ACCT352 Exam 1 Moffa

What is law?

a body of rules of action or conduct prescribed by the controlling authority, and having binding legal force...must be obeyed and followed by citizens subject to sanctions or legal consequences

In what two ways are laws made? And what does each way apply to?

Generally (apply to various groups in same way) and Equally applicable (apply to all or most members in society)

What are the functions of law?

keep peace, moral standards, social justice, status quo, orderly change, planning, basis for compromise, individual freedom

What is property?

ownership, the legal right to exclude or keep others from interfering, private exclusive rights in resources. The central concept underlying Western legal systems

What are the two major legal systems?

Civil Law and Common Law

Civil Law under Common Law Classification

law based on statutory codification of law EX. Japan, Latin America, Spain, French colonies

Common Law under Common Law Classification

law based on written judicial decisions that establish precedent EX. US, UK, Canada, NZ, India

What state does not use Common Law? and what does it use?

Louisiana uses Civil Law

Public Law

law dealing with regulation of society...constitutional law, administrative law, criminal law

Private Law

law dealing with issues that concern private resource relationships...property law, contract law, tort law

Civil Law under Criminal Law Classification

law dealing with private rights between people...torts & contracts, damages, no punishment

Criminal Law under Criminal Law Classification

law dealing with offenses against society at large...prosecuted by govt, results in punishment

Substantive Law under Procedural Law Classification

part of law creating, defining and regulating rights, duties and powers...THE WHAT

Procedural Law under Procedural Law Classification

part of law telling the method/means for having rights or duties enforced...THE HOW

What are the sources of law?

Constitutions, Legislation, Administrative Regulation, Judicial Decisions or Case Law

What do Constitutions do?

set fundamental rights, describe and empower gov, limits power

What is Legislation?

laws by congress, states, and local

What is Administrative Regulation?

rule or order by federal, state, or local regulatory agencies

What are Judicial Decisions or Case Law?

decisions by courts that interpret and enforce laws or common law

U.S Constitution

-Supreme Law of the Land

-established structure of federal govt...legislative, executive, and judicial branches

-enumerates federal powers, and reserves all other powers to states

-gives protection to individual liberties and rights

Codified Law: Statutes and Ordinances

-Congress enacts federal statutes, states enact state statutes

-municipalities and local gov enact ordinances

-federal laws preempt state and local laws

Executive Orders

-Issued by president or state governors EX. order requiring federal agencies to buy more hybrid cars

-power derived from express delegation from legislative branch or implied from constitutional powers

Regulations and Orders of Administrative Agencies

-empowered by legislative and executive branches...adopt rules and regulations, enforce statutes, hear and decide disputes

-EX. SEC, FTC, DOT

Judicial Decisions

Courts decide controversies

What is used to reach Judicial Opinions and what is it a foundation of?

state rationale, foundation for common law

Stare Decisis

based on the common law tradition, past court decisions become precedent for deciding future cases

Doctrine of Stare Decisis

-lower court follow the precedent established by higher courts

-both federal and state courts MUST follow precedents established by Supreme Court decisions

-Courts in one state or local jurisdiction are not bound by precedent of another state or local jurisdiction, but may look at it for guidance

Advantages of Case Law

Stare Decisis, judges follow precedents, give certainty and predictability, flexibility-power to depart from or change precedent

Disadvantages of Case Law

volume of cases, conflicting precedents, conflicts of law

Priority of Law in the US

-US Constitution and treaties take precedence over all other laws

-federal statutes take precedence over federal regulations

-valid federal law takes precedence over conflicting state or local law

-doctrine of federal "preemption"

-state constitutions rank as the highest state law

-valid state law takes precedence over local laws

What is a crime based on criminal conduct?

public wrong, court punishes on behalf of society

What is a punshment based on criminal conduct?

death, prison, fine, removal, disqualification

Breach of Contract

private wrong, failure to perform

What are the Remedies for Breach of Contract?

damages ($$$...compensatory, consequential), rescission, specific performance

Tort

civil wrong other than breach of contract, intentional, negligence, strict liability

What are the Remedies for Tort?

compensatory money damages, punitive damages (exemplary damages)

Legal System & Corporate Governance

-Corporation - legal person

-Ownership - shareholders

-Resource control: board of directors/managers

-corporate governance - rules protecting owners property interest

Two Major Court Systems in US

Federal Court System and Court Systems of the 50 states and DC

Federal and Most State Court Systems

Trial Courts -> Appellate Courts -> Supreme Courts

Subject Matter Jurisdiction

power over particular issues

Sources of Authority in State Courts

-State constitution

-state laws

-court rules of procedure

-limited and general jurisdiction trial courts

-intermediate appellate courts

-highest state court

Limited Jurisdiction Trial Courts

hears matters of specialized or limited nature

EX. traffic, juvenile, justice of peace, probate, family law, misdemeanor, small claims

General Jurisdiction Trial Courts

hears cases of general nature that are not within jurisdiction of limited jurisdiction courts

EX. real estate, business law, contracts, negotiable instruments--record and store testimony and evidence

Intermediate Appellate Courts

-hears appeals from trial courts

-reviews trial court record to determine if there have been any errors at trial that would require reversal or modification

-no new testimony or evidence

Highest State Court

-in most states called "supreme court"

-hears appeals from intermediate state courts and certain trial courts

-no new testimony or evidence

-decisions of state supreme courts are final, unless a question of law is involved that is appealable to the US Supreme Court

What do Federal Courts Review?

-Article III of Constitution

-reviews: questions of federal law, US as Party, State Disagreements, Suits between citizens of different states -> Federal Jurisdiction

What is the Federal Court System?

US Supreme Court -> US Court of Appeals -> Special Federal Court or US District Courts

Federal Question Cases

US Constitution Issues, Federal Statute Issues, No $$ limit

Diversity of Citizenship

Plaintiffs/Defendants - Citizens of Different States, each claim must be 75000+, guard against state court bias

Federal District Courts

federal trial courts, general jurisdiction, receive evidence, evaluate testimony, impanel juries, resolve disputes, lifetime appointments for judges

Why are Federal judges and Supreme Court judges appointed for life

to avoid built in bias

US Court of Appeals

-Intermediate appellate courts

-hears appeals from district courts located in their circuit

-13 circuits (11+DC+Federal) by region

-Lifetime appointments

-3 judge panel or en banc

-review the record of lower courts or administrative agency proceedings

-determine if there have been any error of law that would warrant several or modification of the lower court decision

-no new evidence or testimony

Who does the US Supreme Court hear appeals from?

Federal Circuit Courts of Appeals, Highest State Courts, Special federal courts, conflicting decisions of US Circuit Courts

US Supreme Court

- decision becomes "law of the land" - not subject to review

-no new evidence or testimony

-9 justices with lifetime appointments

-accepts about 100 cases each year out of 10000 filed

-only court without mandatory retirement age

How can decisions be made in the US Supreme Court?

unanimous (9-0). majority (more than 5-4) tie (lower court decision stays the same)

Petition for Certiorai

a petition asking the Supreme Court to hear case

Writ of Certiorai

an official notice that the Supreme Court will review a case

Concurrent Jurisdiction between Federal and State

federal questions and diversity of citizenship cases

Standing to Sue - Article III

Plaintiff must have a stake in the outcome of case EX. one cannot sue on behalf of a friend who has been injured

In Personam Jurisdiction

-exists over any plaintiff who files a lawsuit

-exists over defendant who is within the boundaries of the state

Is a Corporation subject to personal jurisdiction?

subject to it in any state where it is incorporated, has principal office, or does business

Long Arm Statute

allows state courts to obtain personal jurisdiction over persons or business located in another state

-allows summons to be served in other state

-must have minimum contacts with state

-must uphold notions of fair pay and substantial justice

Long Arm Statute is exercised over non-residents who have

committed torts within the state, entered into a contract either in the state or that affects the state (internet sales), transacted other business in the state that allegedly caused injury to another person

Venue

location of the court, must be near where incident occurred or where parties reside

-several courts may have jurisdiction

-must be convenient to both sides

Why would there be a change of venue?

to avoid pretrial publicity that may have prejudiced potential jurors

Forum Selection Clause

-parties may specify in a contract what court to us

Choice-of-Law Clause

parties may agree on the states or countrys law that will apply to the contract

What is essential to any system hat preserved private property interests?

an impartial enforcement and dispute resolution

What do you need to get into court?

standing to sue, personal jurisdiction and subject matter jurisdiction

Phases of Litigation

-pleadings

-pretrial

-trial

-post-trial

-appeal

Pleadings

-complaint, answer, counterclaim, reply

Complaint

Plaintiff files this to start suit, lists parties, alleges facts and laws violated, prayer for relief (asks for damages, injunction..)

Summons

Court issues this. Directs defendant to appear and answer within a specified time

Answer

-Defendant must file this, if they do not then they will lose by default.

-Admitting or denying fact allegations

-stating affirmative defenses

Counterclaim

-defendant may sue plaintiff for damages or some other remedy

-pleading is this combined with an answer

Reply

Original Plaintiff must file this and serve on defendant

-it is the "answer" to the counterclaim (admit/deny allegations; affirmative defenses)

Intervention

other parties have interest in lawsuit and become parties

EX. bank with security interest in property that is subject of lawsuit

Consolidation

-several plaintiffs have filed lawsuit stemming from same situation

-court will consolidate if no undue prejudice

-reduces strain on court system

"Virtual Courthouse"

allows E-filing of documents and electronic conferences, available in federal court and some states

Advantages of E-Filing

saves paper, time, and easier to track documents

Statute of Limitations

-Establishes the period during which plaintiff must bring a lawsuit against a defendant

-if a lawsuit is not filed within this time period, plaintiff loses right to sue

-established for each type of lawsuit

EX. 2 years for tort claim for personal injuries

EX. 4 years for breach of contract under UCC

Discovery

-A legal process during which both parties investigate facts of the case from the other party and witness prior to trial

-usually involves review of documents (paper and electronically stored info like email, and taking depositions)

Purposes of Discovery

-preventing surprise

-allowing parties to thoroughly prepare for trial

-preserving evidence

-saving court time

-promoting settlement of cases

The major forms of Discovery

-Depositions

-Interrogatories

-Production of Documents

-Physical and Mental Examination

-Requests for Admissions

Scope of Discovery

Discoverable info: allowable if it will lead to evidence admissible at trial

Why can Discovery be expensive?

-time searching for info, preparing depositions, copying and shipping costs, attorney fees interpreting requests

Depositions

-Oral testimony given by party or witness

-under oath

-parties MUST give these

-witnesses can be compelled by subpoena

-evidence preserved by court reporter or videotape

Interrogatories

-written questions submitted by one party to the other

-must be answered and returned within a set time period

-answers affirmed under oath

Production of Documents

-Documents that parties request the other side to produce or make available for review

EX. Company records, email

-Discoverable if may lead to admissible evidence

Examinations

If the physical or mental condition of a party are in question, this may be required to be done by an expert

Request for Admissions

-written statements propounded on the opposing party with request to "Admit" or "deny" the state as true

-can be used as evidence at trial

Pretrial Motion

a motion a party can make to try to dispose of all or part of a lawsuit prior to trial

Motion for judgement on pleadings

even if all the facts presented int he pleadings are taken as true, the party making the motion would win the lawsuit when the proper law is applied to these facts

Motion to dismiss

jurisdiction, failure to state a valid claim for relief

Motion for summary judgement

motion that assets that there are no factual disputes to be decided by the jury

What can a judge apply to the undisputed facts in a case and decide the case without a jury?

proper law

What are motions supported by?

affidavits, documents, and deposition testimony

Settlement Conference

-federal court rules and most state rules allow for a pretrial hearing and this

-done in judges chambers

-at least 95% of all cases settle before trial

Cost-Benefit Analysis of a Lawsuit

-consider: probability of winning or losing. never certain

-amount of money to be won or lost

-lawyers fees and other costs of litigation

-loss of time by managers and other personnel

-effect on relationships and reputation

-aggravation and psychological costs

What does the 7th amendment guarantee?

the right to a jury trial in cases in federal court