business law quiz

Law

Laws

  • Codified rules of behavior enforced by a society

  • Body of rules of action or conduct prescribed by a controlling authority having binding legal force

  • Must be obeyed and followed by citizens object to legal consequences

    • Note: Mr. G wrote this with bad grammar, but it means that the citizens have to be punished if they break the law

Types of Law

Common Law

  • The body of decisions handed down by courts ruling on individual cases


Statutory Law

  • Law crafted by constitution(s) or by federal, state, or local legislative acts


Regulatory (Administrative) Law

  • Law made by the authority of administrative agencies

    • Note: Means law made by agencies from the next term ⬇


Agencies Restricting US Business Practice

  1. Equal Employment Opportunity Commission (EEOC)

  2. Environmental Protection Agency (EPA)

  3. Food and Drug Administration (FDA)

  4. Federal Trade Commission (FTC)

  5. Occupational Safety and Health Administration (OSHA)

  6. Securities and Exchange Commission (SEC)


Trends in Deregulation and Regulation

Deregulation

  • The elimination of rules that restrict business activity

Note: Deregulation is one of the primary incentives for innovation. Businesses from deregulated climates will perform better than those from Regulated climates cuz they are better at innovation and stuff.


The Court System

Three Levels

  • Federal

    • Constitutional

    • Maritime

    • Federal Statutes

    • Regulatory

    • Note:

  • State

  • Local


 Both

  • This is a heading, but in Mr. G’s notes, he took this and made it sound worse

  • He wrote: Three-tiered system for most federal and state

Trial Court

  • The general court that hears cases not specifically assigned to another court


Appellate Court

  • The court that reviews the case records of trials whose findings have been appealed


Supreme Court

  • Cases not resolved at the appellate court




Areas of Business Law

Contract Law

Contract

  • An agreement between two or more parties that is enforceable in court


Capacity

  • Competence required of individuals entering into a binding contract


Consideration

  • An item of value exchanged between parties to create a valid contract

    • Note: Usually, money is exchanged for a good or service

    • Note: Doesn’t have to be fair, just has to be an exchange of some sort


Contract Parties

Offeror

  • Makes an offer to enter into a contract


Offeree

  • To whom the offer is made


Elements of a Contract

  1. Agreement between the parties

  2. Consent

    1. Voluntary signing

  3. Contractual Capacity

  4. Consideration

  5. Legality

  6. Proper Form


Breach of Contract

  • In the event of a breach, an injured party may

    • Cancel the contract

    • Sue for Damages up to the amount that was lost

    • Require Specific Performance


Tort

  • Injury to people, property, or reputation for which compensation must be paid

  • Civil, non-criminal

  • Applies to most business relationships not governed by contract


Classifications of Tort

  1. Intetional

  2. Negligence/Unintentional

  3. Product Liability


Intentional Torts

Intentional Tort

  • Tort resulting from the deliberate actions of a party


Compensatory damages

  • Monetary payments intended to redress injury actually suffered because of tort


Punitive Damages

  • Fines imposed over and above any actual damages suffered by the plaintiff


Negligence Torts

Negligence

  • Conduct that falls below legal standards for protecting others against unreasonable risk


Product Liability Torts

Product liability

  • Tort in which a company is responsible for injuries caused by its products


Strict Product Liability

  • The principle that liability can result not from a producer's negligence but from a defect in the product itself

  • An injured party needs only to show

    • The product was defective

    • The defect was the cause of the injury

    • The defect caused the product to be unreasonably dangerous

    • Note: Plaintiff doesn’t have to prove negligence or fault, so it has a high success rate in court


Examples of Tort

  • Intentional

    • Fraud/ Deceit

    • Defamation

  • Negligence/Unintentional

    • Slip and Fall accidents

    • Medical Malpractice

  • Product Liability

    • Defective Product


Property Law

Property

  • Anything of value to which a person or business has sole right of ownership


Four Categories of Property Law

Tangible Real Property

  • Land and anything attached to it


Tangible Personal Property

  • Any movable item that can be owned, bought, sold, or leased


Intangible Personal Property

  • Can not be seen but exists by virtue of written documentation

    • Life Insurance contracts, securities, investments


Intellectual Property

  • Property created through a person's creative activities


Protection of Intellectual Rights

Copyright

  • Exclusive ownership right belonging to the creator of a book, article, design, illustration, photo, film, or musical work


Trade Mark

  • Exclusive legal right to use a brand name or symbol


Patent

  • Exclusive legal right to use and license a manufactured item or substance, manufacturing process, or object design


Restrictions on Property Rights

Eminent Domain

  • The principle that the government may claim private land for public use by buying it at a fair price


Agency Law

Agent

  • An individual or organization acting for and in the name of another party

  • An agent’s authority to bind a principal can be express, implied, or apparent


Principal

  • An individual or organization authorizing an agent to act on its behalf


Authority of Agents

Express Authority

  • An agent’s authority derived from a written agreement to bind a principal to a certain course of action


Implied authority

  • An agent’s authority, derived from business custom, to bind a principal to a certain course of action

  • Implied by role


Apparent authority

  • An agent’s authority based on a principal’s compliance to bind a principal to a certain course of action 

  • What a 3rd party believes


Commercial Law

Uniform Commercial Code (UCC)

  • A body of standardized laws governing the rights of buyers and sellers in transactions


Warranty

  • Sellers promise to stand by their products or services if a problem occurs after the sale


Express Warranty

  • Warranty whose terms are specifically stated by the seller


Implied Warranty

  • Warranty, dictated by law, based on the principle that products should fulfill advertised promises and serve the purposes for which they are manufactured and sold


Bankruptcy Law

Bankruptcy

  • The court granted permission to not pay some or all incurred debts


Involuntary Bankruptcy

  • Bankruptcy proceedings initiated by the creditor of an indebted individual or organization


Voluntary bankruptcy

  • Bankruptcy Proceedings initiated by an indebted individual or organization


Three Plans for Business Bankruptcy

Liquidation Plan

  • Business ceases to exist

  • Under Chapter 7 of the US Bankruptcy Code


Repayment Plan

  • Bankrupt company simply works out a new payment schedule to meet its obligations

  • Under Chapter 10 of US Bankruptcy Code


Reorganization

  • New plan for remaining in business

  • May include new management and financial strategy

  • Under Chapter 11 of US Bankruptcy Code


Main factors accounting for the increase in bankruptcy filings

  • Increased availability of credit

  • Fresh-start promises in current bankruptcy laws

  • Growing acceptance of bankruptcy as a financial tactic


The International Framework of Business Law

  • Yellow part not included in Mr. G notes but in Textbook

International Law

  • General set of cooperative agreements and guidelines established by countries to govern the actions of individuals, businesses, and nations