Legal Environment of Business (Chapters 8-13)

types of businesses impacted by zoning

- adult-themed businesses - feedlots and agricultural operations - chemical plants - landfills and trash dumps

types of contracts covered by Statute of Frauds

- contracts for the sale of real property (land) - contracts that cannot be performed within one year - promises to pay the debt of another, including the debts of an estate - promises made in consideration of marriage

rights and duties of tenants

- right of exclusive possession for a set time - implied warranty of habitability - cannot abuse the property by changing it in ways that will affect it after the lease ends - cannot be a nuisance to neighbors or engage in illegal activities

common terms in commercial leases cover:

- security deposits - (specific) use of the property - maintenance and repair responsibilities - how alterations will be handled - right to sublease - early termination provision - insurance - responsibility for attorney's fees - prohibitions on hazardous substances - right of inspection - taxes - utilities - what signage will be allowed - liability waivers - damage provisions - what happens if eminent domain forces relocation - subordination to mortgage - dispute resolution

acceptance

1. expression of assent or agreement to the terms of an offer 2. must be unconditional, unequivocal, and properly communicated 3. any words or conduct indicating the intent to accept can be effective 4. must be properly communicated

criteria for trade secrets

1. it is not known by the competition 2. the business would lose its advantage if the competition were to obtain it 3. the owner has taken reasonable steps to protect the secret from disclosure

communication by offeror

1. offer, when received by offeree, offeree has the power to accept 2. revocation, when received by offeree, ends offeree's power to accept

communication by offeree

1. rejection, when received by offeror, terminates the offer 2. counteroffer, when received by offeror, terminates the offer 3. acceptance, when sent by offeree, forms a contract

four factors of fair use

1. the purpose and character of the copying (commercial use or nonprofit educational use) 2. the nature of the copyrighted work 3. the extent of the copying 4. the effect of the copying on the market for the work

Copyright Act gives a copyright owner five rights

1. the right to reproduce the work 2. the right to publish or distribute the work 3. the right to display the work in public 4. the right to perform the work in public 5. the right to prepare derivative works based on the original work

three requirements of an offer

1. there must be a clear intent by the offeror to become contractually bound 2. the basic terms and conditions of the offer must be clear and certain 3. the offer must be properly communicated

quitclaim deed

a conveyance that passes whatever interests the guarantor had in the property

promissory estoppel

a doctrine used by courts that does not require consideration for a promise to be enforceable

trust

a form of property ownership that separates the legal and beneficial ownership of property

trade secret

a formula, pattern, device, or compilation of information that a business uses

police power

a general rule of the states to enact laws to protect public safety, health, and order so long as due process and equal protection are not violated

patent

a grant from the government for the right to exclude others from making, using, offering for sale, or selling the invention for 20 years; apply to products, processes, acts, or methods

offer

a promise to do something or refrain from doing something

certification mark

a word, symbol, device, or other combination of these that is used or intended to be used in commerce to certify regional or geographic origin

unilateral contract

acceptance by performance

infringement

action in tort for wrongful and unauthorized use of intellectual property

lease

agreement by which a leasing arrangement is set up

private nuisance

an activity that substantially and unreasonably interferes with the use and enjoyment of another's land

contract

an agreement, upon consideration, to do or not to do a particular thing

bilateral contract

an exchange of promises

types of trademarks

arbitrary and fanciful, suggestive, descriptive, generic (no longer trademarks)

implied contract

arises from actions rather than expressions of the parties

bilateral mistake

both parties are wrong about presumed facts important to the deal; either party can rescind

contracts in restraint of trade

can be unenforceable because competition is encouraged

profit easement

can give or sell the right to remove valuable things from an estate

negative easement

cannot do certain things would be able to do normally

title

comes from receipt of a valid deed and is the means by which the owner of property has legal possession of the property

counterfeiting

copying or imitating the mark of another without authority

Erichsen v. No-Frills

criminal acts were not forseeable, but the owner had a responsibility to take precautions

positive easement

cross the land to get to another property

fair use

defense to a claim of copyright infringement

commercial symbols

designs, logos, phrases, distinctive marks, names, or words a manufacturer puts on its goods so they can readily be identified in the market

Moran v. Sims

easement was granted to Sims due to historical use

legality

for a contract to be valid, its subject matter must be lawful

Kelo v. New London

government used eminent domain to take her house for a Pfizer plant; now meant public benefit and not just public use

terms and conditions of an offer

have to be detailed enough that the parties' promises to each other are certain

suggestive trademarks

hint at the product ex: Orange Crush, Dairy Queen, Playboy

beneficiary

holds an equitable title to the property

trustee

holds the legal title to the property and can make all decisions about the property

adverse possession

hostile uses of the land of another, which can lead to formal ownership (use must be actual, open, hostile, exclusive, and continuous)

parol evidence rule

if the contract was intended to be the full and complete deal, extrinsic evidence will not be admitted to change or add terms

arbitrary and fanciful trademarks

inherently distinctive (fanciful) or names not related to the product (arbitrary) ex: Polaroid, Lexus, Clorox

trespass to personal property

intentional and unlawful control of the personal property of another

conversion

intentional and unlawful control of the personal property of another, which is so serious it justifies payment

real property

land, which includes things under the land, such as oil and minerals, and things attached to the land, such as buildings and trees

leasehold

legal term for a rental property

clear title

means no other party can claim valid ownership

descriptive trademarks

must be shown to have acquired customer recognition ex: Raisin Bran, Yellow Pages, Holiday Inn

sufficiency of the writing

must give material terms of the contract and be signed by at least the defendant

trade name

name of a business used in practice; can be the same as the trade name of the product

essence of a contract

negotiations → offer → acceptance → parties perform duties → contract completed

Pena v. Fox

no contract because the offer and the acceptance did not match

unconscionable contracts

occur when one of the parties, being in a strong position, takes advantage of the other party

undue influence

occurs when someone exploits an influence to convince someone to sign

revocation

offer can be withdrawn or revoked

commercial leases

often drafted by the lessor's legal department based on state law requirements and experience

estate

one may have possession of land now or may have the right to take possession of land at some point in the future

unilateral mistake

one party enters into the contract based on false information or accidentally makes a significant error; if one party knows there is a problem with the deal, it will not be enforceable

landlord

owner of the property

tenancy in common

ownership in which each owner has an undivided interest in the property; if one dies, their interest goes to their estate or heirs

joint tenancy

ownership in which two or more persons have the same interest in the undivided possession of property; if one owner dies, their interest passes to the other owner

tenant

party with right of possession for a certain period of time

eminent domain

power of a government to take private property for public use

Statute of Frauds

prevents parties from claiming that a contract existed when in fact it did not

Audi AG v. D'Amato

products infringed on Audi trademark and diluted brand (no control over quality or what products are sold)

warranty deed

promises that the seller is conveying a good, clear title to the property

exculpatory agreement

releases one party from the consequences brought about by their wrongful acts or negligence

life estate

right to be a tenant for one's life, terminates upon their death

copyright

rights of literary property recognized by law; books, poems, musical works, and other written compositions

statutes of limitations

rules for the number of years the adverse possession must occur before it becomes a legally protected possession

covenants

run with the land and are a means by which owners of estates in land can make agreements that bind their successors - common in residential neighborhoods - generally enforceable unless they violate public policy

collective mark

similar concept to certification mark; used by a union, association, or other organization

fee simple

simplest form of ownership; extend to the skies and the center of the Earth

duress

someone is forced to sign a contract

consideration

something of value or something bargained for in exchange for a promise; courts only care if mutual promises were made

Lanham Act

strengthens the common law protection of trademarks

special warranty deed

the grantor warrants that the buyer or grantee has received title, and that the property was not encumbered during the ownership by the grantor, but does not warrant things that may have happened prior to ownership by the current seller

capacity

the legal ability to create a contract

trade dress

the look and feel of products and service establishments; must have secondary feel and identify the maker

mirror image rule

the offer and the acceptance have to match

premises liability

the owner of the property has a duty to keep the premises reasonably safe under the circumstances

deed

the primary way to transfer ownership interests (title) in property

goodwill

the reputation of the firm or company; gives value to trademarks and other intellectual property; can be more valuable than a company's physical property

easement

the right to enter land owned by another and make certain use of it

a contract is void if

the subject matter is illegal or the law changes to make them illegal

economic espionage

theft of commercial trade secrets; can lead to criminal prosecution

misappropriation

tort against intellectual property, including trademarks and trade secrets

forms of intellectual property

trademarks, copyrights, patents, trade secrets

cybersquatting

trying to capture value in a domain name from another company's trademark

trespass to land

unauthorized intrusion by a person or thing on land belonging to another

public nuisance

unreasonable interference with a right held in common by the general public (usually involves health or welfare)

title insurance

used to make sure: - chain of title is clear - no mortgages, taxes, or liens exist - boundaries are clearly established - the deed is properly prepared

zoning

when the land in an area, usually a city, is divided into categories according to the kinds of structures that may be built, the purposes of the use of the land, and other regulations that may apply to different parcels of property

generic trademarks

words that are common and do not refer to products from a specific producer ex: trampoline, thermos, zipper

express contract

written or oral expression of intent