadequate remedy and the subject matter of the contract is unique (for example, real property). Ex: a court compels a party to fulfill specific terms of a contract. For example, if Bob breaches a real estate contract with Alice, she may seek specific performance to force Bob to sell the unique property as agreed, as monetary damages would be inadequate

Products Strict Liability

Applied to products that are unreasonably dangerous. What is viewed as unreasonably dangerous must take into consideration the balancing of the benefits or a need of the product against unavoidable risks or dangers associated with the use of the product. In strict liability, the "state of the art" defense may be applied. Essentially, this defense determines the standard by which the product will be judged as reasonably safe, in light of technological advances or developments which enable a manufacturer or seller of a product to make it safer

Ethics and Business Decision Making

Business decision makers need to consider not just whether a decision is legal, but also whether it is ethical.

Equitable Estoppel

Common law doctrine that requires transfer of title to property if seller acquires title only after a purported sale of the property to someone else; intended to prevent unjust enrichment.

disparate-impact discrimination

Discrimination that results from certain employer practices or procedures that, although not discriminatory on their face, have a discriminatory effect. Ex: if a company introduces a pre-employment test that unintentionally screens out a specific race, and there's no legitimate business necessity, it could be considered disparate-impact discrimination.

Age Defense

Excuses the acts of minors because they are too young to be criminally responsible for their actions Ex: If the 16-year-old encounters issues with the laptop purchase, such as defects or non-compliance with the agreed specifications, the age defense could potentially be used to void the contract. The argument would be that the minor lacked the legal capacity to enter into a binding agreement, rendering the contract unenforceable against them.

ratification

Formal approval, final consent to the effectiveness of a contract

Discharge of a Contract by Performance

Good: Total performance by all parties -You do everything you are supposed to do and so does the other party. Yay everyone is happy. Anything less that is full performance is breach of contract. Bad: Substantial (almost) performance -Slightly below what is reasonably expected. Substantial does not discharge the breaching party from the contract. Non-breaching is still entitled to sue for damages. Ugly: Material breach of the contract. -Well below what is reasonably expected. Further you get from complete performance the closer you get to material breach. Ex: In a construction contract, Builder B fulfills all obligations by constructing a commercial building, obtaining permits, and meeting quality and safety standards. Company A accepts the completed project on time, acknowledging Builder B's satisfactory performance. This constitutes a substantial discharge of the contract, releasing both parties from their obligations.

Ethics in Finance

Held accountable for misinformation or improper recording of a company's financial situation. Keep accurate, honest, and complete record of its accounting transactions, Be educated about insider trading and other unethical practices. Refrain from misrepresenting the facts to achieve short-term goals. Confidentiality must be maintained with regard to clients' personal information as well as company information. Efforts must also be made to avoid conflicts of interest between employees and customer

shareholders

Investors who purchase shares of stock in a corporation.

Libel or slander

Libel= letter (write) Slander= speak (talk); different ways to analyze if it is in writing; damages must be proven as an element if statements are spoken

products misrepresentation

Misrepresentation is the representation of a material fact about a product which would reasonably induce somebody to rely upon such representation, which is false. This tort requires affirmative representation made about the performance of a product, reliance by the buyer on the representation and the failure of the product to perform in accordance with such representation Ex: ABC Electronics falsely advertised its smartphone, the TechMaster 5000, as having an "indestructible screen." Consumers, relying on this claim, discovered that the screens were prone to scratches and could shatter. ABC Electronics may be held liable for product misrepresentation, as consumers who suffered harm or financial loss could pursue legal action for damages.

Punitive Damages

Money damages that may be awarded to a plaintiff to punish the defendant and deter future similar conduct. Ex: if one party intentionally misrepresents information in a real estate transaction, causing significant financial harm to the other party, punitive damages may be considered. For example, if a seller inflates the property's value through intentional fraud, the affected party may seek both compensatory and punitive damages to not only recover actual losses but also punish and deter such fraudulent behavior.

Anticipatory Breach

Notified that a party to the contract will not fulfill their part of the contract prior to the required time of fulfillment. Ex: Company A contracts with Company B to deliver a shipment of goods by a specific date, and payment is due upon delivery. However, a week before the scheduled delivery date, Company B sends a letter to Company A stating that they will not be able to deliver the goods as agreed and have no intention of doing so.

unjust enrichment

Occurs when one party has undeservedly or unjustly secured a benefit at the other party's expense. Ex: f Sarah mistakenly overpays a contractor by $5,000 for a $10,000 job, and the contractor keeps the extra money without correcting the error, it may be considered unjust enrichment. In such cases, the aggrieved party can seek legal remedies to recover the unjustly enriched amount.

Consideration

Something of value promised, given or done that has the effect of making an agreement a legally enforceable contract Ex: Payment of Money: Example: Alice agrees to pay Bob $500 in exchange for a laptop. Transfer of Property: Example: Sarah agrees to sell her car to John for $10,000. Rendering of Services: Example: Tom agrees to mow Mary's lawn every week, and Mary agrees to pay him $50 per month. Forbearance to Act: Example: Jane promises not to compete with her former employer for one year after leaving in exchange for a severance package. Surrender of Legal Right: Example: Jack promises not to sue Jill for damages arising from a past dispute in exchange for Jill paying him $1,000. Mutual Promises: Example: Alex promises to deliver 100 units of a product by a certain date, and in return, Chris promises to pay $5,000 upon delivery. Part Payment of a Debt: Example: Dave owes Emily $1,000, and Emily agrees to accept $500 as full settlement of the debt. Performance of an Obligation: Example: Mike agrees to repair Lisa's roof, and Lisa agrees to provide him with materials for the repairs.

Fiduciary Duty

That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure. Ex: John, a director of a publicly traded company, has a fiduciary duty to prioritize the interests of shareholders. If he exploits his position for personal gain, such as recommending a contract with his personal business without disclosure, he breaches his duty. Shareholders could take legal action for damages, emphasizing the critical role of fiduciary duty in business law.

Discharge of Contract

The cancellation or termination of a contract.

breach of contract

The failure, without legal excuse, of a promisor to perform the obligations of a contract. Ex: In a construction contract, Party B breaches the agreement by consistently delaying the project and deviating from specified quality standards. This material breach substantially affects Party A, as timely completion and adherence to quality terms were essential to the contract. Consequently, Party A may choose to terminate the contract, seeking alternative solutions and potentially pursuing damages for the significant impact on their plans and business operations.

Vicarious Liability

The idea that the principal is responsible for the acts of the agent that are performed within the scope of the agent's employment. If the agent acts outside of these, an agent may be wrong Ex: An employee, Alex, negligently runs a red light while driving a company vehicle for a delivery. The employer, the delivery company, can be held vicariously liable for Alex's actions since the accident occurred within the scope of his employment. Despite not directly causing the accident, the employer may be legally responsible for the employee's negligence.

corporate veil

The personal liability shield; the corporate protection that entitles shareholders, directors, and officers to limited liability; can be pierced for improper conduct of business or fraud. Ex: if the company engages in fraudulent activities, fails to maintain corporate formalities, or commingles personal and business funds, a court may pierce the corporate veil. This would result in holding individual shareholders, such as Alice, Bob, and Carol, personally liable for the company's debts, bypassing the usual protection offered by the corporate structure.

Breach of implied Warranty of fitness for normal purposes

This theory considers whether the product performed in accordance with what one should reasonably expect of a product of that nature and type. The claims may be made against any defendant in the chain from production to sale of the product Ex: Jane buys a new laptop expecting it to function for standard tasks. Despite normal use, the laptop consistently malfunctions and crashes. If these issues stem from inherent product defects rather than misuse, Jane may have a valid claim for breach of the implied warranty of fitness for normal purposes. The warranty is breached when a product fails to meet expectations for typical use, allowing consumers to seek recourse for financial losses.

Breach of warranty of fitness for a particular purpose

This theory requires a special relationship between the supplier of the product and the consumer. The consumer relies upon the expertise of the seller or provider in choosing a product for a specifically described need or expectation. The key in this tort is the consumers reliance upon the expertise of the provider of the product Ex: Sarah tells a fitness store salesperson she needs a treadmill for high-intensity training. Relying on the salesperson's recommendation, she buys a specific model. However, the treadmill malfunctions during use, causing injury. If it's proven the treadmill wasn't suitable for high-intensity training, Sarah may have a valid claim for breach of the warranty of fitness for a particular purpose. This warranty assures a product is fit for a specific purpose communicated to the seller. If it fails to meet that purpose, the buyer may have legal grounds for a claim.

Assignment of Contract

Transfer of all rights under a contract to a third party. Assignor remains secondarily liability. Ex: Imagine Party A agrees to sell an antique clock to Party B. Party A can't fulfill the contract, but Party C steps in with a similar clock. Through an assignment agreement: Party A, B, and C agree to transfer the contract rights. An assignment agreement details the transfer. Party B is informed of the assignment. Party C delivers the clock, and B pays $5,000 to C.

Employment Discrimination

Treating employees or job applicants unequally on the basis of race, color, national origin, religion, gender, age, or disability; prohibited by federal statutes.

Unilateral vs. Bilateral Contracts

Unilateral: I'll pay anyone 100 if they find my dog Bilateral: I'll pay you 100 in exchange for the dog

unconscionable contract

a contract that courts refuse to enforce in part or at all because it is so oppressive or manifestly unfair as to be unjust.; 3 conditions: have a consumer and business, consumer must be unsophisticated, contract has to be patently unfair.

Reformation of Contract

a court may rewrite contract to express true intentions of parties Ex: if a contract mistakenly states the sale price of a car as $1,000 instead of the agreed $10,000, a court may order reformation to correct the error and align the contract with the parties' actual agreement.

Breach of Duty of Care

a failure to exercise care or to act as a reasonable person would act. Ex: Sarah breached her duty by texting while driving and not stopping at the red light.

hostile work environment

a form of sexual harassment in which unwelcome and demeaning sexually related behavior creates an intimidating and offensive work environment

board of directors

a group of persons elected by the stockholders to manage a corporation; determine policies and have fiduciary duty

Bona Fide Occupational Qualification (BFOQ)

a necessary (not merely preferred) qualification for performing a job Ex: allows employers to make employment decisions based on a characteristic essential to the job. An example is gender being a BFOQ for certain acting roles in the entertainment industry to fulfill artistic vision or authenticity.

Principal

a person who gives a task Ex: In business law, a principal is an individual or entity that grants authority to an agent to act on its behalf. For example, a business owner (principal) may appoint a sales representative (agent) to promote and sell products. The principal-agent relationship is governed by an agency agreement, specifying the agent's authority and the terms of engagement. The principal is generally liable for the agent's actions within the authorized scope, emphasizing the importance of clear roles and responsibilities in commercial transactions.

frolic

a significant deviation from an employee's normal course of employment. Ex: if a delivery driver takes a substantial detour to visit a friend and causes an accident during this deviation, it may be considered a "frolic." Employers may argue that they shouldn't be held liable for actions during such deviations.

limited liability corporation

a type of business with limited liability for the owners, with the advantage of not paying corporate income tax

articles of incorporation

a written legal document that defines ownership and operating procedures and conditions for the business

Ethics in Public Relations

advocacy, honesty, expertise, independence, loyalty, fairness

Causation: Actual Cause

also called "factual cause," the part of the case where the plaintiff links the breach with the injury he suffered - use the "but for" test - "but for the breach, would the plaintiff be injured today? - think through situation as an alternate universe where pl did not do the act and what the result would have been example: "but for defendant taking his eyes off the road, he would not have run over plaintiff." Ex: Sarah is driving her car through an intersection while texting on her phone. At the same time, Tom runs a red light and collides with Sarah's car. Sarah suffers a severe neck injury due to the accident and decides to sue Tom for negligence. In this scenario, to establish actual causation, Sarah must demonstrate that "but for" Tom running the red light, the accident and her resulting injury would not have occurred. If Tom hadn't run the red light, the collision wouldn't have happened, and Sarah wouldn't have sustained the neck injury. Therefore, Tom's running of the red light is the actual cause of Sarah's injury

Duress Defense

an affirmative defense claiming that the defendant was forced to commit the wrongful act by threat of immediate bodily harm or loss of life Ex: Suppose that Party A is in financial distress and owes a significant sum of money to Party B. Party B, aware of Party A's vulnerable financial situation, threatens to harm Party A physically or financially if they do not sign a contract agreeing to repay the debt at exorbitant interest rates.

Mistake of Fact

an erroneous belief about the facts of the contract at the time the contract is concluded Ex: Imagine that Party A, a vintage car collector, agrees to purchase what is believed to be a rare and highly valuable classic car from Party B. Both parties are under the impression that the car is a limited edition model that greatly increases its market value. However, after the contract is formed and the transaction is completed, Party A discovers through thorough research and expert opinions that the car is not as rare as believed. In fact, there was a mistake in the identification of the model, and it is a more common version of the car.

Intentional Infliction of Emotional Distress

an intentional tort in which the harm results from extreme and outrageous conduct with intent to cause, or reckless disregard of the tendency to cause emotional distress, significant emotional distress or other damage Ex: Emily, a sensitive individual, works at a company where her manager, Mark, continuously subjects her to severe and persistent emotional abuse. Mark constantly insults Emily, threatens her job security without any valid reason, and makes her work in a hostile and intimidating environment.

invasion of privacy

appropriation of name or likeness or invasion of physical solitude in an objectionable manner or disclosure of objectionable facts without justification, license or permission. Ex: photographing someone without consent in their private space, and then publicizing the images, constitutes invasion of privacy.

Tort Theories

based on arguments of negligence

pierce the corporate veil

co-mingling of corporate and personal assets, alter-ego doctrine, use of corporate form to harm public, failure to follow corporate formalities and breach of fiduciary duty. Ex: John, owner of ABC Construction, Inc., neglects legal requirements for a project, leading to an accident. In the ensuing lawsuit, evidence reveals he commingled funds and disregarded corporate procedures. The court may pierce the corporate veil, holding John personally liable for damages due to fraud and improper conduct, bypassing the usual limited liability protection.

mental incapacity

condition in which a party to a contract is unable to understand the consequences of the contractual act. Ex: Imagine Jane, a 75-year-old woman suffering from severe dementia, enters into a contract to sell her valuable vintage car to Bob. Jane is not capable of understanding the terms of the agreement, the value of her vintage car, or the consequences of the sale due to her mental condition.

Quasi Contract

court-imposed obligation to prevent unjust enrichment in the absence of a contract. Ex: if a contractor mistakenly installs a fence in a homeowner's neighbor's yard, and the homeowner keeps the benefit, the law may imply a quasi-contract. This legal concept prevents unjust enrichment by requiring the homeowner to compensate the contractor for the value of the work, even without a formal agreement.

Trespass

entry to another's property without consent, license or other legal excuse Ex: John enters Mary's property without permission and against her will. He disregards any "No Trespassing" signs and ignores Mary's explicit objections

agent duties

exercise reasonable care, fiduciary duty, loyalty to principal, account to principal, follow instructions of principal, act within scope of employment, inform principal and disclose conflicts of interest

Negligence

existence of a duty of care to the plaintiff -breach of that duty of care -causation (actual cause/cause in fact),proximate or foreseeable cause (excludes extremely unforeseeable chain of events) -damages arising from the breach of duty Ex: Sarah, a driver, is texting on her phone while driving and fails to notice a red light. As a result, she collides with the back of another car, causing injuries to the driver, Alex

limited partnership

form of partnership where one or more partners are not active in the daily running of the business, and whose liability for the partnership's debt is restricted to the amount invested in the business

officers of corporation

individuals picked by board to run corporation (President of CEO, VP, Sec, Treasurer)

Malicious Prosecution

initiated criminal prosecution with malice or in bad faith, plaintiff exonerated of criminal charges Ex: Sarah is falsely accused of shoplifting, and the store manager, Mark, intentionally presses baseless criminal charges against her. After being acquitted due to lack of evidence, Sarah can potentially sue Mark for malicious prosecution, alleging that he initiated legal proceedings without probable cause and with malicious intent, causing harm to her reputation and well-being.

Battery

intentional act resulting in a harmful or offensive contact without license or authorization (legal excuse) Ex: John, in a fit of anger, punches Alex in the face during an argument.

assault

intentional act, causing apprehension of offensive/harmful contact, damages Ex: John threatens to hit Alice during an argument by raising his fist, causing Alice to fear immediate harm. Even though there's no physical contact, John's action creates a reasonable fear of imminent harm in Alice

general partners

invest capital, manage the business, and are personally liable for partnership debts; operate the business

Business Code of Ethics

is a set of rules or moral guidelines that define and govern principles and actions in an organizational environment. 1. Public Image 2. Guidance for employees/managers/owners/board of directors 3. Guidance for making difficult decisions 4. Rationale/Justification to defend decisions

Strict Liability

liability without fault; extremely dangerous or hazardous activity, causation-did it cause damages and what are those damages Ex: A company manufactures a defective product that causes harm to consumers. Regardless of fault or intent, the company is held strictly liable for the injuries caused by the defective product.

Compensatory Damages

money intended to restore a plaintiff to the position he was in before the contract Ex: if a supplier fails to deliver computer equipment on time, resulting in lost profits, additional expenses, and penalty payments, compensatory damages would cover these specific financial losses incurred by the buyer. The purpose is to restore the non-breaching party to the financial position they would have been in if the contract had been fulfilled as agreed.

Duty to Mitigate

non-breaching party must the legal responsibility to make damages from a harm such as breaching a contract less severe if possible Ex: John's employment contract promises an annual bonus from XYZ Corporation, but the company fails to pay him. John must promptly inform XYZ of the breach and actively search for new job opportunities. If he finds a comparable job, he should accept it, even if pursuing legal action. By securing new employment, John minimizes potential losses. If he doesn't actively seek new employment, his damages in a lawsuit against XYZ may be reduced, as he failed to mitigate his losses.

Failure of Condition

occurs when one party fails to perform his condition, resulting in a breach of contract. The non-breaching party's own duty of performance is discharged. This means the contract is still in effect and the breaching party still has a duty to perform. If he does not, contract remedies may be imposed. Ex: In a construction contract, Party A hires Party B to build a house with the condition that Party A obtains necessary permits within three months. If Party A fails to secure the permits within the specified timeframe, it constitutes a substantial failure of condition. Consequently, Party B is released from the obligation to construct the house, and Party A is no longer obligated to pay for the services. The failure of the condition acts as a substantial discharge, as it makes the contract's performance impossible or significantly different from the original intent. The specifics of the contract and the nature of the condition will influence the legal consequences.

Undue Influence

occurs when one party to a contract is in a position of trust and wrongfully dominates the other party. Ex: Consider Ms. Johnson, an elderly woman with valuable property. Mr. Smith, a distant relative, exploits her financial struggles and offers frequent assistance. Taking advantage of her vulnerability, Mr. Smith convinces Ms. Johnson to sign a property sale contract at a significantly discounted price, claiming it's in her best interest. Unbeknownst to her, the contract heavily favors Mr. Smith. If Ms. Johnson later seeks to void the contract, she may assert undue influence, arguing that Mr. Smith exploited her vulnerability, rendering the contract unfair and unenforceable. If the court agrees, it could declare the contract voidable.

limited partners

partners in a limited partnership who invest capital but do not participate in management and are not personally liable for partnership debts beyond their capital contributions; do not participate in day-to-day operations

Impossibility

performance of contract cannot be done Ex: The artist agrees to deliver the specific artwork to a collector. However, before the delivery date, an unforeseen event, such as a fire, destroys the painting.

Principal duties

reasonable care in selection of agent, instruct, monitor, control, cooperate with agent and compensate agent when required

Uniform Commercial Code

recognized as the most important statute in business law, it includes provisions which regulate certain sales of goods and negotiable instruments

Legal Implications

refer to the positive or negative legal consequences or commitments as a result of an action or choice made by an individual or group Ex: John starts a business without obtaining required permits. Legal implications may include fines, business closure, legal action, damages, and potential criminal charges. Failure to comply with legal requirements can result in various consequences.

Forms of Business Organization

sole proprietorship, partnership, corporation

Independent Contractor

special skills or knowledge, works without supervision, nature of task, supplies own tools, manner of compensation

acceptance

the action of consenting to receive or undertake something offered Ex: "I accept your offer to buy the Honda Accord for $15,000."

expectation damages

the money required to put one party in the position she would have been in had the other side performed the contract. Ex: Party A agrees to buy a unique vintage car from Party B for $50,000. Party B fails to deliver the car on the agreed date, causing Party A financial losses and damaging their reputation because they couldn't fulfill commitments. To compensate for the breach, the court might award Party A $20,000, representing the extra cost Party A would need to buy a similar car, putting them in the position they would have been if the contract had been fulfilled.

Scope of Employment

the realm of activities engaged in by an agent when acting on behalf of a principal

Ethics and safety for customers/clients/employees

transparently communicating the identified safety risk to employees, clients, and customers. This means providing clear and accurate information about the potential hazards associated with the product.

False Imprisonment

unauthorized confinement of a person, non-consent of the plaintiff, plaintiff has knowledge of the confinement Ex: a store security guard, without proper justification, detains a shopper in a small room on suspicion of shoplifting. Even though the shopper is innocent, the act of restricting their freedom of movement creates a situation of false imprisonment. The shopper, fearing they cannot leave, experiences emotional distress due to the unwarranted confinement

illegality of the subject matter

when either the subject matter (e.g. the sale of illegal drugs) or the consideration of a contract is illegal Ex: Imagine two parties, A and B, enter into a contract where A agrees to sell illegal drugs to B. The terms of the agreement specify the quantity, price, and delivery method for the illegal substances. This contract is illegal because it involves activities that are against the law, specifically drug trafficking. In this scenario, the subject matter of the contract violates criminal laws and public policy. As a result, the contract is deemed void ab initio, meaning it is void from the beginning. Neither party can enforce the contract in court because the law refuses to recognize agreements that involve illegal or unlawful activities.

equitable remedies for contracts

where legal contracts fail, courts may create a remedy that corrects an unfair result. Ex: In contract law, equitable remedies include specific performance, where a court compels a party to fulfill specific terms of a contract. For example, if Bob breaches a real estate contract with Alice, she may seek specific performance to force Bob to sell the unique property as agreed, as monetary damages would be inadequate

conversion

wrongful or unauthorized exercise of dominion or control over property belonging to another without consent, license or other legal excuse; preventing someone from accessing their property. Ex: Samantha borrows her friend Alex's laptop with the understanding that she will only use it temporarily. However, Samantha decides to keep the laptop for an extended period without Alex's consent and refuses to return it despite repeated requests