LAW 115 Comprehensive Study Guide: Legal Systems, Contracts, IP, and Business Entities

General Principles of the United States Government

• Types of Law in the United States

  • Federal Law: Laws established by the national government.

  • State Law: Laws established by individual state governments.

  • Statutory Law: Written laws passed by legislative bodies.

  • Common Law: Law derived from judicial decisions and custom rather than statutes.

  • Foreign Treaties: International agreements entered into by the United States with foreign nations.

• Structure of the US Government

  • Legislative Branch: Responsible for making the laws.

  • Executive Branch: Responsible for enforcing the laws.

  • Judicial Branch: Responsible for deciding (interpreting) the laws.

• Organization of the Courts

  • Trial Courts: These are the courts of original jurisdiction where all cases are initially brought.

  • Appellate Courts: Higher courts that review the decisions of trial courts.

  • Supreme Court: The highest court in the judicial hierarchy.

• Legal Standards and Principles in Court Cases

  • Roles of Judge and Jury: In a court case, the judge is the arbiter of questions of law, whereas the jury is responsible for deciding questions of fact.

  • Stare Decisis: This principle dictates that trial courts must give deference to the previous decisions made by higher courts (specifically appellate or supreme courts). They must follow these precedents unless a compelling reason exists to change the law.

  • Subject Matter Jurisdiction: This refers to a court’s specific ability to hear a particular type of case. Typically, lawsuits are filed in a court location where the injury or accident occurred, or where the defendant resides.

  • Personal Jurisdiction: This refers to a court’s ability to exercise legal power over a person. To establish personal jurisdiction, the court must prove that the parties have sufficient minimum contacts to make the exercise of power reasonable.

• The Doctrine of Due Process

  • The right to receive formal notice of the charges against you.

  • The right to an opportunity to present your side of the case.

  • The right to have your case heard before an impartial judge.

• Burden of Proof Standards

  • Criminal Cases: The burden of proof is Beyond a Reasonable Doubt.

  • Civil Cases: The burden of proof is By a Preponderance of the Evidence.

• Types of Injunctions

  • Temporary Restraining Order (TRO): An emergency order that cannot last any longer than $14\,days$.

  • Preliminary Injunction: A court order that lasts until the trial process is completed.

  • Permanent Injunction: A final order that is enforced as part of a final judgment in a trial.

Criminal Court Actions

• Definition: Criminal actions are considered offenses against society.

• Types of Crimes

  • Felony

  • Gross Misdemeanor

  • Misdemeanor

  • Infraction

• The Insanity Defense: A legal defense used in criminal proceedings.

• Penalties: Criminal penalties may include the payment of money damages and/or incarceration.

• Criminal Procedure and Constitutional Amendments

  • 4th Amendment: Provides protection from unreasonable search and seizures.

  • 5th Amendment: Confers the right to due process and the right against self-incrimination.

  • 6th Amendment: Grants the right to a speedy trial, the right to a trial by a jury of one’s peers, and the right to the assistance of counsel.

  • Four Miranda Warnings: These must be provided during criminal procedures.

Civil Court Actions

• Definition: Civil actions are considered offenses against an individual or a company.

• Cease & Desist Letters

  • The letter should state your identity.

  • It must identify the property that you own.

  • It must specify where you encountered the infringing work.

  • It should ask the other party to either pay royalties or stop infringing your work.

  • It should not include threats of legal action.

• Initiating a Civil Action: Summons and Complaint

  • A civil action begins with the filing of a Summons and Complaint.

  • Requirements for a Complaint:

    • Identification of the parties involved.

    • Statement regarding the jurisdiction of the court.

    • The facts of the case.

    • The specific cause(s) of action.

    • The relief requested.

• Punishment in Civil Law: Civil punishment is limited to the recovery of money damages or the issuance of an injunction.

Alternatives to Litigation

• Mediation: A process where a neutral third party helps the parties of a lawsuit reach a mutual agreement.

• Arbitration: A "mini-trial" featuring attorneys and a person acting as a judge. Arbitration can be used to test the merits of a lawsuit or may be mandated by contract terms.

Statutes of Limitations

• Definition: A legal action for damages must be filed within a specific timeframe, or the rights to the claim are lost.

• Torts

  • Assault, battery, false imprisonment, defamation (libel & slander), and nuisance: $2\,years$.

  • Other torts, including negligence, fraud, and personal injury: $3\,years$.

• Criminal Law

  • Felony: Generally $3\,years$ for most felonies. There is no statute of limitations for murder or felony murder.

  • Gross Misdemeanor: $2\,years$.

  • Misdemeanor: $1\,year$.

• Contracts

  • Written Contract: $6\,years$.

  • Oral Contract: $3\,years$.

  • Contract for the Sale of Goods: $4\,years$.

• Appealing a Case: If you lose at trial, you must take action within $30\,days$ of the entry of a final judgment by:

  • Filing a motion for a new trial; or

  • Filing an appeal.

General Contract Law Principles

• Types of Contracts

  • Express vs. Implied

  • Bilateral vs. Unilateral

  • Executory Contracts

  • Divisible Contracts

• The Offer

  • Terms must be clear and definite, showing a manifest intent to be bound.

  • The offer must be communicated to the offeree.

  • The offeree must be aware of the offer at the time they accept it.

  • The offeree has the right to reject the offer.

  • An offer can be revoked at any time prior to its acceptance.

  • If no specific time is stated for acceptance, the offer remains open for a reasonable time.

  • Offers may expire upon the death or mental incapacity of either the offeror or the offeree.

• Acceptance

  • The offer is personal to the offeree and is not assignable to others.

  • Revocation is prohibited once the offeree has performed a substantial part of their duties (substantial part-performance).

• Consideration

  • Valid consideration is defined as a benefit to the promisor or a detriment to the promisee.

  • Invalid Forms: Past consideration and pre-existing legal duties are not valid consideration. Gifts are also not considered valid consideration.

• Legal Subject Matter and Capacity

  • A contract is void if the subject matter becomes illegal.

  • A contract is void if the parties involved lack the legal capacity to enter into an agreement.

• The Statute of Frauds: Contracts must be in writing if they involve:

  • Marriage contracts.

  • Contracts intended to last for more than $1\,year$.

  • Contracts for goods valued at more than $\$500$.

  • Leases or sales of land.

  • Guarantees for the debt of another person.

Voidable Contracts and Remedies

• Mistake

  • Unilateral Mistake: A mistake made by one party.

  • Mutual Mistake: A mistake made by both parties; these are unenforceable because there was never a ‘meeting of the minds.’

• Unconscionability

  • Procedural: Involves high-pressure bargaining or extreme sales tactics.

  • Substantive: Involves unfair terms within the actual text of the contract.

• Fraud Elements

  • A false statement of fact.

  • The statement is intended to cause reliance.

  • The party actually relied upon the false statement.

  • Damages resulted from that reliance.

• Other Grounds for Voidability

  • Fiduciary’s Undue Influence.

  • Duress.

  • Promissory Estoppel: Can be invoked when there is a promise, reliance on that promise, and a material shift by the person relying on it. The person who made the promise is ‘estopped’ from denying the promise was made.

• The Parol Evidence Rule

  • In an "integrated" contract (where parties state the contract represents the entire agreement), outside evidence contradicting the contract is inadmissible.

  • Exceptions:

    • To show a defect in contract formation.

    • To provide evidence that a condition precedent did not occur.

    • To clarify ambiguity within the contract.

    • To show the parties modified the contract later.

Performance, Breach, and Damages

• Standards of Performance

  • Full Satisfactory Performance: Complete fulfillment of duties.

  • Substantial Performance: Under common law, parties might still be required to pay if the contract was not fulfilled exactly. However, for the sale of goods, there is no duty to pay unless delivery is exactly as expected. A minor breach does not relieve the other party of the duty to pay for performance rendered.

• Excusable Non-Performance

  • Lack of cooperation or hindrance by a party.

  • Contractual subject matter becomes illegal after formation.

  • Death or incapacity in a personal services contract.

  • Destruction of the source of supply.

  • Destruction of the subject matter.

  • UCC Failure of a Presupposed Condition: Includes events like war, terrorist attacks, fires, local crop failures, power outages, and earthquakes.

• Non-Performance by Agreement

  • Rescission: When both parties agree to cancel the contract before any performance has occurred.

• Breach of Contract

  • A Material Breach completely relieves the non-breaching party of any obligation to perform.

• Damages

  • Parties have a legal Duty to Mitigate (lessen) their damages.

• Timing of Performance (Conditions)

  • Condition Precedent: Must happen before something else can occur.

  • Condition Concurrent: Must happen at the same time as another event.

  • Condition Subsequent: Must happen after a specific event occurred.

• Ambiguity in Contracts

  • Ambiguity is held against the party who drafted the contract.

  • A contract can be enforced against a person who knew of an ambiguity but failed to inform the other party.

Common Law vs. UCC Contracts

• Common Law Contracts

  • Subject matter includes Services, Intangibles, and Real Estate.

  • Acceptance must be the mirror-image of the offer (unequivocal and unconditional).

  • Non-conforming acceptance results in a counter-offer.

• UCC Article 2 (Sale of Goods)

  • Applies only to the sale of goods.

  • Imposes a duty of good faith on all parties.

  • Offer: Only the quantity of goods must be specified.

  • Acceptance: Can be made in any reasonable manner.

  • Insecurity and Assurance: Upon written demand by an insecure party, the other party must provide reasonable written assurance of performance within a reasonable time.

• Warranties

  • Express Warranty: Specific guarantee provided in the contract.

  • Implied Warranties: Provided by law and do not require writing:

    • Warranty of Merchantability.

    • Warranty of Fitness for a Particular Purpose.

    • Warranty of Good Title and Against Infringement.

Intellectual Property: Copyright

• Definition: Protects original works of authorship fixed in a tangible medium. It protects the expression of an idea, not the idea itself.

• Protected Creative Works

  • Literary, musical, and dramatic works.

  • Pantomimes and choreographic works.

  • Pictorial, graphic, and sculptural works.

  • Motion pictures and audiovisual works.

  • Sound recordings.

  • Compilations and derivative works.

• Work for Hire: Copyright of work created during employment belongs to the employer, not the individual creator.

• Duration of Protection

  • Individual: Life of the author + $70\,years$.

  • Work for Hire: The earlier of $95\,years$ from first publication or $120\,years$ from creation.

• Infringement Requirements

  • Proof of a protected work.

  • Proof the defendant copied the work (requires showing knowledge of and access to the preexisting work).

  • Proof that the copying constituted infringement.

• Remedies for Infringement

  • Injunctions.

  • Damages:

    • Unregistered works: No damages.

    • Registered after infringement: Actual damages.

    • Registered before infringement: Actual damages + statutory damages + attorney’s fees.

    • Statutory Damage Range: $750\,dollars$ to $30,000\,dollars$ per copy.

• Limitations and Specific Issues

  • Utility: Only expressive aspects are protectable.

  • First Sale Doctrine: Distinction between ownership of a work and the license.

  • Fair Use Factors: Purpose/character of use, nature of work, amount taken, and effect on the market.

  • Berne Convention: Governs copyright protection in foreign countries.

  • Modern Issues: Game emulators, $3D$ printing/modeling, AI, and fan-fiction.

Intellectual Property: Patents

• Rights: The right to exclude others from making, selling, or using an invention.

• Length of Protection: $20\,years$ from the date of filing.

• Requirements: No public disclosure, utility, novelty, and non-obviousness.

• Application Specification: Must enable someone with ordinary skill in the art to implement the invention without undue experimentation.

• Claims: Specifically stake out the protected invention; unclaimed material is dedicated to the public.

• Types of Patents

  • Utility Patent: Implementation of a useful item.

  • Design Patent: Ornamental design of a useful article (non-functional aspects only).

  • Plant Patent: Asexually reproduced plants that are invented or discovered.

Intellectual Property: Trademarks

• Purpose: Serves as a "source identifier" to protect consumers.

• Potential Trademarks: Words, phrases, symbols, colors, sounds, smells, and non-functional product shapes.

• Sources of Trademark Law

  • State Law: Valid only within state boundaries.

  • Federal Law: Grants protection across all 50 states and territories.

  • Common Law: Established through use in commerce; registration is not strictly necessary for protection.

  • Foreign Treaties: The Madrid Protocol allows for easy registration of US marks overseas.

• Administration

  • Classes: There are $34$ classes of goods and $11$ classes of services. Fees are paid per class.

  • Duration: Protection lasts as long as the mark is used in commerce. A Statement of Use must be filed every $10\,years$.

• Distinctiveness Spectrum

  • Generic, Descriptive, Suggestive, Arbitrary, and Fanciful.

• Infringement and Dilution

  • Infringement Factors: Strength of mark, similarity, market overlap, actual confusion, product quality, and consumer sophistication.

  • Dilution (Famous Marks only):

    • Blurring: Association harms the distinctiveness of the mark.

    • Tarnishment: Association with unsavory subject matter (e.g., pornography).

Other Intellectual Property Rights

• Trade Secret: Secret devices or techniques in manufacturing. Protection is infinite unless disclosed. There is no protection against reverse-engineering.

• Right of Publicity: Protection of a famous person’s likeness or voice. This is a creature of State law; no federal right exists. Where you die affects your heirs.

• Brand Licensing: A license is the right to use another’s property. Factors for licensability include strong identity, broad awareness, emotional connection, elasticity, and a unique point of difference.

Business Entities

• Agency

  • Consensual relationship where an agent acts on a principal's behalf. Includes employees and independent contractors.

  • Liability: Principals may be liable for agent torts via Vicarious Liability and Respondeat Superior.

• Sole Proprietorship

  • Owned by a single person.

  • Owner is $100\%$ liable for all business debts.

• General Partnership

  • Co-owned association of two or more persons for profit.

  • Liability: Partners have Joint and Several Liability, meaning each partner is individually $100\%$ liable for partnership debts.

• Corporations

  • A separate legal entity from shareholders. Owned by shareholders, managed by a Board of Directors, and run by Officers.

  • Liability: Shareholders have limited liability, usually restricted to their initial investment.

  • Piercing the Corporate Veil: Courts may remove limited liability to avoid unfairness or unjust enrichment.

• Limited Liability Company (LLC)

  • Owned by members. Managed by members (or a designated member).

  • Liability: Members are liable only to the extent of their initial investment. The corporate veil may also be pierced in LLCs.