Business Law Exam 1

BLA201

Constitution

Guarantees basic rights, establishes 3 branches of government.

Statutory Law

Laws passed by legislative body, within constitutional limits.

Administrative Law

State and Federal agencies given power to make and enforce regulations by Congress

Caselaw (Common law)

Judge made law. Fills in blanks left by other sources, such as the Constitution, Congress, and administrative agencies. This type of law is used as precedent.

Precedent

consists of unwritten law based on previous court decisions.

Public Law

Applies to everyone equally

Private Law

Applies only to parties that agree on it.

Criminal Law

Crimes against society. Prosecuted by the government. Punished by loss of liberty (jail, probation, death) and/or fines

Civil Law

Laws that protect the rights and property of individuals from harm by other individuals. Lawsuits are brought by individuals. Punished by fines/monetary damages.

Federal Law

applies to all residents of the US

State Law

Applies only to a state’s residents

Supremacy Clause

Federal law is supreme law of the land, preempts state law when laws conflict.

Subject Matter Jurisdiction

The authority of a court to hear a case

Federal Question

Cases that deal with federal law, treaty or constitutional issue

Diversity

When the parties for a case are residents of different states, and the amount in controversy is over $75,000

Statute of Limitations

Specifies the time within which a lawsuit can be filed. Time begins to run from the date of injury, when it was discovered or when it could be discovered with reasonable efforts.

Precedent

Principle or rule established in a previous legal case that is either binding on or persuasive for a court when deciding subsequent cases with similar issues or facts.

U.S. District Courts (Trial Court)

Most federal cases originate here

Bench Trial

Takes place in front of a judge only; no jury. The judge acts as both the trier of fact and ruler on matters of law and procedure. Useful for complex cases.

Jury Trial

In a jury trial, the jury decides issues of fact, while the judge decides issues of law. Issues of fact deal with what actually happened, both parties present their case and the jury decides what happened. Issues of law are the legal procedures that go on in a court room, such as attorney’s filing motions.

U.S. Court of Appeals (Circuit Court)

Above district courts. PA, NJ, DE and the U.S. Virgin Islands fall into the 3^rd Circuit Court of Appeals

Supreme Court

Highest appeals court in the U.S., may choose to hear cases from lower appeals court. The Supreme Court picks and chooses which cases it wants to hear; if the Supreme Court agrees to hear a case it is called “granting certiorari,” which they typically do to resolve a split in the circuit courts or address important issues.

Personal Jurisdiction

Personal jurisdiction is the power of a court over specific litigants, these litigants must have minimum contacts, meaning there must be some connection between the defendant and the state where the court is.

Voir Dire

the process of selecting prospective jurors for a jury trial through a series of questioning by both parties' attorneys; attorneys obtain background information on prospective jurors to determine if they may be biased against their client or case.

Preemptory Challenge

attorneys excuse a potential juror for no given reason, although they are only allowed to do this a limited number of times. Jurors may be challenged because of their life background or occupation. Jurors cannot be challenged based on their race or gender.

Challenge for Cause

jurors are excused if the attorney can show the judge that they have a good reason; juror being biased, having a personal relationship with one of the parties are examples of good reasons to challenge a juror.

Pleadings

Papers that begin a lawsuit. First, the complaint is filed with the clerk of the court where the case will be heard. Second, the clerk will issue a summons to the defendant with a copy of the complaint. If the defendant does not reply to the complaint, the court may issue a default judgment against the defendant. Third, the defendant files an answer to the complaint within a specified time addressing each specific issue raised in the complaint. The defendant may also file a counterclaim which adds the defendant’s own claims against the plaintiff to the lawsuit. If this occurs, the plaintiff would have to answer the defendant’s counterclaim.

Discovery

The process in which each side finds out information about the other’s case. Occurs after pleadings are filed

Interrogatories

Written questions answered under oath. Least expensive part of discovery.

Depositions

Interviews under oath of parties and potential witnesses conducted by opposing counsel. Most expensive part of discovery

Production of Documents

Request to see other side’s documents related to the litigation

Physical or Mental Examination

Must be relevant. Asks “Is this person able to stand trial?” 

Beyond a Reasonable Doubt

the burden of proof in criminal cases; the prosecution must prove that the defendant committed the crime by showing that no other logical explanation can be derived from the facts.

Preponderance of the Evidence

the burden of proof in civil cases falls on the plaintiff (person who brings the case); For a party to win they must “tip the scales of justice” and convince the jury that they are at least 51% correct and the other party is only 49% correct.

Alternative Dispute Resolution

formal or informal processes to settle disputes without trial.

Negotiation

Parties make offers and counteroffers for settlement, no third party has authority, the least formal of the ADR methods

Mediation

Neutral person (mediator) attempts to get parties to a voluntary settlement; the mediator does not decide on a settlement (not binding). Can be court ordered (divorce, child custody)

Arbitration

Parties vest authority in a third-party neutral decision maker who will hear their case and issue a decision called an arbitration award, which can be binding (enforceable). There is no precedent in arbitration decisions.

Federal Arbitration Act

A federal statute that requires parties to participate in arbitration when they have agreed by contract to do so.

Trademarks

Protects words, phrases, names, logos, sounds, or looks that distinguish goods/services. The Lanham Act protects trademarks. Unlike copyrights, trademarks last forever – or as long as consumers continue to associate the trademark with its specific origin.

Trade Secret

A trade secret is an area of law that protects things that are secret and have value.  A trade secret's value is derived by the fact that the information is not known.  A trade secret could be a recipe, marketing strategies, product designs, customer lists, etc.

Copyrights

to obtain protection a work must meet a three-part test

1. It must be original

2. It must involve some degree of creativity and 

3. it must be fixed in a durable medium

Patents

Property right held by inventor for limited period of time (usually 20 years).  Excludes others from making/selling/using product

Tenancy in common

two or more people own the property. Each has the right to convey her interests or pass it down to her heirs

Joint tenancy

similar to tenancy in common, but includes right to survivorship. Common in marriage.

Easement

a right to enter land owned by another for a limited use.  (ex: a landowner with a landlocked parcel of property may obtain an easement across a neighboring property so she can install a driveway and access a road.  Also common for utility companies/builders)

Licensee

duty not to intentionally injure and to warn of known defects

Invitee

duty to inspect for defects and then correct and warn of defects

Trespasser

duty not to intentionally injure

Warrant of habitability

landlord must maintain property in habitable condition (for ex:  a rat infested property is not habitable

Quiet Enjoyment

Tenants are entitled to use property without interference of landlord (for ex: landlord cannot constantly show up unannounced and enter the property)

Tenant’s Duties

pay rent, use premises for proper purposes, not to damage premises

Rent abatement

court-ordered reduction in rent

Rent withholding

tenant refuses to pay all/part or rent in proportion to defective conditions

Repair and deduct

tenant may sometimes make repair and deduct costs

Suit for damages

tenant may file suit

Contract

A legally enforceable promise; can be a promise to do something or not to do something. Contracts are a form of private law, as they are only binding to those who agree to them and are also part of civil law.

Bilateral

an exchange of promises, acceptance of the offer is made by making a promise. The most common type of contract Ex: I offer to sell my bike to you for $100, you agree to buy my bike for $100.

Unilateral

one party in the contract makes a promise for an action, which may only be accepted through the other party’s action. Ex: A reward for a lost cat: Poster promises to pay $100 if the cat is returned, person who finds the cat is paid $100. There is an obligation to pay based on satisfaction of the term made in the promise

Express

parties explicitly state all important terms. Maybe written or oral. Most contracts are express contracts. Ex: a purchase and sale agreement for a car; lists purchase price, delivery date, etc. Oral contract to pay for babysitting. Tom promises to pay Lisa $25/hr to babysit at his house on Friday night

Implied (quasi)

Contract found by the court based on conduct of both parties. Implied contracts are not written or spoken, there is no record of agreement. Ex: if a restaurant mistakenly delivers a more expensive meal to your table and you eat the food anyway, knowing that you didn’t order it, a court might order you to pay for the meal.

Executory

when one or more parties have not yet fulfilled their obligations according to the contract. the contract is still ongoing. Ex: Signed a lease agreement for a year, but since its only been 6 months, you haven’t made all your rent payments yet.

Executed

All parties to the contract have fulfilled their obligations.  Ex: You have paid your last month of rent on your 1- year lease agreement, moved out and the landlord returned your security deposit

Common law contracts

law established by court decisions about contracts over centuries. Not easy to form a contract under common law, one must have offer, acceptance, and consideration.

Offer

A statement that proposes definite terms which permits the other party to create a contract by accepting those terms. Must have:

Price

Time for performance

Identification of subject matter

Identification of parties

Revoking an offer

an offer can be cancelled before it is accepted, this cancellation must be communicated

Acceptance

Agreeing to the terms of a contract. This is done through the mirror

image rule

the terms of the acceptance must mirror the terms of the offer. Changing or adding terms to an offer constitutes a rejection of the original offer creation of a new offer (counteroffer = rejection)

Consideration

there must be an exchange between the parties in which both parties stand to benefit and suffer a detriment (giving up something to gain another thing). Exchange can be another promise, or action, or promise to refrain from doing something.

Illusory promise

appears to be a promise to do something but is instead only an illusion of a promise. Does not constitute consideration. Ex: you offered to sell your bike to James for $300. James says, “I will look at it tonight and if I like it, I will pay you $300 tomorrow.” The next day James brings $300 but you refuse to sell.  James cannot enforce the offer he said he would buy if he liked it- he didn’t commit to anything.

Uniform Commercial Code (UCC)

Modern law of commercial transactions, must be adopted by state legislatures in order to apply in that state. Changes common law rules of contracts; contracts still must have offer, acceptance, consideration (like common law), but if conflict between contract common law and UCC- UCC rules are used

Article 2

Regulates sales contracts, applies to the sale of goods (moveable items) between merchants (someone who routinely deals in the particular goods involved). Merchants are held to a higher standard than non-merchants according to UCC.

Legality

Contracts can only be formed for legal subject matter.

Ex: if a drug dealer hires a pilot to deliver his drugs, in the pilot does not deliver, he has no case because the courts will not enforce a contract dealing with illegal subject matter.

Capacity

legal ability of a person to enter into an agreement the law will enforce. Minors and mental incapacitation lack legal capacity and may void a contract

Misrepresentation

when a party says something factually incorrect (not an opinion) that induces the other party to enter into a contract. A party cannot truly consent if they lack all the necessary information, so the contract can be voided even if it was an innocent misrepresentation.

Fraud

One party has used deception to acquire money or property. Must prove 5 things:

a)     A misrepresentation

b)    Of a material fact

c)     Made with the intent to deceive

d)    Relied upon by the other party

e)     To their detriment

Duress

improper pressure on another to force them to do something against his/her will. Usually improper physical force, sometimes duress or business compulsion is enough.

Ex: Threatening to harm the other party/ their family/ their property, threatening to cause significant economic loss to another party.

Mistake

contract is voidable if there is a mistake which materially affected the agreed upon exchange of performances

Express Condition

Agreed upon by the parties and explicitly stated in the agreement.

Constructive Condition

Supplied by the court during a contract dispute - not stated by the parties.

Parole Evidence Rule

If a written agreement has an integration clause it cannot be contradicted by prior oral or written agreements. Any statements or actions outside of the four corners of the contract will not be used by the courts to interpret the meaning of the contract.          

Statue of Frauds

Requires certain contracts to be in writing.

1. For any interest in land

2. Cannot be performed within one year

3. For the sale of goods over $500

4. To pay the debt of another

5. Interest in land

6. Consideration of marriage

Compensatory damages

Intended to compensate the non-breaching party for the economic injury (make them whole).

Ex: John has a contract with Aaron to buy his shoes for $200; Aaron gives John the wrong pair of shoes, John demands that Aaron give him the pair he agreed to buy but Aaron says he already sold them to someone else. A court would order Aaron to refund John his $200, these are compensatory damages because they compensate John for the money he spent.

Punitive damages

Meant to punish party that breaches contract.

Consequential damages

damages that are not a direct result of the breach, but instead are consequences from the incident. These secondary damages flow from the initial breach.

Ex: You have a contract with a construction company to build you a house, the house is supposed to be ready on June 1^st. The construction company fails to complete the house by June 1^st, now you must rent an apartment for a month. The court could order the company to pay the cost for that one month’s rent you had to pay because they failed to hold up their end of the contract.

Liquidated damages

Amount agreed to in advance that will be awarded in event of a breach. Ex: Hotels have a late cancellation policy, if you fail to provide 24 hours’ notice before cancelling, they charge you a certain amount.