Business Law Exam #2 (Chapters 9-11, 14, 17-19)

Privacy law

Laws surrounding data, privacy, or people's right to control information about themselves

Four ways privacy can be violated

1) Security & Data Breaches

2) Surveillance

3) Biometric Data

4) Data Mining & Behavior Advertising

Fourth Amendment

Protects against unreasonable searches and seizures

Fifth Amendment

Protects against self-incrimination (privacy issue)

Reasonable expectation of privacy

A person has an actual, subjective expectation of privacy unless the government has reasonable cause

Tort of public disclosure of private facts

Protects people from the disclosure of embarrassing or private information even though it may be true

What is considered private facts?

1) Private

2) Not newsworthy

3) Invasion of privacy (embarrassment)

Tort of intrusion

Occurs when a plaintiff shows that the defendant intentionally intruded, did it upon the solitude of another or on private terms, and intruded in a manner that is highly offensive to a reasonable person

Electronic Communications Privacy Act of 1986 (ECPA)

Prohibits the unauthorized interception of wire and electronic communications

Foreign Intelligence Surveillance Act (FISA)

Limits the collection of foreign intelligence through electronic surveillance in the United States

Health Insurance Portability and Accountability Act (HIPAA)

Protects medical records from being disclosed

Family Educational Rights and Privacy Act (FERPA)

Protects the privacy of student records which include grades and what institution they are attending

Employee right to privacy

Employer does not have the right to conduct things off the job (no genetic testing, etc.)

State privacy statutes

1) Security breach notifications

2) Reader privacy

3) Biometric privacy

4) Disclosure of personally identifying information

5) Social media passwords

How does the First Amendment impact privacy laws?

Balances the right to freedom of expression while limiting harmful behavior on the internet

- Defamation and hate speech are illegal (violate other people's rights)

Wiretapping & Electronic Surveillance

Can not be done unless the party consents

- Law enforcement needs a warrant

Contract

Agreement that is legally enforceable

- It is assumed that you will make decisions based on your own best interest

7 elements of a contract

1) Offer

2) Acceptance

3) Consideration

4) Legality

5) Capacity

6) Consent

7) In Writing

Offer

A promise or commitment to perform or refrain from performing some specified act in the future

Revocation

The offeror cancels the offer before it is accepted by the offeree

Rejection

The offeree does not accept the offer

Counteroffer

The offeree makes a different offer to the offerer

Expiration

When an offer specifies a time limit for acceptance and the time limit expires

Destruction of the Subject Matter

What is to be purchased no longer exists the agreed upon form

Acceptance

When a offeree says or does something that a reasonable person would understand to mean that the offeree is accepting the offer

Mirror Image Rule

The acceptance must be the "mirror image" of the offer

Consideration

The inducement, price, or promise that causes a person to enter into a contract and forms the basis for the parties' exchange

- Exchange of goods and services

Two basic elements of consideration

1) Value

2) Exchange

Value

Both parties agree to something of value from the contract

- An Act: Doing something that is not legally required to do

- Forbearance: Not doing something he/she had a legal right to do.

Exchange

The item of value must be exchanged

Legality

The contract must be for a lawful purpose in the jurisdiction where it is agreed upon

A contract is not legally binding if...

- For an illegal action for product

- Involves criminal activity

- Is signed under duress, undue influence, or misrepresentation

Exculpatory clause

A contract provision that relieves a party from liability for damages caused by another party during the duration of the contract

Mailbox rule

The contract is binding the moment the letter is in the mail

Capacity

Legal ability of a party to enter into a contract

- Be of sound mind (over 18 years old, not intoxicated, etc.)

Consent (contracts)

Must be agreed upon to avoid frauds and mistakes

Contract fraud

Knowingly lying on a contract (statement is factually wrong)

Mistakes on a contract

When a party lies on the contract

1) Basic errors about characteristics

2) Unilateral (not an easy fix)

3) Mutual mistakes (voidable contract)

4) Conscious uncertainty

5) Prediction error

6) Mistake of value

In Writing

Verbal contracts can be legally binding and enforceable in court, but they are much more difficult to prove than written contracts

Contracts that must be in writing

- Agreements for the sale of land

- Agreements that cannot be performed within 1 year

- Promise to pay the debt of another

- Promise made by an executor of an estate

- Promise made in the consideration of marriage (if you marry me, I will giveyou...)

- The sale of goods worth $500 or more (per the Uniform Commerical Code)

Uniform Commercial Code (UCC)

A collection of laws that govern commercial (business) transactions (contracts) in the United States

Bilateral contract

Both parties make a promise

Unilateral contract

One party makes a promise to the other which the party can accept by doing something

Valid contract

One that meets all the requirements of the law including all the elements of a contract

Unenforceable contract

One where two parties seek to form a bargain, however a court declares that a certain rule of law prevents the ability to enforce it

Voidable contract

When a contract involves some kind of defect or violation and so one party can terminate the contract

Void contract

One that neither party can enforce because the deal is illegal or neither party has the authority to make the contract

Express contracts

The terms of the agreement are fully and explicitly stated in words (can be oral but most commonly written)

Implied contract

Claims that the words and conduct of the contract indicate that an agreement is intended (verbal)

Executed contract

A contract which has already happened

Promissory estoppel

Occurs when a plaintiff can prove justifiable reliance on a promise made by the defendant if there was no valid contract made

Article 2 of the UCC

Applies to the sale of goods which constitute as any movable physical object except for money and securities (investments)

How does UCC apply to contracts?

When there are transactions involved including the exchange of goods (not services)

Merchant

A party who routinely deals in a particular good involved

Warranty

A promise that goods will meet a certain standard (can be written or verbal)

Express warranty

One created with the words or actions of the seller

3 ways an express warranty is created

1) With an affirmation of fact or a promise

2) With a description of the goods

3) With a sample or model

Implied warranty

Those created by the UCC itself not by any act or statement of the seller

Warranty of fitness

Legal guarantee that a product is suitable for a buyer's specific needs

Agent

A person who is authorized to act and has the legal power, on behalf of another person or entity

Principal

The person or entity that the agent works on behalf of

Agency relationship

Occurs when someone (an agent) agrees to perform a task for and under the control of someone else (a principal)

To create an agency relationship there must be...

1) Consent

2) Control

3) Fiduciary relationship

Consent

The principal must ask the agent to do something, and the agent must agree

Control

Principals are liable for an agent's acts because principals exercise control over the agent

Fiduciary relationship

A relationship founded on trust between the principal and agent

General duties of agents to principals

1) Duty to obey

2) Duty of care

3) Duty to provide information

Specific duties of agents to principals

Agents have a duty of loyalty which includes:

- Responsibility not to receive outside benefits without approval

- Not disclose confidential information

- No competition against the principal

- No acting for two principals with conflicting interests

- No secret dealings with the principal

- Do not engage in inappropriate behavior

If an agent breaches a duty, a principal can...

1) Sue for damages

2) Recover profits due from a breach of duty

3) Rescind (void) the transaction

Duties of principals to agents

1) Pay the agent as required by the employment agreement

2) Indemnify (reimburse) the agent for reasonable expenses

3) Cooperate with the agent in performing agent duties

How to terminate an agency relationship

- Term of the agreement expires

- The purpose of the relationship has been fulfilled

- By mutual agreement

- Agency "at will" if no terms have been established in advance

- Wrongful termination (possible sue for damages)

- Inability to perform required duties

Express authority

Specific verbal or written instructions from principal to agent

Implied authority

Actions reasonably necessary to complete a duty/responsibility

Apparent authority

"Power of position" or authority to act on behalf of the principal to get the job done, even if it does not grant through express or implied authority

Principal liability in a tort

The principal is as responsible as if the principal had personally performed the work of the agent (always liable on a contract)

Agent liability in a tort

Agent is only liable when the principal's identity is unknown

Negligent physical tort

A legal claim brought against a person or entity for causing harm to another person through their negligence

Liability between principal and employee

Principal may be liable for employee's torts, even if the principal was not negligent

Liability between principal and independent contractor

Principal is not liable for torts of an independent contractor unless the principal was negligent in hiring or supervising

Employment at will

Unless there is an employment contract that specifies an employment term/duration or an employer has a specific policy against employment at will, employees are at-will employees

- Can be fired for good, bad, or no reason at all

Wrongful discharge

An employer cannot fire an employee for a bad reason, that is a reason that violates public policy

3 reasons for wrongful discharge

1) Refusing to violate the law

2) Exercising a legal right

3) Supporting basic societal values

Family Medical Leave Act (FMLA)

Gives both men and women up to 12 weeks of unpaid leave each year in the case of childbirth, adoption, or a serious health condition of their own or in their immediate family

Requirements of FMLA

1) Employees who take leave must be allowed to return to the same or equivalent job with the same pay or benefits

2) Applies to employees who have worked for their company for a year or more

3) Only applies to companies with at least 50 employees

Whistleblower

An employee who discloses illegal behavior on the part of their employer

Whistleblowers are protected in cases of...

1) Defrauding of the government

2) Employees of public companies

Off-Duty Activities

In the absence of a specific law to the contrary, employers do not have the right to fire workers for off-duty conduct

Illegal drugs and alcohol

Private employers are permitted to randomly test job applicants and workers for alcohol and illegal drugs

Section 7 of National Labor Relations Act (NLRA)

Employees have the right to:

1) Organize and join unions

2) Bargain collectively with representative of their own choosing

3) Engage in other activities with coworkers (concerted activities)

National Labor Relations Board (NLRB)

Oversees and enforces statutes of the NLRA and its purpose is to protect employee rights

Occupational Safety and Health Act (OSHA)

In place to ensure that workers are given safe working conditions (given oversight over workplaces and has authority to inspect)

Fair Labor Standards Act (FLSA)

Regulates a minimum wage, overtime wage, and child labor

- Enforced by the Department of Labor

To organize a union there must be...

1) A campaign

2) Signing of authorization cards from 30% of employees

3) Petition/Election - if 50% of employees vote in favor, the NLRB designates the workface as unionized

Collective bargaining

After a union is formed a company must bargain with the select union members with the goal of creating an employment contract

Concerted actions

Actions taken to gain a bargaining advantage

NLRA regulations of strikes

- Unions must give 60-day-notice

- Many states do not permit state employees to strike

- No sit-down strikes

- No partial strikes

Picketing

The goal of picketing is to discourage employees, replacement workers, and customers from doing business with the company

Lockouts

Management prohibiting workers from entering the premises and earning their paycheck

Title VII of the Civil Rights Act of 1964

It is illegal for employers to discriminate based on race, color, religion, sex, or national origin (applies to all aspects of the employment process)

Disparate treatment

Plaintiff experiences different treatment because of their sex, race, color, religion, or national origin