Business Law 2 Exam

Purpose of criminal law

Punishes offenders for causing harm to the public health, safety, or morals
Determines the range of punishment for prohibited conduct

Elements of Crime

“Actus Reus”—Wrongful behavior (guilty act)
Mens Rea”—Wrongful state of mind, such as purpose, knowledge, recklessness, or negligence
(guilty mind)
◦ Must prove that someone acted with purpose, knowledge, recklessness, or negligence

Felonies

Serious crimes punishable by death or imprisonment for more than one year

Misdemeanors

Crimes of lesser severity than felonies

Petty Offenses

Minor crimes
◦ Building code violations
◦ Punishable by small fines

Criminal Procedure

Arrest,Seizure, Miranda Rights

Arrest

To seize and hold under the authority of the law

Probable cause

Reasonable inference from available facts and circumstances that the suspect committed the crime

Miranda Rights

Legal rights that a suspect must be immediately informed of upon arrest

Burden of Proof

the duty of proving a disputed charge

Burden of Production of Evidence

Prosecution must present physical evidence and testimony that
proves all elements of the crime

Burden of persuasion

Prosecutor needs to convince the jury beyond a reasonable doubt that the defendant committed the crime

Entrapment

Crime committed after being suggested by law enforcement

Insanity defense

Claimed when a person could not understand the wrongful nature of the act, or distinguish between right and wrong

Duress defense

Threatened with harm unless you perform a wrongful act

Mistake-of-fact defense

Honest and reasonable mistake that negate mens rea

White Collar Crime

Committed in a commercial context by a member of the professional–managerial class

Strict liability offense

Defendant is engaged in an activity that is so inherently dangerous that no amount of due care can make it safe

Extortion

Blackmail – threatening to do something if someone doesn’t comply with your request

Bribery

Offering, giving, soliciting, or receiving of money or any object of value for the purpose of influencing the judgment or conduct of a person in a position of trust, especially a government official

Violations of federal regulations

Violations of regulations pertaining to economic matters, protection of health, safety, and welfare of employees, consumers, and the general public

Criminal fraud

Intentional use of some sort of misrepresentation to gain an advantage over another party

Larceny

Secretive and wrongful taking and carrying away of the personal property of another with the intent to permanently deprive the rightful owner of its use or possession

Embezzlement

Wrongful conversion of the property of another by one who is lawfully in possession of that property

Racketeer Influenced and Corrupt Organizations Act (RICO)

Federal statute that prohibits persons employed by or associated with an enterprise from engaging in a
pattern of racketeering activity

False Claims Act

Private citizens may sue employers on behalf of the government for fraud against the government

Sarbanes-Oxley Act

Establishes new rules regarding corporate accounting, government oversight, and financial regulations

Whistleblower Protection Act

Offers protections to federal employees who report illegal governmental activities

Sources of Contract Law

Case Law and Statutory Law

Case Law (aka Common Law)

Based on early decisions in England and the US, and continues to be modified by case law and legislatures

Statutory law

the body of laws created by legislative statutes

Express contracts

An exchange between parties of oral or written promises that are enforceable

Implied contracts

A contract established by the conduct of the parties

Void

A contract that at its formation has an illegal object or serious defects

Voidable

A contract that gives one of the parties the option of withdrawing from the agreement

Valid

A contract that meets all the legal requirements for a fully enforceable contract

Executed Contracts

A contract the terms of which have been performed

Unenforceable contracts

A contract that exists but cannot be enforced because of a valid defense

Quasi Contract

A court-imposed agreement to prevent the unjust enrichment of one party when the parties have not previously agreed to an enforceable contract

Elements of a legal offer

Shows objective intent to enter into the contract
Must be definite in nature
Must be communicated to the offeree

Methods of Terminating an Offer

Lapse of time
Death of either party
Destruction of the subject matter
Rejection by the offeree
Revocation by the offeror

Acceptance

An intent to accept must be shown by the offeree

What are the three most important elements of a valid contract that make up the following equation?
O+A+C=K

Offer + Acceptance + Consideration = Contract

Unilateral Contract

a one-sided agreement whereby you promise to do something in return for a performance

The Statute of Frauds

name of the rule that certain types of contracts must be in
writing to be enforceable

Illusory Promise

promise that is unenforceable due to indefiniteness or lack of mutuality

Consideration

something of value, given in exchange for something
else of value, that is the product of a mutually bargained-for
exchange

Compensatory, Nominal,
and Punitive

three types of damages that are available in tort cases

What are the elements that must be proven to prevail when bringing a negligence claim

Duty, Breach, Causation, and Harm/Damages

Doctrine, which is latin for “the thing speaks for itself,” that allows a court to infer that the defendant’s negligence was the cause of the plaintiff’s harm

Res Ipsa Loquiter

Name for the defamation defense that applies to statements made by litigants or in documents submitted
during a lawsuit

Absolute Privilege

Negligence, Strict Product Liability, and Breach of Warranty

Three commonly used theories of recovery for defective
products

Manufacturing Defects and Design Defects

Two different examples of defects

Does a plaintiff need to have
privity of contract with a
defendant to bring a claim
under a product liability
cause of action

No

What distinguishes between strict liability and negligence claims under product liability?

Duty is not relevant in strict liability claims, and the focus is
on whether the product is defective and unreasonably
dangerous.

Warranty of Fitness for a Particular
Purpose

Warranty that arises when the seller tells the consumer a good is fit for a specific use

Pre-existing duty rule

A promise to do something that you are already legally
obligated to do is not valid consideration

Specific Performance

the performance of a legal contract as specified by its terms

Kinds of contracts minors can enter into

Voidable

Fee Simple Absolute

most all-encompassing interest in real property

A Leasehold Estate

Right to possess property for an agreed-upon period of time

Easement by Prescription

easement is acquired when one openly uses a portion of another’s property for a specified period of time

Condemnation or Eminent Domain

government acquisition of private property for pubffflic use over protest of the owner of the property

Exception to the rule that a fixture is
part of a piece of real estate

If the fixture is subject to a written agreement that states the fixture is personal property, or if the fixture is a trade fixture used in a commercial

Actus Reus

Element of a crime requires that someone engaged in wrongful behavior, or a guilty act

Regulatory or Strict Liability Crimes

category of crimes are created when the legislature decides that the need to protect the public outweighs the traditional requirement of mens rea

Insanity Defense

Which defense can be claimed when a person could not understand the wrongful nature of the act, or distinguish between right and wrong

Bribery

What crime consists of the offering, giving, soliciting, or receiving of money or any object of value for the purpose of
influencing the judgment or conduct of a person in a position of trust, especially a government official

Racketeer Influenced and Corrupt
Organizations Act (RICO)

What is the Federal statute, that was originally used to bring down the Mafia, prohibits persons employed by or associated with an enterprise from engaging in a pattern of racketeering
activity

Real Property

Land and everything permanently attached to it

Fixture

Item that is a piece of personal property, which is later attached permanently to the realty and treated as part of it

Conditional Estate

Comparable to a fee simple absolute, except that interest will terminate upon the happening or nonhappening of a specified condition.

Life Estate

Right to possess property until death, subject to restriction against waste

Future Interest

Present right to possess and own land in the future

License

Temporary and revocable right to be on someone else’s property

Co-ownership

Ownership of land by multiple persons or business organizations

Condominiums

Owner acquires title to a unit within a building and undivided interest in the land, buildings, and improvements of the common areas of the development

Cooperatives

Investor resident acquires stock in the corporation that owns the facility and receives a permanent lease on one unit

Steps in a Conveyance

-Execution of the Deed
◦ Delivery of the Deed by the Grantor
◦ Acceptance of the Deed by the Grantee
◦ Recording of the Deed

General warranty deed

Grantor owns the land and has the right to convey it and the land has no encumbrances other than those stated in the deed

Quitclaim deed

Transfers the interest that the grantor owns in the property to the grantee

Adverse possession

Acquiring ownership of realty by openly treating it as one’s own for a statutorily established period of time

Restrictive Covenants

Promises by the owner to use or not to use the land in particular ways

Variance

Permission given to a landowner to use land owned in a manner prohibited by the zoning laws

Personal Property

All property that is not real property

Tangible

Property that is material and movable

Intangible

Property that does not have a physical form and is evidenced in writings

Manufacturing Defect

When an individual product has a defect making it more dangerous

Design Defect

When all products of a particular design are defective and dangerous

Privity Limitation

Plaintiff must have purchased the good directly from the defendant who manufactured it in order for the defendant to owe a duty to the plaintiff

Negligence Causes of Action

Negligent Failure to Warn, Negligent design, Negligence per
se

Negligent Failure to Warn

Plaintiff must demonstrate that the defendant knew or should have known that, in the absence of a warning, product would be dangerous in its ordinary use or in any reasonably foreseeable use

Negligent design

When all products of a particular design are defective and dangerous

Negligence per se

A statute violation that causes the harm that the statute was enacted to prevent constitutes negligence per se.

Defenses to a Negligence-Based
Product Liability Action

Contributory, comparative, or modified comparative negligence, assumption of risk, misuse of the product

Strict Liability in Tort

One who sells a defective product that is unreasonably dangerous to the user or consumer or his family is subject to liability for physical harm thereby caused to the ultimate
user or consumer, or to his property

Market Share Liability

Damages are apportioned among all the manufacturers of a product based on their market share at the time the plaintiff’s cause of action arose

MacPherson v. Buick Motor Co

Abolished the privity requirement

Genuine Assent

Agreement to a contract that is free of fraud, duress, mental coercion, and mutual mistakes

Competent Parties

Competency/ Incapacity or incompetence