Business Law Exam 2: Criminal Law, Contracts & Remedies (Ch. 8–16)

Penal codes

Collection of criminal statutes

Parties to a crime

Plaintiff = the government (represented by a prosecutor/DA); defendant = the accused (represented by a defense attorney); public defender = government-provided defense attorney

Classification of crimes

Felonies (most serious); misdemeanors (typically less than a year in jail); violations/petty offenses (usually a fine)

Criminal act

A crime needs a criminal act (actus reus) plus criminal intent (mens rea)

General intent vs. specific intent crimes

Intent is either specific-intent or general-intent

Nonintent / strict liability crimes

Criminal liability imposed without finding intent; imposed for reckless or grossly negligent conduct that causes injury to another (e.g., involuntary manslaughter)

Arrest

Police need an arrest warrant based on probable cause; warrantless arrests allowed when police arrive during the crime, a person is fleeing the scene, or evidence is likely to be destroyed

Booking

Administrative process of recording the alleged crime and arrest: personal info, fingerprints, mug shot, confiscating property, background record search

Bail

Money set by a court that an arrested person may post to be released from custody (usually jail) pending trial

Indictment

Charge of having committed a crime based on the judgment of a grand jury

Information

Charge of having committed a crime based on the judgment of a magistrate

Arraignment

Proceeding where the accused is informed of all charges and asked to enter a plea: guilty or not guilty

Unanimous verdict requirement

The accused cannot be found guilty if even one juror doubts guilt

Hung jury

A jury that cannot reach a unanimous decision about the defendant's guilt

Murder

Unlawful killing of a human being by another without justification

First-degree murder

Intentional unlawful killing with premeditation, malice aforethought, and a willful act; can be punished by execution (capital murder)

Second-degree murder

Intentional unlawful killing that is not premeditated or planned in advance (some deliberation, but no long-term planning)

Voluntary manslaughter (third-degree murder)

Intentional unlawful killing, not premeditated, committed under circumstances that would cause a person to become emotionally upset

Felony murder rule

Murder committed during the commission of any felony may be prosecuted as murder, even if the perpetrator did not originally intend to kill

Robbery

Taking personal property from another person by use of fear or force; if a weapon is used it is aggravated robbery

Burglary

Taking personal property from another's home, office, or commercial or other type of building

Larceny

Wrongful and fraudulent taking of another person's personal property; includes tangible property, trade secrets, computer programs, other business property; force or entry into a structure not required

Theft

A crime that includes robbery, burglary, and larceny without distinguishing among them

Receiving stolen property

Knowingly receiving stolen property with the intent of depriving the rightful owner of it; property can be tangible

Arson

Malicious or willful burning of another's dwelling, including willful burning by the structure's owner

Forgery

Fraudulent making or altering of a written document that affects the legal liability of another person

Embezzlement

Fraudulent conversion of property by a person to whom that property was entrusted

Bribery

Crime in which one person gives another anything of value for a favor in return; offeror commits the crime when the bribe is offered, offeree commits it when the bribe is accepted

Extortion

Threat to expose something about another person unless that person gives money or property; blackmail is extortion of private persons

Criminal fraud

Obtaining title to property through deception or trickery; also called false pretenses or deceit; includes mail and wire fraud

Elements of criminal fraud

(1) Misrepresentation of a material fact (2) person knows the fact is false (3) made with intent to defraud (4) victim justifiably relies on it (5) victim suffers actual loss from the reliance

Mail fraud

Use of the mail to defraud another person

Wire fraud

Use of a telephone, smartphone, radio, television, computer, or internet communication to defraud another person

Money laundering

Running illegally obtained money through legitimate businesses to 'wash' it and make it look legitimately earned

RICO

Racketeer Influenced and Corrupt Organizations Act

Criminal RICO

Federal crime to acquire or maintain an interest in, use income from, or conduct or participate in the affairs of an enterprise through a pattern of racketeering activity

Civil RICO

Persons injured by a RICO violation can bring a private civil action against the violator to recover for injury to business or property

Criminal conspiracy

Two or more persons enter into an agreement to commit a crime; liability requires an overt act in furtherance of the crime; the crime itself does not have to be committed

Cybercrime

Acts perpetrated by criminals using computers, digital devices, email, texts, internet, social media, blockchain technology, and artificial intelligence

CFAA

Counterfeit Access Device and Computer Fraud and Abuse Act: federal crime to knowingly use a computer to obtain restricted federal government info, financial records of financial institutions, or consumer reports from consumer reporting agencies

Identity Theft and Assumption Deterrence Act

Federal act making it a crime to knowingly transfer or use, without authority, another person's identity with intent to commit unlawful activity

Fourth Amendment

Protects persons and corporations from overzealous investigative activities by the government; unreasonable search and seizure is prohibited; search warrants based on probable cause required in most cases; government may not search businesses without a warrant

Exclusionary rule

Evidence obtained from an unreasonable search and seizure is prohibited from being introduced at trial against the person searched

Good faith exception

Evidence may be introduced if law enforcement reasonably believed they were acting under a lawful search warrant

Search of electronic information

Electronic devices hold large amounts of data (social media, photos, searches, interests, personal info); government may use it to prove a charge but must establish probable cause that the info is relevant and obtain a search warrant

Search of business premises

Government cannot search business premises without a warrant; exception: hazardous and highly regulated industries may be searched without a warrant if proper statutory procedures are met

Fifth Amendment: self-incrimination

No person shall be compelled in any criminal case to be a witness against himself or herself; protects only natural persons accused of crimes

Miranda rights

Rights a suspect must be informed of before being interrogated; ensures the suspect does not unwittingly give up Fifth Amendment rights

Attorney-client privilege

A client can tell their attorney anything about the case without fear the attorney will be called as a witness against the client

Fifth Amendment: double jeopardy

Persons cannot be tried twice for the same crime in the same jurisdiction

Sixth Amendment

Guarantees a criminal defendant a trial by an impartial jury of the state/district where the crime was committed; right to confront witnesses, assistance of a lawyer, and a speedy trial

Eighth Amendment

Protects criminal defendants from torture or other abusive punishment (cruel and unusual); does not prohibit capital punishment (lethal injection)

Contract

A promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty; the terms become 'private law' between the parties

Offeror

Party who makes an offer to enter into a contract

Offeree

Party to whom an offer is made (who accepts it)

Elements of a valid contract

(1) Agreement (2) Consideration (3) Lawful object (4) Contractual capacity

Agreement (element)

Offer by the offeror and acceptance by the offeree (mutual assent)

Consideration (element)

The promise must be supported by bargained-for consideration that is legally sufficient (e.g., money, services)

Lawful object (element)

The object of a contract must be lawful; contracts for illegal objects or against public policy are void

Contractual capacity (element)

Parties must have capacity for the contract to be enforceable against them

Genuineness of assent

Consent of parties to create a contract must be genuine; it is lacking if obtained by duress, undue influence, or fraud

Writing requirement

The law requires that certain contracts be in writing or in a certain form

Common law of contracts

Contract law developed by state courts

Uniform Commercial Code (UCC)

Comprehensive statutory scheme with laws covering aspects of commercial transactions

Restatement of the Law of Contracts

Compilation of model contract law principles drafted by legal scholars; it is not law, but is often referred to by lawyers and judges in contract disputes

Objective standard (intent to contract)

Intent to contract is judged by the reasonable person standard, including words, conduct, and surrounding circumstances

Bilateral contract

Offeror's promise is answered with the offeree's promise of acceptance ('promise for a promise'); no act of performance necessary

Unilateral contract

Offer can be accepted only by performance of an act by the offeree; no contract until the offeree performs the requested act

Formal contract

Requires a special form or method of creation (e.g., contracts under seal, recognizances, negotiable instruments, letters of credit)

Informal contract

No special method or form required (e.g., leases, sales contracts, service contracts)

Valid contract

Meets the essential elements (agreement, consideration, contractual capacity, lawful objective); enforceable by at least one of the parties

Void contract

Contract that has no legal effect; neither party can enforce it

Voidable contract

One or both parties have the option to void their contractual obligations; if voided, both parties are released

Unenforceable contract

A legal defense to enforcement exists; parties may voluntarily perform

Executed contract

Fully performed on both sides (completed contract)

Executory contract

Not fully performed by one or both sides

Express contract

Expressed in writing or verbally

Implied-in-fact contract

Agreement between parties is inferred from the parties' conduct

Implied-in-law contract (quasi contract)

Equitable doctrine whereby a court may award monetary damages to a plaintiff for providing work or services to a defendant even though no actual contract existed

Equity

Doctrine that permits judges to make decisions based on fairness, equality, moral rights, and natural law; no right to a jury trial in an equitable action; sometimes applied in contract cases

E-contracts and e-licenses

Contracts formed electronically through email, text, apps, or other digital means; traditional contract rules and state and federal statutes also apply

Valid offer requirements

(1) Offeror objectively intends to be bound (2) terms are definite or reasonably certain (3) offer is communicated to the offeree

Intent to be objectively bound

The offeror must objectively intend to be bound by the offer

Reasonably definite terms

The terms of the offer must be definite or reasonably certain

Express terms of an offer

Must be clear enough for the offeree to decide whether to accept or reject; must contain identification of the parties, subject matter and quantity, consideration to be paid, and time of performance

Implied terms of an offer

A court can supply a missing term if a reasonable term can be implied (e.g., time of performance)

Advertisements

Generally treated as an invitation to make an offer; exception: the advertisement is so definite or specific that it shows the advertiser's intent to bind themselves to its terms

Rewards

An offer to form a unilateral contract; to collect, the offeree must know of the reward before completing the requested act and must perform the act

Auction with reserve (default)

Unless stated otherwise an auction is with reserve (invitation to make an offer): seller can refuse the highest bid, can withdraw the goods at any time; contract formed when the auctioneer strikes the gavel or indicates acceptance

Auction without reserve

Must be expressly announced; seller gives up the right to withdraw the goods and must accept the highest bid

Revocation of an offer

Withdrawal of an offer by the offeror that terminates the offer

Rejection of an offer

Express words or conduct by the offeree rejecting an offer; terminates it

Counteroffer

Response by the offeree containing terms different from or in addition to the offer; terminates the original offer

Termination of an offer by operation of law

Offer ends through no fault of either party (e.g., a fire destroying the building listed for sale)

Destruction of subject matter

Destruction of the subject matter

Supervening illegality

A statute, regulation, or court decision that makes the object of an offer illegal

Lapse of time

Offer terminates at the stated time; if no time is stated, it terminates after a reasonable time

Option contract

Offeree pays the offeror compensation to keep the offer open for an agreed period of time; prevents the offeror from revoking during the option period (exception to the rule that an offer can be revoked before acceptance)

Valid acceptance

Must be clear and unequivocal; only one possible meaning; must not contain conditions or exceptions

Mirror image rule

Offeree must accept the terms exactly as stated in the offer; any attempt to accept on different terms is a counteroffer rejecting the offer