Business Law - Exam 1 Flashcards

Core Framework of the Law

Facts + Law = Outcome

Function of the Legislative Branch

create laws, approves presidential appointments

Function of the Executive Branch

executes and carries out the law, vetoes laws, pardons people, appoints federal judges

Function of the Judicial Branch

Interpret the Law, issue rulings, decide if the law is constitutional

What are the 4 balancing qualities of the law?

1. Predictable → must know the law to follow it

2. Flexible → adaptable to new social norms

3. Knowable → must be accessible and clear

4. Reasonable → must reflect common sense and basic fairness

What are Constitutions?

supreme law of the land, overrides all other sources

What are Statutes? (Statutory Law)

Law enacted by legislatures (Federal = congress, State = State Legislatures)

What are Regulations? (Administrative Law)

Rules created by Administrative Agencies (EPA, SEC) that carry force of the law, usually prompted by Congress

What are Ordinances?

Local laws passed by cities and counties

What is Common Law?

Law developed over time and through past judicial decisions, NOT written law

What is Stare Decisis?

Once a court has laid down principle of law applicable to certain facts it will adhere to that principle in the future

What is a Plaintiff?

Injured party filing the lawsuit and seeking compensation

What is a Defendant?

The alleged wrongdoer who must respond to plaintiff claims

Broadly, what does a Judge decide?

All questions of LAW

Broadly, what does the Jury decide?

Resolves disputed questions of FACTS and HUMAN EXPERIENCE

What is Appellate Court?

Where the loser of trial court goes if they wish to appeal the ruling

How do lawsuits proceed?

1. Pleading → what happened

2. Discovery → parties answer questions under oath

3. Motions → asking judge to act

4. Trial → evidence presented and verdict reached

5. Appeal → loser has right to appeal

What is the burden of proof?

the party trying to convince the judge or jury (usually the plaintiff) bears the burden of proof

must show greater weight of supporting evidence against other party

What is negligence?

A remedy for carelessness

What is a tort?

The body of law the recognizes that people can cause injury to others and the injured should be compensated

NOT criminal and NOT contract

What are intentional torts?

The defendant meant to inflict harm

What are unintentional torts?

The defendant was careless (usually the case)

What are the 4 required elements of negligence?

1. Duty

2. Breach

3. Cause (actual AND proximate)

4. Injury

What is the Duty of Care? (negligence)

A duty of care is owed if consequences from the defendants negligent is REASONABLY FORSEABLE

must evaluate how far that duty reaches

What duty of care is owed to Trespassers?

Liable for intentional harm only (setting traps)

What duty of care is owed to Licensees?

Licensees are social guests, must warn of hidden dangers the landowner knows about

What duty of care is owed to Invitees?

Invitees are invited for the landowners benefit: customers

A duty is owed to exercise reasonable care to keep the premise safe, landowner has active duty to inspect the premise

What is Breach (of Duty of Care)?

When a person is not using ordinary care and commits negligent act

Must ask; what would a reasonable person do considering the situation?

What level of care does the law require? did the defendant meet it?

What is Cause? (negligence)

Did a breach of duty of care cause the injury

What is Actual Cause?

But for defendants conduct, would the injury have occurred?

Was the defendant’s conducted a substantial factor in causing harm?

What is Proximate Cause?

The defendant is liable for all foreseeable consequences happening to foreseeable plaintiffs flowing from negligent act

What is Injury? (negligence)

Physical or financial loss is required to recover from negligence

Was there injury? how much will compensate plaintiff? who bears most responsibility?

In a negligence case, what does a Judge decide and what does the Jury decide?

Judge: Duty, Proximate Cause

Jury: Breach, Actual Cause, Injury

What is Negligence Per Se?

When a safety statute that is intended to protect against harm is violated and plaintiff in group the statute meant to protect

Bypasses Duty and Breach

What is Res Ipsa Loquitor?

“The thing speaks for itself”, so obviously negligence that burden of proof shifts to defendant

Considers:

• if defendant had control of situation

• if event would have occurred in absence of negligence

• there is no other explanation for negligent act

What is Comparative Negligence?

Divides the fault among multiple defendants, Jury assigns % of blame to all parties W

What are the steps to Comparative Negligence?

1. decrease recovery by plaintiff share of blame

2. recover only against defendants more at fault then plaintiff

3. apply joint and severally liable rules (one party could be responsible for all recoveries)

What are the required elements of a trade secret?

1. Information → pattern, formula, method, etc.

2. Economic value provided by information being secret

3. Reasonable measures taken to maintain secrecy → NDAs, few people knowing, etc.

What are some benefits of a trade secret over a patent?

1. Trade Secrets do not require disclosure

2. There is no time limit on protection

How are Trade Secrets violated?

Through Misappropriation in two ways:

• Improper Acquisition → bad conduct, inducement

• Improper Disclosure of use → obtained through improper ways and disclosed, mistake of another

What is NOT misappropriation of a trade secret?

• obtaining from public info

• reverse engineering

• independent invention

What is required of a trademark to be protected?

1. Distinct from day 1 or,

2. Secondary meaning established over time

What is required for a trademark to be created?

1. Distinctiveness → from day one, fanciful, arbitrary or suggestive, or earns secondary meaning

2. Used in commerce

What are the elements of the Distinctiveness Continuum?

Fanciful → Arbitrary → Suggestive → Descriptive → Generic

Fanciful to Suggestive are inherently distinctive

Merely Descriptive or Generic must have a secondary meaning established

What is The Lanham Act?

If you are using a mark that is likely to cause consumer confusion with another existing mark, you will be liable in civil court

What are some benefits of registering a trademark?

1. national protection

2. public notice, R symbol

3. Strengthened legal position → higher damages, burden of proof shifts to infringer

4. Increased brand value

5. Perpetual protection

What is the Famous Mark Act?

Act protecting famous marks from dilution through blurring (confusion with another mark) or tarnishment (negative image of company)

What are the requirements for a copyright to be established?

1. Original work

2. Fixed in tangible form

3. Copyright filler must be the owner

What is protected under copyright law?

Books, movies, music, code, paintings, architecture, photos, etc.

What is NOT protected under copyright law?

facts, ideas, procedures, systems, AI works that lack human creative control

Does copyright protection exist without registration?

Yes - protection is granted the moment the original work is fixed in tangible form

BUT you cannot file for infringement without being registered with USPTO

What are the exclusive benefits of copyright holders?

1. Reproduce copies

2. Distribute copies

3. Derivative works

4. Perform or display publicly

What are the levels of copyright infringment?

Level 1: Verbatim → reproducing exact copyrighted work without consent

Level 2: Substantial Similarity → similarity of ideas AND expression

What are the four fair use factors of the Fair Use Doctrine?

1. Purpose and character of use → commercial vs. non-profit? transformative work?

2. Nature of original work → creative works have stronger protection

3. Amount and substantiality of work → how much taken?

4. Effect on market for original work

What is a patent?

The right to make, use, or sell an invention at the absolute exclusion of others

What are the requirements for creating a patent?

1. Utility → must have specific, substantial, and credible use

2. Novelty → new

3. Non-Obvious → person having ordinary skills in the art (PHOSITA) could easily create

What is the one year rule on patents?

More than one year before filing for a patent, the creator cannot sell, use publicly, describe in publication, or demonstrate the invention

When does the patent timeline begin?

When the application is filed, usually granted in about 2 years with 18 years of protection remaining

What is a contract?

A legally enforceable agreement to act or refrain from acting in specific way

What are the four elements of every contract?

1. Mutual Assent → offer and acceptance or rejection

2. Consideration → some benefit is exchanged, does not have to be equal

3. Capacity → parties understand the nature and consequences of contract

4. Legal Purpose → object of contract must not violate the law

What problem does the Uniform Commercial Code (UCC) solve?

UCC creates one model act that all states can follow related to goods crossing state lines

When does UCC article 2 apply?

ONLY for sale of goods (anything movable)

If not → common law (real estate, intangibles, services, leases/renting, mixed contracts mainly about a service)

What is a merchant?

Someone who deals in a good of any kind, but you are only a merchant in what you regularly deal in

What is a Quasi Contract?

1. not a contract, but some benefit conferred

2. recipient knows of the benefit

3. keeping the benefit without a contract would be unjust