Practice

What is the main issue in the Stambovsky case?

Misrepresentation in real estate contracts; seller disclosed the house was haunted to the public but not to the buyer.

What legal principle did the Stambovsky case establish?

Sellers must disclose unique conditions they’ve publicized, even if caveat emptor usually applies.

What is the main issue in the Jacobs & Youngs case?

Substantial performance in construction contracts; the builder used non-specified pipe but of equal quality.

What legal principle did the Jacobs & Youngs case establish?

Substantial performance doctrine: minor deviations from a contract do not prevent enforcement if the deviation is trivial and innocent.

What is the main issue in the Fitl case?

Breach of contract and damages; buyer discovered a baseball card was altered and worthless after purchase.

What legal principle did the Fitl case establish?

Notification of a defect must be given within a reasonable time, but earlier notice would not have fixed the issue in this case.

What is the main issue in the Coca-Cola case?

Trademark infringement; competitors used the name 'Koke' to imitate Coca-Cola.

What legal principle did the Coca-Cola case establish?

Trademarks are protected based on their current meaning and public recognition, not their historical origins.

What is the main issue in the Lundberg case?

Breach of contract; a farm manager guaranteed six live foals but only one was produced.

What legal principle did the Lundberg case establish?

Apparent authority: a principal is bound by an agent’s actions if the principal creates circumstances leading third parties to believe the agent has authority.

What is the main issue in the Guth case?

Breach of fiduciary duty; Guth used company resources to start Pepsi-Cola for personal gain.

What legal principle did the Guth case establish?

Corporate officers must act in the best interest of the company, not for personal gain.

What is the main issue in the Schaefer case?

Breach of contract; Schaefer was not paid his salary and bonuses by the LLC.

What legal principle did the Schaefer case establish?

LLC members are not personally liable for the LLC’s debts unless they act outside their role in the LLC.

What are the elements of a valid express contract?

1. Offer, 2. Acceptance, 3. Consideration, 4. Capacity, 5. Legality, 6. Intent of parties.

What is promissory estoppel?

A promise is enforceable if one party relies on it to their detriment, even without consideration.

What is the Statute of Frauds?

Requires certain contracts (e.g., real estate, marriage, goods over $500) to be in writing.

What is the difference between secured and unsecured creditors?

Secured creditors have collateral (e.g., house, car), while unsecured creditors do not (e.g., credit card debt).

What is the purpose of a UCC-1 financing statement?

To perfect a security interest in goods, giving the creditor priority over other claimants.

What is the Business Judgment Rule?

Protects corporate directors from liability for bad decisions unless there is fraud or gross negligence.

What is piercing the corporate veil?

Holding a company or individual liable for another company’s debts by proving they are the 'alter ego' of each other.

What debts are not discharged in bankruptcy?

Student loans, alimony, child support, punitive damages, and back taxes.

What is the difference between compensatory and punitive damages?

Compensatory damages cover actual losses, while punitive damages punish intentional wrongdoing.

What is the purpose of a non-compete clause?

To prevent employees from working for competitors or starting competing businesses after leaving the company.

What is the FTC’s proposed rule on non-competes?

Prohibits non-competes in employment agreements and requires employers to rescind existing non-compete clauses.

What is the difference between an employee and an independent contractor?

Employees are agents of the employer, while independent contractors are not, limiting employer liability for their actions.

What is the doctrine of substantial performance?

A party who substantially performs a contract, despite minor deviations, is entitled to payment, with adjustments for any differences in value.

What is the purpose of a merger/modification clause?

To state that the written contract represents the entire agreement and can only be modified in writing.

What is the purpose of a liquidated damages clause?

To predetermine damages in case of a breach, avoiding the need to prove actual damages.

What is the difference between common law and statutes?

Common law evolves through court decisions, while statutes are written laws passed by legislatures.

What is the purpose of a savings/severability clause?

If any part of the agreement is invalid, the rest remains enforceable.

What is the purpose of a choice of law clause?

Specifies which state’s laws will govern the contract.

What is the purpose of a forum selection clause?

Specifies the location where disputes will be resolved.

What is the purpose of an attorney fee clause?

The prevailing party in a dispute is entitled to recover reasonable attorney fees and costs.

What is the purpose of a non-disclosure clause?

Protects trade secrets and confidential information.

What is the purpose of a non-solicitation clause?

Prevents soliciting clients or employees after leaving the company.

What is the purpose of a preemptory rights clause?

Gives shareholders the right of first refusal to purchase shares up to their percentage interest.

What is the purpose of a voting bloc agreement?

Ensures shareholders vote the same way on important corporate matters.

What is the purpose of a prospectus?

Provides detailed information about a company, including risks, when issuing securities.

What is the purpose of a security agreement?

Outlines the terms of a secured transaction, including collateral.

What is the purpose of a fixture filing?

Perfects a security interest in goods attached to property (e.g., bolted equipment).

What is the purpose of a deed and mortgage?

Perfects a security interest in land.

What is the purpose of a promissory note?

A written promise to pay a specified amount of money.

What is the purpose of a shareholder’s agreement?

Defines roles, responsibilities, and ownership percentages among shareholders.

What is the purpose of a bylaws document?

Outlines the rules and regulations of a corporation.

What is the purpose of articles of incorporation?

Establishes a corporation and includes its name, purpose, address, and registered agent.

What is the purpose of articles of organization?

Similar to articles of incorporation but for LLCs.

What is the purpose of a fictitious name?

The name under which a company operates (e.g., 'd/b/a').

What is the purpose of a registered agent?

A person or entity designated to receive legal documents on behalf of a corporation or LLC.

What is the purpose of a declaratory action?

Asks the court to interpret the terms of a contract.