Business Law Final Exam Study Guide

Partially disclosed principal

a principal whose identity is unknown by a third party, but the third party knows that the agent is or may be acting for a principal at the time the agent and the third part form a contract

Agency

a relationship between two parties in which one party (the agent) agrees to represent or act for the other (the principal)

Comparative Negligence

a rule in tort law, used in the majority of states, that reduces the plaintiff's recovery in proportion to the plaintiff's degree of fault, rather than barring recovery completely (the plaintiff's damages are decreased by the percentage they are deemed at fault)

Partnership

an agreement by two or more persons to carry on, as co-owners, a business for profit

Undue hardship

an employer is not required to make an accommodation that requires the employer to make changes that are disproportionately a burden or obstacle

Immigration Reform and Control Act (IRCA)

it originally provided amnesty to certain groups of illegal aliens living in the US and established a system that sanctions employers who hire illegal immigrants lacking work authorization (Illegal to hire, recruit, or refer for a fee someone not authorized to work in this country)

OSHA (Occupational Safety and Health Act)

law that requires that employers provide their employees with working conditions that are free of known dangers (safe and healthy working conditions)

Proximate Cause

legal cause; it exists when the connection between an act and an injury is strong enough to justify imposing liability

Independent Contractor

one who works for, and receives payment from, an employer but whose working conditions and methods are not controlled by the employer

You are eligible to take a family medical leave up to 12 weeks within a 12 month period for what reasons:

(1) Care for a newborn baby within one year of birth (2) To care for an adopted or foster child within one year of the time the child is placed with the employee (3) To care for the employee's spouse, child, or parent who has a serious health condition (4) If the employee suffers from a serious health condition and is unable to perform the essential functions of her or his job (5) For any qualifying exigency (nonmedical emergency) arising out of the fact that the employee's spouse, son, daughter, or parent is a covered military member on active duty

Requirements for defamation to be established:

(1) Defendant made a false statement of fact (2) The statement was understood as being about the plaintiff and tended to harm the plaintiff's reputation (3) The statement was published to at least one person other than the plaintiff (4) If the plaintiff is a public figure, she or he must prove actual malice

What are the 4 elements of negligence?

(1) Duty - the defendant owed a duty of care to the plaintiff (2) Breach - the defendant breached that duty (3) Causation - the defendant's breach caused the plaintiff injury (4) Damages - the plaintiff suffered a legally recognizable injury

What questions are used to determine the difference between an employee and independent contractor?

(1) How much control can the employer exercise over the details of the work? (If an employer can exercise considerable control over the details of the work, this indicates employee status. This is perhaps the most important factor weighed by the courts in determining employee status.) (2) Is the worker engaged in an occupation or business distinct from that of the employer? (If so, this points to independent-contractor status, not employee status.) (3) Is the work usually done under the employer's direction or by a specialist without supervision? (If the work is usually done under the employer's direction, this indicates employee status.) (4) Does the employer supply the tools at the place of work? (If so, this indicates employee status.) (5) For how long is the person employed? (If the person is employed for a long period of time, this indi-cates employee status.) (6) What is the method of payment—by time period or at the completion of the job? (Payment by time period, such as once every two weeks or once a month, indicates employee status.) (7) What degree of skill is required of the worker? (If little skill is required, this may indicate employee status.)

The National Labor Relations Act regulated labor and classifies the following as unfair labor:

(1) Interference with the efforts of employees to form, join, or assist labor organizations or to engage in concerted activities for mutual aid or protection. (2) An employer's domination of a labor organization or contribution of financial or other support to it. (3) Discrimination in the hiring or awarding of tenure to employees based on union affiliation. (4) Discrimination against employees for filing charges under the act or giving testimony under the act. (5) Refusal to bargain collectively with the duly designated representative of the employees

2 Types of Assumption of Risk

(1) Knowledge of the risk (knew or should have known) (2) Voluntary assumption of the risk (did it on their own volition)

What are the two forms of sexual harassment?

(1) Quid pro quo → "if you sleep with me, I will give you a promotion" (2) Hostile Work Environment → think "Wolf of Wallstreet"

Requirements for Receiving Workers' Compensation

(1) The existence of an employment relationship (2) An accidental injury that occurred on the job or in the course of employment, regardless of fault (injury that occurs while an employee is commuting to or from work usually is not considered to have occurred on the job or in the course of employment and hence is not covered)

Advantages of Sole Proprietorship

- Flexibility - Taxes (only personal income taxes on the business's profits so certain retirement accounts can be tax-exempt until funds are withdrawn)

Discrimination based on age

- You have to be 40 or older to have an actual claim !! - Age Discrimination in Employment Act (ADEA) prohibits employment discrimination on the basis of age against individuals forty years of age or older

Child Labor Rule

14 and under can only do certain types of work (for their parents, entertainment, agriculture, delivering newspapers)

When does a principal hold liability on an agent?

A principal who authorizes an agent to commit a tort may be liable to persons or property injured while completing the tort because the act is considered to be the principal's; The principal is always directly responsible for an agent's misrepresentation made within the scope of the agent's authority

Publication Requirements for Defamation

A third party needs to hear it as a witness (could be in written or verbal form)

Discrimination based on disability

Americans with Disabilities Act (ADA) prohibits discrimination against persons with a mental or physical impairment that substantially limits a major life activity, or who have a record of such an impairment or who are regarded as having such an impairment, or who are associated with a disabled person (must have equal health insurance options)

Statement of Opinion

Can not be proven; not actionable because they are protected by the First Amendment

Wage discrimination

Equal Pay Act requires equal pay for male and female employees doing similar work at the same establishment

Visa Program

H-1B visa can be obtained when a potential employee qualified in a "specialty occupation" and the individual has highly specialized knowledge and has attached a bachelor's or higher degree or its equivalent (Those with this visa can stay in the US for 3-6 years and can work only for the sponsoring employer)

What is the Palsgraf Case?

Hellen Palsgraf was waiting for a train. A man carrying a packaged rushed onto the train and accidentally dropped his package. The package had fireworks and they want off, exploding the railroad tracks and knocking a scale on the platform onto Palsgraf. She tried to sue the railroad company but the court said that the train station was not negligent

Public Figures

In general, public figures are considered fair game, and false and defamatory statements about them that appear in the media will not constitute defamation unless the statements are made with actual malice

Privileged Communication

In some circumstances, a person will not be liable for defamatory statements because she or he enjoys a privilege or immunity.

Agency by Agreement of the Parties

Most agency relationships are based on an express or implied agreement that the agent will act for the principal and that the principal agrees to have the agent so act. An agency agreement can take the form of an express written contract or be created by an oral agreement

Undisclosed principal

a principal whose identity is unknown by a third party, and the third party has no knowledge that the agent is acting for a principal at the time the agent and the third party form a contract

Pregnancy discrimination

Pregnancy Discrimination Act amended the Title VII and expanded the definition of gender discrimination to include discrimination based on pregnancy (Women affected by pregnancy, childbirth, or related medical conditions must be treated the same as other persons not so affected by similar in ability to work)

Agency by Estoppel

Principal causes a third person to believe that another person is his or her agent; the principal's actions create the appearance of an agency that does not in fact exist (It is the deeds or statements of the principal that creates an agency by estoppel)

Cooperation (Duties of the Principal)

Principal must cooperate with and assist the agent in performing his or her duties

Compensation (Duties of the Principal)

Principal must pay the agreed-on (or reasonable) value for the agent's services

Safe Working Conditions (Duties of the Principal)

Principal must provide a safe working environment for agents and employees

Who is liable for their crimes?

The agent (not the principal)

Causation in Fact

The court must first determine if the injury occurred because of the defendant's act. If an injury would not have occurred without the defendant's act, then there is causation in fact

False Imprisonment

The intentional confinement or restraint of another person's activities without justification

Disadvantages of Sole Proprietorship

The proprietor alone bears the burden of any losses or liabilities incurred by the business enterprise (they have unlimited liability)

Why is an employer not liable for physical harm caused to a third person by the negligent act of an independent contractor?

This is because the employer does not have the right to control the details of an independent contractor's performance

What happens if an agent commits a negligent act?

When an agent commits a negligent act, both the agent and the principal are liable

Disclosed principal

a principal whose identity is known to a third party at the time the agent makes a contract with the third party

Employment at Will

a common law doctrine under which either party may terminate an employment relationship at any time for any reason unless a contract specifies otherwise

Business Necessity

a defense to alleged employment discrimination in which the employer demonstrates that an employment practice that discriminates against members of a protected class is related to job performance

Assumption of Risk

a defense to negligence. A plaintiff who voluntarily enters into a risky situation, knowing the risk involved, will not be allowed to recover.

Green Card/ I-551 Permanent Resident Card

a document, known as a "green card" that shows that a foreign-born individual can legally work in the United States

Closed Shop

a firm that requires union membership as a condition of employment, which is illegal

Disparate-treatment discrimination

a form of employment discrimination that results when an employer intentionally discriminates against employees who are members of protected classes (intentional discrimination)

Protected class

a group of persons protected by specific laws because of the group's defining characteristics, including race, color, religion, national origin, gender, age, and disability

Compensatory Damages

a monetary award equivalent to the actual value of injuries or damage sustained by the aggrieved party

Agency by Ratification

a party's act of accepting or giving legal force to a contract or other obligation entered into by another that previously was not enforceable

Right to work law

a state law providing that employees may not be required to join a union as a condition of retaining employment

Statement of Fact

a statement that can be verified or proven right or wrong (If it is a statement of fact and it's not true, that is when potential defamation suit comes to play)

Loyalty (Duties of the Agent)

agent has a duty to act solely for the principal's benefit

Implied authority

agent has implied authority to do what is reasonably necessary to carry out his or her express authority and accomplish the objectives of the agency (can be implied by custom or inferred from the position the agent occupies)

Notification (Duties of the Agent)

agent is required to notify the principal of all matters that concern the subject of the agency

Obedience (Duties of the Agent)

agent must follow all lawful and stated instructions from the principal

Accounting (Duties of the Agent)

agent must provide records of all property and funds received or paid out on the principal's behalf

Performance (Duties of the Agent)

agent must use reasonable diligence and skill when performing duties

Family Medical Leave Act

allows employees to take time off from work for family or medical reasons and in certain situations that arise from military service

Tort of Intentional Infliction of Emotional Distress

an extreme and outrageous act, intentionally committed, that results in severe emotional distress to another

Assault

any word or action intended to make another person fearful of immediate physical harm - a reasonably believable threat (assault tort is civil but it can also be a criminal charge)

Express authority

authority declared in clear, direct, and definite terms (can be given orally or in writing)

Apparent authority

authority that is only apparent, not real. An agent's apparent authority arises when the principal causes a third party to believe that the agent has authority even though she or he does not

Public Policy (exemption to the employment at will doctrine)

basis that the worker was fired for reasons that violate a fundamental public policy of the jurisdiction (example, whistleblowing / when employee discloses that an employer is engaging in unsafe or illegal activities)

Reasonable Foreseeability

being able to reasonably determine or predict that something would happen (if it is obvious that something bad could happen and a company does nothing to prevent said occurrence, the company is negligent)

Second defense against an employment discrimination action

claim Bona Fide Occupational Qualification (certain characteristic is needed to normally operate a particular duty)

Slander

defamation in oral form

Libel

defamation in writing or another form having the quality of permanence (such as a digital recording)

Reverse discrimination

discrimination against the majority individuals, such as white males

Disparate Impact Discrimination

discrimination that results from certain employer practices or procedures that, although not discriminatory on their face, have a discriminatory effect (unintentional discrimination)

Respondeat Superior

doctrine under which a principal or an employer is held liable for the wrongful acts committed by agents or employees acting within the course and scope of their agency or employment; However, most intentional torts that employees commit have no relation to their employment. Thus, their employers will not be held liable

Requisite Intent

doing an action that has a clear end result; example: you shoot a gun in the air so you have the requisite intent of hurting someone (even if you did not direct the bullet to someone, there is still the chance of hurting someone when you shot the gun in the air)

Overtime provisions and exemptions

employees who work more than forty hours per week normally must be paid 1.5 times their regular pay for all hours over forty; employees exempt from this = executive and administrative employees, outside salesperson, and computer employees

First defense against an employment discrimination action

employer charged with employment discrimination should asset that the plaintiff has failed to meet his/her initial burden of proving that discrimination occurred

Reasonable accommodation

employer must reasonably accommodate the religious practices of its employees, unless to do so would cause undue hardship to the employer's business (such as adjusting the work environment or schedule)

Workers Compensation Laws

state statutes that establish an administrative process for compensating workers for injuries that arise in the course of their employment, regardless of fault

Trespass to Land

entry onto, above, or below the surface of land owned by another without the owner's permission or legal authorization; Causes anything to enter onto land owned by another; Remains on land owned by another or permits anything to remain on it Ex: walking or driving on another's land, shooting a gun over another's land, and throw-ing rocks at a building that belongs to someone else

Defamation

false statements of the face that are published or publicly spoken and that cause injury to another's a good reputation

Agency by Operation of Law

if an agent cannot contact the principal and failure to act would cause the principal substantial loss, the agent may take steps beyond the scope of her/his authority (When there is an absence of a formal agreement in other situations - usually in family relationships)

Contract theory (exemption to employment at will doctrine)

if an employee is fired outside the terms of the implied contract, he or she may succeed in an action for breach of contract even though no written employment contract exists

Tort Theory (exemption to the employment at will doctrine)

if the discharge of an employee gives rise to an action for wrongful discharge under tort theories (abusive discharge could be seen as intentional infliction of emotional distress or defamation)

Strict Liability

liability regardless of fault, which is imposed on those engaged in abnormally dangerous activities, on persons who keep dangerous animals, and on manufacturers or sellers that introduce into commerce defective and unreasonably dangerous goods

Punitive Damages

monetary damages that may be awarded to a plaintiff to punish the defendant and deter similar conduct in the future

Privileged Communication Type - Absolute Privilege

occurs in judicial proceedings and legislative hearings

50 Percent Rule

prevents the plaintiff from recovering any damages if she or he was more than 50 percent at fault

Liability for contracts

principal is classified and on whether the actions of the agent were authorized or unauthorized

Reimbursement and Indemnification (Duties of the Principal)

principal must reimburse the agent for any funds paid out at the principal's request, as well as for necessary expenses

Norris-LaGuardia Act

protected peaceful strikes, picketing, and boycotts

Actual Malice

the deliberate intent to cause harm that exists when a person makes a statement with either knowledge of its falsity or reckless disregard of the truth; required for defamation to be claimed by public figures because there is often a lot of fake news in media about these figures (not all fake news can be considered defamation)

Sexual harassment

the demanding of sexual favors in return for job promotions or other benefits, or language or conduct that is so sexually offensive that it creates a hostile working environment

Product Liability

the liability of manufacturers, sellers, and lessors of goods to consumers, users, and bystanders for injuries or damages that are caused by the goods

Minimum Wage

the lowest wage, either by government regulation or union contract, that an employer may pay an hourly worker

Collective bargaining

the process by which labor and management negotiate the terms and conditions of employment

I-9 Verification

the process of verifying the employment eligibility and identity of a new worker. It must be completed within three days after the worker commences employment

Sole Propriotorship

the simplest form of business, in which the owner is the business. The owner reports business income on his or her personal income tax return and is legally responsible for all debts and obligations incurred by the business

Reasonable Persons Standard

the standard of behavior expected of a hypothetical "reasonable person." It is the standard that must be observed to avoid liability for negligence

Battery

unexcused harmful or offensive physical contact with another that is intentionally performed (battery tort is civil but it can also be a criminal charge); battery tends to come after assault

Privileged Communication Type - Qualified Privilege

when statements are made in good faith and communicated only to those who have a legitimate interest