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
