BUS 302 - Exam 1

What is the burden of proof?

In a civil case: a preponderance of evidence (>50%). Criminal case: beyond a reasonable doubt, higher requirement

Plaintiff

person filing lawsuit in CIVIL case

Defendant

accused party in CIVIL case

Prosecutor

government lawyer who brings CRIMINAL charges

Victim

person affected/hurt in CRIMINAL case

Jurisdiction

the power of a court to hear a given case. Can be broken down into subject matter and personal. Consists of what can be heard in federal vs state courts

Governing law/choice of law

a clause state what particular law will apply in the event of a dispute. ex. using a specific nation/state law in contracts

Posture

the status or process used to identify how a case is treated and where it is in the process

Holding

a court’s decision on a legal issue that arises during a case

Grease

facilitating payments, NON-bribes paid to speed up admin work

What are the differences between tort and crimes? Is there overlap?

Tort: protected CIVIL interests. All relating to compensation. Private harm brought by private party. Common law and statutes.

Criminal: all about deterring or punishing for a wrong. relating to society’s interests in safety, order, and moral standards

Mens rea

MENTAL STATE! a specified state of mind or intent on the part of a person to commit a crime. Involves both awareness and desire, or reckless or negligent behavior.

Actus reus

ACT ITSELF: the performance itself of a prohibited act

What liability is there for attempting to commit a crime?

Need to have substantial steps and intent

What liability is there for conspiring to commit a crime?

taking an action toward the act of a crime

What impact does culpability have on determining level of negligence?

Negligence, gross negligence, recklessness, intent. How does your conduct compare to what a reasonable person would do

What are the different kinds of criminal sanctions and their purposes?

Purposes are to punish and deter. Include fines, forfeiture/seizure, restitution to victim, and loss of liberty (jail/probation)

What criminal liability does an individual have in a business context?

An individual is liable only for the crimes they commit

What criminal liability does a director/officer have in a business context?

liable for crimes they commit regardless of for personal or corporation benefit. Potentially liable for actions of employees under supervision

What criminal liability does a business entity have in a business context?

Liable if the entity could have prevented it or if supervisor authorized/had knowledge of the act

Vicarious liability

when a supervisor or corporation is held liable for those under them

White collar vs organized crime

White collar: crime that happens underlying a normal business
Organized crime: criminal activity acting as a legitimate business

How is fraud a crime and tort?

Crime: intentionally trying to harm someone, usually related to a slight of hand/deception/trick

Tort: when an injury is suffered from misrepresentation

Larceny vs embezzlement

Larceny: unlawful taking of someone else’s property with intent to permanently deprice of possession

Embezzlement: a person entrusted with property appropriates it

What is prohibited under the Foreign Corrupt Practices Act?

Title 15 of U.S. Code, U.S. people and businesses cannot pay bribes to foreign governments or officials

Law

a body of enforceable rules governing relationships among individuals and between individuals and their society

Constitutional law

both state and federal constitutions

Statutory law

laws enacted by legislative bodies such as statutes passed by congress or state legislatures

Administrative law

rules, orders, and decisions of administrative agencies

Stare decisis

gives power to precedent, the decision stands until legislation or a subsequent case overrules it

Theft, embezzlement, fraud, bribery

theft: umbrella term for crime of obtaining goods by false pretenses

bribery: offering to give something of value to a person in an attempt to influence that person in a way that serves private interest

What are some of the protections for the accused?

actions were justified under the circumstances, lack required mental state, procedural violations (no warrant), double jeopardy

Gratuitous agent

acting as an agent without payment, cannot be liable for breach of contract b/c there is not contract

Fiduciary

refers to a person having a duty created by a particular undertaking to act primarily for another’s benefit, involving trust and confidence

Scope of authority

consists of actual and apparent authority

Actual authority: includes both express authority and implied authority

Apparent authority: what a third party reasonable believes is authorized based on indications from the principal

What is needed to create a principal/agent relationship?

3 Cs! Consent, control, capacity.

Capacity: you cannot give/control what you do not have. A principal that is unable to perform a task cannot appoint an agent to do so

Consent: agent consents to relationship

Control: principal has control of agent’s work

What tests are used to determine whether an agent is an employee or independent contractor?

Multifactor test, ABC test (every agent is an employee unless principal can prove agent is free of direction and control, service is performed outside of usual course of business)

What are ways a principal/agent relationship can be terminated?

Express act: revocation (ended by principal), renunciation (agent wants to quit), expiration (automatic, fixed term ends)

Operation of law events: death of prinicpal/agent, incapacity of principal, bankruptcy, failure to acquire necessary licenses

What are the duties of the agent to a principal?

Performance (standard of care), notification (communication), loyalty (preserve confidential info), obedience, accounting

What are the duties of the principal to an agent?

Compensation, reimbursement and indemnification, cooperation, safe working conditions

When is a principal held liable for a contract?

When there is actual authority, apparent authority, or ratification

When is an agent held liable for a contract?

when the principal/agent relationship is undisclosed or partially disclosed, when performing any unauthorized acts

Respondeat superior

meaning “let the master respond”, a doctrine under which a principal-employer is liable for any harm caused to a third party by an agent-employee in the scope of employment

What are terms used to determine scope of employment while traveling?

Frolic: purely for own reasons unrelated to work, outside of scope

Detour: small deviation from duties, within scope

Commute: outside of scope, unless driving employer vehicle

What are the classifications of crimes?

Felony: serious crimes, punishable by death or imprisonment for more than one year

Misdemeanor: less serious, punishable by fine or confinement up to a year

Petty offenses: minor violations, fined, jailed for a few days

What are the five main categories of crime?

violent, property, public order, white-collar, organized

Malpractice

Also known as professional negligence. Have you behaved like a reasonable professional with your training would have?

Privity

parties within a contract or chain of relationship

Fraud

a misrepresentation of material fact, an intent to deceive, with justifiable reliance by the innocent party on the misrepresentation

What is the general background and impact of the Sarbanes Oxley act?

imposes strict requirements on domestic and foreign public accounting firms, audit committee requirements and record retention requirements

What is the general background and impact of the Dodd Frank act?

Subprime mortgage meltdown, audit firms can whistleblow conduct by clients intended to thwart SEC investigations. Increased penalties, fines, and enforcement

Employment at will

either party may terminate the employment relationship at any time and for any reason, unless doing so violates an employee’s statutory or contractual rights

Ultramares vs Restatement (Third) of Torts

Ultramares: accountants were not held liable for inaccurate financial records showed to investors. Records were intended only for primary benefir of stern. Absence of privity.

Restatement: accountants held liable for information given to any person that the information is intended to influence or knows the recipient intends to influence

What are exceptions to employment at will?

Contract: employee fired outside of the terms of a contract (written or implied)

Tort: wrongful discharge, abusive discharge procedures, fraug

Public policy: commonly whistleblowing

Wrongful discharge

when an employer discharges an employee in violation of an employment contract or statutory law protection employees

Vesting

gives employees a legal right to receive pension benefits when they stop working

Defined contribution vs defined benefit plans

Defined benefit: traditional pension

Defined contribution: 401k, profit sharing, stock bonus

Form I-9

done to establish a worker’s identity and eligibility for employment in the United States

What does the Fair Labor Standards Act (FLSA) require?

minimum wage, 40 hour workweek, overtime rules, child labor restrictions, exempt employee rules

What does the Worker Adjustment and Retraining Notification act (WARN) require?

requires employers to provide 60 days notice before implementing a mass layoff or closing a plant that employs more than 50 full-time workers. Mass layoff: 1/3 of employees at a particular job site. Applies to employers with at least one hundred full-time employees

What does the Patient Protection and Affordable Care Act (ACA) require?

Referred to as Obamacare, most employers with 50+ full-time employees has to offer health-insurance benefits

Under what circumstances may the court pierce the corporate veil?

a party is tricked into dealing with a corporation rather than individual. Corp is set up to never make profit. Formed to evade legal obligation. Statutory requirements such as holding corporation meetings are not followed. Personal and corporate interests are commingled to extent that corp has no separate identity

Declarations page

usually the first page of an insurance policy, summarizing the key details of who/when/what/how much

Endorsement

Document containing amendments or changes to a generic insurance policy

Additional insured

Usually in business policies, another party that is entitled to recover or file claim under and insurance policy

Subrogation

the right to step into the shoes of another

What are the definitions of agent and broker in the insurance context?

Agent: a person who works for the insurance company to sell contracts, owes the fiduciary duties to the insurance company

Broker: ordinarily an independent contractor, working with the applicant/insured, not the insurer

Insurable interest

need for personal connection/use of thing being insured

Application vs Binder vs Policy

Application: all of the facts of coverage/policy

Policy: an insurance contract

Binder: indicating that a policy is pending and stating its essential terms, provides temporary coverage until a formal policy is accepted or denied

Premium vs Deductible vs Proceeds

Premium: the consideration paid to the insurer, the amount you pay to shift the risk

Deductible: how much you have to pay before the insurance takes over the risk. Your share.

Proceeds: the amount that the insurer pays over for the loss, the coverage

Key-Person vs Life Insurance

Key-Person: protects a business in the event of death or disability of key employee

Life: covers the death of the policyholder, on the death of insured, insurer pays amount specified in policy to beneficiary.

Bad Faith action

when there is a breach of an insurance contract, one can recover more than policy limits and potentially punitive damages

Incontestability Clause

provides that after a policy has been in force for a specified length of time, the insurer cannot contest statements made in the application

Coinsurance clauses

specifies the amount that would be co-payed after the deductible

Appraisal clause

if parties cannot agree on the amount of a loss covered or the value of property lost, an appraisal can be demanded

Multiple insurance

if the amount of coverage exceeds the loss, insured can collect from each insurer only the company’s proportionate share of the liability relative to the total amount of insurance

Arbitration clause

independent 3rd party will help to determine a decision and resolution instead of going to court

What are the insurer’s defenses against payment and what are their effects?

Fraud/misrepresentation: may not have to pay on the claim, right to disaffirm or rescind contract

Lack of insurable interest: renders policy void from the beginning

Illegal/improper actions: defense against payment of claim or rescind contract

Subrogation: take up claim but then go sue whoever caused issue, to recover some of the money paid

What are the types of life insurance coverage?

Whole life, limited-payment life, term insurance, endowment insurance, universal life

What are the types of automobile insurance coverage?

Liability: covers impact to other person for bodily injury and property

Collision: damage to car in any type of collision for own injury, regardless of fault

Comprehensive: covers loss, damage, destruction due to fire, hurricane, hail, vandalism, and theft

Uninsured motorist: covering insuring the driver and passengers against injury caused by a driver without insurance

What are some common types of business policies?

General liability: can encompass as many risks as the insurer agrees to cover

Product liability: can be written to match a specific products’ risks

Professional liability/malpractice: protect professionals against malpractice claims

Workers’ comp: covers payments to employees who are injured in accidents arising out of and in the course of employment

Employment practices: improper practices such as discrimination and sexual harassment