BUSE 140 Final Exam: Chapter 10, 14-15, 19, 24, Negligence Case

Syllabus stated Chapter 12 - 15, 19, 24 but due to loss of time Chapter 10 replaced Chapter 12 for this Final Exam. Removed Chapters 13, 20 & 21 from final exam. Topic of Negligence Case is included; specifically the duties and Progression of Mental States From Negligence to Crimes

What is a Commercial Paper?

In its broader sense, documents used to facilitate the transfer of money or credit.

• Documents that act like cash

What are the Two Types of Commercial Paper?

• A promise to pay (promissory, certificate of deposit [CD])

• An order to pay (the draft, the check)

What is an Negotiable Instrument?

A type of commercial paper; a written, signed, unconditional promise or order to pay a fixed amount of money to order or bearer either on demand or at a definite time.

What is considered an Negotiable Instrument?

• Personal checks

• Paychecks

• Bonds

• Certificate of Deposit

• Promissory notes

What is Negotiation?

The process by which both possession of, and title to, an instrument are transferred from one party to another, with transferee becoming a holder

• Transfer of an Negotiable Instrument

What is a Holder?

A person who possesses a negotiable instrument issued, drawn, or indorsed to that person or his/her order or to bearer

What does the UCC Article 3 cover?

Governs negotiable instruments: drafts (including checks) and notes representing a promise to pay a sum of money, and that have independent value because they are negotiable.

What does UCC Section 3-104(a) cover?

The Elements of Negotiability that shows what is to be a negotiable instrument

• TDLR; Is it valid or not?

What are the Elements of Negotiability?

• a.) be written;

• b.) be signed by the marker or drawers

• c.) contain an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the instrument; and no other undertaking or instruction given by the marker or drawer, except as authorized by Article 3.

• d.) be payable on demand or at a definite time

  • UCC 3-108(b)

    • fixed date or dates

    • fixed period after acceptance

    • fixed reasonable time

    • prepayments

• e.) and be payable to order or to bearer

  • (UCC 3 - 109(b)) The order includes instruments that state: pay to the order or to an identifiable person and pay to his/her order

  • (UCC 3 - 109 (a)) The bearer includes instruments that do not state a payee and the instruments that are stated are:

    • pay to bearer

    • pay to the order of bearer

    • pay identified person or bearer

    • pay cash or order to cash

What is a Marker?

The person who signed a promissory note; taking on debt

What is a Drawer?

The person who wrote the check; paid down the debt

What is does the UCC Article 3-108(b) cover?

Be payable on demand or at a definite time

• fixed date or dates

• fixed period after acceptance

• fixed reasonable time

• prepayments

What does UCC Article 3-109(a) &(b) cover?

be payable to order or to bearer

• (UCC 3 - 109 (a)) The bearer includes instruments that do not state a payee and the instruments that are stated are:

  • pay to bearer

  • pay to the order of bearer

  • pay identified person or bearer

  • pay cash or order to cash

What is the Order?

includes instruments that state: pay to the order or to an identifiable person and pay to his/her order

What is the bearer?

Includes instruments that do not state a payee and the instruments that are stated are:

• pay to bearer

• pay to the order of bearer

• pay identified person or bearer

• pay cash or order to cash

What does UCC Article 3-106(a) Cover?

Conditional Negotiation

What is a Conditional Negotiation?

If a negotiable instrument comes with conditions, it is not nonnegotiable

• express condition on payment.

• a statement that the instrument is subject to or governed by another agreement.

What are the Types of Negotiable Instruments?

• Promissory Note

• Draft

• Check

What is a Promissory Note?

• Also called a Note

• Two party instrument in which one person (the maker) makes an unconditional, written promise to pay another person (the payee), or a person specified by the payee, a fixed amount of money either on demand or at a particular time in the future.

What is a Draft?

• Three party instrument. The drawer orders the drawee to pay a fixed amount of money to the payee, or another person specified by the payee, either on demand or at a particular time in the future.

What is a Check?

Special type of draft in which the drawee is always a bank and the instrument is payable on demand.

What is a Cashier’s Check?

• A check down by a bank upon itself

• The most common draft

What is a Traveler’s Check?

• A check in which the financial institution is both the drawer and drawee

• Payee/holder required to sign a specimen signature on the instrument when it is issued and then sign it again when cashing it

What are Certified Checks?

Checks that have been “accepted” by the drawee bank, that it, the bank certifies that there is money in the drawer’s account to cover the check

What is a Holder of a Negotiable Insturment?

• A holder possesses an instrument passing to him/her via an unbroken chain of negotiation, if transferred, and

  • 1.) Issued, drawn, or indorsed to him/her or to his/her order to,

  • 2.) Payable to bearer

Holder V. Holder in Due Course (HIDC)

• A holder is not necessarily the “owner” of an instrument. Can obtain payment on an instrument. Unless the opposing party proves a defense to payment

• A HIDC takes possession and title free of most personal defenses that could be raised against the HIDC’s transferor.

  • Payee can be a HIDC

What is a Holder in Due Course (HIDC)?

One who takes possession and title free of most personal defenses that could be raised against the HIDC’s transferor.

How was it Acquired? [Requirements for a HIDC]

• a.) Is it legally written to the person stated on the instrument?

• b.) Is it exchanged for something w/ consideration?

• c.) Is it accepted w/ good faith? Did the holder act in honesty & accepted the instrument believing the genuineness of it? [Taken for Value & Good Faith]

• d.) Is it taken w/o notice of alternation or claims against it? [Absence of Notice]

  • Change the value of the money from $10k to $100k.

What is a Bearer Paper?

• Checks make out to “cash” or indorsed in blank.

  • Can be negotiated merely by a change in possession.

What is Order Paper?

Negotiation not only requires delivery, but also the proper indorsement(s).

What is an Agency?

A legal relationship whereby one person acts for another

What is an Agent?

A person authorized to act for another (principal)

What is Principal?

The people for whom an agent acts and from whom the agent derives authority

What is an Independent Contractor?

A person hired to undertake a contractually defined result (not an employee and usually not an agent)

What is Agency Law?

• Consists of all the rules, recognized and enforced by society, whereby one person acts for another

• Is State Common Law

What is an Attorney?

A representative or agent

What is Attorney - At - Law?

• A legal representative, employed to represent a client in lawsuits and other legal matters.

What is Attorney In Fact?

• May represent another person as an agent for general or special purposes other than legal ones

• Named as a representative or agent in Power of Attorney

What is Power of Attorney?

• A written document setting out the appointment of the attorney

• The appointment may for board agency purposes for named and limited purposes.

  • “to do any act for me”

  • “to sell my real estate known as ‘Blackarce’”

What are the Legal Concepts?

• Agency may include employment

• Agency includes and may be created by a power of attorney

• Agency generally does not include independent contractors

• Personal Service obligations cannot be performed by an agent

• Distinguish between employees (who are agents) and independent contactors

What does Agency may include employment mean?

• Under control and supervision of his/her employer

• Determines not only what is to be done, but also how it is to be done and other details of performance

• Certain types of employees have no power to represent the employer and thus are not agents.

What does Personal Service obligations cannot be performed by an agent mean?

These nondelegable obligations require the special skill of a designated person who cannot a representative (agent) to act in his/her place.

What is Creation of an Agency

• By Express Contract or Consensual Agreement [refer to Contracts]

• By the Conduct of the Parties

• By Ratification of an Unauthorized Act

• By Estoppel

• By Necessity

What does By Ratification of an Unauthorized Act mean?

• 1.) Party was in existence when the “agent” acted

• 2.) Had full knowledge of all material facts before it ratified

• 3.) Ratified the entire act of a would-be agent, not simply the favorable parts.

What are the Duties of The Agent to The Principal?

• Act as a Fiduciary

• No Comingling

• 1.) Duty to Obey Instructions

  • Self Evident

• 2.) Duty to Act with Skill

  • Must be Competent

• 3.) Duty to Avoid Conflict of Interest

  • Agent cannot act for his/her personal interest

• 4.) Duty to Protect Confidential Information

  • Agent must protect this property from the general public, third persons, and the principal's competitors

• 5.) Duty to Notify

  • Agent is some extension of the principal and must notify all information that is or may be useful to make further choices with respect.

• 6.) Duty to Account

  • Agents must maintain an “open book” for the principal so that the principal may assess the progress of the work.

  • Upon termination of the agency, all property must be accounted for and all income turned over to the principal in accord with the agency agreement

What is Fiduciary?

Someone who manages money or property for someone else

What is Commingling?

• Fiduciary mixes Clients funds with their personal funds

  • Breach of Agency Contract

  • Criminal Act of Embezzlement, larceny after trust

What are the Duties of the Principal to the Agent?

• Duty to Follow the Contract of the Agency

  • Governed by contract of agency

• Duty to Compensate the Agent

  • Primary Duty is to compensate the agent for his/her services

    • If implied, the agents fee is generally understood

    • No express or implied, agent is entitled to compensation in quasi contract calculated at the reasonable value of the services

    • However, if the agent agreed to perform at the agency gratuitously, no compensation is due.

    • If the agent is an employee, he/she is entitled to a place to work and to the equipment supplies, and accessories necessary to perform the employment.

• Duty to Pay all Expenses Incurred by the Agent

  • The principal must pay all expenses the agent reasonably incurred in furtherance of the principals business.

• Duty to Inform the Agent of Dangerous Risks

  • Inform the agent of dangerous risks and the principal has reason to know exist.

What is Liability of the Principal/Agent Third Parties?

• Since an Agent is an extension of the Principal, when the agent is acting within the authority granted by the Principal, he/she can bind the Principal to the deal; otherwise representatives would serve no purpose

• The Principal is bound contractually if the agent has either actual authority to make a contract for the Principal or has the apparent authority to do so

What is Actual Authority?

Expresses or Implied Authority

What is Apparent Authority?

Third Party judges the actions or conducts whether to believe that the Agent has the authority to make contracts for the Principal

What is Sole Proprietorship?

The simplest form of business, in which a sole owner and his/her business are not legally distinct entities, the owner being personally liable for business debts

What is Partnership?

• The association of two or more persons who have expressly or implicitly agreed to carry on, as co-owners, a business for profit

  • General Partnership

  • Limited Partnership

What is General Partnership?

A partnership in which there are no limited partners, and each partner has managerial power and unlimited liability for the partnership.

What is Limited Partnership?

A partnership conforming to statutory requirements and having one or more general partners and one or more limited partners.

What is Corporation?

An artificial being created by operation of law, with an existence distinct from the shareholders who own it.

What is Limited Liability Company (LLC)?

A business format that is a hybrid of the corporation and the partnership; it is taxed as a partnership but has the limited liability of a corporation

What is Crime?

A public wrong, committed with intent or by negligence, for which the law provides punishment or recompense to society

What is a Tort?

• A private wrong against a person or his/her property. Aside from certain limited circumstances, all torts arise from either an intentional, wrongful action or from a negligent action.

• A private wrong, a trespass against a person or his/her property, for which a damages award or other judicial remedy may be sought.

  • Either intentional, wrongful action, or negligent action

  • Also constitutes crimes so a single action may result in two trials; a criminal trial and a tort (civil) trial

What is Burden of Proof?

• degree of proof necessary for a criminal conviction (beyond a reasonable doubt) or for a successful civil suit (preponderance of evidence)

• Crucial difference between Criminal and Civil cases in the level of proof required.

• A verdict ending in “not guilty” doesn’t necessarily mean that the judge or jury believes the defendant to be innocent.

  • Simply finding that there was insufficient evidence to prove guilt beyond a reasonable doubt.

Important Facts About Torts

What are the important facts about crime?

• American criminal law is primarily codified law that is based on statutes and regulations rather than past judicial decisions.

• Crime may be under both federal law and state (civil) law

  • Depending on which category the crime falls into, it may be prosecuted in separate criminal cases in each of the two court systems [state & federal]

What is the Fourth Amendment?

• Protects against unreasonable searches and seizures and requires probable cause before a search warrant or arrest warrant is issued.

  • Exceptions to this are: “hot pursuit” of a suspect, evidence in plain view or about to be destoryed, searches of arrested persons, and good faith police behavior

  • When an arrest for a serious offense is supported by probable cause, the suspect’s being required to furnish a DNA sample - fingerprints & photography - constitutional.

What is the Fifth Amendment?

• Prohibits compulsory self-incrimination

  • “I plead the fifth” rather than testify

  • Prohibition against double jeopardy (trying someone again for the same crime once he/she has been acquitted of that crime)

  • Due Process with the Fourteenth Amendment

    • Constitutional basis for our presumption of a criminal defendant’s innocence

What is the Sixth Amendment?

• Outlines the criminal defendant’s rights - the right to counsel, to a speedy trial and public trial, to confront witnesses, and to a jury trial

What is Miranda v. Arizona, 384 U.S. 436 (1966): The Miranda Rights

• Right to remain silent

• Anything you say can and will be used as evidence against you

• Right to an attorney and will be provided one from the state for free if you cannot afford one

What are the Classifications of Crimes?

• Treason

• Felonies

• Misdemeanors

• Infractions or Violations

What is Treason?

• Rarely Charged

• Crime against the United States; the only crime defined.

What are Felonies?

• Most Serious; punishable by imprisonment

• Murder

• Manslaughter

• Aggravated assault

  • attempt to murder, rob, kill, rape, or assault with deadly or dangerous weapons

• Arson

• Bribery

• Burglary

• Embezzlement [Stealing from employee’s payroll]

• Forgery

• Grand Larceny [taking and keeping from robbing a bank]

• Kidnapping

• Price Fixing

• Rape

• Robbery

• Tax Evasion

What are Misdemeanors?

• Generally Punishable

• Only by Fines or, at most, a brief stay in the local jail

• Simple assault [physical harm - attempt or hit; Karen slapping you across the face type of deal]

• Disorderly conduct [disrupting public peace]

• gambling

• petty larceny [in-store theft like clothing and food]

• prostitution

• trespassing private property

What are Infractions / Violations?

• Too petty to be labeled as crimes

• Violations of city ordinances

• Traffic Regulations

What is Actus Reus?

• Criminal Act

• Doing vs Thinking

• Party A thinks about hurting Party B, but does nothing about it; No Actus Reus because no crime actually happened

What is Mens Rea?

• Criminal Intent

• Thinking vs Accident

• Party A’s Car Collides with Party B and kills them, no crime because Party A does not know Part B nor had any malicious intent.

What are the Criminal Procedures?

• Probable Cause

• Indictment?

What is Probable Cause?

• Reasonable grounds - something more than mere suspicion, to believe that a particular person committed the crime, that person can be arrested

  • Warrant for arrest is necessary unless the pressure of time requires immediate action (before the suspect flees)

  • Concealing weapons or contraband

  • Being look out for others to commit a crime

  • Using a retail store as a cover to commit crimes in a location [Hidden drug dealing basement]

  • Witness description matching the suspect

What is Indictment?

A grand jury or magistrate or police officer, not a persecutor, has filed criminal charges against you based on probable cause

What are the Classifications of Torts?

• Intentional Torts

• Negligence

  • Duty: Standard of Care by Reasonable Person

  • Breach: Violation of Rule to Duty

  • Causation (Cause in Fact) (Actual Cause) (of the wrong/injury)

    • Must be proven in fact

  • Proximate Cause - The legal cause of the wrong/injury

    • Involves forseeability

    • Plaintiff’s damages natural and probable conseqences [that are closely related or connected to] of the defendants unreasonable acts

  • Damages

    • Bodily

    • Property

    • Mental & Emotional

• Other Tort Theories

  • Negligence Per See: Violation, by itself, proves duty and breach

  • Res Ipsa Loquitur: When a certain type of accident occurs ordinarily because of negligence and the defendent had EXCLUSIVE CONTROL of the instrument causing the injury [e.g. surgeon leaving a rag inside a patient]

• Strict Liability

  • Defendent is liable for the plaintiff’s injuries despite the absence of negligence or intentional wrongful acts. [Engaged in abnormally dangerous activities like demolition with explosives]

What is Intentional Tort?

• Defendant’s act must be expressly or implicitly intended or reasonably foreseeable

  • Examples: Assault & Battery, false imprisonment, slander [only if it brings financial harm], invasion of privacy

What is Negligence?

• Failure to use reasonable care, resulting in damage or injury to another.

What are the steps that classify a case to be a Negligent Case?

• Duty: Standard of Care by Reasonable Person

• Breach: Violation of Rule to Duty

• Causation (Cause in Fact) (Actual Cause) (of the wrong/injury)

  • Must be proven in fact

• Proximate Cause - The legal cause of the wrong/injury

  • Involves foreseeability

  • Plaintiff’s damages natural and probable consequences [that are closely related or connected to] of the defendants unreasonable acts

• Damages

  • Bodily

  • Property

  • Mental & Emotional

What are the Other Tort Theories?

• Negligence Per See: Violation, by itself, proves duty and breach

• Res Ipsa Loquitur: When a certain type of accident occurs ordinarily because of negligence and the defendent had EXCLUSIVE CONTROL of the instrument causing the injury [e.g. surgeon leaving a rag inside a patient]

What is Negligence Per See?

Violation, by itself, proves duty and breach

What is Res Ipsa Loquitur?

When a certain type of accident occurs ordinarily because of negligence and the defendant had EXCLUSIVE CONTROL of the instrument causing the injury [e.g. surgeon leaving a rag inside a patient]

What is Strict Liability?

Defendant is liable for the plaintiff’s injuries despite the absence of negligence or intentional wrongful acts. [Engaged in abnormally dangerous activities like demolition with explosives]

What is Title VII?

• A statute in the federal Civil Rights Act of 1964 prohibits discrimination in the hiring, firing, promotion, compensation, or any other aspect of employment because of a person’s race, color, religion, sex, or national origin

  • TL;DR - Protects employees and job applicants from employment discrimination based on race, color, religion, sex, and national origin.

• Also prohibits any employment discrimination against someone because he/she opposed a Title VII violation or participated in a Title VII investigation or proceeding (making a change, testifying, or otherwise assisting at a proceeding)

• Discrimination involves treating other employees or job applicants better than members of the protected class.

• This applies to any employment agency and any business or labor organization that affects interstate commerce and has at least 15 workers/members.

What is Worker’s Compensation?

A law found, in all states, requiring employees to relinquish their right to sue their employers for accidental death, injury, or disease arising from or during the course of their employment; in exchange, the employees gain the right to receive financial benefits (according to a statutory schedule of benefits) regardless of fault

• TL;DR - insurance that provides cash benefits and/or medical care for workers who are injured or become ill as a direct result of their job

What is The purpose of Employment Legislation?

Is to protect workers’ health and safety, provide workers with a minimum level of economic support, and - overall - foster a workplace free from both discrimination and disruptive labor/management “wars”

Why do we have Worker’’ Compensation?

• Is a direct result of public awareness and outrage at the poor and often dangerous working conditions people were forced to labor under in order to make a living, and the financially devastating effects of a work-related injury or illness on the worker and the worker's dependents.

• TL;DR - The more dangerous the working conditions are, the more the employer is liable for any work-related injuries, death, or illnesses

What is Occupational Safety and Health Act (OSHA) 1970?

• Sets and enforces standards to ensure safe and healthy working conditions, complied with by both employer and employee.

• Doesn’t have to be anything majorly dangerous/fatal, all unsafe incidents, accidents, lost workdays, job transfers and terminations, medical treatments, and restrictions on work must be documented and reported

• A Federal Plan

What is CAL OSHA (California Occupational Safety and Health Act of 1973)?

• Enacted by the California Legislature to assure safe and healthful working conditions for all California working men and women.

• A State plan

What is National Institute for Occupational Safety and Health (NIOSH)

Charged with conducting research into health and safety standards and recommending new rules or regulations to OSHA

What is Occupational Safety and Health Review Commission (OSHRC)?

An independent organization that reviews appeals from OSHA’s decisions

What are the The Three Reviews for Appeal from OSHA’s Decision?

1. As with most other federal administrative agencies, OSHA cannot make new rules or policies until it has studied and verified that these new regulatory proposals, if enacted, would provide societal benefits exceeding their costs

2. OSHA has been promulgating regulations, which set forth performance standards focusing on a level of protection rather than a particular device to share to achieve that protection

3. OSHA has gone beyond just concentrating on immediate, overt dangers to life and limb, and it instead increasingly emphasizes the “hidden” hazards from relatively low-level exposure to toxic workplace chemicals sometimes linked to “delayed manifestation diseases,” such as cancer and asbestosis

What is the The Family and Medical Leave Act of 1993?

• Requires governmental employers and private employers of 50 or more workers to provide their employees up to 12 weeks of unpaid leave for their own serious illness, the birth or adoption of a child, or the care of a seriously ill child, spouse, or parent.

  • Only eligible to employees who have given reasonable notice and have worked for the employer for at least one year - a minimum of 1250 hours annually.

• Workers who take such leaves are obligated to return to the same or equivalent jobs, with the same pay and benefits.

What is The Fair Labor Standards Act (FLSA)

1. Establishes a minimum wage. This can be reduced by equivalent in the form of food or lodging.

   • Tipped employees are individuals engaged in occupations in which they customarily and regularly receive more than $30 a month in tips. The employer may consider tips as part of wages, but the employer must pay at least $2.13 an hour in direct wages.

2. Mandates payment of “time and a half” for overtime work, with a regular work week being 40 hours.

   • Does not include travel time

   • Includes compensable activities such as preparatory actions on the work site

3. Exemption of Executive, administrative, professional, and outside sales employees (as defined in Department of Labor regulations) who are paid on a salary basis from both the minimum wage and overtime provisions of the FLSA.

4. Forbids child labor of those under 14 years of age

5. Prohibits employment of persons under age 18 in hazardous occupations (construction, mining)

   • also restricts the employment of 14 to 15-year-olds to non-school hours in non-hazardous, non-manufacturing jobs, such as retail stores, food service establishments, and gas stations

What is The Doctrine of Abusive (wrongful) Discharge?

• Most at-will employees cannot lawfully be fired because of their race, sex, or religion

• Also includes:

  • worker asking for their superiors to obey securities and environmental laws

  • an employee is about to become entitled to a bonus

  • a worker exercises a statutory right (workers compensation claim )

  • employee refuses to participate in antitrust violations

  • worker seeks to have his/her employer comply with consumer protection laws

  • employee reports criminal activity by his/her employer (whistleblower exception to at-will employment)

What is the Equal Employment Opportunity Act (1972) (EEOC)?

• Enforces Title VII and other federal statutes such as the Equal Pay Act, the Age Discrimination in Employment Act, and the Americans with Disabilities Act

• May investigate, conciliate, and litigate grievances filled by existing and prospective employees

What is The Bona Fide Occupational Qualification (BFOQ)?

• the BFOQ law allows for necessary employment discrimination based on sex, religion, or national origin if the particular business’s operations or the job position’s duties justify it.

  • Ex.) A wet nurse may only be a woman to protect others’ right to privacy

  • Ex.2) A Baptist church may interview only Baptist ministers for the job of parish pastor.

• Preferences do not count for it is opinionated

What is The Requirements for BFOQ?

1. Show that BFOQ is necessary for the business

2. Demonstrate that its necessity is established by a verifiable, rational basis

3. Prove that the rational basis is rooted in a substantial belief that all, or nearly all, employees who are not members of the suspect class do not have qualifications for the position

4. Demonstrate that this belief can either be proven, through appropriate tests if necessary or that it would be impossible or impracticable to “deal with all of the excluded class,” as validated by expert testimony or generally accepted research and data.

What is Disparate Treatment?

• A type of intentional discrimination that occurs when an employer treats a member of a protected class differently than others. This can happen based on the protected class's race, color, religion, sex, national origin, or other discriminatory reasons.

  • For example, an employer might test a particular skill only on certain minority applicants

What is Adverse (Disparate) Impact?

• The selective adverse effect of a facially neutral law, requirement, or process, which lacks any relevant justification, on individuals belonging to a legally protected group.

  • TL;DR - While neutral on its face, it has an unequal negative impact