BLAW 3210

Mrs. Palsgraf (P) was standing on a Long Island Railroad (D) train platform when two men ran to catch a train. The second man was carrying a small package containing fireworks. He was helped aboard the train by one guard on the platform and another on the train. The man dropped the package which exploded when it hit the tracks. The shock of the explosion caused scales at the other end of the platform many feet away to fall, striking and injuring Palsgraf. Palsgraf brought a personal injury lawsuit against Long Island Railroad and the railroad appealed the court's judgment in favor of Palsgraf. The judgment was affirmed on appeal and Long Island Railroad appealed. Majority opinion by Judge Cardozo: A duty that is owed must be determined from the risk that can reasonably be foreseen under the circumstances. A defendant owes a duty of care only to those who are in the reasonably foreseeable zone of danger. Judge Andrews dissent: Everyone owes the world at large the duty of refraining from acts that may unreasonably threaten the safety of others. The proximate cause (liability), involved as it may be with many other causes, must be, at the least, something without which the event would not happen. The court must ask itself whether there was a natural and continuous sequence between cause and effect. Was the one a substantial factor in producing the other? In determining proximate cause the court must ask whether there was a natural and continuous sequence between the cause and effect and not whether the act would reasonably be expected to injure another. The court must consider that the greater the distance between the cause and the effect in time and space, the greater the likelihood that other causes intervene to affect the result

Palsgraf V Long Island R.R. Co (Release- more serious injuries)

provides that, when parties enter a written contract that they intend as a complete integration (final statement of agreement), a court will not permit evidence of contemporaneous or prior statements to contradict, add to, or alter the terms of the written contract. There are exceptions to the parol evidence rule, but what you need to know to understand the conclusion of the following case is that the court will disregard the parol evidence rule (that prevents bringing in evidence outside of the four corners of the k document to explain the k) in order to achieve justice

Parol Evidence (what fits inside the four corners)

unfairness in the bargaining process (i.e. the use of fine print or inconspicuously placed terms, complex, legalistic language, & high pressure sales tactics), lack of voluntariness (imbalance in parties' bargaining positions, weaker party is unable to negotiate more favorable terms b/c of economic need, lack of time, or market factors), unequal bargaining power does not make a contract unconscionable, it's the exploitation

Procedural Unconscionability

24. the party that detrimentally relied on the promise may hold the promisor contractually obligated; the promisor is estopped from raising defenses to the K.; in certain situations one person might rely on a promise made by another even though the promise and the relevant circumstances are not sufficient to justify the conclusion that a contract exists (i.e. grandfather's promise to pay his granddaughter interest on a demand note he gave her so that she would not have to work was enforced against him after she quit her job in reliance on his promise); promise that the promisor should foresee is likely to induce reliance

Promissory Estoppel aka Detrimental Reliance

24. Quasi-Contract is a remedy to prevent Unjust Enrichment and also known by the less-often used Contract Implied-in-Law; An obligation imposed by law to prevent unjust enrichment. Also called a contract implied in law or a constructive contract, a quasi contract may be presumed by a court in the absence of a true contract, but not where a contract—either express or implied in fact—covering the same subject matter already exists. Because a quasi contract is not a true contract, mutual assent is not necessary, and a court may impose an obligation without regard to the intent of the parties. When a party sues for damages under a quasi-contract, the remedy is typically restitution or recovery under a theory of quantum meruit. Liability is determined on a case-by-case basis.; Latin for "as much as he has deserved." An equitable remedy that provides restitution for unjust enrichment. Damages awarded in an amount considered reasonable to compensate a person who has provided services in a quasi-contractual relationship. See quasi-contract. A claim in quantum meruit is usually an action to recover the reasonable value of services rendered by one party to another

Quasi Contract/Unjust Enrichment/Quantam Meruit

1. David Leon Riley belonged to the Lincoln Park gang of San Diego, California. On August 2, 2009, he and others opened fire on a rival gang member driving past them. The shooters then got into Riley's Oldsmobile and drove away. On August 22, 2009, the police pulled Riley over driving a different car; he was driving on expired license registration tags. Because Riley's driver's license was suspended, police policy required that the car be impounded. Before a car is impounded, police are required to perform an inventory search to confirm that the vehicle has all its components at the time of seizure, to protect against liability claims in the future, and to discover hidden contraband. During the search, police located two guns and subsequently arrested Riley for possession of the firearms. Riley had his cell phone in his pocket when he was arrested, so a gang unit detective analyzed videos and photographs of Riley making gang signs and other gang indicia that were stored on the phone to determine whether Riley was gang affiliated. Riley was subsequently tied to the shooting on August 2 via ballistics tests, and separate charges were brought to include shooting at an occupied vehicle, attempted murder, and assault with a semi-automatic firearm. Before trial, Riley moved to suppress the evidence regarding his gang affiliation that had been acquired through his cell phone. His motion was denied. At trial, a gang expert testified to Riley's membership in the Lincoln Park gang, the rivalry between the gangs involved, and why the shooting could have been gang-related. The jury convicted Riley on all three counts and sentenced to fifteen years to life in prison. The California Court of Appeal, Fourth District, Division 1, affirmed. Was the evidence admitted at trial from Riley's cell phone discovered through a search that violated his Fourth Amendment right to be free from unreasonable searches? Unanimous decision for Riley majority opinion by John G. Roberts, Jr. : A warrantless cell phone search violates the Fourth Amendment right to privacy. Yes. Chief Justice John G. Roberts, Jr. wrote the opinion for the unanimous Court. The Court held that the warrantless search exception following an arrest exists for the purposes of protecting officer safety and preserving evidence, neither of which is at issue in the search of digital data. The digital data cannot be used as a weapon to harm an arresting officer, and police officers have the ability to preserve evidence while awaiting a warrant by disconnecting the phone from the network and placing the phone in a "Faraday bag." The Court characterized cell phones as minicomputers filled with massive amounts of private information, which distinguished them from the traditional items that can be seized from an arrestee's person, such as a wallet. The Court also held that information accessible via the phone but stored using "cloud computing" is not even "on the arrestee's person." [My comment: Therefore, it is not the same as a traditional search with an officer looking in a 'container" found on the suspect's person (e.g., a pack of cigarettes that might contain a razor blade), but rather a search of data found on a remote server that poses no danger to the officer.] Nonetheless, the Court held that some warrantless searches of cell phones might be permitted in an emergency: when the government's interests are so compelling that a search would be reasonable.

Riley v California (digital data search- not warranted)

Night games are now played at Wrigley Field (partly because of television contracts and added revenue). The business judgment rule protects management when they decide not to install lights and it protects management when it decides to install them.The above does not mean management can get away with anything...;By these thoughts we do not mean to say that we have decided that the decision of the directors was a correct one. That is beyond our jurisdiction and ability. We are merely saying that the decision is one properly before directors and the motives alleged in the amended complaint showed no fraud, illegality or conflict of interest in their making of that decision.

Shlensky v Wrigley (business judgement rule)

Spokeo operates a "people search engine," which searches a wide spectrum of databases to gather and provide personal information about individuals to various users, including prospective employers. After Robins discovered that his Spokeo-generated profile contained inaccurate information, he filed a class-action complaint alleging that the company willfully failed to comply with the Fair Credit Reporting Act of 1970, 15 U.S.C. 1681e(b). The district court dismissed. The Ninth Circuit reversed, reasoning that Robins' "personal interests in the handling of his credit information are individualized." The Supreme Court vacated. A plaintiff invoking federal jurisdiction bears the burden of establishing the "irreducible constitutional minimum" of standing by demonstrating an injury in fact, fairly traceable to the defendant's challenged conduct, likely to be redressed by a favorable judicial decision. A plaintiff must show that he suffered "an invasion of a legally protected interest" that is "concrete and particularized" and "actual or imminent, not conjectural or hypothetical." The Ninth Circuit' focused on particularization: the requirement that an injury "affect the plaintiff in a personal and individual way," but an injury in fact must be both concrete and particularized. Concreteness requires an injury to actually exist; a plaintiff does not automatically satisfy the injury-in-fact requirement whenever a statute grants a right and purports to authorize a suit to vindicate it... The Court did not rule on the correctness of the Ninth Circuit's ultimate conclusion, but stated that Robins cannot satisfy Article III by alleging a bare procedural violation

Spokeo Inc V Robins (Standing)

A plaintiff must show that he suffered "an invasion of a legally protected interest" that is "concrete and particularized" and "actual or imminent, not conjectural or hypothetical." An injury in fact must be both concrete and particularized. Concreteness requires an injury to actually exist

Standing

24. Seller filled out a Property Disclosure Statement that acknowledged that when it rains the basement occasionally becomes "damp"Before showing the property, the Seller used fans to dry out the basement. In an email to the Seller's agent, the seller indicated that there were additional leaks. Seller's agent advised the Seller to update the Disclosure. (There were also facts concerning sewer lines encroaching on the neighbor's and city's property.) After closing escrow the buyers experienced extensive water damage in the basement. The buyers sued the sellers for fraud based on alleged misrepresentations and the active concealment. Procedural History and Holding:The trial court granted summary judgment to the Seller, which the buyer appealed. The court of appeals examined the applicable law to establish a fraud claim (i) a false representation made by the defendant, (ii) knowledge by the defendant that the representation was false when made, (iii) intent to induce plaintiff to act or refrain from acting, (iv) justifiable reliance on the misrepresentation by the plaintiff, and (v) damage to the plaintiff. The evidence of the use of fans by the seller and the email in which the seller acknowledged additional leaks was sufficient to show that the seller had continued knowledge of the defects and that their disclosure was not truthful Pg 406, top of second column: "For purposes of summary judgment, scienter and intent to deceive are determined on the basis of the seller's knowledge of the falsity of his representations at the time made to the prospective purchaser." The court of appeals determined that a genuine issue of material fact existed regarding the Wheats' fraud claim

Stephen A. Wheat Trust V Sparks

24. : courts scrutinize the contract terms themselves to determine whether they are oppressive, unreasonably one-sided, or unjustifiably harsh (i.e. a party to the contract bears a disproportionate amount of risk or other negative aspects of the transaction and situations in which a party is deprived of a remedy for the other party's breach)

Substantive Unconscionability

1. At a public school in Des Moines, Iowa, students organized a silent protest against the Vietnam War. Students planned to wear black armbands to school to protest the fighting but the principal found out and told the students they would be suspended if they wore the armbands. Despite the warning, students wore the armbands and were suspended. During their suspension the students' parents sued the school for violating their children's right to free speech. A U.S. district court sided with the school, ruling that wearing armbands could disrupt learning. The students appealed the ruling to a U.S. Court of Appeals but lost and took their case to the United States Supreme Court. Decision: In 1969 the United States Supreme Court ruled in a 7-2 decision in favor of the students. The high court agreed that students' free rights should be protected and said, "Students don't shed their constitutional rights at the school house gates."; symbolic speech not protected at private schools

Symbolic Speech (Tinker v Des Moines)

Symons brought an action against the co-administrators, asserting claims for promissory estoppel (AKA detrimental reliance) and unjust enrichment (AKA quasi-contract).; recovered alcoholic took care of his friend who was an alcoholic- Symons filed a creditor's claim against Plachek's estate, sought compensation for the care and services he provided; one friend took care of another for years; Summary judgment: one party asks for an immediate judgment claiming there are no factual issues left to be decided*; if the summary judgment motion is granted, the judge then applies the law.)

Symons v Heaton

1. Fourth amendment (protects against arbitrary and unreasonable governmental violations of their privacy rights); if there was a search and seizure- was it unreasonable? (protection); reasonable if conducted with a warrant, not necessary in all instances; evidence obtained in an unreasonable search can not be used in a criminal case ("exclusionary rule"); protected places: private dwellings and surrounded areas, offices, sealed containers, mail, & telephone booths; unprotected places: bank records, voluntary conversation between government informants and criminals suspects/defendants, and open field; warrant not needed: search incident to lawful arrest, motor vehicles, investigate stops upon reasonable suspicion, "Stop and Frisk"/ "Terry Pat"- search for weapons- pat down to determine whether he is carrying a weapon that could endanger officers, plain view- sees contraband in plain view (right in front of the face- visible), consensual searches, searches under exigent circumstances (if people are at risk of harm), custom searches, administrative inspections of closely regulated businesses

Terry V Ohio ("terry pat")

24. Although the funds to purchase the land would be provided by the City, The City's Industrial Development Board ("IDB") worked to secure the options to purchase property for the purpose of persuading Hyundai Motor Manufacturing to build a vehicle assembly plant. The IDB secured an option to purchase 328 acres from the Russells (and other lot owners) for $4,500 per acre. However, they couldn't get the Shelton's lot. The option included a "most-favored-nation" or "price-escalation" clause whereby it guaranteed that Russell and the other lot owners wouldn't be paid a lower price per acre than that "paid to any other landowner included in the project planned for the Property."Hyundai indicated that it needed to secure rail access to the site, which would require acquiring Shelton's property. [If you pay Shelton more than $4,500 per acre, what happens?] Railroad company CSX Transportation (CSX) entered a real estate purchase agreement with Shelton for $12,000 per acre which was later assigned to Hyundai, and the State provided Hyundai with the funds to pay for the Shelton property. Russell and the other lot owners allege that the IDB and Hyundai had violated the most-favored-nation clauses by not paying them $12,000 per acre for their properties. IDB contended that based on the City assuming the contract, it was an improper party to the litigation and moved for summary judgment Issue (for the purposes of this lesson): the obligations under the option contracts signed by the Plaintiffs and the IDB assumed by the City of Montgomery and Montgomery County, thus barring any claims for breach of contract against the IDB? the obligations under the option contracts signed by the Plaintiffs and the IDB assumed by the City of Montgomery and Montgomery County, thus barring any claims for breach of contract against the IDB? Alabama Supreme Court: In the instant case, there exist both an assignment of rights and a delegation of duties.... Generally speaking, upon assignment of a right, the assignor's interest in that right is extinguished; however, upon the delegation of a contractual duty, the delegating party remains liable under the contract, unless the contract provides otherwise or there is a novation [at top of pg 489, the court refers to this as passing something on is not the same as getting rid of it.] Assuming that this assignment of rights carried with it a delegation of the duties owed by the IDB under the agreements, the IDB nonetheless also would have had to demonstrate either (1) that the terms of the contracts allowed the IDB to relieve itself of contractual liability by way of such a delegation or (2) that the parties had entered into novations pursuant to which McLemore/Russell agreed that the IDB's obligations had changed. [Why would IDB have to "demonstrate" either #1 (the K by its terms was fully assignable or, putting it another way and using a double-negative, in the K did parties agree not have a non-assignments clause ) or demonstrate #2 (that the parties had entered into a novation ) to the court? What is the relief sought/ what is pending before the court? Answer= IDB moved for summary judgment. (explaining that "`[a] novation is the substitution of one contract for another, which extinguishes the pre-existing obligation and releases those bound thereunder.... In addition, the party alleging a novation has the burden of proving that such was the intention of the parties.'" The IDB does not assert or demonstrate either condition. Accordingly, the trial court's denial of the IDB's motion for a summary judgment is not due to be reversed on this ground. Accordingly, the Supreme Court affirmed the trial court's denial of the IDB's motion for summary judgment.

The Industrial Development Board of the City of Montgomery v Russell

24. Wilson had been licensed to practice architecture in Hawaii, but his licensed lapsed in 1971 because he had failed to pay a $15 renewal fee. A Hawaii statute provides that any person who practices architecture without having been registered and "without having a valid unexpired certificate of registration... shall be fined not more than $500 or imprisoned not more than one year, or both." In 1972, Wilson performed architecture and engineering services for Kealakekua Ranch, and billed the Ranch over $33,000 for the work. Is the K legal?: Answer: The court there ruled for Wilson on the ground that the fee aspect of the statute was a revenue-raising rather than a regulatory measure. The court therefore concluded that the annual fee provision of the statute was not intended to protect the public and that it is unlikely that the legislature intended unenforceability of these Ks. Would it matter if Wilson had never met the licensing requirements to be licensed in Hawaii? Answer: Yes. The licensing requirements are designed for the protection of the public. A K in violation of a regulatory statute will not be enforced. This is similar to California law governing licensed versus unlicensed contractors. Is the Kealakekua Ranch required to pay Wilson anything for his work? : Answer: Yes. It must pay him the sum agreed upon because the K was valid. However, if Wilson had never been a licensed architect, the court could refuse to give Wilson any remedy. Does the result here sound like a legal concept you learned before? Answer: Quantum meruit/ unjust enrichment (Quasi-Contract is a remedy to prevent Unjust Enrichment and also known by the less-often used Contract Implied-in-Law).

Wilson V Kealakekua Ranch Ltd.

24. Five-year-old Trent Woodman's parents had his birthday party at Bounce Party (operated by Kera LLC). Bounce Party is an indoor play area with inflatable play equipment. Before the party, Trent's father, Jeffrey Woodman, signed a liability waiver on Trent's behalf. Trent jumped off a slide and broke his leg. Trent's mother, Sheila Woodman, filed suit on his behalf against Kera on several bases, including negligence and gross negligence. ▲ Kera filed a motion for summary judgment, arguing that Trent's claims were barred by the liability waiver. π Woodmans argued the waiver was invalid as a matter of law. Trial court ruled that waiver barred Trent's negligence claim but not his gross negligence claim. Both parties appealed. Court of appeals reversed and held the waiver invalid to bar the negligence claim. ▲ Kera appealed. Issue: Can a parent bind his/her child by contract if the child could not otherwise be bound? Michigan common law rule is clear: a guardian, including a parent, cannot contractually bind his minor ward. Affirmed in favor of Trent; Minors may not avoid contracts if statutory exception exists- Marriage, educational loans, insurance, Emancipation of minor from parents does not give minor capacity to contract, Minor's power to avoid contracts does not end on day he/she reaches age of majority, but continues for reasonable time thereafter, Ratification occurs when a person who reaches majority indicates that he/she intends to be bound by a contract made while still a minor; Disaffirmance Duties: Each party has duty to return to the other any consideration (money, goods) that the other has given

Woodman V Kera LLC LLC (Bounce Party waiver/release)

the most common board committee; has authority to act for the board on most matters when the board is not in session

executive committee

based on residence, location, or activities of the defendant; state court has " ..." over a defendant who is a citizen/resident of the state (even if situated out of state), who are within the state's borders when process is served on them (even if nonresidents), or who consent to the courts authority (entering state to defend against plaintiff's claim)—same on a federal level

in personam jurisdiction

choose management's slate of directors that is submitted to the annual election of directors; Independent directors- not employed by the company

nominating committees

24. In July, 2008, the Fuglebergs agreed to purchase from Triangle Ag 352.5 tons of urea fertilizer at a cost of $660 per ton and 135 tons of MES-15 fertilizer at a cost of $1,100 per ton. No terms of the k were put in writing. The Fuglebergs prepaid the $38,150 purchase amount. The Fuglebergs later contended that Triangle's agents told them at the time they agreed that they could rescind the k at any time by remitting $50 for each ton of undelivered fertilizer plus payment of accrued interest. In November 2008, the Fuglebergs attempted to rescind the K with Triangle, but Triangle refused to cancel the K, stating that it had already ordered the fertilizer. The Fuglebergs filed suit against Triangle for rescission and other claims. Both parties admitted the existence of the K in court. One of Triangle's defenses was that the SOF barred the Fuglebergs' K claims. Did it?Answer: No. Contracts for the sale of goods for $500 or more are within the statute of frauds under § 2-201 of the Uniform Commercial Code. Under the UCC, however, a writing signed by the party to be charged is not the only way of satisfying the statute of frauds. Admission of the contract under oath is one way and acceptance and payment of goods shipped is another way. Both were present in this case. Thus, the statute of frauds did not bar enforcement of the contract. Covered K's: One Year Rule: Bilateral contracts that cannot be performed within a year from the date of their formation (one year rule) must be in writing

A & R Fugleberg Farm Inc V Triangle Ag (Exceptions to SOF)

absent bad faith, fraud, or breach of fiduciary duty, the judgment of directors and officers is conclusive

Business judgement rule

"Freeze-out" on non-voting shares, Business Purpose Test, and was the merger fair to the non-voting shareholders under the Intrinsic Fairness Test.- merger would have had to have been for a legitimate business purpose and fair to the minority

Coggins v New England Patriots Football Club Inc.

Coma Corp. (Coma) entered into employment K with Cesar Martinez Corral, an undocumented worker, for above-minimum wage, but paid less than agreed amount, then fired the worker. Mr. Corral sued his former employer (actually, he filed a claim with the Kansas Dept. of Labor (DOL) for earned but unpaid wages under the Kansas Wage Payment Act. The DOL awarded above-minimum wages Arguments: The employer claimed that the Kansas act was preempted by the federal Immigration Reform and Control Act (IRCA) and that the employment K was illegal and void. Holding and Disposition: At the Kansas DOL level, the agency decided that the IRCA did not preempt Kansas law regarding payment of wages and that the employment K was not illegal. Coma Corp appealed; the district court determined the K illegal and remanded the case to the Kansas DOL for a reduction of DOL's award (down to minimum wage due to illegality of K). [*Do you find anything odd about that?* Appeal to Kansas Supreme Court: Coma Corp's argument: employment K is unenforceable and federal immigration laws preempt state wage laws. Court: federal preemption not presumed, and to deny enforceability of employment K would contravene Kansas public policy to protect wages and wage earners

Coma Corp. v Kansa Department of Labor

has no liability on contracts made for the corporation if the officer signs on behalf of the corporation rather than in a personal capacity

Corporate officer

motion to dismiss for failure to state a c/a; even if the facts alleged in the complaint were true, there is no legal basis for a lawsuit; a written response to a complaint filed in a lawsuit which, in effect, pleads for dismissal on the point that even if the facts alleged in the complaint were true, there is no legal basis for a lawsuit. A hearing before a judge (on the law and motion calendar) will then be held to determine the validity of the demurrer. Some causes of action may be defeated by a demurrer while others may survive. Some demurrers contend that the complaint is unclear or omits an essential element of fact. If the judge finds these errors, he/she will usually sustain the demurrer (state it is valid), but "with leave to amend" in order to allow changes to make the original complaint good. An amendment to the complaint cannot always overcome a demurrer, as in a case filed after the time allowed by law to bring a suit... Some states have substituted a motion to dismiss for failure to state a cause of action for the demurrer

Demurrer

Joseph Dodson, age 16, bought a 1984 Chevrolet truck from Burns and Mary Shrader, owners of Shrader's Auto Sales, for $4,900 cash. At the time, Burns Shrader, believing Dodson to be 18 or 19, did not ask Dodson's age and Dodson did not volunteer it. Dodson drove the truck for about eight months, when he learned from an auto mechanic that there was a burned valve in the engine. Dodson did not have the money for the repairs, so he continued to drive the truck without repair for another month until the engine "blew up" and stopped operating. He parked the car in the front yard of his parents' house. He then contacted the Shraders, rescinding the purchase of the truck and requesting a full refund. The Shraders refused to accept the truck or to give Dodson a refund. Dodson then filed an action seeking to rescind the contract and recover the amount paid for the truck. Before the court could hear the case, a hit-and-run driver struck Dodson's parked truck, damaging its left front fender. At the time of the circuit court trial, the truck was worth only $500. The Shraders argued that Dodson should be responsible for paying the difference between the present value of the truck and the $4,900 purchase price. The trial court found in Dodson's favor, ordering the Shraders to refund the $4,900 purchase price upon delivery of the truck. The Tennessee Court of Appeals affirmed this judgment, and the Shraders appealed. Court: "The first of these minority rules (meaning under age 18) is called the "Benefit Rule." This rule holds that, upon rescission, recovery of the full purchase price is subject to a deduction for the minor's use of the merchandise. This rule recognizes that the traditional rule in regard to necessaries (meaning things a minor needs for basic survival such as food, clothing, shelter, medical care, tools of the minor's trade, and basic educational or vocational training) has been extended so far as to hold an infant bound by his contracts, where he failed to restore what he has received under them to the extent of the benefit actually derived by him from what he has received from the other party to the transaction. The other minority rule holds that the minor's recovery of the full purchase price is subject to a deduction for the minor's "use" of the consideration he or she received under the contract, or for the "depreciation" or "deterioration" of the consideration in his or her possession." [The theory here is quasi-contract (unjust enrichment).]

Dodson v Schrader (16 yr old buys a truck)

Cynthia Hines purchased a vacuum cleaner online from Overstock.com, believing that she was buying a new vacuum cleaner. When she discovered that the item was refurbished rather than new, she returned it. Overstock.com charged her a $30 "restocking fee." Hines brought a class action against Overstock.com. Overstock.com moved to dismiss the case on the ground that its website terms of use contained an arbitration clause. The trial court denied the motion, and Overstock.com appealed. Issue: Did the website terms of use arbitration clause become part of the parties' contract absent actual or constructive knowledge of the clause? Holding: The Second Circuit affirmed on the basis that there was no indication that Hines had knowledge of the terms or the opportunity to see the terms before "accepting" them.

Hines v Overstock.com

Hinkel was employed by Refractory Engineers, Inc. and Ceramic Technology, Inc. John Jacobs was the owner of Sataria. In late August or September 2005, Hinkel and Jacobs met to discuss working together. Jacobs offered Hinkel a job at Sataria. Hinkel had reservations. Jacobs told him, "Mark, are you worried that I'll f* * * you? If so, and things don't work, I'll pay you one (1) year's salary and cover your insurance for the one (1) year as well. But let me make it clear, should you decide this is not for you, and you terminate your own employment, then the agreement is off." ... Jacobs later sent Hinkel the following written job offer: Dear Mark, This is written as an offer of employment. The terms are as described below: . Annual Compensation: $120,000 2. Work Location: Belmont Facility 3. Initial Position: Supervisor Receiving Team 4. Start Date: 08/19/2005 5. Paid Vacation: To be determined 6. Health Insurance: Coverage begins 09/01/2005 pending proper Enrollment submission Please sign and return. Hinkel signed the offer and resigned from his other employers. He began working at Sataria in September 2005. According to Hinkel, Jacobs reiterated the severance promise again in November 2005 and December 2005. Sataria terminated Hinkel's employment involuntarily on January 23, 2006. Sataria paid Hinkel six weeks of severance thereafter. Hinkel brought this action for breach of contract and/or promissory estoppel against Sataria. He claimed that Sataria owed him the severance package that Jacobs promised. Sataria moved for summary judgment. The trial court granted Sataria's motion. Was the court correct in doing so? Answer: Yes, according to the Indiana Court of Appeals. The court concluded that the parties' written agreement amounted to a complete integration, and that the parol evidence rule barred evidence of the earlier promise to provide a one-year severance package (four corners). The court also held that any later reiteration of the promise was unsupported by consideration

Hinkel v Sataria Distribution and Packaging Inc

officers and directors have confidential access to nonpublic information about the corporation. Sometimes, directors and officers purchase their corporation's securities with knowledge of confidential information. Disclosure of non-public information (insider) affects the value of the corporations securities. Directors and officers make a profit when the prices of the securities increase after the information has been disclosed. Shareholders claim they have been harmed by this disclosure (unfair informational advantage/information misused); insider trading is illegal under the SEC; contains both legal and illegal conduct; must report trades to SEC

Insider trading (book definition)

24. The plaintiff attended a presentation by multi-millionaire MacDonald at a gathering of financial representatives. At the presentation, MacDonald invited attendees to put their business cards in a basket for a drawing and stated that the person whose card was drawn and who stayed for the entire presentation would "leave with a million dollars." Meram put his card in the basket, stayed for the entire presentation, and was the winner of the drawing. MacDonald congratulated Meram and then explained how "this works." MacDonald then stated that what Meram won was one dollar per year for one million years. He gave Meram $100 for the first "hundred years." He further explained that all Meram had to do was attend a presentation once a year for a million years. MacDonald then laughed and thanked everyone for coming. Meram sued for breach of contract and MacDonald... filed a motion to dismiss for failure to state a claim [aka a demurrer:Would a reasonable person believe that he intended to make an offer, and if so, was the offer sufficiently definite?: Demurrer - a written response to a complaint filed in a lawsuit which, in effect, pleads for dismissal on the point that even if the facts alleged in the complaint were true, there is no legal basis for a lawsuit. Summary judgment: one party asks for an immediate judgment claiming there are no factual issues left to be decided; if the summary judgment motion is granted, the judge then applies the law.] Issue: The issue was whether MacDonald had made an offer - would a reasonable person believe that he intended to make an offer, and if so, was the offer sufficiently definite? Arguments and Disposition. ▲ argued no K because no reasonable person would conclude from the words and conduct that a valid offer was made (too good to be true). Court accepts π Meram's belief that MacDonald was a multi-millionaire speaking at an event sponsored by a billion dollar company and therefore, in Meram's mind, MacDonald had the means to pay the promised sum. ▲ argued no K because the offer was vague as to who would receive the million dollars or the terms of payment. The court says the recipient was defined by the pool of potential winners - that is, the people who placed their business cards in the basket and stayed for the entire presentation. The terms of payment were also definite: the winner would "leave with a million dollars." The court held that the complaint alleged sufficient facts that could be proven to show that an offer was made. Offerees are bound by terms if they have actual or reasonable notice of the terms

Meram v MacDonald

1. On March 13, 1963, in Phoenix, AZ, Officer Carroll Cooley and Detective Wilfred Young were investigating a rape of an 18 year old woman, Lois Ann Jameson; she was attacked while returning home from her late-night job. Her assailant forced her into a car while threatening her with a knife, drove to the Arizona desert, sexually assaulted her, took her money, and dropped her off a few blocks from her home. She later described the attacker and the car to detectives. The Interrogation and Confession: At the police station, Miranda was lined-up next to three other men, and Jameson told the officers that he most resembled her attacker; however, she was not positive. Then, Cooley and Young questioned him in an interrogation room for two hours. Miranda later claimed that they had tried to bully him, by warning him that they would make all possible charges against him. However, both officers later testified in court that they neither hurt nor threatened him. They knew that he had the Constitutional right to remain silent but, since they were not required by law to inform him of this right, they did not do so. Miranda soon confessed of rape, and admitted to committing eight other unsolved crimes in the area, including a robbery and an attempted rape. Miranda later stated that he had felt pressured by Cooley and Young, and that they had told him the rape charge could be dropped if he confessed to one of the other robberies. Yet again, the officers denied having offered Miranda any deals. After his verbal confession, Miranda was given a standard police department form to make a written confession of the Jameson rape. The top of the form stated: "I...do hereby swear that I make this statement voluntarily and of my own free will, with no threats, coercion, or promises of immunity, and with full knowledge of my legal rights, understanding any statement I make may be used against me." It did state that he had "legal rights," although it didn't explicitly explain what these rights were. He wrote a written confession of the rape, and both he and the officers signed it. The Arizona Trial: Miranda was then transferred to the Phoenix city jail, and formally charged with kidnapping and rape of Jameson two days later. He could not afford a lawyer, so was assigned to the experienced 73 year old lawyer, Alvin Moore. His trial in Arizona began on June 20, 1963, and during the trial, Miranda's written confession was the only document that the prosecution (the attorneys representing the state of Arizona) submitted into evidence. They also called four people to testify against Miranda: Jameson, who described her abduction and rape, Jameson's sister, and Cooley and Young, who described their investigation and questioning. On Miranda's side, Alvin Moore offered no witnesses, and instead focused on the cross-examination of Jameson and the arresting officers. The jury considered the evidence for 5 hours before declaring Miranda guilty of kidnapping and raping Jameson, and on June 27, he was sentenced to 20-30 years in state prison. Moore then appealed to the Arizona Supreme Court, arguing that Miranda should have had legal counsel during police questioning as well as during the trial. His reasoning was that Miranda would not have confessed if a lawyer had been there to advise him of his right to remain silent. However, the state of Arizona upheld his conviction, ruling that the police had not violated Miranda's Constitutional rights in obtaining his confession. They reasoned that Miranda had voluntarily confessed to the crimes, so the prosecutor could justly present the confession to the jury. SCOTUS [384 US 436 (1966)] overruled the Arizona courts: Privilege against self-incrimination. Self = must be a natural person, not a corporation; "Self" means just that, e.g., if ▲makes statements against an accomplice, statements are admissible. Must be in custody, i.e. lawfully detained. 2 parts to Miranda: Right to remain silent. Right to have an attorney present during questioning. The Supreme Court set aside Miranda's conviction, which was tainted by the use of the confession that had been obtained through improper interrogation. The state of Arizona retried him. At the second trial, his confession was not introduced into evidence, but he was convicted again on testimony given by his estranged de facto wife. He was sentenced to 20 to 30 years in prison. Miranda was paroled in 1972.

Miranda ("natural person" not to a corporation)

duty of care test requires a director or officer to make a reasonable investigation and honestly believe that the decision is in the corporation's best interests

Model Business Corporation Act

board of directors appoints officers of the corporation; agent of the corp., thus have express authority conferred on them by the bylaws or the board of directors and implied authority to do things reasonably necessary to accomplish duties

Officers

within authority conferred by the articles of incorporation, bylaws, and board of directors

Officers must act...

money laundering through buying real estate for cash and borrowing money-defrauded the bank (getting favorable interest rates); money laundering and tax fraud. ; didn't pay taxes on income, used properties as collateral; Using shell companies, he purchased the homes in all-cash deals, then transferred the properties into his own name for no money and then took out hefty mortgages against them, according to property records

USA v Manafort and Gates

the absence of meaningful choice/w/ terms reasonably advantageous to one of the parties

Unconscionability

refused to draw blood from an unconscious patient who had been involved in a fiery crash; the crash victim was not under arrest, and the police officer did not have a warrant to draw blood and could not obtain consent from the patient who was unconscious; arrested her

University Hospital nurse Alex Wubbels incident

no contract (illegal, commit a crime)

Void

some contracts are cancelable because a party is thought to lack the capacity to contract or because we want to protect them (minors) so they are allowed an "out" (disaffirmance)

Voidable

As alleged in this case, plaintiff, a married woman, obtained an adjustable rate loan from a bank to purchase real property secured by a deed of trust on her residence. [Aceves borrowed $845,000 at an initial rate of 6.35 percent. After two years, the rate became adjustable. The term of the loan was 30 years. Aceves' initial monthly payments were $4,857.09.] About two years into the loan (when the adjustable rate mortgage required higher payments), she could not afford the monthly payments (she received a foreclosure notice) and filed for bankruptcy under chapter 7 of the Bankruptcy Code (11 U.S.C. §§ 701-784). She intended to convert the chapter 7 proceeding to a chapter 13 proceeding (11 U.S.C. §§ 1301-1330) and to enlist the financial assistance of her husband to reinstate the loan, pay the arrearages, and resume the regular loan payments. Chapter 7: Under Chapter 7, you will likely have to return the house or car to the creditor (e.g., the bank) or arrange to pay the item's wholesale value.Chapter 13: You will likely be allowed to keep the house or car if you stay current with a court ordered payment system.] Plaintiff contacted the bank, which promised to work with her on a loan reinstatement and modification if she would forgo further bankruptcy proceedings. In reliance on that promise, plaintiff did not convert her bankruptcy case to a chapter 13 proceeding or oppose the bank's motion to lift the bankruptcy stay. While the bank was promising to work with plaintiff, it was simultaneously complying with the notice requirements to conduct a sale under the power of sale in the deed of trust, commonly referred to as a nonjudicial foreclosure or foreclosure. (See Civ. Code, §§ 2924, 2924a-2924k.) The bankruptcy court lifted the stay. But the bank did not work with plaintiff in an attempt to reinstate and modify the loan. Rather, it completed the foreclosure. [On January 8, 2009, the day before the auction, Samantha called Aceves' bankruptcy attorney and stated that the new balance on the loan was $965,926.22; the new monthly payment would be more than $7,200; and a $6,500 deposit was due immediately via Western Union. Samantha refused to put any of those terms in writing. Aceves did not accept the offer. On January 9, 2009, Aceves' home was sold at a trustee's sale to U.S. Bank. On February 11, 2009, U.S. Bank served Aceves with a three-day notice to vacate the premises and, a month later, filed an unlawful detainer action against her and her husband] Plaintiff filed this action against the bank, alleging a cause of action for promissory estoppel [detrimental reliance], among others. She argued the bank's promise to work with her in reinstating and modifying the loan was enforceable, she had relied on the promise by forgoing bankruptcy protection under chapter 13, and the bank subsequently breached its promise by foreclosing. The trial court dismissed the case on demurrer*. Aceves' promissory estoppel claim is not based on a promise to make a unilateral offer but on a promise to negotiate in an attempt to reach a mutually agreeable loan modification

Aceves v US Bank

contracts in which a stronger party is able to determine the terms of a contract, leaving the weaker party no practical choice but to adhere to the terms

Adhesion K's

On two occasions in 1980, Hodge met with Jon Tilley, president and chief operating officer of Evans Financial Corporation, to discuss Hodge's possible employment by Evans. Hodge was at that time assistant counsel and assistant secretary of Mellon National Corporation and Mellon Bank of Pittsburgh. According to Hodge's trial testimony, Tilley asked Hodge at the second meeting what his conditions were for accepting employment with Evans. Hodge replied, "No. 1, the job must be permanent. Because of my age, I have a great fear about going back into the marketplace again. I want to be here until I retire." Trial Transcript ("Tr.") at 109. Hodge testified that Tilley's response was "I accept that condition." Tr. at 110. Hodge subsequently accepted an offer of employment as vice president and general counsel of Evans. He moved from Pittsburgh to Washington, D.C. in September, 1980, and worked for Evans from that time until he was fired by Tilley on May 7, 1981. In 1980, Hodge was 54 years old. Regarding his retirement plans, Hodge testified "I really questioned whether I was going to go much past 65." Hodge brought a breach of K lawsuit against Evans. Evans argued that the oral K was unenforceable because of the SOF. Was Evans correct? Answer: The court held that the statute of frauds did not apply to this case. The reason is that the one-year provision of the statute of frauds applies only to those contracts that, by their terms, are impossible to perform within one year. Here, while it may be unlikely that Hodge would retire within a year, it is nevertheless possible. Thus, enforcement of the oral contract is not barred by the statute of frauds

Albert Z Hodge v Evans Financial Corp

Even with a long-arm statute, the defendant is still entitled to due process- doing business within the state, committing a tort (a civil wrong) within the state, contracting to supply goods/services within the state, or committing tort outside of the state if it creates harm within the state. The ▲ must have "minimum contacts" with the forum so as to not offend "traditional notions of fair play and substantial justice." In "I-Shoe" the court ruled that the standard was met and "I-Shoe" could be sued in Washington state.

International shoe

a transaction is fair if reasonable persons in an arm's-length bargain would have bound the corporation

Intrinsic fairness standard

a traditional defense to negligence liability based on the argument that the plaintiff voluntarily exposed himself to a known danger created by the defendant's negligence---plaintiff's voluntary consent to known danger; accepted risk of own free will; assume risk of injury- exculpatory clause (one party relieved of potential liability)

Assumption of Risk

feather, 51% rule; to win a civil case, the plaintiff must prove each element of his, her, or its claim by a preponderance of evidence. This standard of proof requires the plaintiff to show that the greater the weight of the evidence (by credibility, not quantity)- supports the existence of each element. The plaintiff must convince the fact-finder that the existence of each element is more probable than its nonexistence. The attorney for each party presents his or her client's version of the facts, tries to convince the judge or jury that this version is true, and attempts to rebut conflicting factual allegations by the other party. Each attorney also seeks to persuade the court that his/her reading of the law is correct

Civil Court

24. Appellant Homeowner (Tanzer) contracted with Appellee (Audio Visual Artistry) for the installation of a "smart home" system. After [a] myriad [of] problems arose, Appellant fired Appellee, who filed the instant lawsuit to collect the unpaid balance for equipment and installation. On or about March 26, 2004, Appellant Stephen Tanzer and Appellee Audio Video Artistry ("AVA") entered into discussions for the sale and installation of electronic and entertainment equipment in Mr. Tanzer's home. AVA is a residential entertainment and communications firm specializing in custom design projects. ...AVA... offer(s) state-of-the-art home theater, multi-room music and television, lighting control and phone/intercom systems. The sale, installation, and integration of these systems for the creation of a "smart home" ... is AVA's specialty.In March 2004, Chris Rogers (of AVA) met with Mr. Tanzer to discuss Mr. Tanzer's desires for the home he was building. Based upon their discussion, AVA submitted a proposal to Mr. Tanzer for components, parts, and installation, totaling $78,567.13. The written proposal specifically provided for the following work: 6 "independent" zones of music consisting of 13 rooms and related equipment to switch, power, and control the music system; phone system throughout the house with door communications; lighting control system throughout the house to include 64 standard wattage (600w) loads; network wiring for television, phone, music, and computers throughout the home. The systems pricing for this work (i.e., the total price of $78,567.13) was broken out in the original proposal as follows: Equipment: $56,375.00, Labor/Programming: $9,880.00, Cable: Misc. Parts: $5,660.00, Total: $71,915.00, Tax: $6,652.13; On September 22, 2004, AVA and Mr. Tanzer entered into a written contract, which incorporates the original proposal, adding an additional "seventh zone" for music, and also adding seven automated shades. At the time the parties entered their contract, construction had just commenced on Mr. Tanzer's home. The home is not a usual residence; rather, it is an approximately 15,000 square foot, $3.5 million dollar build. Because of the size and scope of the project, AVA was to install certain wiring and equipment during the construction process. Pre-wiring began on the house as the framing went in, but equipment installation and programming of the smart system did not begin in earnest until March, 2006. Mr. Tanzer and his family moved into the home in April, 2006. During the project, and as contemplated in the contract, the original scope of work was changed and AVA performed additional work. One significant change was the decision to use an Escient music system in lieu of the Concierge music system. Mr. Rogers allegedly represented to Mr. Tanzer, after the job had begun, that the Escient system was better able to do what Mr. Tanzer wanted, i.e., stream music from his PC, which was not a function that the Concierge system offered. AVA agreed to sell and install the Escient system for the same price as the Concierge system. Later, an art frame and shade were also added to conceal the television in the sitting room. The "art shade" is a custom-painted, frame-mounted piece of artwork on canvas, which can be rolled down to conceal a television at the push of a button.The trial court determined that the primary purpose of the parties' agreement was the sale of goods and applied Article 2 of the Uniform Commercial Code. The court granted judgment in favor of Appellee.... Appellant appeals, arguing that the trial court erred in applying the UCC...Discerning no error, we affirm.

Audi Visual Artistry v Tanzer (breach of contract)

The burden of proof is upon the prosecution who must prove his/her case beyond a reasonable doubt.; setting out public wrongs by prosecuting wrongdoers

Criminal Court

1. The Fourth Amendment protects people from unreasonable searches by the government. A search occurs when the police intrude into a place where a person has a reasonable expectation of privacy, such as a person's house or even a person's body. For a search to be reasonable, police are usually required to meet the standard of "probable cause" (having a good reason to search). In most cases, an officer will get a search warrant by providing some information to a judicial official that a crime was committed at the place to be searched or that particular evidence of a crime exists at the location to be searched. This process can go quickly, especially when done over the phone or electronically. If the judicial official agrees that probable cause exists, he or she will issue the warrant. However, the following examples are instances when police can search without a warrant: In a consent search. This is when the person gives permission for the search. In a search incident to lawful arrest. This is when a person is lawfully arrested and police can search the person and the area within that person's immediate control for the officers' safety. When evidence of a crime is in plain view because there is no expectation of privacy in this situation. In an exigent circumstances search. This is when there is an emergency or pressing need and not enough time for a police officer to secure a search warrant. Taking a blood or breath test is referred to as a BAC test (blood alcohol content). A BAC test is considered a search. Having a driver take a breath or blood test is one of the most common ways to gather evidence in a DUI case (driving under the influence). In a breath test, which may occur on the road or at the police station, the driver breathes into a breathalyzer. The purpose is to detect the amount of alcohol in the driver's body. A blood test that detects alcohol or drugs in the body is usually a more accurate method than the breath test. It is taken by a certified professional, usually at a hospital, who uses a syringe to take blood. All 50 states have "implied consent laws." These laws say that drivers automatically give permission to police officers to test for BAC if an officer has reason to believe that a driver is under the influence. If drivers refuse, they can lose their license. However, 12 states, including North Dakota, go further and make it a separate crime (arrest and potential jail time), apart from how the DUI turns out, for drivers to refuse to let officers test their BAC. This case is about whether such laws that criminalize refusal are constitutional under the Fourth Amendment. In 2013, Danny Birchfield drove his car into a ditch in North Dakota. A police officer arrived and suspected that Mr. Birchfield was intoxicated. The officer told Mr. Birchfield about the implied consent rule in North Dakota. Mr. Birchfield agreed to a breath test, which showed that Mr. Birchfield was intoxicated. The officer then arrested Mr. Birchfield and asked if he would consent to give his blood as well. Mr. Birchfield refused. Subsequently, North Dakota authorities charged Mr. Birchfield with breaking North Dakota's implied consent law. He argued in state court that the law was unconstitutional because it violated his Fourth Amendment rights by criminalizing his refusal to be searched. The trial court ruled against him. Mr. Birchfield appealed to the Supreme Court of North Dakota. That court also ruled against him. It said that the State could criminalize a refusal to take a test because officers only administer the test when they already have probable cause to believe a person was driving while impaired. Thus, it is reasonable to require a driver to consent and an efficient tool to discourage drunk driving. Because the U.S. Supreme Court hears cases involving federal constitutional rights, Mr. Birchfield sought review and the Court agreed. The Court also decided to hear the case along with two similar cases (Bernard v. Minnesota and Beylund v. Levi). (Can not conduct warrantless blood tests on drunk drivers!)

Birchfield v North Dakota (invasive search- breathalizer v blood (court not ok with))

...the doctrine of "badges of fraud": proof by a creditor of certain objective facts (for example, a transfer to a close relative, a secret transfer, a transfer of title without transfer of possession, or grossly inadequate consideration[sell it to someone else- $10]) would raise a rebuttable presumption of actual fraudulent intent. (i.e. buy a property and creditors are coming after you, transfer property to a close relative [but you still live there]) 1. Void- no contract (illegal, commit a crime)

BFP v Resolution Trust Corporation

authority and duty to manage the corporation (day-to-day); supervises the actions of its committees, chairman, and officers to ensure the board's policies are being carried out and the corporation is managed wisely

Board of Directors

usurping corp. opportunities (must be able to financially take advantage of), torts/authorizing a tort, crime

D&O liable for...

the constitution and federal laws are the supreme law of the land. Where there is a conflict between the federal and state law, the federal law will control and the state law is rendered void

Federal Preemption

agent of the corporation, right to inspect

Directors

owe a fiduciary duty

Directors and officers

duties of loyalty, including the duty not to self-deal (a conflict of interest). If a director has a conflict of interest, a court may void the transaction with the corporation if it is unfair to the corporation.

Directors and officers owe the corp.

liable for losses to the corporation caused by their lack of care or diligence; usupring corp. opp.

Directors and officers...

misrepresentation made with knowledge of its falsity and intent to deceive; not in accord with the truth, a contract can be rescinded on the ground of misrepresentation when the assertion relates to a material fact or is made fraudulently and the other party actually and justifiable relies on the assertion

Fraud

24. As a result of Sparks' negligent driving, Hicks was injured in a car accident with Sparks. Hicks settled with the insurance company for $4,000 and signed a Release. Nearly a year after the accident, Hicks began to experience pain in both of her arms and tingling and numbness in her hands and later underwent surgery. Procedural History: Based on the Release, the trial court granted Sparks' motion for summary judgment. Hicks appealed to the Delaware Supreme Court. Hick's alleges that her post-Release injuries are materially different from those contemplated in the Release, thus amounting to a mistake of fact; Rule: To establish a mutual mistake of fact, the plaintiff must show by clear and convincing evidence that (1) both parties were mistaken as to a basic assumption, (2) the mistake materially affects the agreed-upon exchange of performances, and (3) the party adversely affected did not assume the risk of the mistake. Reasoning and Holding: Hicks assumed the risk of mistake. She executed a clear and unambiguous Release in exchange for a settlement payment. She assumed the risk that her injuries were more serious than she believed and that her symptoms could worsen and require further treatment. Page 412 "Hicks assumed the risk of mistake when she signed the Release without obtaining a more thorough medical examination to fully discover the extent of her injuries related to her neck pain."

Hicks V Sparks (mutual mistake; signing a waiver/release)

cattle futures contracts; 1,000=100,000 after ten months of trading- spectacular rate of return (COI, bribery?); had no experience in these financial instruments; low household income; James Blair- friend of the Clinton's-outside counsel to Tyson Foods-made most of the trades; altered her story

Hillary Clinton futures trading

buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include "tipping" such information, securities trading by the person "tipped," and securities trading by those who misappropriate such information

Illegal Insider trading

to protect or insure; refers to practice by which corporations pay expenses of officers or directors named as defendants in litigation (i.e. directors and officers)

Indemnify

not employed by the company

Independent directors

24. Lambert and Barron had a friendly as well as professional relationship, Barron had financial troubles due to problems with five pending construction projects. Lambert had some background in arbitrating constructions cases. Lambert was concerned about Barron's finances and his depressed mental state. In November of 1998, Barron's employee had transmitted various documents pertaining to Barron's problems to Lambert for Lambert's review. Barron then sent a plane for him and Lambert flew from New Orleans to Farmerville to meet with Barron. Lambert claimed that, as Lambert and Barron were standing on the airport runway immediately before Lambert returned home, he and Barron (orally) agreed to a consulting contract whereby Barron would pay Lambert for providing consulting services for him. Lambert claims that he and Barron orally contracted for Lambert to provide consulting services for one year at his customary monthly rate of $3,100, at a minimum one-year term. In late 2000, Lambert billed Barron $34,100 for the balance owed on the alleged contract. With what you now know about the case, who wins: depressed Barron who allegedly owes $34,100 or his friend who consulted him, Lambert? Between April and August of 1999, Lambert was sent copies of correspondence between Barron and Barron's attorney concerning scheduling mediation and arbitration hearings on the construction projects. Lambert did not respond. There was no evidence of Barron using or benefitting from Lambert's construction mediation expertise. Barron claimed Lambert only spent a day with him and that Lambert also spent a few additional hours looking over documents. Barron thought $2,000 would have been enough but an employee paid a $3,100 invoice. Barron refused to pay more than the $3,100 already paid. Procedural History and Issue: Lambert sued for breach of contract and lost at the trial court level. Issue on appeal: was there a valid K? Did Barron's acceptance of Lambert's help indicate the formation of a K, or was it merely an indication of a person accepting the help of a friend? Let's rephrase that using the elements - Was this a K involving consideration (any promises?) or was this, as objectively seen from Barron's viewpoint, a friend helping out a stressed-out friend (which would not be a K because it is missing an element of the law, a step in building the structure if you will) - or was it merely a gift between friends? Was there a meeting of the minds as to a K? Did the parties both intend to form a K? Whatever was said on the runway, did Barron intend to accept Lambert's offer of services or did Barron think Lambert was offering to help him (gift)? If we go the other way, did Barron think he was asking Lambert to help him as a friend (gift) or did Barron think he was asking Lambert if he could provide him with professional services in exchange for payment? Trial Court and Appellate Court: There are two competing views here and there is not much evidence that a contract was formed or that substantive business benefit was realized by Barron from his friend, Lambert. With the evidence the court had, what could we deduce? Lambert didn't have much evidence. His bills are evidence and the documents he reviewed are evidence. However, the court noted that documents were sent for Barron's review prior to the plane picking him up to fly to see Barron. Please keep in mind that their oral testimony is evidence (not necessarily weighted equally). 'The relationship to that point was that of friends and there was no indication that either party intended a contractual relationship. The court did not give much (if any weight) to the copies of the attorney correspondence concerning mediation and arbitration scheduling provided to Lambert.' ...With the evidence presented, as objectively seen from Barron's viewpoint, this was a friend helping out a stressed-out friend (and so no K because we are missing an element of the law, a step in building the structure). Lambert does and we know Lambert thinks there was a meeting of the minds - of course he does or he wouldn't be in court trying to enforce a K - and so Lambert must convince the court that, as objectively seen from Barron's viewpoint (the judge is, or the jurors are, now standing in Barron's shoes, and based on the evidence presented, is it fair to believe, objectively, that Barron thought he was asking Lambert if he could provide him with professional services in exchange for payment? Again, there was no discussion of a contract prior to that flight. The relationship to that point was that of friends and there was no indication that either party intended a contractual relationship. The court did not give much (if any weight) to the copies of the attorney correspondence concerning mediation and arbitration scheduling provided to Lambert. Barron's attorney never consulted Lambert and Barron never benefited from Lambert's expertise. No K formed. Lambert could not have reasonably believed a contract existed. There was no "meeting of the minds" between an offeror and offeree. Lower court ruling affirmed in favor of Barron. Offer, Acceptance and Consideration . The first two elements, offer and acceptance, must form a "meeting of the minds." Under the objective theory, would a reasonable person in the position of the other party believe there was an offer and acceptance?

Lambert v Barron (valid contract?)

1. converting illegally obtained funds into what appears to be legitimately earned funds, or, taking legitimately earned funds and making them appear to be tax-free transactions; Place the money into the financial system;Transfer or conceal the source of the money through complex or multiple transactions; "Repatriate" the money back in a manner that makes it appear "legitimate." Placement and concealment/transfer (steps 1 and 2) are related and sometimes that particular order is reversed (concealment followed by placement). Internal Revenue Code §61 requires US taxpayers to report all gross income "from whatever source derived..." The Bank Secrecy Act of 1970 requires financial institutions to report deposits over $10,000 in a single day. To avoid suspicion, launderers funnel cash from an illegal source through a legitimate business. E.g., Penny Mobster launders her illegal drug sales through her check cashing service, bar, nightclub, or convenience store. That does increase her taxable income and therefore her income taxes, but it does reduce suspicions that she obtained the money by illegal means.Small time alternative example wherein the steps are reversed: Joey Goodson creates phony loan documents showing that his grandmother loaned him $12,000. He then deposits the funds at his local bank. If the bank even takes the funds (unlikely today at most legitimate banks), his excuse for the forthcoming scrutiny is that he borrowed the money from his grandmother who kept the funds in cash because she was afraid of banks collapsing. More Complicated Means of Avoiding Detection: The more the illegally obtained funds are moved around, the harder it is to trace them. What seems like an infinite amount of money is wire transferred each day. [The term is derived from when Western Union, the telegraph company, began the service of "wiring" funds in the 1800's.] At some point the true identity of the owner is masked. This can be achieved by using "shell" corporations and by using tax haven countries. In some countries it is considered "economic espionage" if foreign law enforcement tries to trace money in those countries. Other Techniques: Moving bulk cash across an international border, e.g., in a suitcase or in the trunk of a car (not a very practical means); Breaking up the total cash into smaller amounts (less than the over $10,000 in a single day ) and using "smurfs" to make the bank deposits; Converting your cash into casino chips and then cashing back out (and reporting the latter as 'legitimate gambling winnings); Wiring money to pay for inflated invoices. E.g., you are trying to launder $1M. You obtain $2M in legitimate inventory from your affiliated company in a tax haven country. However, the invoice is inflated and you paid $3M for the $2M you obtained. Real estate (one of the worst ways to do this): you pay cash for real estate and later sell it; Cash payments to employees for salaries; "Scholarships."

Money Laundering

Oral contracts lend themselves to disputes (he said/ she said) and even false testimony from alleged witnesses to the 'contract formation.' In 1677 Parliament created the "statute of frauds" to prevent abuses and that legislation "mandated that certain K's be in writing in order to be enforceable." UCC 2-201: contracts for the sale of goods for a price of $500 or more must be in writing. Example: Pam buys a refrigerator for $501, thus a writing is required to be enforceable. No writing required for <$500 refrigerator

Statute of Frauds

Plaintiff is a South Carolina real estate broker who buys underpriced properties to renovate and sell, engaging in a process we are told is commonly known as "flipping." In 2003, Plaintiff conceived of the idea of a television show to document the flipping process and later developed a pilot episode of the show. In 2004, Plaintiff submitted the pilot to multiple television networks, including Defendant. Defendant's vice president directed him to deal with Charles Nordlander, director of lifestyle programming for Defendant. After Nordlander viewed the pilot, the two spoke over the phone for a little less than an hour on June 3, 2004 about turning the show into a series. Essentially, Plaintiff proposed that he would assume all of the financial risk relating to the purchase and resale of the real estate but that they would otherwise equally split the net revenues of the television show. In response to Plaintiff's offer, Plaintiff maintains Nordlander said "Okay, okay, I get it." Thus, Plaintiff argues that by the end of this June 3 telephone conversation he and Defendant, via Nordlander, had entered into an oral contract to produce a television series based on Plaintiff's pilot and to share all resulting net revenues equally, subject to approval by Defendant's board of directors. Plaintiff testified that Nordlander arranged a conference call shortly thereafter during which Plaintiff confirmed the terms of the contract with three other representatives of Defendant. Nordlander also arranged a meeting in New York on June 14 between a production company, Departure Films, and Plaintiff. With Departure Films on board, filming for the pilot began in August 2004. In March 2005, Defendant's Senior Vice President e-mailed Plaintiff that "[t]he board approved the money for our series." Plaintiff and Departure Films then began filming season one. The parties never reduced any oral agreement to writing. Nonetheless, they filmed thirteen episodes of "Flip this House." By all accounts, the show was a commercial success. But, as must be the case since the parties came knocking on the Court's door, their business relationship fell apart in 2006. The parties could not resolve the matter of Plaintiff's compensation. Defendant offered to pay Plaintiff an appearance fee per episode and a five percent share of incremental revenue attributable to the show. Plaintiff rejected that offer and signed a talent agreement with another television network. Defendant went on to produce three more seasons of "Flip this House" without Plaintiff's participation. Defendant never paid Plaintiff any money, let alone half of the series' net revenue, for his role in its production. At trial, Defendant denied ever entering into any contract with Plaintiff. Plaintiff sued Defendant in state court for breach of that oral contract in 2006, demanding approximately $7.5 million in damages, i.e., half of the net revenues from the three seasons that had completed filming prior to trial. Defendant successfully removed the case to federal court on the basis of diversity jurisdiction. After five days of trial in South Carolina federal district court, a jury returned a verdict awarding Plaintiff a little over $4 million, essentially half of the first season's net revenues. The district court subsequently denied Defendant's motions for judgment as a matter of law and a new trial... Issue: The issue on appeal was whether A & E objectively manifested assent to the terms that Davis proposed. Rationale and Holding: Absent prohibition by the statute of frauds, oral contracts are just as binding as written contracts under New York law... To establish Defendant breached their oral contract, Plaintiff must, of course, first prove that they formed such a contract...."There must, in other words, be 'an objective meeting of the minds sufficient to give rise to a binding and enforceable contract.'... The same is true whether the parties formed the contract orally or with the written word... "Generally, courts look to the basic elements of the offer and the acceptance to determine whether there is an objective meeting of the minds sufficient to give rise to a binding and enforceable contract."... "The first step" in that analysis requires a court "to determine whether there is a sufficiently definite offer such that its unequivocal acceptance will give rise to an enforceable contract." ... But, even assuming Plaintiff's offer was sufficiently definite, Defendant maintains Plaintiff's assertion of its acceptance of his offer was not. We therefore move to the next step in the mutual assent analysis: acceptance. As long as the offer does not dictate otherwise, "oral acceptance of an offer is valid."... Parties may also manifest the "'assent necessary to form a contract . . . by . . . act, or conduct which evinces the intention of the parties to contract.'" ... When an offeree communicates "an acceptance [that] is ambiguous or equivocal—that is, an acceptance that a reasonable person could view as assent, rejection, or an invitation to bargain further . . . it is the offeror's reaction to that ambiguous acceptance that controls whether the parties have entered into a contract." ... [B]y their nature, equivocal responses are capable of being understood either as the offeree apparently intends them . . . or as the offeror might apparently understand them... [T]he offeror who reasonably treats an equivocal response as an acceptance may hold the offeree to a contract...So long as the offeror's interpretation of the offeree's equivocal acceptance is plausible or reasonable, New York courts will find a contract has been formed. "In other words, where an offeree communicates an ambiguous acceptance, the offeree must assume the risk of the offeror's misinterpretation."... Therefore, ours is an objective inquiry. We do not care about the "parties' after-the fact professed subjective intent." ... Rather, in deciding whether parties have reached an agreement, we must look to the parties' [o]bjective intent as manifested by their expressed words and deeds at the time. . . . In determining whether the parties entered into a contractual agreement and what were its terms, "disproportionate emphasis is not to be put on any single act, phrase or other expression, but, instead, on the totality of all of these, given the attendant circumstances, the situation of the parties, and the objectives they were striving to attain. . . ." ... Therefore, "[w]hether an acceptance is ambiguous or equivocal . . . depends not on the subjective, undisclosed intent of the offeree, but rather on the offeree's words and actions as viewed from the perspective of a reasonable person."... Defendant argued...that Plaintiff had failed to provide any evidence of Defendant's assent...Defendant claims that the only specific words of acceptance Plaintiff at trial ever attributed to Nordlander were "Okay, okay, I get it." Defendant contends that statement does not constitute unambiguous acceptance because it conveys at most that Nordlander understood the terms of the offer, not that he accepted the offer on behalf of Defendant. So, Defendant maintains a contract was never formed. Context matters—a saying as old as time because it is true. Because we must view the evidence in the light most favorable to Plaintiff, we start with Plaintiff's evidence of the context of the June 3 phone conversation. According to Plaintiff's testimony, he and Nordlander discussed the pilot and making it into a series:... Plaintiff testified over and over again in unequivocal terms as to his interpretation or characterization of his June 3 phone conversation with Nordlander. He repeatedly declared they "absolutely" had a deal. Consequently, we accept, as we must, that Plaintiff subjectively believed by the end of his June 3 phone conversation with Nordlander he had a deal with Defendant to make a television show and to split the revenues equally. The court found that there was sufficient evidence from which a reasonable jury could conclude that Davis objectively treated Nordlanger's statement as an acceptance

Trademark Properties v A&E Television Networks

...[The] oil company presented to the appellant-defendant leasee, a filling station operator, a printed form contract as a lease to be signed, by the defendant, which contained, in addition to the normal leasing provisions, a "hold harmless" clause which provided in substance that the leasee operator would hold harmless and also indemnify the oil company for any negligence of the oil company occurring on the leased premises. The litigation arises as a result of the oil company's own employee spraying gasoline over Weaver and his assistant and causing them to be burned and injured on the leased premises. This action was initiated by American Oil and Hoffer (Appellees) for a declaratory judgment: a judgment of a court which determines the rights of parties without ordering anything be done or awarding damages. While this borders on the prohibited "advisory opinion," it is allowed to nip controversies in the bud. Examples: a party to a contract may seek the legal interpretation of a contract to determine the parties' rights, or a corporation may ask a court to decide whether a new tax is truly applicable to that business before it pays it.*]to determine the liability of appellant Weaver, under the clause in the lease. The trial court entered judgment holding Weaver liable under the lease. Rationale, Holding and Disposition: It will be noted that this lease clause not only exculpated [cleared] the leasor oil company from its liability for its negligence, but also compelled Weaver to indemnify [reimburse] them for any damages or loss incurred as a result of its negligence. The appellate court held the exculpatory clause invalid... but the indemnifying clause valid... In our opinion, both these provisions must be read together since one may be used to effectuate the result obtained through the other. We find no ground for any distinction and we therefore grant the petition to transfer the appeal to this court. This is a contract, which was submitted (already in printed form) to a party with lesser bargaining power. As in this case, it may contain unconscionable or unknown provisions which are in fine print. Such is the case now before this court. The facts reveal that Weaver had left high school after one and a half years and spent his time, prior to leasing the service station, working at various skilled and unskilled labor oriented jobs. He was not one who should be expected to know the law or understand the meaning of technical terms. The ceremonious activity of signing the lease consisted of nothing more than the agent of American Oil placing the lease in front of Mr. Weaver and saying "sign", which Mr. Weaver did. There is nothing in the record to indicate that Weaver read the lease; that the agent asked Weaver to read it; or that the agent, in any manner, attempted to call Weaver's attention to the "hold harmless" clause in the lease. Each year following, the procedure was the same. A salesman, from American Oil, would bring the lease to Weaver, at the station, and Weaver would sign it. The evidence showed that Weaver had never read the lease prior to signing and that the clauses in the lease were never explained to him in a manner from which he could grasp their legal significance. The leases were prepared by the attorneys of American Oil Company, for the American Oil Company, and the agents of the American Oil Company never attempted to explain the conditions of the lease nor did they advise Weaver that he should consult legal counsel, before signing the lease. The superior bargaining power of American Oil is patently obvious and the significance of Weaver's signature upon the legal document amounted to nothing more than a mere formality to Weaver for the substantial protection of American Oil. Had this case involved the sale of goods it would have been termed an "unconscionable contract" under sec. 2-302 of the Uniform Commercial Code...

Weaver V American Oil

are directly responsible for appointment, compensation, and oversight of independent public accountants: Sarbanes- Oxley Act requires all publicly held firms to have audit committees of independent directors

audit committees

is someone to whom power has been entrusted for the benefit of someone else

fiduciary