Comprehensive Business Law Pt. II

What is the difference between executory & executed contracts?

Executory: Performance still required

Executed: Performance is complete by both parties

What is the pre-existing duty rule?

Promise to do what you are already legally obligated to do is not valid consideration

What is the doctrine of impossibility?

Performance is excused when it becomes objectively impossible to perform

What is commercial impracticability?

Performance is excused when it becomes extremely difficult or expensive due to unforeseen circumstances

What is the difference between restitution damages & reliance damages?

Restitution: Awarded to prevent unjust enrichment by requiring the breaching party to forfeit benefits gained from a contract breach.

Reliance: Compensate a party for losses incurred by reasonably relying on a promise that was later broken (aka promissory estoppel)

What is the Administrative Procedure Act?

Sets procedures for agency rule-making & adjudication (i.e Public notice for new rules)

What is the Administrative Law Judges (ALJs)?

Adjudicate (make a decision on) claims related to administrative agencies with relaxed standards for evidence

What are tie-in agreements under anti-trust law?

Seller with monopoly power requires buyer to purchase additional product to get desired product in order to limit competition

What is price discrimination under the Robinson-Patman Act?

Charging different prices to different consumers, prohibited if it creates a monopoly

What is the Clayton Act?

Prohibits mergers & acquisitions that reduce competition / create monopolies

What is the Family & Medical Leave Act?

Provides 12 weeks unpaid leave for serious health conditions, birth of a child, or spousal care

What is worker’s compensation?

Specifies benefits for workplace injuries; employees cannot sue employer but can get a predetermined compensation

What is the National Labor Relations Act?

Protects collective bargaining rights & union formation; prohibits discrimination against union members

What is the Equal Employment Opportunity Commission (EEOC)?

Federal agency & first place to file employment discrimination complaints

3 types of product liability

Manufacturing defect, design defect, & inadequate warning defect

What is the Fair Debt Collection Act?

Regulates when & how debt collectors can act against consumers

What is the Truth in Lending Act?

Requires $ lenders to disclose how debt will operate & the terms of lending

What is the Export Administration Act?

Makes rules regulating exports from the US to ensure national security and foreign policy interests

What is the Foreign Sovereign Immunity Act?

Allows foreign states to be sued in US courts for commercial activities with US connections

What is the Convention on International Sale of Goods?

An international treaty that provides a uniform framework for contracts for the sale of goods

What is the Organization for Economic Co-Operation & Development (OECD)?

International organization promoting policies to improve economic & social well-being worldwide, setting standards for international trade and promoting sustainable economic growth

When is an agent liable for their actions?

When acting without authority or when the principal’s identity is not fully disclosed

What is the difference between shareholders, directors, & officers in corps?

Shareholders: Own company, elect directors

Directors: Oversee management

Officers: Run daily operations

What is double taxation in corporations?

Corporation pays taxes on profits; shareholders pay taxes again on the dividends they receive

When can a buyer revoke acceptance under UCC?

When goods are non-conforming affecting value, the defect was hard to discover, or cure was not efficiently made

What is the knockout rule in UCC contract formation?

When conflicting terms exist, both are knocked out & neither applies

What is Ch. 9 bankruptcy used for?

Reorganizing debt for municipalities (towns, cities, school districts) with protection from creditors

What does Ch. 7 bankruptcy involve?

Liquidation of assets; court appointed trustee sells assets to pay off creditors; remaining unsecured debt typically erased (some debts like taxes & student loans not able to be erased)

What is Ch. 11 bankruptcy used for?

Business reorganization - allows businesses to continue operating while paying off debt under court-approved plan

Who qualifies for Ch. 12 bankruptcy?

Family farmers & fisherman with regular income seeking to avoid foreclosure

What is the purpose of Chapter 13 bankruptcy?

Reorganize individual debt over 3-5 yrs through court-approved repayment plan

What is Ch. 15 bankruptcy designed for?

International bankruptcies involving foreign debtors with U.S. assets

Why are advertisements not considered offers in contract law?

They are viewed as invitations to negotiate / make offer; not actual offers themselves

Choice of forum clause

Allows parties the choice of specifying which court / jurisdiction case will be resolved

Choice of law clause

Allows parties to decide which state / country’s laws will govern contract

Statute of Limitations

Time limit to initiate legal proceedings after injury / breach

Statute of repose vs. Statute of limitations

Repose sets a limit based on a fixed event, regardless of when harm is discovered (ex: If a defect in construction happens 9 years after completion the law suit is barred if it exceeds the 8 year statute of repose limit)

Voir Dire

Jury selection process where potential jurors are questioned for impartiality

Does negligence require a contract between parties?

No

Why are contracts with minors sometimes valid?

They are voidable — not void — meaning the minor can choose to enforce or cancel them

What is rescission in contracts?

Canceling a contract & returning both parties to their pre-contract positions

What is the difference between composition with creditors and accord & satisfaction?

Composition: Agreement w/ multiple creditors

Accord & Satisfaction: Agreement w/ one creditor

Can a trial judge force parties to settle a case?

No — they can encourage & facilitate but not impose a settlement

What is the liability limit under the Fair Credit Billing Act?

$50 for unauthorized use of lost / stolen credit card

Compensatory v. Punitive damages

Compensatory: Make plaintiff whole

Punitive: Punish malicious behavior

Both can be financial or not financial

Employers are banned from using the defense of contributory negligence when it comes to?

Workers compensation — Employers are prohibited from using the defense of contributory negligence or assumption of risk to deny benefits

Third-Party Creditor Beneficiary

A creditor beneficiary is a third party who is owed a debt and benefits from a contract between two other parties. The contract is intended to satisfy an existing debt

Illusory promise (contract term)

A statement that appears to be a promise but, on closer inspection, does not actually bind the promisor to any real obligation.

Conversion

Intentional torn involving the unauthorized taking, use, or control of another's property, distinct from criminal theft (ex: Lending my lawnmower & then you sell it)

Exculpatory Clause

A contract clause that releases one party from liability for damages caused to the other party, often due to negligence. (ex: Dry leaner including in their contract: “I am not liable for any damage done to clothes in cleaning process”)