Legal Studies Final

Importance of choosing the right business organization

if affects taxation, liability, control, and funding

corporate shield

it protects shareholders from being personally liable for corporate debts

due diligence

is the investigation or audit of a potential investment or product to confirm all facts, such as reviewing financial records and legal obligations.

Business Judgement Rule

protects directors/officers from liability if decisions are made in good faith, with due care, and in the best interest of the company

electronic data record system

SEC requires companies to maintain accurate accessible records (often digital) for auditing and compliance

Securities Act of 1933

A federal law that requires companies to register their securities with the SEC and provide full disclosure to investors, aimed at preventing fraud and ensuring transparency in the securities market.

SEC (Securities and Exchange Commission)

regulated the stock market and made it a safer place for investments

IPO (initial public offering)

the first time a company sells shares of its stock to the public

registration statement

a statement filed with the SEC that discloses all material information concerning the corporation making a public offering

prospectus

summary document shared with investors included risk factors, company finances, and offerings

short-swing profits

profits earned by corporate insiders from the sale and purchase of a company's stock within a six-month period, subject to restrictions by securities laws.

Insider Trading (Rule 10b-5)

Illegal practice of buying or selling a security based on material nonpublic information, violating fiduciary duties to shareholders. includes info on mergers, earnings, bankruptcy

Misappropriation Theory

even outsiders like attorneys and consultants can be liable if they misuse confidential info

Material information

info a reasonable investor would consider important when making a decision to buy/sell securities

U.S. v. Bhagat (2006)

Employee claimed he “didn’t read the email” with insider info before tipping a friend; still found guilty because knowledge was accessible and used

Agency formation

the process by which a principal and an agent create a legal relationship, often involving mutual consent.

Employer-Employee vs. Independent contractor

The distinction between a worker who is directly employed by a company with specific employer obligations and someone who provides services under a contract, often with greater independence and less oversight.

respondeat superior

employers are liable for torts committed by employees within scope of employment

vicarious liability

a legal doctrine holding one party responsible for the actions of another, typically an employer for an employee's wrongdoing occurring in the course of their job.

intentional torts/motivation test

employers liable if the tort was motivated in part to serve the employer’s interest or benefit the employer in some way.

contract liability

principals are bound by contracts entered into by agents within actual or apparent authority

Line and Scope of Employment

Refers to the range of activities an employee is engaged in while performing their job duties, determining when an employer may be held liable for an employee's actions.

Frolic and Detour

Refers to a situation where an employee deviates from their employer's business for personal reasons, affecting liability for their actions during that time.

coming and going rule

not liable for employee’s commute

Bosse V. Brinker (Chili’s Case)

Guest chased dine and dash suspects. Court ruled he wasn’t an agent of Chili’s; no control or consent from manager

fiduciary relationship

a relationship of trust and confidence, as between trustee and beneficiary, attorney and client, or director and corporation.

Termination of Agency

The conclusion of an agency relationship, resulting in the end of the agent’s authority to act on behalf of the principal. This can occur through mutual agreement, expiration of the agreed term, or the accomplishment of the agency's purpose.

ADA (American Disabilities Act)

a civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life.

Who is protected under the protected classes

individuals of a minority race, women, older people, those with disabilities

EEOC (Equal Employment Opportunity Commission)

Investigates and rules on charges of discrimination by employers and labor unions

Title VII of the Civil Rights Act of 1964

a federal law that prohibits employment discrimination based on race, color, religion, sex, or national origin.

Lilly Ledbetter Fair Pay Act

restricts the 180 day time period in which victims of discrimination can challenge and recover for discrimination

FMLA (family and Medical Leave Act)

a law that provides eligible employees with unpaid, job-protected leave for specific family and medical reasons.

Sexual Harassment: Quid Pro Quo

occurs when job benefits are directly tied to the acceptance or rejection of sexual advances.

Sexual Harassment: Hostile Environment

occurs when an employee experiences a work environment that is intimidating, hostile, or offensive due to unwelcome sexual conduct.

Employee Discrimination

refers to unfair treatment of employees based on characteristics such as race, gender, age, or disability, violating equal employment opportunity laws.

Disparate treatment

intentional discriminations against employees

Disparate Impact

occurs when a seemingly neutral policy disproportionately affects a protected group in a negative way, leading to unintentional discrimination.

ADEA (Age Discrimination in Employment Act)

protects individuals over 40

Reasonable Accommodation

modifications or adjustments to a job or work environment that enable a qualified individual with a disability to perform essential job functions.

BFOQ (Bona Fide Occupational Qualification)

a legal defense that allows an employer to hire employees based on specific qualities necessary for the job, even if it may lead to discriminatory practices.

Pregnancy Discrimination Act

specifically outlaws discriminations on the basis of pregnancy

Affirmative Action

A policy designed to redress past discrimination against women and minority groups through measures to improve their economic and educational opportunities

OSHA

Ensures workplace safety

Workers compensation

provides financial and medical benefits to employees injured on the job, protecting them from loss of income.

Bailments

the temporary transfer of personal property by one party (the bailor) to another (the bailee)

gift requirements

include intention, delivery, and acceptance to create a legally binding gift.

Lost/Mislaid/Abandoned property

refers to property that is unintentionally left by its owner ( ), intentionally placed but forgotten ( ), or intentionally relinquished ( ), each with different legal considerations regarding the rights of finders.

real property rights

any of the bundle of rights, applied to airspace, surface, and subsurface

recording statutes

protect buyers/lenders by ensuring public record of ownership

statutes of frauds

requires certain contracts to be in writing

types of ownership

fee simple, life estate, leasehold estate, concurrent ownership

life estate

an interest in property that lasts for the duration of an individual's life, after which the property reverts to the original owner or passes to another party.

Life tenant

the individual who holds a life estate and has the right to use and benefit from the property during their lifetime.

Remainder Man

the person who receives the property after the life tenant's interest ends, either returning to the original owner or passing to a designated individual.

Bundle of Rights

rights to possess, control, enjoy, exclude, and transfer property

Adverse possession

acquiring title by openly, continuously using land for statutory period

eminent domain/takings clause

the power of the government to take private property for public use, with compensation to the owner.

Kelo V City of New London

A landmark Supreme Court case that ruled the government can use eminent domain to transfer land from one private owner to another to further economic development.

Easements

the right to use land for a specific and limited purpose

Leases

a contractual agreement where one party allows another to use property for a specified time in exchange for payment.

Tenant

a person who rents or leases property from a landlord.

Landlord

a person or entity that owns property and rents it out to tenants.

Non-possessory rights

easement/ options to purchase/ rights of refusal

Mineral Rights

can be separated from surface rights and sold separately

contracts for sale of land vs U.C.C

Land = governed by common law; goods = UCC Article 2. Contracts for the sale of land are governed by common law rules, while the Uniform Commercial Code (UCC) Article 2 regulates transactions involving the sale of goods.

finders of property

they can keep lost/abandoned land, but owner retains rights to mislaid

transfer at death

wills, probate process, remainder interest, or right of reversion