Introductory Business Law CLEP

Why do we need a formal legal system

We need it to be fair, consistent, and have order (1.1)

What is Civil Law

Based on code based law. Legislature makes a very detailed code and those previsions are THE law (Used in Europe and much of the world) (1.1)

What is Common Law

Based on case based law. Legislature can create statues, but they are generally more broad and dissolves to judges that are case by case decisions, that become precedents for other decisions. (Used in United States, United Kingdom and Australia) (1.1)

What is Substantive Law

Defines the rights, duties, and criminal offenses of law. “The what” (1.1)

What is Procedural Law

Sets the rules and processes for applying and enforcing laws. “The how” (1.1)

What is stare decisis 

A legal doctrine that says courts have an obligation to follow precedents set by previous court rulings (1.1)

What is a precedent

A principle in prior court cases that might serve as a reference point for future cases (1.1)

In a common-law system, rules governing behavior can be developed by:

Legislatures, Administrative Agencies and Judges. (1.1 Question)

The legislative branch is governed by what article of the constitution

Article I (1.2)

The executive branch is governed by what article of the constitution

Article II (1.2)

The judicial branch is governed by what article of the constitution

Article III (1.2)

What is checks and balances

The acts of one branch interacts with the other branches. One branch “checks” the other. (1.2)

In what Supreme court case was judicial review established

Marbury V. Madison. Judicial review is NOT in the constitution (1.2)

What is judicial review

It is because of judicial power that we can look at a law (executive, legislative branch or at the state level) and review it too see if it follow the U.S. Constitution. (1.2)

Where is the commerce clause found in the U.S. Constitution

Article I Section 8. (1.2)

Congress is given specific powers. What are these powers known as

Enumerated Powers (1.2)

Does congress have the power to regulate interstate commerce

Yes. We want some uniformity with how trade is held. (1.2)

What is interstate commerce

Buying, selling, and transporting of goods and services across state lines (1.2)

What is intrastate commerce

Buying, selling, and transporting of goods and services within a single state’s borders (1.2)

What is federalism

We have a federal government and state government and they work together. In some areas, the federal government is more powerful, in others, the state is more powerful (1.2)

What is the supremacy clause

The U.S. constitutions laws, are the “supreme law of the land” (1.2)

States also have their own constitution and towns have local ordinances. How are they limited?

They cannot violate the U.S. Constitution (1.2)

What are uniform laws

The law exists throughout all the states, hence uniformity. (1.2)

Statutory law is best defined as

Administrative Law (1.2)

What is the Bill of Rights designed to do 

It’s designed to limit the governments power (1.3)

Negative Liberty

Things the government CANNOT do against you. (1.3)

Positive Liberties

Things the government is allowed to do against you (1.3)

What does the establishment clause say

The government CANNOT favor one religion over another. Cannot “establish” a religion (1.3)

What does the free exercise clause say

The government cannot establish laws that interfere with someone’s religious beliefs

The establishment clause and free exercise clause are found where in the constitution

In the 1st amendment (1.3)

What are some exceptions to freedom of speech

Incitement, defamation, intellectual property, misleading commercial speech (1.3)

Content based regulation of speech

Laws that restrict speech based on what is being communicated. Does not consider when, how, or where (1.3)

Content neutral regulation of speech

Time, place, and manner is considered for the speech. (1.3)

What does the takings clause say

Federal government cannot take away your property without providing just (fair) compensation (1.3)

The takings clause is found where in the constitution

The 5th amendment (1.3)

Equal protection clause

Everyone has to be treated fairly and equally under the law (1.3)

Where is the equal protection clause found in the constitution

The 14th amendment (1.3)

What is Criminal Law

The government is the actor who goes after an individual. If the person is found guilty, they could be fined, or imprisoned, or death penalty is possible. For guilt to be found, there must be proof beyond a reasonable doubt (2.1)

What is Civil Law

Lawsuits between two parties which could include the government. There maybe monetary damages or specific performances. Nobody goes to prison in a civil case. Proof of Preponderance of the evidence means something happened more likely than not. And that is what’s used here. Has a plaintiff and defendant (2.1)

What are tribal courts

Courts that deal with specific Native American tribes (2.2)

What do trial courts do

Interpret the facts of the case. (2.2) 

What do Appellate Courts do

Figures out if the trial court got something wrong, or interpreted the substantive or procedural laws incorrectly (2.2)

What are petitions and writs of certiorari 

Petitions of certiorari are filed by people to the U.S. Supreme court to have their case heard. Writs of Certiorari are issued by the Supreme Court if they agree to hear your case (2.2) 

What are the main actions appellate courts can take

1. Affirm: They keep their decision

2. Reverse: Reverse their decision because the law was neglected

3. Vacate: What the trial court did was wrong, and we will send it back to them

4. Remand: Etc

(2.2)

What does De Novo Review mean

“New Review.” Review for the first time. Appellate courts do this (2.3)

What do you need to commence a Civil Suit

It’s called “Standing”. In these Civil Suits, you have to have been harmed to sue. Bystanders CANNOT sue (2.3)

To actually get a Civil Suit going you need what

Pleadings. There are steps to it.

1. Complaint (Governed by Rule 8 of federal procedures)

2. Answer (Rule 8)

3. Affirmative Defense

4. Counterclaim

5. Motions to Dismiss (Rule 12B)

(2.3)

Complaint part of a pleading

Filed by the plaintiff. The plaintiff must write what actions there are asking the court to do. They also state what law the defendant broke and this should be a short, brief statement. (2.3)

Answer part of pleading

Done by the defendant. Usually the defendant admits or denies various allegations (2.3)

Affirmative Defense part of All Pleading

Says that the defendant will admit to wrongdoing, but they have justification for it. For example, maybe they committed self defense, or maybe they signed a contract but had a gun to their head. The defendant has to prove these things. (2.3)

Counterclaim part of Pleading

Done by the defendant. The defendant may want to sue back. They have a claim on the plaintiff. (2.3)

Motions to dismiss part of pleading

Might include the claim that defendant says this is the wrong court to address this issue. (2.3)

Discovery

Period of time when each side asks the other to present information that is relevant. The next stage to a court procedure after pleading. (2.3)

Deposition

Questions of potential witnesses done under oath. (2.3)

Motion for Summary Judgement

Governed by Rule 56. The idea is too analyze all the undisputed facts. Based on those facts, who wins? The plaintiff or Defendant.

Who decides facts? Judges or Jurys

Jurys. NOT Judges (2.3)

Jury Verdict

Jury makes their decision to determine guilt or innocence (2.3)

Judgement Notwithstanding the Verdict

Judge says the Jury was not rational. The Jury may have decided something that was just not at all supported by the evidence. This is quite rare. (2.3)

Who is the Appellant

The person who appealed the trial courts decision (2.3)

Who is the Appellee

The person who did not appeal the trial courts decision (2.3)

What is a criminal indictment 

The first step of a criminal trial. Basically the equivalent of a Civil Complaint. The crime is brought up (2.3)

Grand Jury

Only hears evidence from the prosecution. Only their case. That determines if the case goes to trial (2.3)

If the defendant wants to appeal and a Supreme Court does not want to hear their case, what can they do

The defendant can go to a federal court and issue a Writ of Habeas Corpus. Writ of Habeas Corpus serves as a barrier from unlawful imprisonment (2.3)

What is jurisdiction

The power of a court to hear a particular case (2.4)

Subject Matter Jurisdiction

Asks which court system will I bring my case in? State or federal. (2,4)

What are the 2 type of federal court jurisdiction

Diversity jurisdiction and federal question jurisdiction (2.4)

Diversity Jurisdiction 

Happens when people are from different states. For example, one from Georgia, another from New York (2.4)

Federal question jurisdiction

Refers to if the case raises a federal question? (2.4)

What is Domicile

Refers to an individual or corporations home. If it’s a corporation, you look at the headquarters (2.4)

Specific Jurisdiction

Form of minimum contacts (2.4)

What is minimum contacts

The defendant has minimum contacts with the states so it’s fair to the plaintiff. (2.4)

Venue Rules

Refers to a geographic location where the legal case is too be held (2.4)

Where does contract law come from

Usually not the federal government. It comes from “The Restatement Second of contracts”. It is NOT law, it’s just kind of a summary by legal scholars (3.1)

The uniform commercial code

Used for goods. Somethings moveable. NOT services. Adopted into state law of all 50 states. (3.1)

What exactly is a contract

A legally enforceable promise. Contracts happen in the future. Not in the present moment. Contracts do NOT have to be written down. They could be physically said (3.1)

What is a Quasi Contract

Designed to prevent unjust enrichment when no contract exists between the parties (3.1)

What is a Unilateral Contract

One act of performance means an act of acceptance. For example, I give you 100 dollars to clean the house (3.1)

What is a Bilateral Contract

Both parties make some promises (3.1)

Who is a beneficiary

A third party that might benefit from the promise of a contract (3.1)

What is a bailment

A particular kind of contract relationship. It’s giving goods to someone without transferring ownership. For example, if I go to a parking garage, someone else might hold my car, but that does not mean they own it (3.1)

To form a contract, what must both parties do

They must agree to the contract. Has to be mutual (3.2)

What are the things we need for a contract to be made

1. Offer

2. Acceptance

3. and Consideration

(3.2)

What’s a offer in contract law

Someone must offer something to the offeree (3.2)

How do you terminate offers in contract law 

Your offer can be terminated if the other party has not yet agreed to it (3.2) 

What does the Mailbox Rule say

A contract is valid the moment it is sent. So if I send you the letter that I’ve agreed to it, that contract is now in effect. (3.2)

What is Detrimental Reliance or Promissory Estoppel 

You don’t give consideration, but you relied on their promise, so you did it too your detriment. For example, I take care of your child, and leave my own child alone, thinking you will take care of them and you don’t do it and it was harmed. (3.2)

Who cannot legally enter contracts

1. Minors

2. People deemed Mentally Incompetent

3. Intoxicated individuals

(3.3)

Who is a creditor beneficiary 

A third party that benefits from some promise. (3.4)

Who is a donee beneficiary 

A single person who benefits from a promise others made (3.4)

What is an assignment in contract law?

An assignment is a transaction where a party (assignor) transfers their rights under a contract to a third party (assignee). The obligor (the party who owes a duty) must now perform that duty for the assignee instead of the assignor (3.5)

How is an assignment made effective?

The assignor only needs to demonstrate an intent to assign their rights. The assignment is effective immediately, and the assignor cannot retain any rights (e.g., cannot claim partial performance from the obligor for themselves). The assignor must notify the obligor, but does not need their consent. (3.5)

Can an assignment be conditional?

Yes, an assignment can be conditioned on some future act or event, such as death. For example, if I die, the duty owed to me by you is then owed to my son or daughter. (3.5)

When is an assignment irrevocable?

An assignment is irrevocable if it is:

1. Supported by consideration (e.g., the assignee pays for the assignment).

2. Delivered to the assignee in writing (e.g., through a will).

3. Relied upon by the assignee to their detriment (promissory estoppel).

4. Performed by the obligor for the assignee. (3.5)

When can an assignment be revoked?

If an assignment is made gratuitously (without consideration) and is not delivered in writing, the assignor may revoke it until it is formally delivered or until the assignee detrimentally relies on it or the obligor performs for the assignee. (3.5)

What is a delegation in contract law?

A delegation occurs when a party (delegator), who owes a duty under a contract, transfers their contractual duties to a third party (delegate) to perform. The person receiving the performance is the obligee. (3.5)

Who remains responsible if a delegated duty is not performed?

The original obligor (delegator) remains contractually responsible to the obligee if the delegate fails to perform the duty. The delegator is still 'on the hook.' (3.5)

Can an obligee refuse performance from a delegate?

Generally, no. The obligee has to accept performance from the delegate. (3.5)

Can a delegate be compelled to perform the delegated duty?

The delegate cannot be compelled to perform the duty unless there is a separate contractual arrangement (supported by consideration) between the delegator and the delegate for the delegate to perform. (3.5)

When can duties NOT be delegated?

Duties cannot be delegated if the contract involves a particular skill or unique service of the delegator, where the obligee specifically contracted for that individual's expertise (e.g., a specific artist painting a portrait). (3.5)

What is the Statute of Frauds?

A common law doctrine (not a statute) that requires certain types of contracts to be in writing to be enforceable. Its purpose is to prevent fraud and disputes by requiring written evidence for historically problematic agreements. Most oral contracts are valid unless they fall under this statute. (3.6)