Legal Environment of Business Final

2 elements of Stare Decisis

1) Follow precedents unless compelling reason not to

• Egregious mistake, negative consequences, not upset legitimate reliance interests

• change in society/technology

2) Higher authority binds lower courts

• Constitution Statutes Regulations Ordinances

• Supreme Court Appeals Court Trial Court

in rem jurisdiction

Geography

Personal Jurisdiction

Looking at fairness, if there is no contact between the P and D its not fair, looking at the relationship between the P and D.

Subject Matter Jurisdiction

type of case between the P an D (you can't file divorce in federal court), for federal courts diversity of citizenship, more then 75000 dollars, and federal question

Trial vs. Appellate courts:

Appellate: (or reviewing) courts

only questions of law, not fact

Trial: create factual and legal record

Commerce clause

Congress can "regulate commerce with foreign nations, and among the several, and with the Indian Tribes."

u Expands federal powers immensely

u Regulates any business enterprise, including on Internet

Types of primary law-Constitutional, statutory, administrative, ordinances; common (judge made) law

Constitutional: comes from the Constitution and all the other cases that have been decided from the Constitution. Very general because it's incredibly short. Ex: Congress has power over interstate commerce

Statutory: Fills in some of the holes.

Ex: how do we regulate that interstate commerce?

Administrative: Specific on different things. Airplanes, water, etc. DEQ, FAA, FCC, etc.

Common (judge-made) law: comes from appellate courts. Applies law from prior cases to cases before the court (stare decisis)

Power of the Supreme Court

Cant appeal, binds the entire united states, if we don't agree we can make an amendment or file another case some different facts

Federally you file in a district court. What courts are appellate courts?

Circuit= Court of Appellate

Supreme Court= Appellate courts

Types of ADR

Negotiation: informal settlement talks

• goal is to resolve case outside of court

Mediation: Uses neutral third party, called a mediator.

acts as agent between the parties

suggests ways to resolve their dispute

Arbitration: Utilizes an arbitrator(s)

hears a dispute

Imposes binding resolution on the parties

• final

• decision difficult to appeal

4th amendment protections

Protection against unreasonable search and seizures

The gov needs probable cause to arrest you, get a search warrant

What does a federal court need to hear a case?

75,000 or above

Diversity of Citizenship (opposite states)

OR

Federal issues (subject matter) has to be a federal question

Why does the law exist?

businesses (people) can plan into the future, and have expectations set. Dictatorships suck because we plan and then they can decide "no that plan doesn't work anymore"

Benefits and detriments of Supreme Court Ruling on issues

Quicker than legislation

Takes it off the table for something we can fight about in congress, etc.

9 justices that are making decisions for everyone in the US

Types of Torts

intentional, negligence, strict liability

What is an intentional tort

These are wrongs that the defendant knew / should have known would occur through their actions or inactions.

What is the tort of negligence?

Failure to do what a reasonable person would do under the same circumstances. Failure to act in a reasonable way.

What is a tort of strict liability?

liability because the situation is so dangerous

oral defamation

slander

written defamation

libel

assault

threat or attempt to injure

Battery

Completion of assault. Intentional act that

Culminates in unwanted physical contact

and That causes harm

Is physical contact needed for assault?

No

Elements of Negligence

Duty: Defendant owed plaintiff a duty of care. You have a duty to act as a reasonable person.

Breach: Defendant breached that duty

Causation: Defendant's breach of duty caused the injury. Looking at factual cause. Legal cause is whatever is foreseeable. Asked if the party should be held accountable for his actions and the injury.

Damages (Harm): Plaintiff suffered legal injury

Elements of a valid contract

agreement, consideration, capacity, legality

Timing of acceptance, rejection, offers and counteroffers and how roles change

Whenever you make an offer and the subject matter is destroyed no more offer, unless the offer has been accepted prior to the damage

Offeror making an offer can be revoked prior to the offeree accepting it

Counteroffers: if I make you an offer, if you counteroffer you have thrown he previous offer, you cannot go back, YOU REJECTED THE OFFER BY COUNTEROFFER.

Illegality - licensing statutes - safety and revenue generation

-Licensing statute if it's based on safety than the unlicensed person won't be able to enforce a contract

-If its focused on revenue, we are more lineannt to allow people to enforce the contract

Minors

Can enter into any contract that an adult can...but its voidable bc you are a minor

Except (alcohol, cigarettes) when it is void from the start

Voidable by minor (usually under 18)

• Can ratify or disaffirm

Intoxication

Voidable (even with voluntary intoxication) if lacked mental capacity (gone, wasted)

Valid if understood the legal consequences of the agreement (there, lucid, buzzed)

Mental Incompetence

Void every time If court previously judged mentally incompetent. Any contract from there on is void if found by a judge

Voidable: No determination of competence by court, but may be void if:

• (1) did not know forming a contract or

• (2) lacked mental capacity to understand nature, purpose, and consequences

Valid: Not deemed incompetent, and formed during a lucid interval

Substantial performance

good faith, is a minor breach

Material Breach

Big breach of contract. Contract is void

Misrepresentation elements, exceptions, and implications

Elements:

A misrepresentation of a material fact (words or actions)

Intent to deceive

Justifiable reliance on misrepresentation

Harm from misrepresentation

Exceptions:

You can misrepresent the law unless you are a law or realtor,

innocent purchaser dealing with an expert (expert can be held for fraud)

Implications of contracts with minors (majority and minority views)

Majority: Minors can disaffirm a contract EVEN if they lied about age

Minority: Minors can NOT disaffirm if lied about age.

Promissory Estoppel

A doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiably relies; such a promise is binding if justice will be better served by the enforcement of the promise.

What types of contracts must be in writing?

- Promises made in consideration of marriage.

- Contracts that cannot (by their terms) be performed within one year from the day after the date of formation.

- Contracts involving interests in land.

- Executory- wills

- UCC- sale of goods priced at $500 or more.

- Surety Collateral, or secondary, contracts

Plain Meaning Rule

Enforced based on terms if clear and unequivocal (4 corners doctrine)

Contracts of Adhesion

Adhesion contracts are written exclusively by one party and presented to the other party on a take-it-or-leave- it basis. Take it or leave it.

No chance to bargain

Great companies

Ex: Apple

BUT if you make the adhesion contract way to unfair, and screws the consumer, its deemed unconscionable.

Undue Influence

influence that is asserted upon another person by one who dominates that person. Ex: Parent and Child, Dr and Patient

duress

Compulsion, force

Overarching aspect guiding the finding a valid contract or not

If the parties had intent to be bound there can be elements of the contract missing if they had intent. Looking at objective actions.

burden of proof

Criminal Law:

Burden of proof beyond a reasonable doubt

Substantive

Civil Law:

Procedural

Felony, misdemeanor, petty offense, strict liability crimes (differences of each)

Felony more than one year in prison, up to death

Misdemeanor fine or imprisonment for up to one year

Petty Offense (Infraction): misdemeanors - least serious criminal offenses

Strict Liability crimes (speeding or shooting the wrong species while hunting.)

Advantages of the LLC:

Limited Liability-investment amount

Flexibility in Taxation:

Taxed as Partnership (pass through)

Unless elect corporation (C or S) (or single member)

Allow Foreign Investors

Easy to form

Very flexible

No double taxation if elect partnership

Disadvantages of the LLC:

more expensive to start vs S.P.

Filings, operating agreement, records

lack of uniformity with state laws

more accounting expense

Advantages of Sole Proprietorship

Profits- Proprietor receives all the profits

Taxes- owner pays only personal income taxes on the business’s profits

Simplicity- fewer legal formalities with the set-up of the business

Control- owner has complete control

You can just start and go

Disadvantages of Sole Proprietorship

Liability – Unlimited personal liability for all losses or liabilities!

Duration- business dissolved when the owner dies

Limited Funds- personal funds and any loans that she/he can obtain for the business- no outside money

Employee/IC test and the implications of each classification

• Control over details of work?

• Distinct work from employer?

• Direction- employer or little supervision?

• Are tools at the place of work?

• For how long is the person employed?

• Payment- by hour or job?

• What degree of skill is required?

Scope of Employment Factors:

Act authorized by the employer

• The time, place, and purpose of the act

• Act commonly performed by employees for employers

• Employers interest was advanced by the act

Corporation

Formed by Articles of Incorporation

Ownership- Shares

Owner- Shareholder

Bylaws- governing documents

LLCs

- Owners - “members”

- ownership is called an “ownership interest”

- Formed by Articles of Organization

S corp taxation

Tax advantages and limited in ownership (C is open to anyone)

Detour v. Frolic

Detour - minor, principal is liable

Frolic - major, principal is not liable

Doctrine of Respondent Superior

employer vicariously liable for an agent-employee's negligent* torts committed within the agent's "course and scope of employment."