Business module 5&6

Breach of Contract

A failure, without legal excuse, to perform any promise that forms all or part of the contract

Compensatory Damages

Monetary award intended to compensate for the wrong and restore the plaintiff to his/her pre-incident position.

Warranty

a guarantee or promise that provides assurance by one party to another party that specific facts or conditions are true or will happen; a promise that goods sold with meet stated standards of performance.

Negligence under tort law

harm that arises from unintentional action

"To prove an express warranty, a buyer must demonstrate that the two parties included the statements or acts in their bargain." is an example of the expression:

"Basis of the bargain"

According to Uniform Commercial Code 2-313, a seller can create an express warranty in what 3 ways?

1. with an affirmation or fact or promise 2. with a description of the goods 3.with a sample or model

The 5 elements to a negligence case:

1.Duty of due care (did defendant foresee that plaintiff would be harmed bu his/her action) 2.Breach (dud defendant fail to meet (breached) his/her duty of due care. 3.Factual causation (whether defendants failure to meet his/her duty of care caused the harm) 4.Proximate causation (requires plaintiff to prove that defendant could reasonably foresee general type of harm) 5. Damage (proof of harm-injury and/or other measurable loss.)

Tort Law

An act that causes harm or injury to a person or property

Implied Warranty of Merchantability

An implied warranty that a product is fit for the ordinary purpose for which such goods are used. *Does not need to be in writing or otherwise communicated to the buyer*

Implied Warranty of Fitness

An implied warranty that states unless excluded or modified, the seller's knowledge of the particular use of the goods creates an implied warranty that the goods shall be fit for that purpose.

The 4 elements of a legally enforceable contract are:

An offer & acceptance, consideration, capacity, and legality

Sole Proprietorship

An unincorporated business owned and run by one individual in which there is no distinction between the business and the owner

Common law

Based on the concept of precedence, which requires judges to decide a case based on prior rulings or, at minimum, consider the reasoning of prior judges when deciding a case with similar facts.

Statutory law

Laws passed by Congress

Product liability case based on negligence claims one of the following:

1. Design defects 2. Manufacturing defects 3.Failure-to-warn defects

Contract

A legally enforceable agreement

What does consumer Protection legislation protect?

Consumer Protection legislation protects consumer safety, increases consumer confidence and supports economic growth.

Corporation (C Corporation)

an independent legal entity owned by shareholders.

Fair Credit Reporting Act (FCRA)

promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies.

Federal Food and Drug Act (FDA)

Mandates regulation of food, drugs, cosmetics, biologics, medical . products and tobacco.

Calculation of damages for breach of contract based on expectation interest:

Monetary award that may include direct damages, consequential damages and/or incidental damages

What are the most important factors to consider when choosing an organizational type for your business?

Start-up costs, taxation, and control

True or False: A warranty can be in writing or oral.

TRUE

Who enforces consumer protection laws?

The Federal Trade Commission, Consumer Financial Protection Bureau, FDA & US Department of Justice

Whats the downside of choosing a business structure where owner has full control?

The owner has full responsibility and liability for the business.

Implied warranties:

Warranties created by Uniform Commercial Code rather than a particular manufacturer or seller.

The 2 categories of implied warranty are:

Warranty of merchantability & Warranty of fitness

Express Warranty

a warranty created based on a seller's words or actions.

Clayton Act is characterized as:

an antitrust legislation that banned price discrimination and anti-competitive mergers and acquisitions and provided support for labor unions.

National Highway Traffic Safety Administration (NHTSA)

an organization charged with "promoting vehicle safety innovations, addressing vehicle defects, setting safety standards for cars and trucks, and educating Americans to help them make safer choices.

Punitive Damages

damages exceeding simple compensation and awarded to punish the defendant.

Examples of Intentional torts:

defamation, false imprisonment, infliction of emotional distress, assault and battery and trespass, conversion and fraud.

Damages for breach of contract are based on what 3 interest:

expectation, reliance, and restitution

The principle of caveat emptor:

insufficient for consumers safety

Federal Trade Commission Act (FTC) is an agency charged with:

litigating cases involving deceptive trade practices.

Remedy method

method used by the courts to compensate an injured party

The Sherman Act is legislation focused on addressing:

monopolistic business practices

The goal of antitrust legislation is to:

promote competition and achieve associated price, quality, choice and innovation benefits.

Most common form of business ownership in the U.S is

sole proprietorship

Federal Consumer Product Safety Act (CPSA) established the Consumer Product Safety Commission which authorized:

the agency to develop and enforce standards, including the right to ban products.