BLAW 2301 EXAM 3

Agency relationship

a fiduciary relationship where one person (agent) agrees to act on behalf of and under control of another (principal). Ex: A friend agrees to pick up your dry cleaning and represent your interests at the counter — no pay, no writing needed.

Principal

the person on whose behalf the agent acts. Ex: A homeowner who hires a real estate agent to sell their house.

Agent

the person who acts on the principal's behalf. Ex: The real estate agent handling the sale.

Fiduciary duty

a duty of trust, good faith, and candor owed by the agent to the principal. Ex: A financial advisor must act in the client's best interest, not their own.

Duty of loyalty

the agent's obligation not to profit secretly, misuse confidential info, compete with, or self-deal against the principal. Ex: The Pure Power trainers breached this by building a competing gym with stolen methods.

Confidential information

private info the agent learns during the agency that can't be used or disclosed for personal gain, even after termination. Ex: Klein in Abkco using info from his time managing Harrison to buy copyrights years later.

Gratuitous agent

an unpaid agent, held only to a gross negligence standard rather than ordinary negligence. Ex: A neighbor who volunteers to water your plants while you're away.

Indemnify

the principal's duty to reimburse the agent for expenses, authorized torts, and contract liability incurred while acting for the principal. Ex: A company reimburses a delivery employee for a fine incurred following the employer's (mistaken) instructions.

Express authority

authority explicitly granted through words or conduct. Ex: "Please negotiate and sign this lease on my behalf."

Implied authority

authority to do what's reasonably necessary to carry out express authority. Ex: An agent told to "sell my car" implicitly has authority to negotiate the price.

Apparent authority

authority a third party reasonably believes exists because of the principal's own conduct, even though it wasn't actually granted. Ex: A store manager introduces an employee as "authorized to make purchases," even though internally that employee's authority was revoked.

Ratification

accepting the benefit of, or failing to repudiate, an unauthorized act, making it binding as if authorized. Ex: A business owner keeps goods an employee ordered without authorization and pays the invoice.

Fully disclosed principal

third party knows both the principal's existence and identity; only the principal is liable on the contract. Ex: A leasing agent signs "on behalf of Acme Corp," a company the tenant knows by name.

Unidentified (partially disclosed) principal

third party knows a principal exists but not who; both agent and principal can be sued. Ex: A buyer's agent bidding "on behalf of an undisclosed buyer" at auction.

Undisclosed principal

third party doesn't even know an agency exists; both agent and principal can be sued once discovered. Ex: A celebrity's agent buys property under their own name to hide the celebrity's involvement.

Respondeat superior

"let the master answer"; employer liability for an employee's negligent torts committed within the scope of employment. Ex: A pizza delivery driver rear-ends someone while delivering — employer is liable.

Independent contractor

a worker not subject to the same control as an employee; principal generally not liable for their torts. Ex: A freelance plumber hired for a single job, using their own tools and schedule.

Scope of employment

conduct closely connected to job duties, including some forbidden but incidental acts; excludes abandonment for personal purposes. Ex: Sheehan's personal lunch drive in Berry fell outside scope.

Abandonment

when an employee steps away from work duties to pursue a purely personal purpose, taking them outside scope of employment. Ex: Driving your own car on a personal coffee run during work hours.

Negligent hiring/supervision

an exception making a principal liable for an independent contractor's torts if the principal was careless in choosing or overseeing them. Ex: A company hires a mover with a known history of theft, and he steals from a customer's home.

Nonphysical tort

harm to reputation, feelings, or finances (e.g., defamation, fraud) rather than the body; treated like a contract claim requiring authority. Ex: A salesperson makes fraudulent claims about a product with the company's implied blessing.

Employment at will

either party may end the relationship anytime, for any (legal) reason, or no reason. Ex: Firing someone because you don't like their haircut is legal (assuming no protected class involved).

Wrongful discharge

firing that violates public policy, contract, or law. Ex: Firing an employee for refusing to falsify safety inspection records.

Qualified privilege

protects employers giving job references from defamation liability, unless they knew the statement was false or acted with malice. Ex: A former employer says "average performer" in good faith and is protected, even if the ex-employee disagrees.

FMLA (Family and Medical Leave Act)

guarantees 12 weeks unpaid leave for qualifying family/medical reasons at employers with 50+ employees. Ex: A father takes 10 weeks off unpaid after his child is born and returns to his same job.

Whistleblower protection

legal shields for employees reporting employer misconduct. Ex: An accountant reports securities fraud under Sarbanes-Oxley and can't be fired in retaliation.

Pay transparency law

requires employers to disclose salary ranges. Ex: A job posting must list "$55,000–$65,000" instead of "salary DOE."

Concerted activity

action taken by employees together (or by one on behalf of the group) regarding work conditions, protected under NLRA §7. Ex: Two coworkers discuss unfair scheduling and ask HR to change it together.

Supervisor (NLRA definition)

someone with independent authority to hire, fire, discipline, or promote; NOT protected the same way as regular employees under §7. Ex: A shift lead who can only relay complaints upward (no independent authority) is likely NOT a supervisor for NLRA purposes.

Unfair labor practice (ULP)

prohibited conduct by employers or unions that interferes with NLRA rights. Ex: An employer threatens to close a plant if workers vote to unionize.

Lifestyle law

state laws protecting employees' lawful off-duty conduct or product use. Ex: A state law prevents firing an employee for smoking cigarettes at home.

Polygraph (lie detector) restriction

under the Employee Polygraph Protection Act, employers generally can't require polygraphs. Ex: A retail store cannot force a cashier suspected of theft to take a lie detector test (with narrow exceptions).

OSHA general duty clause

employer's duty to keep the workplace free of recognized hazards likely to cause death or serious injury. Ex: A warehouse with known faulty wiring that hasn't been fixed violates the general duty clause even without a specific OSHA rule on wiring.

FLSA (Fair Labor Standards Act)

sets federal minimum wage and overtime rules. Ex: An hourly employee working 45 hours in a week must be paid time-and-a-half for the extra 5 hours.

Workers' compensation

no-fault system paying for workplace injuries in exchange for the employee giving up the right to sue the employer. Ex: A warehouse worker hurt lifting boxes gets compensation regardless of who was at fault, but can't also sue the employer.

COBRA

allows employees to continue employer health coverage for 18 months after leaving a job (employee pays premium + 2%). Ex: Someone laid off keeps their same health plan for a year and a half by paying the full premium themselves.

NLRB (National Labor Relations Board)

federal agency administering the NLRA, resolving ULP charges, and overseeing union elections. Ex: The NLRB investigates a claim that a company illegally fired workers for trying to unionize.

Economic strike

a strike over wages/benefits; employer may hire permanent replacements. Ex: Workers strike demanding higher pay; the company hires permanent replacement workers and the strikers aren't guaranteed their jobs back.

ULP strike

a strike protesting an employer's unfair labor practice; strikers must be reinstated when it ends. Ex: Workers strike because the employer illegally refused to bargain; once the strike ends, they get their jobs back.

Secondary boycott

picketing a business not directly involved in the labor dispute; generally illegal. Ex: A union picketing a retailer that merely sells a struck manufacturer's products.

Lockout

employer bars employees from the workplace as a bargaining tactic; generally legal. Ex: During stalled contract talks, a company locks out unionized workers until an agreement is reached.

Right-to-work law

state law letting employees opt out of joining a union or paying union dues even in a unionized workplace. Ex: An employee at a unionized auto plant in a right-to-work state works there without joining the union or paying dues.

Disparate Treatment

Intentional discrimination — treating someone worse because of a protected trait. Ex: A manager refuses to hire qualified Black applicants while hiring less-qualified white applicants

Disparate Impact

A neutral policy that unintentionally excludes a disproportionate number of a protected class. Ex: A height requirement for a job that isn't necessary for the role and disproportionately excludes women

Hostile Work Environment

Harassment so severe or pervasive it alters the conditions of employment. Ex: Constant sexually explicit jokes directed at an employee that make it hard to work (Sharp v. Activewear)

Quid Pro Quo Harassment

"This for that" — job benefits conditioned on submitting to sexual advances. Ex: A supervisor promises a promotion in exchange for a date

Retaliation

Punishing an employee for reporting or opposing discrimination. Ex: Firing an employee shortly after they file an EEOC complaint

BFOQ (Bona Fide Occupational Qualification)

A narrow defense allowing discrimination when a trait is essential to the job. Ex: Hiring only women as attendants in a women's locker room

Undue Hardship

The standard employers can use to deny an accommodation because it's too costly/burdensome. ex: An employer proving significant increased operating costs (Groff v. DeJoy)

Interactive Process

The required back-and-forth dialogue between employer and employee to find a reasonable ADA accommodation. Ex: HR meeting with an employee to discuss options like a modified schedule or assistive equipment

Reasonable Accommodation

A change to the job or workplace enabling a person with a disability (or religious need, or pregnancy) to work. Ex: Allowing a wheelchair user a modified desk height

Right-to-Sue Letter

EEOC document permitting an employee to file a lawsuit after the agency process concludes. Ex: Employee receives this letter and then sues their employer in federal court

Prima Facie Case

The minimum evidence needed to raise a presumption of discrimination, shifting the burden to the employer. Ex: Showing protected class + adverse action + circumstances suggesting discrimination

But-For Cause

Standard requiring that the illegal factor was the actual deciding reason (ADEA standard). Ex: Proving the employee would NOT have been fired "but for" their age

CROWN Act

State law banning discrimination based on natural hairstyles (e.g., braids, locs). Ex: An employer can't fire an employee for wearing braids under this law (in CA, NY, NJ, VA, CO)

Sole Proprietorship

Unincorporated business owned by one person with no liability protection. ex: A freelance graphic designer working under their own name with no LLC or corporation

Flow-Through Taxation

Business profits are taxed once, passed directly to owners' personal tax returns. Ex: An LLC's profits are reported on the member's individual 1040, not taxed at the entity level

Double Taxation

Corporate profits taxed once at the corporate level, then again when distributed as dividends. Ex: A C Corp pays corporate income tax, then shareholders pay tax again on dividends received

Limited Liability

Owners are not personally responsible for business debts beyond their investment. Ex: An LLC member isn't forced to pay company debts out of personal savings

Certificate of Organization

The formal document filed with the state to legally create an LLC. Ex: Filing this one-page document with the Secretary of State to start an LLC

Operating Agreement

Internal document setting out LLC members' rights, duties, and profit-sharing (not required but recommended). Ex: An agreement stating that Member A gets 60% of profits and Member B gets 40%

Piercing the Corporate/LLC Veil

Court disregards limited liability protection and holds an owner personally liable. Ex: BLD Products v. TPO — Hardie held personally liable after commingling personal and LLC funds

Commingling

Mixing personal and business funds/assets together. Ex: Using the LLC's bank account to pay a personal mortgage

Member-Managed LLC

An LLC where all members participate directly in running the business. Ex: Three co-owners of a bakery LLC who each handle daily operations

Manager-Managed LLC

An LLC where members appoint a manager to run the business while other members stay passive. Ex: Two members appoint the third member (or an outside manager) to handle day-to-day decisions

Novation

Substituting a new party into a contract, releasing the original party from liability. Ex: Once the LLC is formed and a novation occurs, the promoter is released from personal liability on the pre-formation contract

Promoter

A person who takes preliminary steps to organize a business before it's legally formed. Ex: Someone who signs a lease for a storefront before the LLC is officially created

General Partnership (GP)

Two or more co-owners sharing unlimited personal liability for all business debts. Ex: Two friends running a landscaping business together with no formal filing

Limited Liability Partnership (LLP)

A partnership where partners aren't liable for the firm's debts but are liable for their own wrongful acts. Ex: A law firm structured as an LLP, where one partner's malpractice doesn't make the other partners personally liable

S Corporation

A corporation electing flow-through taxation, limited to 100 U.S. shareholders and one class of stock. Ex: A small family-owned business incorporated as an S Corp to avoid double taxation

Professional Corporation (PC)

A corporate structure for licensed professionals in the same field. Ex: A medical practice where all shareholders are licensed physicians

Joint Venture

A partnership formed for one limited/specific purpose. Ex: Two construction companies teaming up to build a single stadium project

Public Benefit Corporation (PBC)

A for-profit entity that must pursue a stated public benefit alongside profit. Ex: A Delaware PBC whose charter commits it to environmental sustainability, reported biennially

Franchise Disclosure Document (FDD)

Legally required disclosure document franchisors must give prospective franchisees before signing. Ex: A potential Subway franchisee receives the FDD detailing costs, territory, and litigation history 14 days before signing

Duty of Good Faith

Obligation not to act irrationally or capriciously toward the other party in a contract. Ex: National Franchisee Assn v. Burger King — franchisees argued the forced below-cost pricing breached this duty

Utility Patent

Protects how an invention works; 20 years from filing. Ex: A patent on a new mechanical engine design

Design Patent

Protects the appearance (not function) of an item; 14 years from issuance. Ex: The distinctive curved shape of a Coca-Cola bottle

Plant Patent

Protects a new plant variety that reproduces asexually. Ex: A new type of rose developed through grafting

Novel

Not previously known or used anywhere in the world — a patent requirement. Ex: An invention that has never before existed in public use or literature

Nonobvious

Not obvious to someone with ordinary skill in that field — a patent requirement. Ex: A device that wouldn't be an easy next step for a typical engineer in that area

Patentable Subject Matter

A tangible application — excludes laws of nature, natural phenomena, and abstract ideas. Ex: A specific machine is patentable; the abstract concept of "gravity" is not

First to File

Under the America Invents Act, patent priority goes to whoever files first, not who invented first. Ex: Two inventors create the same device; whoever files their application first gets the patent

Copyright

Protection for original creative works fixed in tangible form, arising automatically at creation. Ex: A novel is copyrighted the moment it's written down, with no registration needed

Idea/Expression Dichotomy

Copyright protects the specific expression of an idea, not the underlying idea/system itself. Ex: Bikram's Yoga — the sequence of poses (a system) wasn't copyrightable, but the specific book text was

Fair Use

A defense allowing limited use of copyrighted material without permission, based on a four-factor test. Ex: Quoting a short passage of a book in a critical review

Transformative Use

Fair use factor asking whether the new work adds new meaning/purpose to the original. Ex: Parody that comments on the original work, versus a straight commercial reproduction (Warhol)

First Sale Doctrine

A lawful owner of a copyrighted copy may resell or dispose of that copy. Ex: Reselling a used textbook at a college bookstore

DMCA (Digital Millennium Copyright Act)

1998 law prohibiting circumvention of digital copyright protections. Ex: It's illegal to distribute software that cracks DRM encryption on movies

ISP Safe Harbor

Protects internet platforms from liability if they remove infringing content after a takedown notice. Ex: YouTube isn't liable for a user's infringing video if it removes it after notice

Trademark

A word, symbol, or design identifying and distinguishing the source of goods. Ex: The Nike "swoosh" logo

Likelihood of Confusion

The core test for trademark infringement — whether consumers might confuse two marks. Ex: AMF v. Sleekcraft — whether "Sleekcraft" boats could be confused with "Slickcraft" boats

Dilution (Blurring)

Weakening a famous mark's distinctiveness through unauthorized use, even without confusion. Ex: Using "Tiffany" for an unrelated product like auto parts

Dilution (Tarnishment)

Harming a famous mark's reputation through unsavory or negative association. Ex: Using a beloved children's brand's name in an adult-content context

Genericide

When a trademark becomes a generic term for a product category, losing protection. Ex: "Escalator" and "Aspirin," once trademarks, are now generic terms

Trade Secret

Confidential business information that provides a competitive advantage as long as it stays secret. Ex: The Coca-Cola formula or KFC's spice blend

Misappropriation

Wrongfully acquiring or using someone else's trade secret. Ex: A former employee taking a client list to a competitor (CDM Media v. Simms)

Economic Espionage Act

Federal criminal law punishing trade secret theft, especially for foreign governments/third parties. Ex: Someone convicted of stealing formulas to sell to a foreign competitor faces up to 15 years in prison.

Subjective Expectation of Privacy

• The actual, personal belief held by an individual that their activity or information is private

• Example: Whispering a secret to a friend in a quiet room because you genuinely believe no one else can hear you.

Objective Expectation of Privacy

• An expectation of privacy that society recognizes as legitimate and reasonable under the law.

• Example: Expecting privacy inside a closed public restroom stall versus having no reasonable expectation of privacy while standing on a crowded public sidewalk.

Third-Party Doctrine

• The legal rule stating that individuals lose 4th Amendment protection for information they voluntarily share with third parties.

• Example: Bank transaction records or phone call logs shared with bank or telecom companies can be accessed by law enforcement without a warrant.