bus law exam 4

advantages of a franchise

*owning a business (In theory, buying a franchise combines the best of all worlds—a franchisee gets to be his own boss and he acquires an established business with all the kinks worked out. As the International Franchise Association puts it, "Owning a franchise allows you to go into business for yourself, but not by yourself." Subject to franchisor approval, franchisees are free to choose which franchise to buy, where to locate it, and how to staff it.) *support (The franchisor helps get the business up and running quickly, offers ongoing training and support, and invests money in keeping the brand relevant and successful. The McDonald's operations manual explains everything from how to set the temperature controls on the stove, to the number of seconds that fries must cook, to the length of time they can be held in the rack before being discarded. An established name like McDonald's or Subway brings customers through the door. And landlords may be more willing to rent to the owner of a franchise. Franchisees can also help one another. By acting collectively, they can obtain better prices on everything from ingredients to insurance.)

The following agencies, which operate under the UN's umbrella, have great impact on world business:

*world bank *The International Monetary Fund *The World Intellectual Property Organization *The UN Commission on International Trade Law

hareholders of S corps have both the limited liability of a corporation and the tax status of a flow-through entity

, all of an S corp's profits (and losses) pass through to the shareholders, who pay tax at their individual rates. It avoids the double taxation of a regular corporation (sometimes called a "C corporation").

damage

A tenant is liable to the landlord for any significant damage he causes to the property.

advantages of a corporation

-----Limited Liability If a business flops, its shareholders lose their investment in the company but not their other assets. Likewise, if Emily Employee injures another motorist while driving a company van, the business is liable for any harm, but its shareholders are not personally liable. ----A corporation shields managers and investors from personal liability for the debts of the corporation and the actions of others, but not against liability for their own torts and crimes.---- Transferability of Interests Corporations provide flexibility for enterprises small (with one owner) and large (with thousands of shareholders). As we will see, partnership interests are not transferable without the permission of the other partners, whereas corporate stock can be bought and sold easily. Duration When a sole proprietor dies, legally, so does the business. But corporations have perpetual existence: They can continue without their founders.

Although the rules of close corporations may vary from state to state, generally these organizations share certain features:

-Protection of minority shareholders. As there is no public market for the stock of a close corporation, a minority shareholder who is being mistreated by the majority cannot simply sell his shares and depart. Therefore, close corporation laws typically protect minority shareholders by providing that majority shareholders owe them a fiduciary duty. In addition, the charter of a close corporation may require a unanimous vote of all shareholders to choose officers, set salaries, or pay dividends. It could also grant each shareholder veto power over all important corporate decisions. -Transfer restrictions. The shareholders of a close corporation often need to work closely together in the management of the company. Therefore, the charter may require that a shareholder first offer shares to the other owners before selling them to an outsider. In that way, the remaining shareholders have some control over who their new co-owners will be. Flexibility. Close corporations can typically operate without a board of directors, a formal set of bylaws, or annual shareholder meetings. Dispute resolution. The shareholders are allowed to agree in advance that any one of them can dissolve the corporation if some particular event occurs or, if they choose, for any reason at all. Even without such an agreement, a shareholder can ask a court to dissolve a close corporation if the other owners behave "oppressively" or "unfairly."

The most important provisions are:

-The CISG applies to contracts for the sale of commercial -The CISG applies automatically when contracts are formed between two parties located in different signatory countries. -contracting parties can opt out -international sales contracts do not need to be in writing -contracting parties must be flexible and fair -a buyer can be avoid payment under a contract only after giving the seller notice and an opportunity to remedy -countried may use their own national laws to --- replace some CISG provisions or -----fill in the blank on issues that the CISG does not cover at all

GATT and the WTO are founded on the following principles:

-free trade -most favored nation -national treatment

WTO administers both treaties

-general agreement on trade in services -trade related aspects of intellectual property

to recieve a patent, an invention must be

-novel,: an invention is not patentable if it has already been ---- patented ----described, in a printed publication ----in public use ----on sale, or ----otherwise available to the public anything in the world -nonobvious, it cant be obvious to someone skilled in tht field. -utility: needs to be useful -atentable subject matter. Not every innovation is patentable. A patent is not available solely for an idea, but only for its tangible application. Thus, laws of nature, scientific principles, mathematical algorithms, mental processes, intellectual concepts, or formulas (such as ) are not patentable.

s corp face major restrictions

-only one class of stock -no more than 100 shareholders -Shareholders must be individuals, estates, charities, pension funds, or trusts, not partnerships or corporations. -shareholders must be us citizens -all shareholders must agree that the company should be an s corporation

Parties generally create a bailment by agreement

. In each of the preceding examples, the parties consented to the bailment. In two cases, the agreement included payment, which is common but not essential. When you buy your airline ticket, you pay for your ticket, and the price may include the airline's agreement, as bailee, to transport your suitcase. When you rent a car, you pay the bailor for the privilege of using it. By lending your motorcycle, you engage in a bailment without either party paying compensation.

The International Chamber of Commerce (ICC) is the world's largest global business organization

. Its purpose is to facilitate international business. To that end, the ICC advocates on matters of international business policy and develops uniform rules to aid cross-border transactions.

land

. Land is the most common and important form of real property. In England, land was historically the greatest source of wealth and social status, far more important than industrial or commercial enterprises. As a result, the law of real property has been of paramount importance for nearly 1,000 years, developing very gradually to reflect changing conditions.

Uniform Trade Secrets Act (UTSA). Anyone who misappropriates a trade secret is liable to the owner for

1. actual damages 2. unjust enrichment or 3. a reasonable royalty If the misappropriation was willful or malicious, the court may award attorney's fees and double damages.

4 factors which determine whether a use is a fair use one

1. the purpose and character of the use. When copyrighted material is used for purposes such as criticism, parody, comment, news reporting, scholarship, research, or education, it is more likely to be a fair use. Political, educational, and social commentary have long been granted special respect in our society. For example, the Supreme Court permitted the rap group 2 Live Crew to make fun of the Roy Orbison's original hit song "Oh, Pretty Woman," holding that even a commercial parody—that is, one intended for profit-making purposes—could be a fair use of copyrighted material. ---When the resulting work transforms the original in a significant way, it is also more likely to be fair use. 2. the nature of the copyrighted work: Facts receive less protection than fiction. If we were not permitted to use, say, the facts described in a textbook, education would be stifled 3. the amount and proportion of the work that is used: ----However, when the use, even if minimal, involves the "heart" of the work—or its most important part—it is more likely to be an infringement 4. the effect of the use upon the potential market: . Courts generally do not permit a use that will deprive the copyright owner of income or decrease revenues from the original work by, say, competing with it. For example, when users conduct an internet search for a picture, search engines bring up indexed thumbnail-sized images from various sites. A commercial photographer sued a search engine, claiming that its search results showing his photos violated his copyright in the images. The court held that the search results were a fair use because the thumbnails did not harm the market or value of the original photographs. Instead, they were attracting potential buyers to the original work. Again, this case balances the rights of those who create material with others who want to use it for their own purposes.

3 Goals of bankruptcy

1. trying to come in a preserve all the assets of the debtor yo make an organized distribution of those assets to the creditors 2. distribute the assets btw the debts and the creditors in a fair equitable manner 3. fairly distrib. assets to creditors

CPA QUESTION Assuming all other requirements are met, a corporation may elect to be treated as an S corporation under the Internal Revenue Code if it has .

100 or fewer stocks

the fuc*king end

:)))

UNIFORM FOREIGN MONEY JUDGMENTS RECOGNITION ACT

A U.S. act requiring states to recognize foreign judgments under certain conditions.

Foreign Sovereign Immunities Act (FSIA)

A U.S. statute that provides that American courts generally cannot entertain suits against foreign governments.

To create a bailment, the bailee must assume physical control of an item with intent to possess.

A bailee may be liable for loss or damage to the property, and so it is not fair to hold him liable unless he has taken physical control of the goods, intending to possess them.

involuntary bailment

A bailment that occurs without an agreement between the bailor and bailee. Suppose you find a wristwatch in your house that you know belongs to a friend. As we saw in the earlier section, you are obligated to return the watch to the true owner, and until you do so, you are the bailee, liable for harm to the property. This exchange is called a constructive bailment because, with no agreement between the parties, the law is construing a bailment.

arbitration

A binding process of resolving legal disputes by submitting them to a neutral third party. International arbitral bodies, such as the ICC, issue arbitral awards, but enforcement depends upon the laws of the individual countries where the parties operate.

Paul and Shelly Higgins had two wood stoves in their home. Each rested on, but was not attached to, a built-in brick platform. The downstairs wood stove was connected to the chimney flue and was used as part of the main heating system for the house. The upstairs stove, in the master bedroom, was purely decorative. It had no stovepipe connecting it to the chimney. The Higginses sold their house to Jack Everitt, and neither party said anything about the two stoves. Is Everitt entitled to either stove? Both stoves?

A buyer normally takes all fixtures. The downstairs stove was permanently attached to the house and used as part of the heating system. The owner who installed it intended that it remain, and it was a fixture; Everitt got it. The upstairs stove was not permanently attached and was not a fixture; the sellers could take it with them

common carrier

A company that transports goods and makes its services regularly available to the general public. . Generally, a common carrier is strictly liable for harm to the bailor's goods' Under this law, a bailor needs only to establish that it delivered property to the carrier in good condition and that the cargo arrived damaged.

contract carrier

A company that transports goods for particular customers. A contract carrier does not incur strict liability. The normal bailment rules apply, and a contract carrier can escape liability by demonstrating that it exercised due care of the property.

trade secret

A formula, device, process, method, or compilation of information that, when used in business, gives the owner an advantage over competitors.

S corporation

A corporation that provides limited liability to its owners and the tax status of a flow-through entity. -to encourage entrepreneurship through tax breaks

C Corporation

A corporation that provides limited liability to its owners, but is a taxable entity.

close corporation

A corporation with a small number of shareholders whose stock is not publicly traded and whose shareholders play an active role in management. It is entitled to special treatment under some state law.

piercing the company veil

A court holds members of an LLC personally liable for the debts of the organization.

design patents

A design patent protects the appearance, not the function, of an item. These types of patents protect the design of products ranging from Star Wars action figures to Coca-Cola bottles, and Nike shoes to Ferrari chassis. Design patents are granted to anyone who invents a new, original, and ornamental design for an article. They last 14 years from the date of issuance. Design patents are particularly valuable for preventing knock-offs that copy the look and feel of a product.

Franchise Disclosure Document (FDD)

A disclosure document that a franchisor must deliver to a potential purchaser.

constructive delivery

A donor makes constructive delivery by transferring ownership without a physical delivery Most courts permit constructive delivery only when physical delivery is impossible or extremely inconvenient. Suppose Anna wants to give her niece Jen a blimp, which is parked in a hangar at the airport. The blimp will not fit through the doorway of Jen's dorm. Instead of flying the aircraft to the university, Anna may simply deliver to Jen the certificate of title and the keys to the blimp. When she has done that, Jen owns the aircraft

delivery to an agent

A donor might deliver the property to an agent, either someone working for him or for the donee. Assume that Randolph says to Mortimer, "Old boy, I should like for you to have my Rolls Royce." If Randolph gives the keys and the title to his own butler, there is no gift. By definition, the agent works for the donor, and thus the donor still has control and ownership of the property. But if the donor delivers the property to the donee's agent, the gift is made. So, if Randolph delivers the car to Mortimer's butler, then Mortimer owns the car.

partition by kind

A form of partition in which a property is divided among co-owners. If three co-tenants own a 300-acre farm and the court can divide the land so that the three sections are of roughly equal value, it will perform a partition in kind, even if one or two of the co-tenants oppose partition. If partition by kind is impossible because there is no fair way to divide the property, the court will order the real estate sold and the proceeds divided equally.

International Court of Arbitration (ICA)

A forum for international dispute resolution, run by the ICC.

inter vivos gift

A gift made during the donor's life, with no fear of impending death

gift causa mortis

A gift made in contemplation of approaching death. The gift is valid if the donor dies as expected, but it is revoked if he recovers. Suppose Lenny's doctors have told him he will probably die of a liver ailment within a month. Lenny calls Jane to his bedside and hands her a fistful of cash, saying, "I'm dying, this money is yours." Jane sheds a tear, then sprints to the bank. If Lenny dies of the liver ailment within a few weeks, Jane gets to keep the money. The law permits the gift causa mortis to act as a kind of substitute for a will since the donor's delivery of the property clearly indicates his intentions. But note that this kind of gift is revocable. Since a gift causa mortis is conditional (upon the donor's death), the donor has the right to revoke it at any time before he dies. If Lenny telephones Jane the next day and says that he has changed his mind, he gets the money back. Further, if the donor recovers and does not die as expected, the gift is automatically revoked.

Doris Rowley rented space from the city of Mobile, Alabama, to run the Back Porch Restaurant. Her lease prohibited assignment or subletting without the landlord's permission. Rowley's business became unprofitable, and she asked the city's real estate officer for permission to assign her lease. She told the officer that she had "someone who would accept if the lease was assigned." Rowley provided no other information about the assignee. The city refused permission. Rowley repeated her requests several times without success, and finally she sued. Rowley alleged that the city had unreasonably withheld permission to assign and had caused her serious financial losses as a result. Comment.

A landlord is allowed to evaluate a prospective assignee, including its financial stability and intended use of the property. Mobile could not do that because Rowley provided no information about the proposed assignee. Mobile wins.

other interference

A landlord's conduct may interfere with quiet enjoyment even when it is not so harmful as to force a constructive eviction. Suppose a landlord, living in the ground-floor unit, gives trumpet lessons in his apartment six nights a week until 1:00 a.m., producing such a cacophony that a group of students living upstairs can neither study nor sleep. If the students continue to live in the apartment because they cannot afford a better place, there has been no constructive eviction. But the landlord's conduct interferes with the tenants' quiet enjoyment, and the students are entitled to damages.

notice to quit

A landlord's notice terminating a tenancy.

This is a difficult hurdle to overcome, but there are three possible exceptions. ^^^^

A lawsuit is permitted against a foreign country that waives its immunity, that is, voluntarily gives up this protection A plaintiff in the United States can sue a foreign country engaged in commercial, but not political, activity A plaintiff in this country may sue a foreign government that has confiscated property in violation of international law

escalator clause

A lease clause allowing the landlord to raise the rent for specified reasons.

Exculpatory Clauses

A lease clause that relieves a landlord of liability for injuries.

tenancy for years

A lease for a stated, fixed period A tenancy for years terminates automatically when the agreed period ends.

Duty to Use Premises for Proper Purpose

A lease normally lists what a tenant may do in the premises and prohibits other activities. For example, a residential lease allows the tenant to use the property for normal living purposes, but not for any retail, commercial, or industrial purpose. A commercial lease might allow a tenant to operate a retail clothing store but not a restaurant. A landlord may evict a tenant who violates the lease by using the premises for prohibited purposes.

tenancy at will

A tenancy with no fixed duration, which may be terminated by either party at any time

Tenant's Liability

A tenant is generally liable for injuries occurring within the premises she is leasing, whether that is an apartment, a store, or otherwise. Generally, a tenant is not liable for injuries occurring in common areas over which she has no control, such as exterior walkways. If a tenant's dinner guest falls because the building's common stairway has loose steps, the landlord is probably liable.

The Statute of Frauds generally requires that a long-term lease be in writing

A long-term lease is one year or more; anything shorter is usually enforceable without a writing. But even when an oral lease is permitted, it is wiser for the parties to put their agreement in writing because a written lease avoids many misunderstandings. At a minimum, a lease must state the names of the parties, the premises being leased, the duration of the agreement, and the rent. But a well-drafted lease generally includes many provisions, called covenants and conditions.

joint venture

A partnership for a limited purpose

patents

A patent gives an inventor the right to prevent others from making, using, or selling their invention for a limited time. During this period, no one may make, use, or sell the invention without permission. In return, the inventor publicly discloses information about the invention that anyone can use upon expiration of the patent.

Patent Infringement

A patent holder has the exclusive right to make, use, or sell the patented invention during the term of the patent. A holder can prohibit others from using any product that is substantially the same, license the product to others for a fee, and recover damages from anyone who uses the product without permission. But note that patents, like other areas of intellectual property, are territorial, meaning that the holder of a U.S. patent can only enforce those rights in the United States.

tenant

A person given temporary possession of the landlord's property.

covenant

A promise or undertaking contained in a lease whose breach does not result in eviction.

condition

A promise or undertaking contained in a lease whose breach may result in eviction.

rent adatment

A reduction in the rent owed.

mortgage

A security interest in real property.

incoterms rules

A series of three-letter codes used in international contracts for the sale of goods.

tenancy by the entirety

A system of ownership of marital property in which each spouse owns the entire estate This form of ownership exists in about half of the states. The husband and wife each own the entire property, and they both have a right of survivorship. So when the husband dies, his one-half interest in the property automatically passes to his wife. Neither party has a right to convey his or her interest. If the parties wish to sell their interests, they must do so together. An advantage of this is that no creditor may seize the property based on a debt incurred by only one spouse. If a husband goes bankrupt, creditors may not take his house if he and his wife own it as tenants by the entirety. Divorce terminates a tenancy by the entirety and leaves the two parties as tenants in common.

Tenancy at Sufferance

A tenancy that exists without the permission of the landlord, after the expiration of a true tenancy. , a tenancy at sufferance is not a true tenancy because the tenant is staying without the landlord's agreement The landlord has the option of seeking to evict the tenant or of forcing the tenant to pay a use and occupancy fee for as long as she stays. These distinctions are technical but important.

Duty Not to Damage Premises

A tenant is liable to the landlord for any significant damage he causes to the property. The tenant is not liable for normal wear and tear. If, however, he knocks a hole in a wall or damages the plumbing, the landlord may collect the cost of repairs, either by using the security deposit or by suing, if necessary. A landlord may also seek to evict a tenant for serious damage to the property.

Federal trademarks are governed by the Lanham Act.

A trademark is valid for ten years, but the owner can renew it for an unlimited number of ten-year terms as long as the mark is still in use.

General Agreement on Trade in Services

A treaty on transnational services.

north American free trade agreement

A treaty that reduced trade barriers among Canada, the United States, and Mexico.\ -provides american consumer w cheaper products

variance

A variation from the applicable zoning law. An owner prohibited by an ordinance from erecting a certain kind of building, or adding on to his present building, may seek a variance from the zoning board, meaning an exception granted for special reasons unique to the property.

gift

A voluntary transfer of property from one person to another, without consideration. But a gift is a one-way transaction, without anything given in return

The government accused Carlo Francia and another person of stealing a purse belonging to Frances Bainlardi. A policeman saw Francia sorting through the contents of the purse, which included a photo identification of Bainlardi. Francia kept some items, such as cash, while discarding others. At trial, Francia claimed that he had thought the purse was lost or abandoned. Besides the fact that Francia's accomplice was holding burglary tools, what is the weakness in Francia's defense?

Abandoned property is something that the owner has knowingly discarded because she no longer wants it. The burden is on the finder to prove that the property was abandoned, which will be impossible in this case since no one would throw away cash and credit cards. Because the purse contained photo identification, Francia could easily have located its owner. He made no attempt to do so, and his defense is unpersuasive.

A copyright gives its creator the exclusive right to reproduce, distribute, and perform his original work for a limited time

Abner Doubleday could have copyrighted a book setting out his particular version of the rules of baseball, but he could not have copyrighted the rules themselves, nor could he have required players to pay him a royalty. Similarly, the inventor of double-entry bookkeeping could copyright a pamphlet explaining his system, but not the system itself.

adverse possession

Adverse possession permits the user of land to gain title if he can prove entry and exclusive possession, open and notorious possession, a claim adverse to the owner, and continuous possession for the required statutory period.

pc have some limitations

All shareholders of the corporation must be members of the same profession. For Sharp, Payne, & Graves, PC, that means all shareholders must be licensed physicians. Other valued employees cannot own stock. Like other corporations, the required legal technicalities for forming and maintaining a PC are expensive and time consuming. Tax issues are much more complicated than for an LLC or LLP.

Hortense and Gus are each starting a business. Hortense's business is an internet start-up. Gus will be opening a yarn store. Hortense needs millions of dollars in venture capital and expects to go public soon. Gus has borrowed $10,000 from his girlfriend, which he hopes to pay back soon. Should either of these businesses organize as an LLC?

An LLC is not the best choice for either of these businesses. Venture capitalists will insist that Hortense's business be a corporation, especially if it is going public soon. A yarn store has few liability issues, and Gus can always buy insurance. Furthermore, he does not expect to have any outside investors. Hence, a sole proprietorship would be more appropriate for Gus's business.

eviction

An act that forces a tenant to abandon the property. The most common interference with quiet enjoyment is an eviction, meaning some act that forces the tenant to abandon the premises. Of course, some evictions are legal, as when a tenant fails to pay the rent. But some evictions are illegal. There are two types of eviction: actual and constructive.

treaties

An agreement between two or more states that is governed by international law.

lease *contract law*

An agreement in which an owner gives a tenant the right to use property.

lien

An encumbrance on a property to secure a debt.

Bailees often use exculpatory clauses in an effort to limit their liability.

An exculpatory clause is generally unenforceable if it attempts to exclude an intentional tort or reckless behavior. In the event of a lawsuit over the Ferrari's diminished value, an exculpatory clause will not help the parking attendant in the opening scenario because his actions were both intentional and reckless. Courts often look to the parties' relative bargaining power in deciding whether to enforce an exculpatory clause. If the bailor is a corporation and it has bargaining power roughly equal to the bailee's, a court will probably enforce an exculpatory clause

world trade organization

An international organization whose mandate is to lower trade barriers.

prior sale

An inventor must apply for a patent within one year of selling the product commercially anywhere in the world. The purpose of this rule is to encourage prompt disclosure of inventions. It prevents someone from inventing a product, selling it for years, and then obtaining a 20-year monopoly with a patent.

flow-through tax entity

An organization that does not pay income tax on its profits but instead passes them through to its owners who pay personal income tax on all business profits.

mortgagor

An owner who gives a security interest in property in order to obtain a loan.

partnership

An unincorporated association of two or more co-owners who operate a business for profit.

Sole Proprietorship

An unincorporated business owned by one person. *most common form of business*

During her second year at the Juilliard School of Music in New York City, Ann Rylands had a chance to borrow for one month a rare Guadagnini violin made in 1768. She returned the violin to the owner in Philadelphia, but then she telephoned her father to ask if he would buy it for her. He borrowed money from his pension fund and paid the owner. Ann traveled to Philadelphia to pick up the violin. She had exclusive possession of the violin for the next 20 years, using it in her professional career. Unfortunately, she became an alcoholic, and during one period when she was in a treatment center, she entrusted the violin to her mother for safekeeping. At about that time, her father died. When Ann was released from the center, she requested return of the violin, but her mother refused. Who owns the violin?

Ann does. Ann's father made a valid inter vivos gift of the violin while Ann was still a student. He intended to transfer ownership to her immediately and made delivery by permitting her to pick up the violin. From that point on, Ann owned it. Rylands v. Rylands, 1993 Conn. Super. LEXIS 823 (Conn. Super. Ct. 1993).

TENANCIES

Any lease for a stated, fixed period is a tenancy for years. A periodic tenancy is created for a fixed period and then automatically continues for additional periods until either party notifies the other of termination. A tenancy at will has no fixed duration and may be terminated by either party at any time. A tenancy at sufferance occurs when a tenant remains, against the wishes of the landlord, after the expiration of a true tenancy.

plant patents

Anyone who creates a new type of plant can patent it, provided that the inventor is able to reproduce it asexually—through grafting, for instance, rather than by planting its seeds. For example, one company patented a unique rose whose color combination did not exist in nature. This type of patent lasts for 20 years from the date of application.

An LLC offers the limited liability of a corporation and the tax status of a flow-through entity.

As such, it is an extremely useful form of organization often favored by entrepreneurs because it offers the best of both worlds—limited liability and lower taxes.

personal injury

At common law, a landlord had very limited liability for injuries on the premises, but today many courts require a landlord to use reasonable care and hold her liable for foreseeable harm.

Tarnishment is an association with unwholesome goods or services.

Barbie's Playhouse was an adult website with the look and feel of Mattel's trademarked Barbie doll. The website also featured images of dolls that looked like Barbies. The court found that Barbie's Playhouse had tarnished Mattel's trademark.

The Louisiana Civil Code limits an innkeeper's liability for stolen property to $500 and only covers cash, jewelry, rare art items, furs, cameras, and negotiable instruments. While staying at the New Orleans Hilton, Allen Chase was drugged by a woman he met at the hotel bar. He woke up the next morning to find that his gold watch, wallet, credit cards, passport, business papers, and camera were gone. As a result of the drug, Chase suffered health problems, which seriously affected his business. Believing that the hotel bartender had helped the woman who drugged him, Chase sued Hilton for negligence in the amount of $575,000. Who wins and why?

Based on Allen Chase v. Hilton Hotels, 682 F. Supp. 316 (1988). The court limited Chase's recovery to $500 per the statute.

A Saudi Arabian government-run hospital hired American Scott Nelson to be an engineer. The parties signed the employment agreement in the United States. On the job, Nelson reported that the hospital had significant safety defects. For this, he was arrested, jailed, and tortured for 39 days. Upon his release to the United States, Nelson sued the Saudi government for personal injury. Can Nelson sue Saudi Arabia?

Based on Saudi Arabia v. Nelson (U.S. S. Ct. 1993). The Supreme Court found that FSIA applied to immunize Saudi Arabia from the suit. While employing someone is a commercial activity, the Court reasoned that the injury stemmed from his arrest. Since a private citizen cannot jail someone, this is purely a governmental activity.

Trademark dilution occurs in two important ways: blurring and tarnishment

Blurring, or the lessening of a mark's capacity to identify, can occur when a famous mark is identified with unrelated products or services, like Microsoft lipstick or Tesla bicycles.

buildings

Buildings are real property. Houses, office buildings, apartments, and factories all fall in this category.

close corporation

But close corporations are created by state law and, therefore, these entities are not entitled to special treatment under the federal tax code unless they also register with the IRS. Likewise, a corporation that qualifies for S corp status with the IRS, will not necessarily be treated as a close corporation under state law unless it complies with those particular requirements.

A second policy has been to reward the finder if no owner can be located

But courts are loath to encourage trespassing, so finders who discover personal property on someone else's land generally cannot keep it

Chateau, a Canadian winery, contracted over the phone to buy 1.2 million wine corks from Sabate USA, the U.S. subsidiary of Sabate France. The parent company shipped the corks from France to Canada, along with a pre-printed invoice. The invoice contained a forum selection clause providing that any dispute would be heard in a French court. When Chateau realized that the corks altered the taste of its wine, it sued Sabate in California for breach of contract. Chateau argued that the forum selection clause was not part of the original deal. Furthermore, it had an enforceable oral agreement with Sabate USA, which was governed by the CISG because both Canada and the United States were signatories. Did the CISG govern the dealings between Chateau and Sabate USA? If so, did the contract between Chateau and Sabate USA have to be in writing? Was the forum selection clause enforceable against Chateau?

Chateau de Charmes Wine v. Sabate USA, 328 F.3d 528 (9th Cir. 2003). The court held that the CISG applied, and it did not require a writing. The forum selection clause was not part of the original contract and was therefore void.

To ensure that you do not end up in a similar predicament, be sure to consider the following when you negotiate international deals:

Choice of Law: Which Law Governs? As we have seen, there are a variety of legal systems and each country has a different way of applying whatever legal system it uses. Therefore, when making an agreement, it is essential to negotiate which country's law will control. Each side will prefer the law it is most familiar with. How to compromise? Perhaps by using a neutral law. But before reaching any agreement, be sure to seek the advice of an attorney who specializes in the law of that country. It is a good idea to have a trusted legal advisor in any foreign country where you do business . Choice of Forum: Where Will the Case Be Heard? The parties must decide not only what law governs, but also where disagreements will be resolved. This can be a significant part of a contract, because legal and court systems are dramatically different in terms of speed, cost, transparency, and trustworthiness. Choice of Language and Currency. The parties must select a language for the contract and a currency for payment. Language counts because legal terms seldom translate literally. Currency is vital because the exchange rate may alter between the signing and payment.

Common law countries exhibit a trend toward codification. In the United States, many laws, notably in intellectual property, bankruptcy, banking, securities, and tax, are statute-based. The Uniform Commercial Code (UCC) now applies to contracts for the sale of goods in the United States, an area of law previously governed only by common law.

Civil law countries have begun to take precedents into account. One study found that German courts followed precedent in all but 12 out of 4,000 decisions. Spain has enacted laws making the rulings of higher courts binding on lower courts.

tenants duties-- pay rent

Compensation paid by a tenant to a landlord.

A trademark is any combination of words and symbols that a business uses to identify its products or services and distinguish them from others.

Consumers use trademarks to distinguish between competing products. People who feel that Nike shoes fit their feet best can rely on the Nike trademark to know they are buying the shoe they want. A business with a high-quality product can use a trademark to develop a loyal base of customers who are able to distinguish its product from another.

the drawbacks of a franchise

Control Franchisees sometimes complain that franchisor control is too tight—tips on cooking fries might be appreciated, but rules on how often to sweep the floor are not. Sometimes franchisors, in their zeal to maintain standards, prohibit innovation that appeals to regional tastes. Just because spicy biscuits are not popular in New England does not mean they should be off the menu in the South. Still, innovation is possible: one McDonald's franchisee famously invented the Big Mac, which subsequently spread worldwide. cost: Initial purchase. A franchise can be very costly to acquire, anywhere from several thousand dollars to many millions. That fee is usually payable up front, whether or not a McMuffin is ever sold. Royalty fee. On top of the upfront fee, franchisees also typically pay a royalty fee that is a percentage of gross sales revenues, not profit. Sometimes the fee seems to eat up all the profits. Supplies. Franchisees are often required to buy supplies from headquarters or an approved supplier. In theory, the franchisors can purchase hamburger meat and paper plates more cheaply in bulk and also maintain quality controls. On the other hand, the franchisees are a captive audience, and they sometimes allege that headquarters has little incentive to keep prices low. Indeed, some franchisors make most of their profit from the products they sell to their store owners. Often, the franchise agreement permits the company to change the terms of the agreement at any time by raising fees or expenses. Joint advertising. Franchisees may be required to contribute to expensive "co-op advertising" that benefits all the outlets nationally or in a particular region. System standards. To keep the brand image fresh and uniform, franchisees are periodically required to renovate their storefronts and update their computer and payment systems. At their own expense, of course.

corporations have an advantage over LLCs

Corporations are so familiar that the standard documents (such as a charter, bylaws, and shareholder agreement) are well established and widely available. Lawyers can form a corporation easily, and the internet offers a host of free forms. Also, the law of corporations is more established and predictable.

xculpatory clauses are generally void in residential leases.

Courts dislike such clauses because the parties typically have unequal bargaining power, and the goal of the law is to encourage safe housing managed by responsible landlords. So courts in many states simply ignore exculpatory clauses and apply normal rules of negligence to determine whether or not a landlord is liable for an injury. However, this is not universally the case; in some states, a court may still enforce an exculpatory clause in a residential lease. A concerned tenant should learn the local law before signing such a lease.

CUSTOMARY INTERNATIONAL LAW

Courts recognize custom as binding international law if it is widespread and widely accepted, longstanding, and nations obey it out of a sense of obligation to each other.

The WTO tries to promote free trade by limiting countries' efforts to unfairly protect their domestic industries. Among the techniques that countries use (and the WTO tries to limit) are:

Customs duties: taxes imposed on goods when they enter a country Excise taxes: taxes levied on a particular activity, such as the purchase of wine or cigarettes Nontariff barriers: such as quotas on the amount of a particular good that can be imported

GATT is the General Agreement on Tariffs and Trade.

David Ricardo first advocated it in the early nineteenth century. He, and economists since, have argued that citizens of the world will benefit overall if each country produces whatever goods it can make most efficiently and then trades them for goods that other countries make more efficiently

Leo rents an apartment from Donna for $900 per month, both parties signing a lease. After six months, Leo complains about defects, including bugs, inadequate heat, and window leaks. He asks Donna to fix the problems, but she responds that the heat is fine and that Leo caused the insects and leaks. Leo begins to send in only $700 for the monthly rent. Donna repeatedly phones Leo, asking for the remaining rent. When he refuses to pay, she waits until he leaves for the day, then has a moving company place his belongings in storage. She changes the locks, making it impossible for him to re-enter. Leo sues. What is the likely outcome?

Donna has ignored the legal procedures for evicting a tenant. Instead, she engaged in actual eviction, which is quick, and in the short term, effective. However, by breaking the law, Donna has ensured that Leo will win his lawsuit. He is entitled to possession of the apartment, as well as damages for rent he may have been forced to pay elsewhere, injury to his possessions, and the cost of retrieving them. He may receive punitive damages as well. Bad strategy, Donna.

Shari'a is based on the Muslim holy book, the Koran, and the teachings and actions of the Prophet Muhammed

Early Islamic scholars gave definitive guidelines and interpretations on shari'a using a reasoning process known as ijtihad

the advantages of a sole proprietorship

Ease of formation. No formal steps are necessary to create a sole proprietorship. Once Linda starts a business, she automatically has a sole proprietorship. Generally, there is no need to hire a lawyer or register with the state, so costs are low Taxes. A sole proprietorship is a flow-through tax entity, which means that the business itself does not pay taxes and does not even file a separate tax return. Instead, Linda pays personal income tax on all business profits.

In most states, to gain ownership of land by adverse possession, the user must prove:

Entry and exclusive possession; Open and notorious possession; A claim adverse, or hostile, to the owner; and Continuous possession for a statutory period.

While working as a plant superintendent at Rodd, Joseph bought stock in the company, which was a close corporation. On his death, he owned 20 percent, while the founder's children owned the rest. Later, Joseph's widow, Euphemia, found out that Rodd had bought back all of the children's stock, while refusing to buy any of hers. What can Euphemia do?

Euphemia was a minority shareholder. The court ruled that, because the majority shareholders had violated their fiduciary duty to her, the company had to buy her stock, too. Otherwise, her shares would have been worthless.

Registration has several advantages:

Even if a mark has been used in only one or two states, registration makes it valid nationally. Registration notifies the public that a mark is in use because anyone who applies for registration first searches the Public Register to ensure that no one else has rights to the mark. Five years after registration, a mark becomes virtually incontestable because most challenges are barred. The damages available under the Lanham Act are higher than under common law. The holder of a registered trademark generally has the right to use it as an internet domain name.

A court may pierce an LLC's veil in four circumstances:

Failure to observe formalities. Members must treat the LLC like a separate organization. Thus, if an LLC enters into an agreement (particularly with a member), a legitimate contract needs to be signed. Commingling assets. This trap is the most dangerous. An LLC and its members must keep their assets separate. If courts cannot tell who owns what, they are likely to grant creditors access to the assets of both the organization and its members. Inadequate capitalization. In extreme cases, if an LLC is established without enough capital to run its business, then a court may look to the members' assets. An LLC had capital of only about $20,000 but proceeded to borrow millions of dollars from one of the members. That ratio looked wrong. Fraud. Courts are unwilling to protect fraudsters who try to use an LLC as a shield against liability.

three categories of marks that can be trademarked

Fanciful marks and arbitrary marks are immediately protectable as trademarks. Fanciful marks are made-up words such as Exxon or Saucony. Arbitrary marks use existing words that do not describe the product—"Starbucks" for coffee, for example. Starbuck was a whaler in Moby Dick—and the novel said nothing about the character drinking a latte. Suggestive marks indirectly describe the product's function, qualities, or characteristics. "Microsoft" suggests software for microcomputers, and "Coppertone" suggests what customers will look like after applying the product. These marks are also protectable. Descriptive marks directly describe the product in some way. A calendar named "365-Day Calendar" is one example. These marks cannot, by themselves, be trademarked unless they have acquired secondary meaning, that is, they have been used for so long that they are now associated with the product in the public's mind. "Holiday Inn" (motel) and "Windows" are two examples of descriptive marks that have attained secondary meaning

fixtures

Fixtures are goods that have become attached to real property. A house (which is real property) contains many fixtures. The chandelier and the faucets were goods when they were manufactured and when they were sold to the builder because they were movable. But when the builder attached them to the house, the items became fixtures. By contrast, neither the refrigerator nor the grand piano is a fixture.

Loren Andreo leased retail space in his shopping plaza to Tropical Isle Pet Shop for five years at a monthly rent of $2,100. Tropical Isle vacated the premises 18 months early, turned in the key to Andreo, and acknowledged liability for the unpaid rent. Andreo placed a "for rent" sign in the store window and spoke to a commercial real estate broker about the space. But, for nine months, he did not enter into a formal listing agreement with the broker, or take any other steps to rent the space. With approximately nine months remaining on the unused part of Tropical's lease, Andreo did finally hire a commercial broker. He also sued Tropical for 18 months' rent. Comment.

For about nine months, Andreo made no serious effort to lease the store. The court rejected his rent claim for that period, permitting him to recover unpaid money only for the period he made a genuine effort to lease the space.

. In many states, a landlord must use reasonable care to maintain safe premises and is liable for foreseeable harm

For example, the common law rule merely required a landlord to notify a tenant of a latent defect, such as a defective porch railing. Most states now have building codes that require a landlord to maintain structural elements such as railings in safe condition. States further imply a warranty of habitability, which mandates reasonably safe living conditions

In the absence of a partnership agreement that provides otherwise, all partners in a firm have an equal right to share in management.

For this reason, smaller partnerships make more sense than larger ones. When two sisters-in-law form a small accounting firm, they can easily discuss business issues—from hiring a new associate to choosing a printer. But if a partnership had 1,000 accountants speaking four different languages on three continents, consultation and agreement would be difficult.

fee simple absolute

Full ownership privileges in a property.

future interest

Future interests are presently existing nonpossessory rights that may or may not develop later.

dissociation

When a partner leaves the partnership. A dissociation is a fork in the road: The partnership can either buy out the departing partner(s) and continue in business or wind up the business and terminate the partnership.

these categories cannot be trademarked

Generic trademarks. No one is permitted to trademark an item's ordinary name—shoe or book, for example. Sometimes, however, a word begins as a trademark and later becomes a generic name. ----Once a name is generic, the owner loses the trademark because the name can no longer be used to distinguish one product from another—all products are called the same thing. Personal names. The PTO generally will not grant a trademark in a surname unless it has acquired secondary meaning due to an association with a specific business or product. Companies like Dell, Ford, and Heinz have trademarks because, more than just surnames, they achieved recognition as brands in themselves. Geographical terms. Similarly, geographical names that describe the product's place of origin, such as Maine lobster or Idaho potatoes cannot be trademarked because they are generic. However, geographical terms that are used arbitrarily, can be protected, such as: Boston Market, California Pizza Kitchen, and Nantucket Nectars. Deceptive marks. The PTO will not register a mark that is deceptive. It refused to register a trademark with the words "National Collection and Credit Control" and an eagle superimposed on a map of the United States because this trademark gave the false impression that the organization was an official government agency. Similar to an existing mark. To avoid confusion, the PTO will not grant a trademark that is similar to one already in existence on a similar product. Once the PTO had granted a trademark for "Pledge" furniture polish, it refused to trademark "Promise" for the same product. Houghton-Mifflin Co. successfully sued to prevent a punk rock band from calling itself Furious George because the name is too similar to Curious George, the star of a series of children's books.

A partner cannot sell his share of the organization without the permission of the other partners

He can only transfer the value of his partnership interest, not the interest itself. He cannot, for example, transfer the right to participate in firm management or vote on firm matters. Evan's mother is a partner in the McBain Consulting firm. After her death, he goes to her office to take over her job and her partnership. But her partners tell him that although he can inherit the value of her partnership, he has no right to be a partner. He is out on the sidewalk within the hour. The partners have promised him a check in the mail.

Landlord's Liability

Historically, the common law held a landlord responsible for injuries on the premises only in a limited number of circumstance

innkeepers

Hotel patrons often assume that anything they bring to a hotel is safe. But some state innkeeper statutes impose an absolute limit on a hotel's liability. Other statutes require guests to leave valuables in the inn's safe deposit box. And even that may not be enough to protect them fully. For example, a state statute might require the guest to register the nature and value of the goods with the hotel. These statutes are designed to limit risk—but of course, some people like risk. In the following case, a high-stakes gambler placed a large bet ... on his hotel dresser.

in determining if information is a trade secret, courts consider:

How difficult (and expensive) was the information to obtain? Was it readily available from other sources? Does the information create an important competitive advantage? Did the company make a reasonable effort to protect it?

existing members of an LLC cannot transfer their ownership rights, nor can the LLC admit a new member, without the unanimous permission of the other members. (transferability of interest

However, members can transfer their economic interests in an LLC—that is, their right to share in the profits of the enterprise. In other words, members can transfer their right to receive a check from the LLC, but not their right to participate in decision-making.

Some companies that are now corporations might prefer to be LLCs. However, the IRS would consider this change to be a sale of the corporate assets and would levy a tax on the value of these assets. For this reason, few corporations have made the change.

However, switching from a partnership to an LLC or from an LLC to a corporation is not considered a sale and does not have the same adverse tax impact.

Even a bailor is liable if he wrongfully takes back property from a bailee

If a car agency rents Francine a car for a three-day weekend but then repossesses it for use elsewhere, it is liable to her for any damages, even though it owns the car. The bailor must abide by the agreement.

actual eviction

If a landlord prevents the tenant from possessing the premises, he has actually evicted her. Suppose a landlord decides that a group of students are "troublemakers." Without going through lawful eviction procedures in court, the landlord simply waits until the students are out of the apartment and changes all the locks. By denying the students access to the premises, the landlord has actually evicted them and has breached their right of quiet enjoyment. He is liable for all expenses they suffer, such as retrieving their possessions, the cost of alternate housing, and moving expenses. In some states, he may be liable for punitive damages for failing to go through proper eviction procedures.

constructive eviction

If a landlord substantially interferes with the tenant's use and enjoyment of the premises, he has constructively evicted her. Courts construe certain behavior as the equivalent of an eviction. In these cases, the landlord has not actually prevented the tenant from possessing the premises but has instead interfered so greatly with her use and enjoyment that the law regards the landlord's actions as equivalent to an eviction. Suppose the heating system in an apartment house in Juneau, Alaska, fails during January. The landlord, an avid sled dog racer, tells the tenants he is too busy to fix the problem. If the tenants move out, the landlord has constructively evicted them and is liable for all expenses they suffer. To claim a constructive eviction, the tenant must vacate the premises. The tenant must also prove that the interference was sufficiently serious and lasted long enough that she was forced to move out. A lack of hot water for two days is not fatal, but lack of any water for two weeks creates a constructive eviction.

PCs offer the limited liability of a regular corporation.

If a member of a PC commits malpractice, the corporation's assets are at risk, but not the personal assets of the innocent members. If Drs. Sharp, Payne, and Graves form a partnership, all the partners will be personally liable when Dr. Payne accidentally leaves her scalpel inside a patient. If the three doctors have formed a PC instead, Dr. Payne's Aspen condo and the assets of the PC will be at risk, but not the personal assets of the two other doctors.

mistaken accession

If the improver mistakenly believes he is entitled to add accessions, the owner probably has to pay for the increased value. Suppose that, based on its previous leases with Leasing Corp., Delivery Co. believes it has the right to modify its new truck, though in fact it has no such permission. If the modifications increase the value of the vehicle, Leasing probably has to pay for the accessions.

two types of eviction

actual and constructive

Latent Defects.

If the landlord knows of a dangerous condition on the property and realizes the tenant will not notice it, the landlord is liable for any injuries. For example, if a landlord knows that a porch railing is weak and fails to inform the tenant, the landlord is responsible if the tenant plunges off the porch. But notice that, under the common law, if the landlord notifies the tenant of the latent defect, he is no longer liable.

Public Use

If the premises are to be used for a public purpose, such as a store or office, the landlord is generally obligated to repair any dangerous defects, although the tenant is probably liable as well. The purpose of this stricter rule is to ensure that the general public can safely visit commercial establishments. If a landlord realizes that the plate glass in a store's door is loose, he must promptly repair it or suffer liability for any injuries.

othing is required in the way of forms or filings or agreements.

If two or more people do business together, sharing management, profits, and losses, they have a partnership, whether they know it or not, and are subject to all the rules of partnership law. A partnership is the default option for people who do not know better.

The bailee is typically, though not always, permitted to use the property.

If you store your furniture in a warehouse, the storage company is your bailee, but it has no right to curl up in your bed. The bailee may be entitled to compensation.

Recognition and Enforcement of Foreign Judgments

Imagine that you obtain a court judgment for a million dollars against a foreign seller who sent you defective goods. Great news, right? Well, you may not want to celebrate too soon. If the seller has no assets in the country where you won in court, your award may be worthless.

It is not a legal entity, so all tax liability is shared among the participants in the venture. Similarly, these participants also share any liability that arises out of the joint venture's activities.

Imax Corp. decided to form a joint venture with cinema operators—it supplied its big screens in return for a share of the box office revenue. IMAX and the cinema operators did not merge; they simply worked together. Each organization retained its own identity. IMAX would be liable if the electrician who installed the IMAX screen was not paid, but it would not be liable to the cinema's popcorn supplier because providing food was not part of the joint venture.

Regardless of the length of time required, the use must be continuous.

In a residential area, the user would have to occupy the land year round for the prescribed period. In a wilderness area generally used only in the summer, a user could gain ownership by seasonal use.

If you were to look online for a description of a professional corporation, you might find websites stressing that, in a PC, shareholders are still responsible for their own wrongdoing. For example: "In some states, these professionals can form a corporation, but with the distinction that each professional is still liable for his or her own wrongful professional actions." Why is this statement at best unnecessary and at worst misleading?

In every organization, the professional is responsible for his or her own wrongful acts.

Why would a business elect to be an LLP rather than an LLC?

In some states, professionals such as lawyers and accountants are not permitted to operate as an LLC; the LLP form is their only option other than a general partnership. And sometimes lawyers just like to maintain the tradition of operating as a partnership, even if in a more modern version.

Alan Dershowitz, a law professor famous for his prominent clients, joined with other lawyers to open a kosher delicatessen, Maven's Court. Dershowitz met with greater success at the bar than in the kitchen—the deli failed after barely a year in business. One supplier sued for unpaid bills. What form of organization would have been the best choice for Maven's Court?

In this situation, most entrepreneurs would choose an LLC because it would be easier than forming an S corp and registering with the IRS. However, they really should have a good operating agreement.

Note that the ICC does not make law.

Instead, it proposes rules whose adoption is voluntary. However, its influence is so widespread that many of its rules like the Incoterms are now accepted as the global standard in international business.

private international law

International rules and standards applying to cross-border commerce.

customary international law

International rules that have become binding through a pattern of consistent, longstanding behavior.

International law covers a wide array of topics relevant to, well, everything and everyone in the world.

It consists of rules and principles that apply to the conduct of states, international organizations, businesses, and individuals across borders

To form an LLP, the partners must file a statement of qualification with state officials. LLPs must also file annual reports.

It is absolutely crucial to comply with all the technicalities of the statute. Otherwise, partners lose protection against personal liability. Note the sad result for Michael Gaus and John West, who formed a Texas LLP.

In the United States, an arbitral award will generally be enforced if:

It is enforceable under the local law of the country where the award was granted; The arbitral tribunal had proper jurisdiction; The defendant was given notice of the arbitration and an opportunity to be heard; and Enforcement of the award is not fraudulent or contrary to public policy.

Digital Millennium Copyright Act (DMCA),

It is illegal to delete copyright information, such as the name of the author or the title of the article. It is also illegal to distribute false copyright information. It is illegal to circumvent encryption or scrambling technologies that protect copyrighted works. For example, some software programs are designed so that they can only be copied once. Anyone who overrides this protective device to make another copy is violating the law. (The statute does permit purchasers of copyrighted software to make one backup copy.) If you buy a Disney DVD that prevents you from fast-forwarding through commercials, you are violating the DMCA if you figure out how to do it anyway. It is illegal to distribute tools and technologies used to circumvent encryption devices. If you tell others how to fast-forward through the Disney commercials, you have violated the statute. Internet service providers are not liable for posting copyrighted material as long as they are unaware that the material is illegal and they remove it promptly after receiving a "takedown" notice that it violates copyright law.

Today, courts recognize a custom as binding international law if:

It is widespread and widely accepted, It is longstanding, and Nations follow it out of a sense of obligation to each other.

WTO is empowered to settle trade disputes between its member states

It may order compliance and impose penalties in the form of trade sanctions. Suppose that the United States believes that Brazil is unfairly restricting trade. Via the WTO, the United States can request a consultation with Brazil's trade representative. In the majority of cases, these discussions lead to a satisfactory settlement. If the consultation does not resolve the problem, the United States asks the WTO's Dispute Settlement Body (DSB) to form a panel, which consists of three nations uninvolved in the dispute. After the panel hears testimony and arguments from both countries, it prepares a report. The DSB generally approves this report, unless either nation appeals. If there is an appeal, the WTO Appellate Body hears the dispute and generally makes the final decision, subject to approval by the entire WTO. No single nation has the power to block final decisions.

In 1572, during the reign of Queen Elizabeth I of England, a patent application was filed for a knife with a bone handle rather than a wooden one. Would this patent be granted under current U.S. law?

It was useful—no splinters from a bone handle. It was novel—no one had ever done it before. But the patent was denied because it was obvious.

Consider these two entrepreneurs: Judith formed a corporation to write a blog which is unlikely to generate substantial revenues. Drexel operated his construction business as a sole proprietorship. Were these forms of organization right for these businesses?

Judith would be better off with a sole proprietorship—her revenues will not support the expenses of a corporation. Also, her debts are likely to be small, so she will not need the limited liability of a corporation. And no matter what her form of organization, she would be personally liable for any negligent acts she commits, so a corporation would not provide any additional protection. But for Drexel, a sole proprietorship could be disastrous because his construction company will have substantial debts and a large number of employees. If an employee causes an injury, Drexel might be personally liable. And if his business fails, the court would take his personal assets. He would be better off with a form of organization that limits his liability, such as a corporation or an LLC. Change font size help

Also, venture capitalists sometimes prefer to invest in C corporations for three reasons:

LLCs involve arcane tax issues; C corporations are easier to merge, sell, or take public; and the law of LLCs is uncertain.

finding statues or estray statutes

Laws that govern found property, also known as estray statutes.

Sole proprietorships also have some serious disadvantages:

Liability. As the owner of the business, Linda is responsible for all of its debts. If ExSciTe cannot pay its suppliers or a student is injured by an exploding cabbage, Linda is personally liable. She may have to sell her house to pay the debt. Limited capital. The owner of a sole proprietorship has limited options for financing her business. Debt is generally her only source of working capital because she has no stock or memberships to sell. For this reason, sole proprietorships work best for businesses without large capital needs.

While in college, David invented a new and useful machine to make macaroni and cheese (he called it the "Mac 'n' Cheeser"). It was like nothing on the market, but David did not apply for a patent. At that time, he offered to sell his invention to several kitchen products companies. His offers were all rejected and he never sold the invention. Years later, he decided to apply for a utility patent. Is David entitled to a utility patent?

No, while the Mac n' Cheeser was new, useful, and nonobvious at the time it was invented, David's disclosure to the kitchen products companies years before renders it not novel now. Inventors have a grace period of one year once disclosure is made to apply for a patent. That time lapsed. Patent rejected.

disadvantage of a corporation

Logistics Corporations require substantial expense and effort to create and operate. The cost of establishing a corporation includes legal and filing fees, not to mention the expense of annual filings and taxes. taxes- , a corporation is a taxable entity, which means it must pay income taxes on its profits and also file a tax return. Shareholders must then pay tax on any dividends from the corporation.

Lonny Joe owned two rare 1955 Ford Thunderbird automobiles, one red and one green, both in mint condition. He stored the cars in his garage. His friend Stephanie wanted to use the red car in a music video, so Lonny Joe rented it to her for two days, for $300 per day. When she returned the red car, Lonny Joe discovered a long scratch along one side. That same day, he noticed a long scratch along the side of the green car. He sued Stephanie for harm to the red car. Lonny Joe sued an electrician for damage to the green car, claiming that the scratch occurred while the electrician was fixing a heater in the garage. Explain the different burdens of proof in the two cases.

Lonny Joe had no bailment with the electrician because the electrician never assumed control of the car. To win that case, Lonny Joe must prove that the electrician behaved unreasonably and caused the scratch. However, when Lonny Joe rented Stephanie the red car, the parties created a bailment, and the law presumes Stephanie caused the damage unless she can prove otherwise. That is a hard burden, and Stephanie will likely lose.

foreign recognition

Means that a foreign judgment has legal validity in another country.

foreign enforcement

Means that the court system of a country will assist in enforcing or collecting on the verdict awarded by a foreign court.

Angel and Linda Mendez bought a home next door to Rancho Valencia, a fancy hotel on 45 acres of land. The house was about 600 feet from the site where the hotel held outdoor wedding receptions and parties. Even though the Rancho Valencia had installed noise-abating equipment, the Mendezes could still hear music and announcements from its sound system for about 8 hours a month, mostly during the evenings. These noise levels complied with the applicable county noise ordinances. On what theory could the Mendezes sue Rancho Valencia? Will they succeed?

Mendez v. Rancho Valencia Resort Partners, 3 Cal.App.5th 248 (2016). The couple sued for nuisance. The trial court entered a judgment for the hotel and the couple appealed. The judgment of the lower court was upheld. As the trial court noted, "[t]his is one of those situations, so common in discussions of legal philosophy, where reasonable minds can differ. It is not unreasonable for someone . . . to retire for the evening before 10:00 p.m. It is similarly not unreasonable for people . . . to value their solitude and to prefer the sounds of nature to those associated with human habitation. . . . Others find music and laughter, in moderation and at a reasonable hour, pleasant, or at least not disturbing." **558 Given all of the evidence, the trial court reasonably determined that it "cannot conclude that noise levels from the Resort that otherwise comply with the General Sound Level Limits of the County Noise Ordinance are nonetheless 'disturbing, excessive or offensive' within the meaning of section 36.414."

Duty to Return Security Deposit

Most landlords require tenants to pay a security deposit, in case the tenant damages the premises. In many states, a landlord must either return the security deposit soon after the tenant has moved out or notify the tenant of the damage and the cost of the repairs. In addition, landlords are often obligated to credit tenants with interest earned on the deposit. Many states have statutes requiring a landlord who fails to return the deposit in a timely fashion to pay double or even triple damages to the tenant.

All tenants are entitled to quiet enjoyment of the premises, meaning the right to use the property without the interference of the landlord

Most leases expressly state this covenant of quiet enjoyment. And if a lease includes no such covenant, the law implies the right of quiet enjoyment anyway, so all tenants are protected. If a landlord interferes with the tenant's quiet enjoyment, he has breached the lease, entitling the tenant to damages.

Duty Not to Disturb Other Tenants

Most leases, commercial and residential, include a covenant that the tenant will not disturb other tenants in the building. A landlord may evict a tenant who unreasonably disturbs others. The test is reasonableness. A landlord does not have the right to evict a residential tenant for giving one loud party but may evict a tenant who repeatedly plays loud music late at night and disturbs the quiet enjoyment of other tenants.

To limit the number of cars on city streets, Shanghai, China, set up a system under which drivers could only acquire automobile license plates through a monthly auction. But Shanghai ran two different auctions: One for foreign-made cars, in which the government limited the number of license plates to 30 a month and set a high minimum bid, and another auction for Chinese cars, in which 3,000 license plates a month were available with no minimum bid. The United States complained that Shanghai's system had a direct effect on its imports. Is China in violation of WTO principles?

National treatment means that a WTO country cannot give special treatment or benefits to its own goods. Even though Shanghai may not have intended its rules to disrupt international trade, it did because the license auctions had a direct effect on the price of imported cars. Shanghai's rules violated WTO principles.

tort law

Negligence law may determine the liability of the landlord and tenant when a person is injured or property is damaged.

negligent repairs

Negligent Repairs. Even in areas where the landlord has no duty to make repairs, if he volunteers to do so and does the work badly, he is responsible for resulting harm.

Holding out an envelope, Alan says, "Ben, I'm giving you these opera tickets." Without taking the envelope, Ben replies, "Why would I want opera tickets? Loser." Alan leaves, crestfallen. Later that day, a girl whom Ben has liked for some time says, "I sure wish I were going to the opera tonight." Ben scrambles, calls Alan, and says, "Alan, old buddy, I accept your gift of the opera tickets. I'm on my way over to pick them up." Does Ben have a legal right to the tickets?

No because Ben did not accept the gift when offered.

GOVERNMENT REGULATION

Nuisance law, zoning ordinances, and eminent domain all permit a government to regulate property and in some cases to take it for public use

OTHER VIDEO NOTES

OTHER VIDEO NOTES

To be enforceable, a long-term residential real estate lease must

be in writing

reservation

Occurs when a party reserves the right to retain an easement in a transferred property.

grant

Occurs when one party expressly transfers an easement to another party.

accession

Occurs when one person uses labor, materials, or both to add value to personal property belonging to another person.

condemnation

Occurs when the government seizes private property and compensates the owner.

general partner

One of the owners of a general partnership.

leasehold interest

One party has the right to occupy the property for a given length of time.

The ICJ has not been an important force in resolving international business disputes for several reasons:

Only states can be a party to litigation before the ICJ. To have their day in court, individuals and businesses must persuade their country to initiate a case on their behalf. Most states are reluctant to bring business associated with cases on behalf of their citizens because of the political and financial costs that may result from suing another country. The ICJ only has jurisdiction over states that have agreed to be bound by its decisions. The United States had accepted the ICJ's authority—until it lost a case. When the ICJ determined that the United States violated international law by secretly supporting Nicaraguan rebels, it simply withdrew from ICJ jurisdiction. Today the United States agrees to ICJ jurisdiction on a case-by-case basis.

For which of the following activities can a foreign sovereign be sued?

Operating a factory dangerously

life estate

Ownership of property for the lifetime of a particular person.

The Paris Convention for the Protection of Industrial Property

Paris Convention) requires each member country to accept and recognize all patent and trademark applications filed with it by anyone who lives in any member country. For example, the French patent office cannot refuse to accept an application from an American, as long as the American has complied with French law. Under this treaty, inventors who file in one country have up to one year to file elsewhere and still maintain patent protection.

"Hey, Paula," a pop hit that spent months on the music charts, was back on the radio 30 years later, but in a form the song's author never intended. Talk-show host Rush Limbaugh played a version with the same music as the original but with lyrics that poked fun at President Bill Clinton's alleged sexual misconduct with Paula Jones. Has Limbaugh violated the author's copyright?

Parody (especially about politics!) is a fair use of copyrighted material so long as use of the original is not excessive.

A limited liability partnership (LLP) offers the limited liability of a corporation and the tax status of a flow-through organization.

Partners are not liable for the debts of the partnership but, naturally, they are liable for their own misdeeds. (Note that an LLP has no general partners, only limited ones.)

fair use doctrine

Permits limited use of copyrighted material without permission of the author for purposes such as criticism, comment, news reporting, scholarship, or research.

plant life

Plant life growing on land is real property whether the plants are naturally occurring, such as trees, or cultivated crops. When a landowner sells his property, plant life is automatically included in the sale unless the parties agree otherwise. A landowner may also sell the plant life separately if he wishes. A sale of the plant life alone, without the land, is a sale of goods. (Goods, as you may recall, are movable things.) If Douglas chops down all of his land's fir trees to sell to Frasier, this sale of goods will be governed by the Uniform Commercial Code (UCC).

Quick, Onyx, and Nash were deeded a piece of land as tenants in common. The deed provided that Quick owned one-half the property and Onyx and Nash owned one-quarter each. If Nash dies, the property will be owned as follows:

Quick 1/2, Onyx 1/4, Nash's heirs 1/4

REAL PROPERTY; FIXTURES

Real property includes land, buildings, air and subsurface rights, plant life, and fixtures. A fixture is any good that has become attached to other real property, such as land.

Application of Foreign Law in U.S. Courts

Recall the SABIC case, in which a U.S. court applied the law of Saudi Arabia. Clearly, U.S. judges are not experts in the laws of every country, yet federal courts commonly apply the laws of other countries to resolve disputes. Judges may consult experts, request briefs from the parties, listen to testimony, and conduct their own extensive research on the foreign law. While this process may seem inefficient, some foreign litigants are willing to incur the expense for the benefits of the American judicial system, which is internationally regarded as fair and relatively free from political influence.

some companies opt for trade secret protection because their creations cannot be patented.

Recipes, customer lists, business plans, and marketing strategies are some examples.

A work is copyrighted automatically once it is in tangible form. For example, once a songwriter puts notes on paper, the work is copyrighted without further ado. But if she whistles a happy tune without writing it down, the song is not copyrighted, and anyone else can use it without permission.

Registration with the Copyright Office of the Library of Congress is necessary only if the holder wishes to bring suit to enforce the copyright. Although authors still routinely place the copyright symbol (©) on their works, such a precaution is not necessary in the United States. However, some lawyers still recommend using the copyright symbol because other countries recognize it. It also puts potential infringers on notice: The penalties for intentional copyright infringement are heavier than for unintentional violations, and the presence of the © is evidence that the infringer's actions were intentional.

Under common law, the first person to use a mark in trade owns it.

Registration with the federal government is not necessary. However, under the federal Lanham Act, the owner of a mark may register it on the Lanham Act Principal Register. A trademark owner may use the symbol ™ at any time, even before registering it, but not until the mark is registered can the symbol ® be placed next to it.

easement by implication

Results from surrounding circumstances that indicate that the parties must have intended an easement.

public international law

Rules and norms governing relationships among states and international organizations. ublic international law also has rules governing the globe's shared resources and common elements: the sea, outer space, trade, and communications. public international law sets out the basic rules of human rights and laws defining the treatment of refugees, prisoners of war, and international criminals.

Landlord's Remedies for Non-payment of Rent

She is entitled to apply the security deposit to the unpaid rent. She may also sue the tenant for non-payment of rent, demanding the unpaid sums, cost of collection, and interest. Finally, the landlord may evict a tenant who has failed to pay rent. State statutes prescribe the steps a landlord must take to evict a tenant for non-payment. Typically, the landlord must serve a termination notice on the tenant and wait for a court hearing. At the hearing, the landlord must prove that the tenant has failed to pay rent on time. If the tenant has no excuse for the non-payment, the court grants an order evicting him. The order authorizes a sheriff to remove the tenant's goods and place them in storage, at the tenant's expense. However, if the tenant was withholding rent because of unlivable conditions, the court may refuse to evict.

When fishermen trawled for shrimp, they often caught sea turtles as well. The U.S. Environmental Protection Agency (EPA) sought to protect the endangered sea turtles by requiring that fisherman use costly technology called a Turtle Excluder Device (TED). The United States prohibited the importation of shrimp caught without TEDs. Several developing nations claimed that American laws on shrimp fishing were unfair and illegal. Who won and why? The case demonstrated a conflict between two important values. What were the values? In your view, which is more important?

Small nations sued, claiming that American regulations made it difficult or impossible for them to fish, devastating their economic growth. The United States argued that vital environmental concerns mandated such rules. The WTO found in favor of the small nations, ruling that before the United States imposed its environmental standards on other countries, it must engage in multinational negotiations, seeking an acceptable compromise. Environmentalists argued that the decision was short-sighted, and contributed to the destruction of an endangered species. Supporters of the decision responded that long-term environmental concerns sound patronizing and hollow to people with empty stomachs.

Property Already in Donee's Possession

Sometimes a donor decides to give property to a donee who already has possession of it. In that case, no delivery is required, and the donee need only demonstrate that the donor intended to transfer present ownership. Larry lends a grand piano to Leslie for the summer. At the end of the summer, Larry announces that she can keep the instrument. As long as Larry clearly intends that Leslie gets ownership of the piano, the gift is completed.

sovereign immunity

Sovereign immunity holds that the courts of one nation lack the jurisdiction (power) to hear suits against foreign governments, unless the foreign nation has waived immunity, is engaging in commercial activity, or has violated international law.

To comply with the Model Benefit Corporation Act, an organization must:

State in its charter that it is a benefit corporation, Obtain approval of its charter from two-thirds of its shareholders, Measure its social benefit using a standard set by an objective third party, and Prepare an annual benefit report assessing its performance in creating a public benefit.

blue sky laws

State laws that regulate the offering and sale of securities for the protection of the public.

example of tenancy in common

Suppose Patricia owns a house, which she agrees to sell to Quincy and Rebecca. When she conveys the deed—i.e., transfers the deed—"to Quincy and Rebecca," those two now have a tenancy in common. This kind of estate can also be created in a will. If Patricia had died still owning the house and left it in her will to "Sam and Tracy," then Sam and Tracy would have a tenancy in common. Tenancy in common is the "default setting" when multiple people acquire property. Co-owners are automatically considered tenants in common unless another type of interest (joint tenancy, tenancy by the entirety) is specified.

The bailee's primary right is possession of the property. Anyone who interferes with the bailee's rightful possession is liable to her.

Suppose that, after you lend your motorcycle to Stan, Mel sees Stan park the bike, realizes Stan is not the owner, rides the motorcycle away, and locks it up until you return. Mel is liable to Stan for any damages Stan suffered while deprived of transportation.

comminity property

System of ownership of marital property in which assets earned during the marriage are owned jointly by the spouses. his system allows the husband and wife to maintain separate ownership of assets they bring to the marriage or inherit. Those assets are called separate property. They remain the private property of each spouse during the marriage. Either spouse may convey separate property to another person during the marriage and may leave the separate property to anyone he or she wishes. But income or assets that either party earns during the marriage are considered community property, which must be equally shared during the marriage, regardless of who earns it Neither party may convey community property without the consent of the other. When a spouse dies, one-half of the community property goes to the surviving spouse, and the other half goes to the heirs of the deceased.

Howard Geib, Walker McKinney, and John D. McKinney owned two vacation properties as joint tenants with right of survivorship. The parties were not getting along well, and Geib petitioned the court to partition the properties. The trial court ruled that the fairest way to do this was to sell both properties and divide the proceeds. The two McKinneys appealed, claiming that a partition by sale was improper because it would destroy their right of survivorship. Comment.

The McKinneys lost. Any co-tenant (including a joint tenant) has an absolute right to partition. Difficulties in partitioning are irrelevant.

Under the Lanham Act, the owner files an application with the PTO.

The PTO will accept an application only if the owner has already used the mark attached to a product in interstate commerce or promises to use the mark within six months after the filing. In addition, the applicant must be the first to use the mark in interstate commerce.

The UN Charter sets out the organization's governance:

The Secretariat, headed by the Secretary General, administers the day-to-day operations of the UN. The General Assembly is the UN's lawmaking body. It is composed of all of its member nations, which propose and vote on resolutions. The Security Council is charged with maintaining international peace. It has 15 member nations. Ten are elected by the General Assembly; five are permanent members: China, France, Russia, the United Kingdom, and the United States. The five permanent members were the primary victors in World War II. They have the right to veto any Security Council resolution.

Many European nations fear the effects of genetically modified foods, so they choose to restrict their importation. The EU banned the entry of these foods and subjected them to strict labeling requirements. Does this policy contravene the principles of WTO/GATT?

The United States challenged this practice, and WTO ruled that GM food had to be allowed into the EU. The WTO held that no scientific evidence supported the EU's fears and, therefore, the regulation unduly burdened trade.

Uniform Foreign Money Judgments Recognition Act. This act provides that U.S. courts will recognize foreign judgments if:

The award was based on a full and fair trial by an impartial tribunal with proper jurisdiction; The defendant was given notice and an opportunity to appear; The judgment was not fraudulent or against public policy; and The foreign court was the proper forum to hear the case.

BAILEE'S RIGHTS

The bailee is always entitled to possess the property, is frequently allowed to use it, and may be entitled to compensation.

due cares

The bailee is obligated to exercise due care. The level of care required depends upon who receives the benefit of the bailment. There are three possibilities: Sole benefit of bailee. If the bailment is for the sole benefit of the bailee, the bailee is required to use extraordinary care with the property. Generally, in these cases, the bailor loans something for free to the bailee. Since the bailee is paying nothing for the use of the goods, most courts consider her the only one to benefit from the bailment. If your neighbor loans you a power lawn mower, the bailment is probably for your sole benefit. You are liable if you are even slightly inattentive in handling the lawn mower and can expect to pay for virtually any harm done. Mutual benefit. Most bailments benefit both parties. When Ferris and his friends parked the Ferrari with the valet, they benefited from the convenience, and the parking service profited from the fee paid. When the bailment is for the mutual benefit of bailor and bailee, the bailee must use ordinary care with the property. Ordinary care is what a reasonably prudent person would use under the circumstances. It is certainly not what the valet attendant exercised in the opening scenario. Sole benefit of bailor. When the bailment benefits only the bailor, the bailee must use only slight care. This kind of bailment is called a gratuitous bailment, and the bailee is liable only for gross negligence. Michelle enters a pie-eating contest and asks you to hold her $29,000 diamond engagement ring while she competes. You put the ring in your pocket. Michelle wins the $20 first prize, but the ring has disappeared. This was a gratuitous bailment, and you are not liable to Michelle unless she can prove gross negligence on your part. If the ring dropped from your pocket or was stolen, you are not liable. If you used the ring to play catch with friends, you are liable.

duties of the bailee

The bailee is strictly liable to redeliver the goods on time to the bailor, or to whomever the bailor designates. Strict liability means there are virtually no exceptions. Rudy stores his $6,000 drum set with Melissa's Warehouse while he is on vacation. Blake arrives at the warehouse and shows a forged letter, supposedly from Rudy, granting Blake permission to remove the drums. If Melissa permits Blake to take the drums, she will owe Rudy $6,000, even if the forgery was a high-quality job.

Shannon borrows Marty's car, but when she returns the auto, she hands the keys to Scott, who claims he is Marty's brother. Scott offers a driver's license and passport to reassure Shannon. Scott is actually a con artist. Marty sues Shannon. Outcome? Marty will win. Marty will win only if a reasonable person would have spotted the fraud. Marty will win only if he in fact has no brother named Scott. Marty will lose because Scott offered reasonable identification.

The bailee is strictly liable to redeliver the goods to the bailor. There are no excuses. The "reasonable person" standard does not apply. The correct answer is (a).

defects

The bailor must keep the property in suitable repair, free of any hidden defects. If the bailor is in the business of renting property, the bailment is probably subject to implied warranties.

Rights and Duties of the Bailor

The bailor's rights and duties are the reverse of the bailee's. The bailor is entitled to the return of his property on the agreed-upon date. He is also entitled to receive the property in good condition and to recover damages for harm to the property if the bailee failed to use adequate care.

Financing a partnership may be difficult because the firm cannot sell shares as a corporation does.

The capital needs of the partnership must be provided by contributions from partners or by borrowing

It is easy to form an LLC; the only required document is a certificate of organization (also called a charter).

The certificate of organization is short, containing basic information such as name and address. It must be filed with the secretary of state in the jurisdiction in which the LLC is being formed.

No matter where you are in the world, the relationship between landlords and tenants can be a tense one. How would judges in common law, civil law, and Islamic law jurisdictions approach a landlord/tenant controversy?

The common law judge would hear the arguments of lawyers, who formulate their argument based on prior courts' rulings. The civil law judge would consult the applicable code that deals with landlord and tenant disputes. The Islamic law judge would engage in a process of ijtihad, which incorporates legal knowledge with religious reasoning based on the Koran and teachings and actions of Mohammad

most favored nation

WTO/GATT requires that favors offered to one country must be given to all member nations.

Which of the following requirements must be met to create a bailment? Delivery of personal property to the intended bailee Possession by the intended bailee

both 1 and 2

Many of the videos posted on YouTube are copyrighted material, including thousands of hours of shows owned by Viacom, such as The Colbert Report and The Daily Show. Viacom sued YouTube for violating its copyrights. Among the evidence Viacom presented was an email from one YouTube founder to another, saying, "... please stop putting stolen videos on the site. We're going to have a tough time defending the fact that we're not liable for the copyrighted material on the site because we didn't put it up when one of the cofounders is blatantly stealing content from other sites and trying to get everyone to see it.

The court found for YouTube. General awareness that many postings infringed copyrights did not impose a duty for YouTube to monitor its videos. Its only requirement was to respond when notified of infringement. YouTube did just that in this case.

Rebecca Reyher wrote (and copyrighted) a children's book entitled My Mother Is the Most Beautiful Woman in the World. The story was based on a Russian folk tale told to her by her own mother. Years later, the children's television show Sesame Street televised a skit entitled "The Most Beautiful Woman in the World." The Sesame Street version took place in a different locale and had fewer frills, but the sequence of events in both stories was identical. Has Sesame Street infringed Reyher's copyright?

The court held that Sesame Street had not infringed Reyher's copyright because Reyher could not copyright the plot of a story, only her expression of the plot. Reyher v. Children's Television Workshop, 533 F.2d 87, 190 U.S.P.Q. (BNA) 387 (2d Cir. 1976).

Question: DatagraphiX manufactured and sold computer graphics equipment that allowed users to transfer large volumes of information directly from computers to microfilm. Customers were required to keep maintenance documentation onsite for the DatagraphiX service personnel. The service manual carried this legend: "No other use, direct or indirect, of this document or of any information derived there from is authorized. No copies of any part of this document shall be made without written approval by DatagraphiX." In addition, on every page of the maintenance manual, the company placed warnings that the information was proprietary and not to be duplicated. Frederick J. Lennen left DatagraphiX to start his own company that serviced DatagraphiX equipment. Can DatagraphiX prevent Lennen from using its manuals?

The court held that these manuals were DatagraphiX's trade secrets.

A gift involves three elements:

The donor intends to transfer ownership of the property to the donee immediately. The donor delivers the property to the donee. The donee accepts the property.

Physical Delivery

The donor must deliver the property to the donee. Generally, this involves physical delivery—a handoff, if you will. If Anna hands Eddie a Rembrandt drawing, saying "I want you to have this forever," she has satisfied the delivery requirement. But such a dramatic statement is not necessary.

intention to transfer ownership

The donor must intend to transfer ownership to the property right away, immediately giving up all control of the item. Notice the two important parts of this element. First, the donor's intention must be to transfer ownership; that is, to give title to the donee. Merely proving that the owner handed you property does not guarantee that you have received a gift; if the owner only intended that you use the item, there is no gift, and she can demand it back. Second, the donor must also intend the property to transfer immediately. A promise to make a gift in the future is unenforceable. Promises about future behavior are governed by contract law, and a contract is unenforceable without consideration. If Sarah hands Lenny the keys to a $600,000 yacht and says, "Lenny, it's yours," then it is his, since Sarah intends to transfer ownership right away. But if Sarah says to Max, "Next week, I'm going to give you my yacht," Max has not received a gift because Sarah did not intend an immediate transfer. Nor does Max have an enforceable contract since there is no consideration for Sarah's promise.

The primary goal of the common law has been to get found property back to its proper owner, if possible.

The finder must make a good faith effort to locate the owner of the property and return the goods to him. In some states, the finder is obligated to notify the police of what she has found and entrust the property to them until the owner can be located or until a stated period has passed

CISG

The goal of CISG is to make sales law more uniform and predictable—and to make international contracting easier. A sales agreement between an American company and a foreign company may be governed by American law, by the law of the foreign country, or by the CISG.

GATT, GATS, and TRIPs

The goal of the General Agreement on Tariffs and Trade (GATT) is to lower trade barriers worldwide. The General Agreement on Trade in Services (GATS) and the Trade Related Aspects of Intellectual Property (TRIPs) extend GATT principles to services and intellectual property, respectively.

The FDD must provide information on:

The history of the franchisor and its key executives Litigation with franchisees Bankruptcy filings by the company and its officers and directors Costs to buy and operate a franchise Restrictions, if any, on suppliers, products, and customers Territory—any limitations (in either the real or virtual worlds) on where the franchisee can sell or any restrictions on other franchisees selling in the same territory Business continuity—under what circumstances the franchisor can terminate the franchisee and the franchisee's rights to renew or sell the franchise Franchisor's training program Required advertising expenses A list of current franchisees and those that have left in the prior three years (A significant number of departures may be a bad sign.) A report on prior owners of stores that the franchisor has reacquired Earnings information is not required; but if disclosed, the franchisor must reveal the basis for this information Audited financials for the franchisor A sample set of the contracts that a franchisee is expected to sign

Common Areas.

The landlord is usually responsible for maintaining the common areas, and along with this obligation may go liability for torts. As we saw earlier, if your guest falls downstairs in a common hallway because the stairs were defective, the landlord is probably liable.

In most states, a landlord has a duty to deliver the premises in a habitable condition and a continuing duty to maintain the habitable condition.

The landlord's duty to maintain the property focuses on whether the property meets a particular legal standard. The required standard may be stated in the lease, created by a state statute, or implied by law.

reversionary interest

The landlord's right to occupy the property at the end of the lease.

lease

The lease itself generally obligates the landlord to maintain the exterior of any buildings and the common areas. If a lease does not do so, state law may imply the obligation.

COMMON LAW

The legal system based on precedent and adversarial process that was inherited by most British colonies, including the United States and Australia.

Zoning statutes are state laws that permit local communities to regulate building and land use.

The local communities, whether cities, towns, or counties, then pass zoning ordinances that control many aspects of land development. For example, a town's zoning ordinance may divide the community into an industrial zone where factories may be built, a commercial zone in which stores of a certain size are allowed, and several residential zones in which only houses may be constructed. Within the residential zones, there may be further divisions, for example, permitting two-family houses in certain areas and requiring larger lots in others.

civil law

The most widespread legal system in the world, whose main principle is that law is found primarily in statutes rather than in judicial decisions.

landlord

The owner of a freehold estate who allows another person temporarily to live on his property.

Partnerships are flow-through entities:

The partnership itself does not pay income tax; instead the profits pass through to the partners, who report it on their personal returns.

mortgagee

The party acquiring a security interest in property.

Some of its important principles are:

The payment and collection of interest is prohibited because it causes unfair enrichment. Financial investments in companies or industries that do not align with Muslim values are also prohibited. The concept of gharar prohibits any contract gain that is not clearly outlined at the time of contract, especially when it involves risk and deception.

Extraterritoriality

The power of one country's laws to reach activities outside of its borders. title VII of the 1964 Civil Rights Act and the Americans with Disabilities Act expressly protect U.S. citizens working for U.S. employers from discrimination—even when they live and work abroad. The Foreign Corrupt Practices Act, discussed in Chapter 7 on crime, prohibits bribery on foreign soil. Price-fixing conducted abroad is a violation of the Sherman Antitrust Act if it has an impact on the United States. But, as a general rule, U.S. statutes do not apply abroad, unless the laws themselves explicitly say so.

eminent domain

The power of the government to take private property for public use All levels of government—federal, state, and local—have this power. But the Fifth Amendment of the U.S. Constitution states: "... nor shall private property be taken for public use, without just compensation."

national treatment

The principle of nondiscrimination between foreigners and locals.

stare decisis

The principle that legal conclusions must be reached after an analysis of past judgments.

A producer shot a low-budget horror movie and then delivered ten reels of negative film to Filmprocess Corp. for processing. Filmprocess lost the reels. The producer sued for $5 million, the cost of production. Filmprocess based its defense on an exculpatory clause in the parties' contract, which stated that the producer accepted the full risk of loss for any film delivered to Filmprocess and that the producer would insure against such loss. Who will win the lawsuit?

The producer will lose its claim for $5 million. Both parties were corporations, with roughly equal bargaining power, and the exculpatory clause is valid. There was no intentional tort or gross negligence, so the clause will be enforced.

But treaties such as the Berne Convention for the Protection of Literary and Artistic Works require all 172 member countries to provide automatic copyright protection to any works created in other member countries.

The protection does not expire until 50 years after the death of the author.

Jerry Falwell was a nationally known Baptist minister whose website was falwell.com. One of his most outspoken critics registered the website fallwell.com—note the misspelling—to criticize the minister's views on homosexuality. This site has a disclaimer indicating that it was not affiliated with Reverend Falwell. The minister sued fallwell.com, alleging a violation of trademark law. Was there a violation?

The reverend lost. The court ruled that there was no confusion—fallwell.com had a clear disclaimer. Also, there was no indication of bad faith. The court was reluctant to censor political commentary.

remainder

The right of a third person to property upon the death of a life tenant. he difference is that when the life tenant dies, the property goes to a named third person, not to the original owner.

reversion

The right of an owner (or her heirs) to property upon the death of a life tenant.

easement

The right to cross or use someone else's land for a particular purpose, without taking anything away.

profit

The right to enter land belonging to another and take something from it.

freehold estate *property law*

The right to possess land for an undefined length of time. When an owner of a freehold estate allows another person temporary, exclusive possession of the property, the parties have created a landlord-tenant relationship.

license

The right to temporarily enter land belonging to another.

bailment

The rightful possession of goods by one who is not the owner, usually by mutual agreement between the bailor and bailee.

Research Corp. applied for a patent for a so-called halftoning technique that uses a mathematical formula to enable monitors and printers with limited color options to simulate a wider range of colors. Is this technique patentable?

The trial court ruled that this patent application was invalid because it was too abstract. But the appellate court overruled, holding that, although the patent used mathematical algorithms, the inventors were patenting the process not the algorithms. It upheld the patent

In 1944, W. E. Collins conveyed land to the Church of God of Prophecy. The deed said: "This deed is made with the full understanding that should the property fail to be used for the Church of God, it is to be null and void and property to revert to W. E. Collins or heirs." In the late 1980s, the church wished to move to another property and sought a judicial ruling that it had the right to sell the land. The trial court ruled that the church owned a fee simple absolute and had the right to sell the property. Comment.

The trial court was wrong. The church held a fee simple defeasible. The moment the church ceased to use the property as a church, the land reverted automatically to Collins and his heirs. Collins v. Church of God of Prophecy, 304 Ark. 37, 800 S.W.2d 418, 1990 Ark. LEXIS 566 (1990).

The hallmarks of common law are:

The use of an adversarial process of dispute resolution presided over by an impartial judge. After the Norman conquest of England, William the Conqueror introduced trial by combat to settle disputes: The winner of the battle was right. This practice formed the basis of the common law's assumption that the role of lawyers is to battle on behalf of the client by making the most persuasive arguments. The doctrine of stare decisis, which requires judges to base their decisions on prior cases. The use of a jury to determine questions of fact.

The main characteristics of the civil code tradition are:

The use of an inquisitorial process of dispute resolution, in which the judge acts as interrogator and investigator. Judges rely more on written submissions than on lawyers' oral arguments. Courts base their judgments on the code, and statutes, and on the writings of law professors. Civil code systems do not use juries.

A Claim Adverse or Hostile to the Owner

The user must clearly assert that the land is his. He does not need to register a deed or take other legal steps, but he must act as though he is the sole owner. If the user occupies the land with the owner's permission, there is no adverse claim and the user acquires no rights in the property. To succeed, the user must protect his possession of the land against all others the way any normal landowner would. This may mean erecting a home if the area is residential, or fencing property that is used to graze cattle, or posting "No Trespassing" signs in a wilderness area. ut other states require a mistaken belief that the user has title to the land. For example, some states require that the user demonstrate "color of title," meaning that he has some document that he believed gave him good title to the land, although in reality it never did.

Entry and Exclusive Possession

The user must take physical possession of the land and must be the only one to do so. If the owner is still occupying the land, or if other members of the public share its use, there can be no adverse possession.

Open and Notorious Possession

The user's presence must be visible and generally known in the area, so that the owner is on notice that his title is contested. This ensures that the owner can protect his property by ejecting the user. Someone making secret use of the land gives the owner no opportunity to do this, and hence acquires no rights in the land.

tHE INTERNATIONAL CHAMBER OF COMMERCE (ICC)

The world's largest global business organization.

Social enterprise

These organizations pledge to behave in a socially responsible manner even as they pursue profits. (Thus, they are not nonprofits.) Their focus is on the triple bottom line: "people, planet, and profits.

Huma and Zuma want to start Spring High, a business that would take high school students on safe, educational trips during spring break. Eventually, they hope to seek venture capital money and expand the business nationally. After reading up on the legal issues online, Huma thinks Spring High should be a close corporation, while Zuma proposes that it be a S corporation. Neither thinks they should choose an LLC. Who is right?

They are both right. Spring High should not be an LLC because that would discourage venture capital investment. The enterprise should probably be both a close corporation and an S corp. In some states, they would qualify for close corporation status without having to elect it. In any event, there is little downside to such an election. An S corporation is also a reasonable choice because, for now, it makes sense to limit their tax liability. Should they expand to the point that they no longer meet all the S corp requirements, it would be easy to become a C corporation.

In addition to these treaties, any country that joins the World Trade Organization (WTO) must agree to trade-related aspects of intellectual property rights (TRIPS).

This agreement does not create an international patent system, but it does require all participants to meet minimum standards for the protection of intellectual property. How individual countries achieve that goal is left to them.

In addition, an LLC should have an operating agreement that sets out the rights and obligations of the members.

This document is not required, but can be exceedingly helpful, as Jeffrey Horning learned in the opening scenario. If an LLC does not have an operating agreement, then the default provisions of the state's LLC statute govern the organization.

Thomas, aged 80, has spent a lifetime accumulating unspoiled land in Oregon. He owns 16,000 acres, which he plans to leave to his five children. He is not so crazy about his grandchildren. Thomas cringes at the problems the grandchildren would cause if some of them inherited an interest in the land and became part-owners along with Thomas's own children. Should Thomas leave his land to his children as tenants in common or joint tenants?

Thomas is better off leaving the land to his children as joint tenants. That way, when one of his children dies, that child's interest in the land will go to Thomas's surviving children, not to his grandchildren. (There are other approaches Thomas could take, such as creation of a trust, and they are discussed in Chapter 44 on planning for the future.)

Each partner is personally liable for the debts of the enterprise whether or not he caused them

Thus, a partner is liable for any injury that another partner or an employee causes while on partnership business as well as for any contract signed on behalf of the partnership.

copyright infringement

To prove a violation, the plaintiff must present evidence that the work was original and that either -- the infringer actually copied the work or -- the infringer had access to the original and two works are substantially similar

A treaty is ratified when a nation indicates its intent to be bound by it.

To take effect in the United States, treaties must be approved by at least two-thirds of the Senate.

copyright term

Today, a copyright is valid until 70 years after the death of the author, or, in the case of works owned by a corporation, for 95 years from publication or 120 years from creation, whichever is shorter. Once a copyright expires, the work is said to be in the "public domain," meaning that anyone may use the material. Mark Twain died in 1910, so anyone may now publish Tom Sawyer without permission and without paying a copyright fee.

REGIONAL TRADE AGREEMENTS

Trade agreements promoting common policies among member states.

types of marks

Trademarks are affixed to goods. Service marks are used to identify services, not products. Holiday Inn, Burger King, and Weight Watchers are service marks. In this chapter, the terms trademark and mark are used to refer to both trademarks and service marks. Certification marks are words or symbols used by a person or organization to attest that products and services produced by others meet certain standards. The Good Housekeeping Seal of Approval means that the Good Housekeeping organization has determined that a product meets its standards. Collective marks are used to identify members of an organization. The Lions Club, the Girl Scouts of America, and the Masons are examples of collective marks.

regional trage agreements

Treaties that reduce trade restrictions and promote common policies among member nations.

tenancy in common

Two or more people holding equal interest in a property, but with no right of survivorship.

joint of tenancy

Two or more people holding equal interest in a property, with the right of survivorship. This means that when one joint tenant dies, his interest in the property passes to the surviving joint tenants. Joint tenancy has one other curious feature. Although joint tenants may not convey their interest by will, they may do so during their lifetime. If Frank and George own vacation property as joint tenants, Frank has the power to sell his interest to Harry. But as soon as he does so, the joint tenancy is severed: that is, broken. Harry and George are now tenants in common, and the right of survivorship is destroyed.

concurrent estates

Two or more people owning property at the same time. common forms: joint tenency, and tenancy by the entirety

The president negotiates a defense agreement with a foreign government. To take effect, the agreement must be ratified by which of the following?

Two-thirds of the Senate

estates

Types of rights in land.

However, most state laws and the ULLCA provide that an LLC has perpetual existence and, thus, continues in operation even after a member withdraws

Unless, that is, the operating agreement provides otherwise.

LLCs can have members that are corporations, partnerships, or nonresident aliens. LLCs can also have different classes of members

Unlike corporations, LLCs are not required to hold annual meetings or maintain a minute book. unlike s corporation (flexibilitlity)

VIDEO NOTESS

VIDEO NOTESSSS

jus cogens

When rule of customary international law becomes a fundamental legal principle across all nations, it cannot be changed by custom or practice. Slavery, genocide, piracy, and torture are examples of jus cogens. Although these practices still exist in the modern world, no civilized state would say they are acceptable.

Jack arrives at Airport Hotel's valet parking area in a Ferrari, just as Kim drives up in her Smart Car. A valet drives Kim's car away, but the supervisor asks Jack to park the Ferrari himself, in the hotel's lot across the street. Jack parks as instructed, locking the Ferrari and keeping the keys. During the night, both vehicles are stolen. The owners sue for the value of their vehicles—about $10,000 for Kim's Smart Car and $350,000 for Jack's Ferrari. Each owner will win if there was a bailment but lose if there was not. Can either or both prove a bailment?

When the valet drove Kim's car away, the hotel assumed control with intent to possess. The parties created a bailment, and the hotel is liable. But Jack loses. The hotel never had physical control of the Ferrari. Employees did not park the vehicle, and Jack kept the keys. Jack's was a "park and lock" case, with no bailment.

CONCURRENT ESTATES

When two or more people own real property at the same time, they have a concurrent estate. In both a tenancy in common and a joint tenancy, all owners have a share in the entire property. The primary difference is that joint tenants have the right of survivorship, meaning that when a joint tenant dies, his interest passes to the other joint tenants. A tenant in common has the power to leave her estate to her heirs.

new york convension

Widely accepted treaty on the court enforcement of arbitral awards

Austria, Indonesia, and Colombia are all members of the WTO. If Austria imposes a tariff on imports of coffee beans from Colombia, but not from Indonesia, is it in violation of WTO principles?

Yes, Austria is violating the WTO's most favored nation rules.

YOU BE THE JUDGE WRITING PROBLEM Frank Deluca and his son David owned the Sportsman's Pub on Fountain Street in Providence, Rhode Island. The Delucas applied to the city for a license to employ topless dancers in the pub. Did the city have the power to deny the Delucas' request? Argument for the Delucas: Our pub is perfectly legal. Further, no law in Rhode Island prohibits topless dancing. We are morally and legally entitled to present this entertainment. The city should not use some phony moralizing to deny customers what they want. Argument for Providence: This section of Providence is zoned to prohibit topless dancing, just as it is zoned to bar manufacturing. There are other parts of town where the Delucas can open one of their sleazy clubs if they want to, but we are entitled to deny a permit in this area.

Yes, the city could use its zoning powers to deny the license. Earlier zoning ordinances had allowed topless dancing in the section of the city where the pub was located, but the current ordinance prohibited such dancing in that section. The city had no obligation to grant a variance for the Delucas and denied the request. Jonathan Saltzman, "License Is Denied for Topless Dancing at Downtown Pub," Providence Journal-Bulletin, July 11, 1995, p. 2C.

Legal uncertainty

a Delaware court recently decided that a court can, if necessary to avoid an unfair result, overrule both the state LLC statute and any operating agreement.

donor

a person who gives property away

donee

a person who reviceves a gift of property

theres four types of tenancy

a tenancy for years, a periodic tenancy, a tenancy at will, and a tenancy at sufferance

Agreement on Trade Related Aspects of Intellectual Property (TRIPS)

a treaty on intellectual property

The International Monetary Fund

aims to foster worldwide economic growth and financial stability.

The UN Commission on International Trade Law (UNCITRAL)

aims to harmonize international business law by proposing model legislation on such topics as international payments and e-commerce. This agency was responsible for putting forth the UN Convention for the International Sale of Goods (CISG) and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), both significant business-related treaties discussed later in this chapter.

United Nations Convention on Contracts for the International Sale of Goods (CISG)

aims to make sales law more uniform and predictable—and to make international contracting easier. To that end, the treaty relaxes some of the formal rules found in contract law throughout the world, making it simpler for parties to form contracts and live by them. The United States and most of its principal trading partners (except for the United Kingdom) have adopted this important treaty, which governs over two-thirds of the world's trade.

Under the Madrid Agreement,

any trademark registered with the international registry is valid in all signatory countries.

Patent Cooperation Treaty (PCT),

applicants are offered a single filing and streamlined review process. Upon filing an international patent application, inventors receive patent pending protection for 30 months in the 151 PCT member countries, so that they have time to pursue their application.

easement by necessity

arises when the dominant tenement absolutely must make use of other property. Yolanda leases a ninth-floor apartment to Darrin. Darrin has an easement by necessity to use the stairs and elevators since he has no other method of reaching his apartment, short of skydiving.

A limited liability company .

can have an oral operating agreement

Taylor Swift wanted to trademark her song lyrics: "And I'll write your name." She .

can trademark it because it is a short phrase associated with her entertainment services

1996

congress past states securities law uniform laws states cant

Unlike patents, the ideas underlying copyrighted material need not be novel. For example, two 2011 movies—No Strings Attached and Friends with Benefits—are about friends who engage in a casual physical relationship and end up falling in love. The movies have the same plot, but there is no copyright violation because their expressions of the basic idea are different.

copyright does not protect useful creations. For example, fashion designs are not copyrightable because clothes are functional items. Despite the fashion industry's efforts to change the law, only the nonfunctional elements of clothing, such as prints and patterns, are protectable.

According to the company's website, "d.light is a global leader in delivering affordable solar-powered solutions designed for the two billion people in the developing world without access to reliable energy." It is a for-profit enterprise. What form of organization makes the most sense for this business. Why?

d.light is a benefit corporation. It is for profit but uses its profits to provide light to people in the developing world.

. Other infringement remedies include

destruction of the infringing material, up to three times actual damages, any profits the infringer earned on the product, and attorney's fees.

acceptance

donee must accept the gift. This rarely leads to disputes, but if a donee should refuse a gift and then change her mind, she is out of luck. Her repudiation of the donor's offer means there is no gift, and she has no rights in the property.

defenses to copyright infrigments

first sale doctrine: Suppose you buy a textbook that, in the end, you never read. (Unlikely, we know.) Under the first sale doctrine, you have the legal right to sell that textbook. The first sale doctrine permits a person who owns a lawfully made copy of a copyrighted work to sell or otherwise dispose of the copy. ----Note, however, that the first sale doctrine does not permit the owner to make a copy and sell it fair use:

4 kinds of found property

found, lost, mislaid, treasure trove

Non-dischargeable debts

fraudulent debts, students loans, taxes, fines, penalties (dui) child support, any intentional tort

Julie does good deeds for countless people, and many are deeply grateful. On Monday, Wilson tells Julie, "You are a wonderful person, and I have a present for you. I am giving you this baseball, which was the 500th home run hit by one of the great players of all time." He hands her the ball, which is worth nearly half a million dollars.

gift causa mortis is one made in fear of approaching death, and this rule applies to Cassandra. Such a gift is revocable any time before the donor dies, so Cassandra gets her book back. A gift inter vivos is one made without any such fear of death. Most gifts fall in this category, and they are irrevocable. Wilson was not anticipating his demise, so his was a gift inter vivos. Julie keeps the baseball.

Under the Paris Convention

if someone registers a trademark in one country, then he has a grace period of six months, during which he can file in any other country using the same original filing date.

wrongful accession

if the improver knows he is making accessions without authority, the owner may generally take the improved property without paying for the work done. Suppose the lease between Leasing Corp. and Delivery Co. states that Delivery may not modify the truck without written permission. Delivery goes ahead anyway and reconfigures the truck to meet its needs. Even if the work substantially increases the truck's value, Leasing Corp. probably owes nothing for the accessions.

a convention

is a treaty on a specific issue that affects all the participants, like the UN Convention on Contracts for the International Sale of Goods or the Vienna Convention on the Law of Treaties.

a protocol

is an amendment to a treaty. In 1891, a group of countries signed the Madrid Agreement, a treaty creating a registration system for trademarks. Almost 100 years later, the Madrid Protocol updated and strengthened the original treaty to create a uniform process for registering trademarks worldwide.

A nuisance

is an unprivileged interference with a person's use and enjoyment of her property. Offensive noise, odors, or smoke often give rise to nuisance claims. Courts typically balance the utility of the act that is causing the problem against the harm done to neighboring property owners. If a suburban homeowner begins to raise pigs in her backyard, the neighbors may find the bouquet offensive;

A bilateral treaty

is between two countries—similar to a contract between states. The United States and the Bahamas have a bilateral extradition treaty, outlining the process that each country must follow when returning a fugitive to another country's legal system. A multilateral treaty involves three or more countries.

treasure trove

is coins or currency concealed by an owner so long ago that it is likely the owner has died. A sackful of gold coins minted in 1860, found under the roots of a 150-year-old tree, is treasure trove. The finder can generally keep treasure trove.

Bankrupty

is filed under federal jurisdiction -federal courts

The "American rule"

is more favorable to the landlord. (Although called the American rule, this is in fact the minority rule in this country—anything to keep you off balance.) This rule holds that the landlord has no duty to deliver actual possession of the premises. If the previous tenant remains in possession, the landlord has not breached the lease. Under this rule, the new tenant generally has the power to act as a landlord toward the old tenant. The new tenant may evict the old tenant and recover damages caused by her delay in leaving. Alternatively, the new tenant may treat the holdover as a tenant at will for a new rental period and may charge the normal rent for that period.

lost property

is something accidentally given up. A ring that falls off a finger into the street is lost property. Usually, the finder of lost property has rights superior to all the world except the true owner. If the true owner comes forward, he gets his property back; otherwise, the finder may keep it. However, if the finder has discovered the item on land belonging to another, the landowner is probably entitled to keep it.

abandoned property

is something that the owner has knowingly discarded because she no longer wants it. A vase thrown into a garbage can is abandoned. Generally, a finder is permitted to keep abandoned property. But because the owner loses all rights in abandoned property, a court never presumes abandonment. The finder must prove that the owner intended to relinquish all rights.

mislaid property

is something the owner has intentionally placed somewhere and then forgotten. A book deliberately placed on a bus seat by an owner who forgets to take it with her is mislaid property. Generally, the finder gets no rights in property that has simply been mislaid. If the true owner cannot be located, the mislaid item belongs to the owner of the premises where the item was found.

The World Bank's mandate

is to end poverty by encouraging development. Among other activities, it loans money to the poorest countries on favorable terms.

the purpose of bankruptcy

is to stop "frenzy" attack from creditors and to to distribute all assets

A treaty enters into force when it

it becomes legally binding on its signatories. This date may be specified in the treaty or it may be the date on which the treaty receives a certain number of ratifications.

An object is a fixture if

it is attached to property in such a way that removing it would damage the property, it was especially made or adapted to the particular property (such as custom-made bookshelves fitted in a library), or the owner of the property clearly intends the item to remain permanently.

Once an LLC goes public,

it loses its favorable tax status and is taxed as a corporation, not as a partnership Thus, there is no advantage to using the LLC form of organization for a publicly traded company. And there are some disadvantages: Unlike corporations, publicly traded LLCs do not enjoy a well-established set of statutory and case law that is relatively consistent across the many states. For this reason, privately held companies that begin as LLCs often change to corporations when they go public.

periodic tenancy

lease for a fixed period, automatically renewable unless terminated. Suppose a landlord agrees to rent you an apartment "from month to month, rent payable on the first." That is a periodic tenancy.

insolvency

liabilities are greater than assets OR do you have the ability to pay debts as they come due

Two types of bankruptcy

liquidation and reorganization

The Limits of Patentable Subject Matter: Living Organisms and Business Methods

living organisms: The Court held that the bacteria—and other living organisms—could be patented if they are different from anything found in nature, and a product of human ingenuity; that is, if they were made or significantly modified by humans business method patents: The Supreme Court has held that business methods are generally patentable, but has not precisely explained them. In Alice Corporation v. CLS Bank International, the Supreme Court invalidated a patent on an electronic escrow service.

Craig finds a rare 1955 doubled-die penny, worth $1,500, on a city sidewalk outside a coin collectors' convention. The penny is property. If the true owner cannot be found, then the penny will belong to .

lost; Craig

The "English rule"

obligates the landlord to remove the previous tenant in time for the new tenant to take possession. The majority of American states enforce this rule. If the old tenant is still in possession when the new tenant arrives, the landlord has breached the lease She may terminate the lease and sue the landlord for costs she incurs obtaining other accommodations. Or she may affirm the lease, refuse to pay rent for the period in which she cannot take possession, sue for the cost of other accommodations, and then take possession when the old tenant is finally evicted.

The landlord's first important duty is to deliver possession

of the premises at the beginning of the tenancy; that is, to make the rented space available to the tenant. In most cases, this presents no problems and the new tenant moves in.

the Uniform Limited Liability Company Act (ULLCA)

owing to a complex history that involves painful interaction between IRS regulations and state laws (the details of which we will spare you), the specific provisions of state laws vary greatly. An effort to remedy this confusion

Fabric World, a U.S. company, owns and operates a textile factory in the country of Parador. After a political revolution, the new government seizes the factory and refuses to pay for it. It also sells bonds to investors in the United States to raise money to fund government operations and then defaults on their payment. Both Fabric World and the bond investors sue Parador in New York, where it has some large bank accounts. Parador denies liability in both lawsuits, claiming "sovereign immunity." Will this argument succeed in either case?

parador has never waived sovereign immunity. In the Fabric World case, the government enacted new laws that expropriated private property. This is an act of state—not something a business or private citizen could ever do—and so Parador retains immunity. In the case of the bonds, the investors win because the country is engaged in a commercial activity.

bankruptcy begins

petition of bankruptcy is filed, voluntary other type, involuntary the creditors file it for you they force them into bankruptcy

The relationship between landlords and tenants involves three types of law

poperty, contract, and tort law

fraudulent transfer

ppl that are about to file for bankruptcy "sells" assets to family members to avoid losing it. if debitors is found in fraudulent transfer they will be denied a discharge

a court may

prohibit the infringer from committing further violations; order destruction of the infringing material; and require the infringer to pay damages, profits earned, and attorney's fees.

automatic stay

prohibits creditors from collecting debts that the bankrupt incurred before the petition was filed. now creditors cant take action

A limited liability partnership _________

protects the partners from liability for the debts of the partnership

Despite the initial suspicion with which corporations were viewed, economists now suggest that this form of organization, combined with technological advances such as double-entry bookkeeping and stock markets

provided the Western hemisphere with an enormous economic advantage. In particular, the corporate form permitted the creation of large, enduring businesses because corporations could attract outside investors and were more likely than partnerships to survive the death of their founders.

securities act of 1934

regulated companies tht issued securities must filed quarter and yearly reports to prevent misinformation, criminal to commit fraud

securities act of 1933

regulates the issuance of securities (stocks) after 1933 it was criminal to not register stock w SEC Also criminal if u made a material misstatement , everything u say must b true

a sole proprietorship ______

requires no formal steps for its creation

A tenant's personal property will become a fixture and belong to the landlord if its removal would .

result in substantial harm to the landlord's property

Islamic law, also known as

shari'a, is a legal system most commonly found in Africa, Asia, and the Middle East. There is much variation in the interpretation and practice of both Islam and Islamic law.

The Trademark Law Treaty

simplifies and harmonizes the process of applying for trademarks around the world.

liquidation chapter 7

straight bankruptcy, both business and consumer can be voluntary or involuntary -business ceases (no longer exists) sell all the assets and the pay creditors there is no claim to future earnings court appoints a trustee, all assets are taken away from debtor, trustee takes liquidated assets and pays creditors

During the patent application process, third parties have the right to

submit evidence that the invention is not novel. For the nine months after a patent has been granted, third parties have a broad right to challenge its validity in the PTO (without having to go to court).

court will probably issue an abatement

that is, an order requiring the homeowner to eliminate the nuisance.

mitigate damages;

that is, to keep its losses to a minimum by promptly seeking another tenant.

If a country refuses to comply with the WTO's ruling, affected nations may retaliate by imposing punitive tariffs or other measures.

the United States and four Central American countries filed a complaint with the WTO alleging that the European Union (EU) had placed unfair restrictions on the importation of bananas. The WTO agreed, and then granted the United States and Ecuador the right to impose sanctions on EU imports into their countries.

reorganization chapter 11, 13

the company can stay in business they are entitled to future earnings, to pay past debt chapter 11 is for business chapter 13 is for consumer a majority of the creditors must approve the debtors reorganization (they act as trustee themselves)

U.S. citizens Alberto Vilar and Gary Tanaka managed $9 billion in investments through their companies, some of which were located in Panama. The two were arrested in the United States for a massive securities fraud: They had lied to their clients about investments—and used some of the money entrusted to them to repair their homes and buy horses. Vilar and Tanaka claimed that U.S. securities laws did not apply to sales that occurred outside the country. These laws were silent as to their application abroad. Do Vilar and Tanaka have a valid argument?

the court agreed with the defendants: When laws do not explicitly state that they cover conduct abroad, judges cannot interpret them to do so. (Unfortunately for the defendants, they still went to jail on other charges.)

insider trading

the illegal trading of a company's stock by people using confidential company information -nonpublic information !!! can b chargerd if ur tipper/ tippee

gharar

the inslamic prohibition on risk and decpetion

If an examiner denies a patent application for any reason

the inventor can appeal that decision to the Patent Trial and Appeal Board in the PTO and from there to the Court of Appeals for the Federal Circuit in Washington, D.C

international court of justice

the judicial branch of the united nations In 1946, the UN opened the doors the ICJ settles international legal disputes and gives advisory opinions to the UN and its agencies. It is comprised of 15 elected judges from 15 countries representing the world's principal legal systems.

free trade

the major focus of this treaty is to reduce trade barriers

To be valid, a trademark must be distinctive

the mark must clearly distinguish one product from another and identify the product's source.

The ability to take this 20 percent deduction depends upon factors such as:

the owners' income, the kind of business they own, and how much they pay their workers.

the goals of the end of bankruptcy

the person gets a discharge

VitaminWater has become such a success that other companies are also now selling similar (but not identical) flavored colored water. Some competitors bottle their drinks in a similar bell-shaped bottle with a two-toned label that has a horizontal color band. What is the best infringement claim for VitaminWater to make against these competitors?

trademark

sources of international law

treaties custome and gerneral principles of law

utility patents

utility patents protect how they work. Utility patents are valid for 20 years from the date of filing the application. Utility patents are available to those who invent (or significantly improve) any of the following:

The World Intellectual Property Organization (WIPO)

was established to promote the protection of intellectual property: patents, copyrights, trademarks, and industrial design. The organization also has a system for domain name dispute resolution, to which private parties often resort when challenging the illicit international use of domain names.

if you buy a DVD you have the legal right to

watch it as many times as you want and then give it away

how to choose over chapter 7, over 11/13

what makes money in the long run

A treaty is said to be adopted

when those who have drafted it agree that it is in final form.

Both Delaware law and the ULLCA permit oral operating agreements,

which adds a whole new level of complication. How can you tell (without litigating) whether an unsigned operating agreement is enforceable or, indeed, whether any other discussions could be interpreted to be an enforceable agreement? And then you have to determine whether the Statute of Frauds requires a writing. In short, be careful.

building codes

which mandate minimum standards for commercial and/or residential property. The codes are likely to be stricter for residential property and may demand such things as minimum room size, sufficient hot water, secure locks, proper working kitchens and bathrooms, absence of insects and rodents, and other basics of decent housing.

sovereignty

which means that each government has the absolute authority to rule its people and its territory. Under this principle, states are prohibited from interfering in each other's legislative, administrative, or judicial activities.

tacking

which permits her to add on to her years of occupancy any years certain predecessors were in possession. The predecessors must have been in privity with the current user, meaning there was some legal relationship. Suppose that for 12 years, Martha adversely possesses land owned by Jake. Martha then moves, selling her interest in the land to Nancy, who occupies the land for nine years. The total of 21 years is sufficient for adverse possession in any state, and Nancy now owns the land.

Victoria's Secret, a well-known lingerie company, found out that a man named Victor Moseley was running a small store in Kentucky named "Victor's Little Secret." Moseley's shop sold clocks, patches, temporary tattoos, stuffed animals, coffee mugs, leather biker wallets, Zippo lighters, diet formula, jigsaw puzzles, jewelry, candles, and adult novelties. Women's lingerie represented about 5 percent of its sales. Does Victoria's Secret have a valid intellectual property claim?

yes, it won a claim under the trademark dilution act