Final Review MGMT200

Ethics

the ‘right’ thing to do; moral reasoning

freedom

free from government, rules, about autonomy; libertarians

virtue

conscience-based morality

welfare

common good

positive feedback loop

seeing someone else getting away with it means you’re more likely to do it

individual transferrable quota

you can sell your right/quota to someone else

categorical imperative

only act if wiling to have it become universal law

procedural justice

following the rules

disclosure rule

are you comfortable disclosing your action?

utilitarianism

doing what gives the greatest good to the number of people

ethical relativism

what is ethical at different places are different

tragedy of the commons

where there is a shared resource that can be taken advantage of, that shared resource will be used to such a degree that it will unable to replenish itself

consumerism

consumers are empowered to make informed choices and that a product is safe, government passing laws to protect consumers, and leveling the playing field to prevent consumers from being victimized

caveat emptor

let the buyer beware

information disclosure

must disclose accurate and complete information to allow consumers to make informed decisions

product safety

rely on government regulations; ex: tests and warnings on products

leveling the playing field

businesses having too much power needs government regulations

deceptive/unfair practices at federal level

FTC regulates it, Lanham Act allows competitors to sue

deceptive and unfair practices at state level

washington consumer protection act; allows individual to sue

Sherman Act

antitrust law

Federal Trade Commission

regulates antitrust activities at civil level; regulates unfair and deceptive advertising

Deceptive practice test

misrepresentation/omission, likely to mislead, and material is detrimental to consumers

unfair practice test

causes substantial harm to consumer, harm outweighs benefit, and consumer must not have been able to reasonably avoid injury

respondent superior

employer usually liable for negligent conduct of employees; not applicable for independent contractors

fiduciary duty

care and loyalty

equity financing

issuing more stock

debt financing

issuing more bonds

corporate governance

overall control/governing schema of a corporation

pass through taxation

owner only pays taxes as an individual

double taxation

taxed at corporate level, taxed again as dividend income

personally liable

owner’s personal assets at risk

not personally liable

owner only loses your investment

sole proprietorship

owned by single person

Pros of sole proprietorship

pass through taxation; easy to form, no registration; only need to obtain business license

cons of sole proprietorship

unlimited personal liability, difficult to raise capital

partnership

2+ people; pass through taxation; is a distinct legal entity

general partnership

can be created orally, in writing, or inferred from conduct; without agreement, there is equal control/share of profits and losses; owe fiduciary duty to partnership

pros of general partnership

easy to set up; pass through taxation

cons of general partnership

unlimited personal liability for the debts of the partnership (including torts)

limited partnership

at least 1 GP, 1 LP; must be in writing and registered with the State and identified

General partners

decision making, are personally liable

limited partners

no decision making, not personally liable; passive investors

Limited Liability Corporation

pass through taxation; operating agreement + registered with state + identified in its name; members manage the LLC

corporations

complete distinct legal entity; double taxation; complex filing; no personal liability

shareholders

not personally liable to the corporation, no fiduciary duties

corporate charter

rights and obligations of shareholders, directors and officers

closely held corporation

not publicly traded owned by small group (<500); not subject to auditing and reporting requirements; easier decision making process

publicly traded corporation

subject to auditing and reporting requirements

shareholder’s derivative lawsuits

shareholders can bring suit when the board or management doesn’t

piercing the corporate veil

generally no personal liability; fraud, illegal acts, circumventing the law, commingling of assets undercapitalized

s corp

limited number of shareholders (<100); only one class of stock, must be from US, pass through taxation, not personally liable

professional corporation

doctors, lawyers, has malpractice insurance, not liable for another’s professional misconduct

benefit corporation

deviation from traditional corporations that maximize profits; these have other goals/causes

franchise

contractual relationship regulated by both state and federal laws

franchisor

whoever owns the trade name/TM

franchisee

the licensee of the TM

product distributorships

franchisees get territorial rights; car dealerships

business format

franchises set up and run based on rules established by franchisor

rights of a corporation

equal protection, access to court, due process, freedom against unreasonable searches, freedom of speech, small corporations have religious freedom; NO freedom against self incrimination

private wrong

either intentional/unintentional caused harm to another; not a crime

elements of a negligent tort

duty, breach, causation, damage

negligence per se

violation of a statute

standard of proof for breach

reasonable person test

statutory duty of care

level of care required for higher level of care

causation

defendant’s conduct was actual and proximate cause to plaintiff’s harm

actual cause

would injury occur BUT FOR defendant’s conduct?

sine qua non

“without which not;” an indispensable thing; something on which something else relies upon.

proximate cause

was the consequence foreseeable?

res ipsa loquitur

the thing speaks for itself

good samaritan law

not liable for making someone’s injury worse if you try to save someone with actions a reasonable person would act

assumption of risk

voluntarily putting yourself in dangerous situation, cannot sue for damages

contributory negligence

if plaintiff was also at fault (negligent), damages cannot be recovered

comparative negligence

plaintiff’s damages reduced by the percentage of the plaintiff’s fault; defendants more liable

liability waivers

generally seen in contracts, governed by contract law; can’t waive certain rights established via public policy

examples of waiver-nonwaivable rights

rental agreements and landlord negligence

average prudent member standard

standard when analyzing professional liability tort

premises liability to trespassers

have duty to warn of man-made risks, no duty to warn of natural conditions

premises liability to licensees

duty of reasonable care, no need to check for hidden dangerous conditions

premises liability to invitees

owners owe higher degree of care, must inspect and correct problems

intentional torts

deliberate injury to another person

conversion

converting someone’s property to yours

appropriation

using another’s likeness without permission

intrusion into solitude

when someone intentionally intrudes upon solitude; being recorded without being aware

false light

publishing something with significant misinformation

absolute defense

statements made by government officials carrying out their jobs, parties in court proceedings

privity

relationship created by legal obligation

manufacturers

entities who design, produce, make, or construct things

product sellers

retailers, wholesellers

construction defects

deviations from other similar products

breach of warranty

product not conforming to an express or implied warranty

design defects

product not reasonably safe as designed

inadequate warnings

product not reasonably safe because of inadequate warnings or instructions

market share liability

liability allocated to each defendant based on its product market share

misuse

used in unforeseen manner, not maintained properly

state of the art

at the time the product was produced, it was reasonable

statute of repose

no lawsuit if purchased more than 3 years ago

compensatory damages

meant to compensate; restore plaintiff to original state

special damages

out of pocket damages; medical bills, lost wages, etc

general damages

other damages; pain and suffering, mental distress, etc

nominal damage

necessary to include if there are additional punitive or statutory damages and attorney fees