LEB 320F - Foundations of Business Law

Common Law

all the rules and principles currently existing in any state, regardless of their historical origin, that result from judicial decisions in those areas of law where legislatures have not enacted comprehensive statutes.

Statutory Law

legal rules that have been formally adopted by legislative bodies rather than by the courts.

C. Written laws passed by legislative bodies like Congress are statutes.

In 1890, Congress passed the Sherman Antitrust Act. In 2008, Congress passed the Genetic Information Nondiscrimination Act. Which of these is/are a statute?

A. The Sherman Antitrust Act

B. The Genetic Information Nondiscrimination Act

C. BothAandB

D. None of the above

Federal Law

the law of the national government

State Law

State statutes, regulations, principles, and rules having the force of law

Plaintiff

a person who brings a case against another in a court of law.

Defendant

an individual or group being sued or charged with a crime

Civil Law

all those laws that spell out the rights and duties existing among individuals, business firms, and sometimes even government agencies

preponderance of the evidence

The standard of proof in a civil case in which a judge or jury must believe the plaintiff's story and evidence is stronger than the defendant's version.

Criminal Law

those statutes in which a state or the federal government prohibits specified kinds of conduct and which additionally provide for the imposition of fines or imprisonment on persons convicted of violating them.

criminal suits are brought by

the government whose law has allegedly been violated

beyond a reasonable doubt

The level of proof required to convict a person of a crime

A. Private cases between private people or companies are civil lawsuits. In such cases, plaintiffs must present enough evidence to prove their claims true by a preponderance of the evidence.

Paul Plaintiff sues Donna Defendant in a tort case. He accuses her of running a stop sign and hitting his car and seeks damages to compensate him for his losses. Paul's case will be a ___________ lawsuit. In the case, Paul's burden of proof will be to prove his case ____________________.

A. civil; by preponderance of the evidence

B. civil; beyond a reasonable doubt

C. criminal; by preponderance of the evidence

D. criminal; beyond a reasonable doubt

Law

rules that must be followed

Ethics

standards that should be followed in a moral sense but are not attached to a specific penalty

state courts of limited jurisdiction

limited authority and can only hear certain types of cases

State General Trial Courts

empowered to hear all cases except those expressly assigned by statutes to the courts of limited jurisdiction

State Appellate Courts

hear appeals from judgements entered by the lower courts

Specialized U.S. Courts

courts that have very specialized subject matter jurisdiction, including the U.S. Tax Court, which hears only federal tax cases and the U.S. Claims Court, which hears only claims against the U.S. government

U.S. District Courts

the basic trial courts (civil and criminal) in the federal system, where the typical federal case begins

US Appellate Court

The court that hears the appeal of the court decision made in the US District Court. No juries in an appellate court.

writ of certiorari

An order by a higher court directing a lower court to send up a case for review

Trial courts settle questions of

fact and law

Appellate courts settle questions of

law only

D. Appeals from a federal district court would proceed to a federal appellate court, and eventually perhaps to the U.S. Supreme Court, although the Supreme Court grants only a relatively small percentage of requests for writs of certiorari.

Ron loses his discrimination claim in federal district court. If he wishes, he can appeal his case to a ________________ court. If he loses there, he can seek to have his case reviewed by ________________.

A. a general trial court; his state's supreme court

B. a general trial court; the U.S. Supreme Court

C. A U.S. Court of Appeals; his state's supreme court

D. A U.S. Court of Appeals; the U.S. Supreme Court

Appellant

The party who takes an appeal from one court to another.

B. Abner might have been either the plaintiff or defendant originally. But since Abner is listed first for the appellate case, Abner is definitely the side bringing the appeal.

Consider Abner v. Doubleday, a case that will be heard by a U.S. Court of Appeals. Which of the following can you say is definitely true?

A. Abner was the plaintiff in the original lawsuit brought to district court.

B. Abner is bringing the appeal to the U.S. Court of Appeals.

C. Abner was the defendant in the original lawsuit brought to district court.

D. Both A and B are definitely true.

E. None of the above are definitely true.

Summary Judgement

A ruling by the court that no trial is necessary because some essential facts are not in dispute

Remanded

To send a case back to the court that originally heard it.

affirmed

permitted to stand

Plaintiff's Complaint

contains facts to establish jurisdiction, the allegations, and the remedy sought

motion to dismiss

A pleading in which a defendant asserts that the plaintiff's claim fails to state a cause of action (that is, has no basis in law) or that there are other grounds on which a suit should be dismissed.

Defendant's Answer

Procedurally, a defendant's response to the plaintiff's complaint.

defendant's answer: denial

formality that places the plaintiff's allegations in issue and places the burden on the plaintiff to prove the factual assertions he or she has made.

burden of proof

the obligation to present evidence to support one's claim

defendant's answer: defense

A defense defeats the plaintiff's claim even if the plaintiff is able to prove those facts that establish all the elements of his or her claim

defendant's answer: counterclaim

The defendant will sometimes allege facts in his answer that, if proved, will establish a legally-recognized claim against the plaintiff.

default judgement

a decision that the plaintiff wins without trial because the defendant failed to answer in time

E. She does not deny that Adam's claim of a dog bite is true. She asserts instead that there exists a legal justification for the bite. So, she raises a defense and does not make a denial. And, by asking for money to repair the fence, she raises a counterclaim.

Adam sues Brenda and claims that Brenda's dog bit his leg. Brenda receives a copy of Adam's complaint, and in her answer, she alleges that her dog bit Adam when he was trespassing in her yard late at night, that he destroyed her fence when he ran away from the dog, and that he should pay $500 to compensate her for the fence repairs. Characterize the components of Brenda's answer.

A. It contains a denial

B. It contains a defense

C. It contains a counterclaim

D. AandC

E. BandC

the discovery stage

the parties attempt to collect more evidence for trial

Deposition

the testimony of a witness made under oath but not in open court

Interrogatories

A series of written questions for which written answers are prepared by a party to a lawsuit, usually with the assistance of the party's attorney, and then signed under oath.

request for production of documents

discovery tool for uncovering paper evidence in a case

D. The demand for business records is a request for production of documents. The questioning of the supervisor will be a deposition because the lawyer will be talking to him in person, and not by submitting a written request for information, which would be an interrogatory.

Sam sues AlphaCo, his former employer. In his case, he alleges that AlphaCo illegally discriminated against him. During discovery, Sam's lawyer asks AlphaCo for its employment records over the last 10 years. The lawyer also wants to talk to Sam's former supervisor under oath and ask him about Sam's termination.

The demand for the employment records is a(n) _______________. The lawyer would like to talk to the former supervisor as part of a(n) ______________.

A. interrogatory; interrogatory

B. interrogatory; deposition

C. request for production of documents; interrogatory

D. request for production of documents; deposition

Subject Matter Jurisdiction

the power of a court to hear a particular type of case

Jurisdiction

the legal right to hear and determine a case; area of authority

federal-question cases

cases concerning the Constitution, federal laws, or treaties; federal courts have subject matter jurisdiction

Pendent Jurisdiction

Jurisdiction by the federal court over nonfederal claims when both the federal and nonfederal claims derive from a common set of facts.

C. Max's case is based on the federal Constitution, so it's in. And although Jack's lawsuit is based on both state and federal law, since one of his claims raises a federal question a federal court would also have subject matter jurisdiction over his case.

Max sues the Houston Police Department after he is arrested during a protest. He claims his free speech rights under the U.S. Constitution have been violated.

Jack sues MegaCorp over crop losses after MegaCorp dumps toxic chemicals into a river that eventually runs across his farm. He sues based on the federal Clean Water Act and also under Texas tort law.

Which of these two plaintiffs could bring their case to federal court?

A. Max

B. Jack

C. BothAandB

D. None of the above

diversity of citizenship cases

federal cases involving citizens of different states; federal courts are neutral ground

A. Don't be too distracted by the "above or below $75,000" issue. The number of dollars involved is relevant only in a diversity of citizenship situation. Max can sue no matter how much his is seeking because his case is based on federal law and jurisdiction is based on a federal question. Had Max's suit been a claim based on state law, he could successfully file in federal court only if he and the defendant were citizens of different states and more than $75,000 was at stake.

Max, a resident of Texas, sues the Houston Police Department after he is arrested during a protest. He claims his free speech rights under the U.S. Constitution have been violated. He seeks $50,000. Can he bring his claim to federal court?

A. Yes

B. No

plaintiff's option

in diversity of citizenship cases, plaintiff has the option to file in a federal court but does not have to

right of removal

entitles the defendant to transfer the case to the federal court system

Personal Jurisdiction

A court's authority over the parties to a lawsuit.

in personam cases

plaintiff seeks a judgement that will be legally binding against the defendant

Procedural Due Process

procedural laws that protect the rights of individuals who must deal with the legal system

appearance

taking any formal steps to defend a case

Special Appearance Motion

a motion made by the defendant solely for the purpose of challenging the court's personal jurisdiction

D. Don's lawyer has limited his claim to a lack of jurisdiction, and so it counts only as a special appearance and is not considered a "formal step to defend a lawsuit".

Paul Plaintiff, a resident of Texas, files a lawsuit in Texas against Don Defendant, a resident of California. Don receives notice of the lawsuit, and tells his lawyer, "I don't want to travel to Texas to be sued by this guy." Don's lawyer says, "Maybe you don't have to." The lawyer argues that the Texas court lacks personal jurisdiction over Don. Don's lawyer asserts in a court filing that the court does have personal jurisdiction, and that the case should not proceed. He does not say anything else about the case in the filing.

Don's lawyer has filed a(n) _____________________. This action ______________ give the Texas court personal jurisdiction over Don.

A. appearance; does

B. appearance; does not

C. special appearance; does

D. special appearance; does not

personal service of summons

the formal notice of the lawsuit, delivered in person to the defendant while the defendant is physically within the forum state

long arm statute

A state statute that permits a state to exercise jurisdiction over nonresident defendants.

General Personal Jurisdiction

A doctrine permitting adjudication of any claims against a defendant regardless of whether the claim has anything to do with the forum.

Specific Personal Jurisdiction

Jurisdiction over a defendant when the defendant has sufficient minimum contacts with the forum state, and the claim arises out of those contacts, such that haling the defendant into court does not offend traditional notions of fair play and substantial justice.

ANSWER: B. Don engaged in a specific act (signing the contract) in the forum state (Texas), and the lawsuit arises out of that specific act. Don has no long term presence in Texas or regular Texas activities, and so there is no general personal jurisdiction.

Paul Plaintiff, a resident of Texas, files a lawsuit in Texas against Don Defendant, a resident of California. Don receives notice of the lawsuit, and tells his lawyer, "I don't want to travel to Texas to be sued by this guy." Don's lawyer says, "Maybe you don't have to." The lawyer argues that the Texas court lacks personal jurisdiction over Don. Paul's lawyer asserts that the court does have personal jurisdiction, and that the case should proceed.

Six months before, Don travelled to Texas, signed a contract with Paul while he was there, and returned to California. He has made no other trips to Texas, and has had no other interactions with the state.

In Paul's lawsuit, he alleges that Don has breached that contract.Which of the following types of personal jurisdiction does the Texas court have over Don?

A. General personal jurisdiction

B. Specific personal jurisdiction

C. BothAandB

D. None of the above

In Rem Cases

a court is not required to have personal jurisdiction over a particular party; state and federal courts inherently have jurisdiction over any item of property located in the forum state whether the property is in real estate or an item of tangible or intangible personal property

fact finding body

A board or body, usually of an administrative agency, that is empowered to make findings of fact.

critics of trial by jury

1. Jurors do not have the experience or training to sift through substantial amounts of evidence, weigh it, and make carefully reasoned decisions.

2. Untrained and inexperienced decision makers are likely to be influenced too easily by irrelevant sympathies or by the rhetoric of a highly skilled attorney.

3. Many of the rules of procedure and evidence that lengthen and complicate lawsuits exist only to accommodate an untrained and inexperienced fact-finding body.

4. There are some types of cases, such as patent infringement suits, that are simply too complex factually and legally for most jurors to understand.

supporters of trial by jury

1. General experience in "living" is more important for deciding the average case than is any kind of specialized training or experience.

2. Juries serve as a valuable check on the power of the judicial branch of government.

3. Juries provide a means for direct input of community values into the legal system.
4. In the case of complex lawsuits, the use of juries forces attorneys to simplify the case.

impaneling a jury

the process of selecting individuals to serve on a jury from the jury pool

voir dire examination

the preliminary examination of a juror or a witness to ascertain fitness to act as such

challenge for cause

A voir dire challenge for which an attorney states the reason why a prospective juror should not be included on the jury.

peremptory challenge

a defendant's or lawyer's objection to a proposed juror, made without needing to give a reason.

B. Judges will grant challenges for cause only if a prospective juror seems likely to biased. But peremptory challenges can be used for most reasons as long as they are not used in a discriminatory way.

Fred is a prospective juror in a case in which Al Attorney will be asking for $10,000,000 in damages. During voir dire questioning, Al gets the feeling that Fred will be unlikely to award such a large sum. He does not have a good argument that Fred will be biased or will fail to be impartial, but he would still like to keep him off the jury. To do so, Al will probably have to use which type of challenge?

A. challenge for cause

B. peremptorychallenge

C. neither would be effective for keeping Fred off the jury

direct examination

The examination of a witness by the attorney who calls the witness to the stand to testify on behalf of the attorney's client.

cross-examination

The questioning of an opposing witness during a trial.

motion for a directed verdict

A motion for the judge to take the decision out of the hands of the jury and to direct a verdict for the party making the motion on the ground that the other party has not produced sufficient evidence to support her or his claim.

general charge

outlines and explains the relevant legal principles for the jury; it then asks them to decide the relevant facts and reach a verdict either for the plaintiff or for the defendant

special charge

series of questions to the jury; each question relates to a disputed fact and asks for a yes or no answer

writ of execution

A court's order, after a judgment has been entered against the debtor, directing the sheriff to seize (levy) and sell any of the debtor's nonexempt real or personal property. The proceeds of the sale are used to pay off the judgment, accrued interest, and costs of the sale; any surplus is paid to the debtor.

writ of garnishment

An order of the court that orders that wages, bank accounts, or other property of the breaching party held by third persons be paid to the nonbreaching party to satisfy a judgment.

B. Writs of execution empower law enforcement officers as described, and writs of garnishment order third parties to turn over assets belonging to another to the court.

Jack loses a huge sum in a lawsuit with Pat Plaintiff, and he does not pay Pat for a long time. Pat's lawyer goes back to court and seeks the court's help in collecting what is owed.

The court issues a document that empowers a sheriff to seize Jack's car and sell it at auction to raise part of the money. The court issues a second document that orders Jack's bank to deliver some of Jack's deposits into the custody of the court. The first document is a writ of ______________, and the second document is a writ of __________________.

A. execution; execution

B. execution; garnishment

C. garnishment; execution

D. garnishment; garnishment

Negotiated Settlements

The process of reaching final equitable settlement of all outstanding issues, claims, and disputes through negotiation.

Arbitration

settling a dispute by agreeing to accept the decision of an impartial outsider

D. Whether signed before or after an event that leads to a dispute, arbitration is generally binding.

Zena signs an arbitration agreement on her first day at a new job in which she agrees that if she has any disputes with the company in the future, she will not sue and will only pursue a remedy in arbitration.

A year later, Zena has a car accident with Barry. Afterwards, they sign an agreement that they will arbitrate the dispute.

A month after that, Zena does not get an expected promotion at work, and she thinks it is because her supervisor dislikes her personally and not because of the quality of her work.

Now, Zena is upset at both her employer and at Barry, and she would like to "have her day in court" with both of them. That is to say, she wants to sue both, and not go through arbitration. Can she do so?

A. She can sue her company only

B. She can sue Barry only

C. She can sue both her company and Barry

D. No, she must arbitrate both disputes.

Mediation

A method of settling disputes outside of court by using the services of a neutral third party, called a mediator. The mediator acts as a communicating agent between the parties and suggests ways in which the parties can resolve their dispute.

C. A mediation will help her meet her desires for a faster resolution that is more likely to allow the parties to move past the dispute and coexist peacefully.

Tina has a dispute with her next-door neighbor. The neighbor's tree fell over onto her garage roof and caused significant damage. The neighbor has been slow to agree to pay for the damage. Tina says, "I'd like to work this out quickly, and I hope that I can still be friends with my neighbor later - it would be awkward to live next door to someone who is angry with me."

Based on Tina's comments, she should start with which of the following?

A. A trial

B. An arbitration

C. Amediation

tort

a civil wrong in which a defendant fails to meet a legal duty to another in a way that causes harm

Negligence

careless neglect, often resulting in injury

intentional tort

tort in which the defendant means to commit the injurious act

B. Simple carelessness like Alice's leads to negligence lawsuits. Deliberate actions, and reckless actions like Brenda's, lead to intentional tort cases.

Alice is distracted by her navigation system and strikes Al's car with her car. Brenda is driving 50 miles per hour over the posted speed limit while drunk, blindfolded, and talking on two cell phone when she strikes Bill's car. Which of them has likely committed an intentional tort?

A. Alice

B. Brenda

C. BothAandB

D. None of the above

Compensatory Damages

A monetary award equivalent to the actual value of injuries or damage sustained by the aggrieved party.

Punitive Damages

Monetary damages that may be awarded to a plaintiff to punish the defendant and deter similar conduct in the future.

A. Of the types of cases we have examined so far, only in intentional tort cases can a plaintiff seek punitive damages

Ann sues Bill in a negligence lawsuit. What type(s) of damages can she seek?

A. compensatorydamages

B. punitive damages

C. bothAandB

D. none of the above

To win a negligence case, the plaintiff must prove:

(1) that the defendant owed the plaintiff a duty (usually a duty of due care)

(2) that the defendant breached that duty

(3) that the defendant was a factual cause of an injury

(4) that the defendant's breach proximately caused the injury

(5) that the plaintiff suffered a specific injury.

Duty of Care

The duty of all persons, as established by tort law, to exercise a reasonable amount of care in their dealings with others. Failure to exercise due care, which is normally determined by the reasonable person standard, constitutes the tort of negligence.

Professional Duty of Care

You have an obligation to act as a reasonable person in your profession

Children Duty of Care

A person under 18 has only a duty to act as a reasonable child of his or her own age.

Duty of Care: Trespassers

landowners have no obligation to trespassers other than to not injure them intentionally

Duty of Care: Licensee

Licensees may sue for injuries caused by hidden dangers they should have been warned about because the landowner knew about the danger.

Duty of Care: Invitees

Invitees may sue for injuries related to all reasonably discoverable hidden dangers.