1/20 Business Organizations

Overview of Class Proceedings

  • Discussion among students about panels and teaching engagement.

  • Professor Spencer Williams introduces himself and the course.

Professor Introduction

  • Name: Professor Spencer Williams

  • Institution: California Western

  • Courses taught: Business Organizations, Contracts

  • Research focus: Legal automation and AI safety

  • Legal background: Practiced corporate law in Silicon Valley, working with tech companies and venture capitalists.

Class Policies

Attendance

  • Importance of attendance: Attendance is not graded directly but is crucial for understanding the course material.

  • ABA Requirement: Students must attend at least 75% of classes to receive credit.

  • Attendance through Quick Code: Students will enter attendance using the provided code.

Grading Structure

  • Components of Grade:

    1. Midterm Examination

    • Worth 20% of the final grade.

    • Multiple choice format.

    • Scheduled at the semester's midpoint.

    1. Final Examination

    • Worth 80% of the final grade.

    • Combination of multiple choice and essay questions.

    1. Use of Canvas:

    • Canvas for class materials, notes, and announcements.

    • Students should enable notifications for course updates.

Assessments

  • Practice Exams (Assessments):

    • Will be conducted before the midterm and final to mimic exam formats.

    • Past exams will be available for review before final exams.

Takeaways

  • Takeaways Folder:

    • PDFs summarizing key content discussed in class will be posted weekly.

    • Helps students prepare outlines and assess essential rules.

Class Recordings

  • Class Recordings:

    • All classes will be recorded and available on an Opto platform for the entire semester.

Office Hours

  • Professor's Office Hours:

    • Contact via email for appointments (do not message through Canvas).

Teaching Fellow

  • Rebecca Shumen:

    • Teaching fellow available for student assistance, with her own office hours.

    • Will conduct a final exam review session ahead of finals.

Participation

  • Cold Calling Method:

    • Randomized participation using name cards.

    • Encourages meaningful discussion without affecting grades.

Importance of Business Law

  • Why Study Business Law?

    1. Bar Exam Relevance: Business law is a significant portion of the bar exam.

    2. Practical Application: Necessary knowledge for those planning to practice in areas like corporate law, securities law, and commercial litigation.

    3. Understanding Business Structures: Critical for understanding legal implications of business entities, even if they don’t intend to specialize in business law.

Course Content Structure

Core Topics

  • Agency Law:

    • Starting point for the course; fundamental to understanding business organizations.

  • Types of Business Organizations:

    • Partnerships.

    • Limited Liability Companies (LLCs).

    • Corporations (approximately 75% of the course content focus).

  • Securities Law:

    • Discussion on fraud and insider trading, leading to a specialized course in securities regulation for deeper exploration.

Significance of Agency Law

  • Definition:

    • Agency law governs the relationships between agents (those who act on behalf of others) and principals (those who delegates authority).

  • **Core Parties: **

    • Agent: Performs tasks on behalf of the principal.

    • Principal: Authorizes the agent to perform tasks.

Formation of Agency Relationships

  • **3 Elements for Formation: **

    1. Mutual Assent: Both parties must agree to the agency relationship.

    2. Action by Agent: The agent must act on behalf of the principal.

    3. Control: The principal must have some level of control over the actions of the agent.

Fiduciary Duties of Agents

  • Fiduciary Relationship: The agent has a duty to act in the best interests of the principal.

  • Types of Duties:

    1. Duty of Care: Agents must exercise competent and appropriate actions.

    2. Duty of Loyalty: Agents must put the principal’s interests above their own.

    3. Duty of Disclosure: Agents must provide necessary information to the principal.

Case Study Discussion: General Automotive Manufacturing v. Beamer Singer

  • Case Summary:

    • Singer, an employee of General Automotive, referred jobs elsewhere without disclosure, profiting from it.

    • Court ruled in favor of General Automotive for breach of fiduciary duty, specifically duty of loyalty.

Third-Party Involvement in Agency

  • **Liability Considerations: **

  • Tort Liability: Principals may be liable for torts committed by employees but not independent contractors.

  • Contract Liability: Contracts entered into by agents bind principals if the agent had authority (actual or apparent).

Termination of Agency Relationships

  • Methods of Termination:

    1. Completion of the purpose of the agency.

    2. Death or incapacity of either party.

    3. Mutual agreement to terminate.

Agency Costs Concept

  • Definition: The costs associated with managing and mitigating the divergence between the interests of principals and agents.

  • Goal of Business Law: To reduce total agency costs ensuring efficient business operations and relationships.

Summary of Class Discussion

  • A comprehensive introduction to the structure and function of agency law, including the dynamics between principals and agents and how these relationships affect business practices and legal discussions throughout the course.

Conclusion of the Session

  • Next Class: Focus on agency law's specific applications, particularly as related to business organizations/partnerships.