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Role of Law in Society

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Law helps us settle disputes and regulate activity.

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Stare Decisis

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Latin for "let the decision stand".

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Common law

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Consists of case decisions. Is also called case law or judge-made law.

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Statutory Law

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Laws written and passed by legislature and signed by executive.

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Administrative Law

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Regulations produced by Federal Agencies.

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Treaties

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Agreements between US and foreign country negotiated by president and effective when ratified by 2/3 Vote from the Senate.

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Court Orders

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Common Law / Judge Made Laws for specific people, companies, and situations.

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Civil Law

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A law that governs relationships between individuals and defines their legal rights.

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Criminal Law

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Laws dealing with offenses against society (murder, rape, arson). Prosecuted by the government, violation results in fines or prison sentences.

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Alternative Dispute Resolution

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The resolution of legal disputes through methods other than litigation, such as negotiation, mediation, arbitration, summary jury trials, mini-trials, neutral case evaluations, and private trials.

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Reasons A Business Might Prefer Alternative Dispute Resolution vs. Litigation

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ADR methods are generally faster and less expensive than litigation. Business may wish to avoid uncertainty associated with a jury decision. Business may wish to avoid setting precedent through court decision. Business may prefer confidential nature of ADR.

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What are the primary forms of Alternative Dispute Resolution?

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Negotiation, Mediation, Arbitration

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Advantages of Mediation

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Helps disputing parties preserve their professional relationships. Provides possibility of finding creative solutions to dispute. Offers participants high level of autonomy.

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Advantages of Arbitration

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More efficient and less expensive than litigation. Parties have more control over the process of dispute resolution (parties choose the arbitrator and determine how formal the process will be). Parties can choose arbitrator with expertise in specific subject matter of dispute. Arbitrator has greater flexibility in decision-making (compared to decision-making authority of judge).

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What is a Binding Arbitration Clause?

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A provision in a contract mandating that all disputes arising under a contract must be settled by arbitration.

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What is the Purpose of a Contract?

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Contracts exist to make business matters more predictable.

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Judicial Activism

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Judicial activism makes the law more flexible but less predictable.

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Judicial Restraint

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Judicial restraint makes the law less flexible but more predictable.

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What are the elements of a contract?

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Agreement, Consideration, Legality, Capacity.

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Bilateral Contract

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Both parties make a promise (to do something) to each other.

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Unilateral Contract

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One party makes a promise to the other that the other party can accept only by doing something specific.

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Express Contract

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The two parties to the contract explicitly state all of the important terms of their agreement.

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Implied Contract

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The words and conduct of the parties indicate that the parties intended to make an agreement.

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Executory Contract

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When one or more parties has not fulfilled its obligations under the contract.

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Executed Contract

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When all parties to the contract have fulfilled their obligations under the contract.

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Promissory Estoppel

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Even when there is no contract, a plaintiff may use promissory estoppel to enforce the defendant's promise if he can show that: the defendant made a promise knowing that the plaintiff would likely rely on it. The plaintiff did rely on the promise; and the only way to avoid injustice is to enforce the promise.

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Quasi-Contract

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Even when there is no contract, a court may use quasi-contract to compensate a plaintiff who can show that: He gave some benefit to the defendant. He reasonably expected to be paid for the benefit and the defendant knew this; and the defendant would be unjustly enriched if she did not pay.

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Quantum Meruit

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Damages awarded, meaning that the plaintiff gets "as much as he deserved."

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Sources of Contract Law

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Common Law, Uniform Commercial Code, Restatement of Contracts.

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Breach of Contract

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The failure, without legal excuse, of a promisor to perform the obligations of a contract.

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Expectation Interest

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What the non-breaching party reasonably expected to get from the contract. Is the most common interest in a breach of contract case.

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Reliance Interest

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Puts injured party in the position he would have been in had the parties never entered into a contract. It focuses on the time and money that the injured party spent performing his part of the agreement. If there was no valid contract, a court might still award reliance damages under a theory of promissory estoppel.

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Restitution Interest

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Designed to return to the injured party a benefit he has conferred on the other party.

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Equitable Interest

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In some cases, money damages will not suffice to help the injured party. Something more is needed, such as an order to transfer property to the injured party (specific performance) or an order forcing one party to stop doing something (an injunction).

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Compensatory Damages

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The damages awarded an injured party in a contract in which the injured party is entitled to compensation. Are the most common monetary awards.

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Consequential Damages

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Damages special to this plaintiff that were *reasonably foreseeable* to the breaching party at the time of the

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Incidental Damages

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Costs incurred in dealing with the breach (e.g., costs of storing rejected goods or finding a replacement in a services contract). Always recoverable.

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Restitution in Cases of a Valid Contract

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Restitution is a common remedy in contracts involving fraud, misrepresentation, mistake, and duress.

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Restitution in Cases of Quasi-Contract

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A court may award restitution, even in the absence of a contract, where one party has conferred a benefit on another and it would be unjust for the other party to retain the benefit.

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Specific Performance

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A legal action to compel a party to carry out the terms of a contract in cases involving the sale of land or other unique assets.

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Injunction

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A judicial order forcing a person or group to refrain from doing something.

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Reformation

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Reformation is a process in which a court will partially "re-write" a contract.

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Mitigation of Damages

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A rule requiring a plaintiff to have done whatever was reasonable to minimize the damages caused by the defendant.

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Nominal Damages

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Nominal damages are a token sum, such as $1, given to a plaintiff who demonstrates that the defendant breached the contract but cannot prove damages.

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Liquidated Damages

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An amount, stipulated in a contract, that the parties to the contract believe to be a reasonable estimation of the damages that will occur in the event of a breach.

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Punitive Damages

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Compensation awarded to a plaintiff that goes beyond reimbursement for actual losses and is imposed to punish the defendant and deter such conduct in the future. Also called exemplary damages.

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Warranty

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A promise that goods will meet certain standards. May be explicit and written, or could be oral. Warranties are statute based law. Codified in the Uniform Commercial Code (UCC).

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Warranty Types

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Express, Implied, Title, Infringement.

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Codified in the Uniform Commercial Code (UCC)

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The UCC was developed to provide national uniformity and certainty in sales, transportation, remedies, and related issues concerning commerce. Article 2 of the UCC covers 'goods' and related warranties.

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Express Warranties

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An express warranty is one that the seller creates with his words or actions. Any affirmation of fact or any promise can create an express warranty. Any description of the goods can create an express warranty. Any sample or model can create an express warranty. The seller's conduct must have been part of the basis of the bargain.

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Implied Warranties

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Are created by the Code itself, not by any act or statement of the seller. Implied Warranty of Merchantability unless excluded or modified, a warranty that the goods shall be merchantable is implied in a contract for their sale, if the seller is a merchant of goods of that kind. Warranty of Fitness for a Particular Purpose

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Warranty of Title

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The seller of goods warrants that her title is valid and that the goods are free of any security interest that the buyer knows nothing about, unless the seller has clearly excluded or modified this warranty.

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Warranty of Infringement

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Unless otherwise agreed, a merchant warrants that the goods are free of any rightful claim of copyright, patent, or trademark infringement.

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Warranty Disclaimers

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Express can be disclaimed in the contract (clear and conspicuous). Implied must state 'AS-IS" or 'WITH ALL FAULTS"

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Privity

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The contractual relationship between the buyer and the seller is often considered confidential and secret.

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Factors That Limit the Seller's Responsibility

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Buyer's Misconduct. Statute of Limitations and Notice of Breach. The Uniform Commercial Code (UCC) prescribes a four-year statute of limitations.

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Magnusson-Moss Warranty Act

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Federal Legislation requiring that warranty information be made available to consumers before they make a purchase, and it they warrant is offered, it must be either a full of a limited warranty and it must be clearly stated. Manufacturers or sellers are not required to offer a warranty. Any supplier that does offer a written warranty (on a consumer product that costs more than $15) must disclose the terms of the warranty in simple understandable language before the sale.

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Intentional Torts

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A civil wrong resulting from an intentional act committed on the person, property, or economic interest of another. Intentional torts include assault, battery, conversion, false imprisonment, fraud, intentional infliction of emotional distress, trespass to land, and trespass to chattels.

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Criminal Law

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Behavior classified as dangerous to society; prosecuted by the government, whether victim wants to prosecute or not; money award goes to the government

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Contract Law

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Based on breach of an agreement between the two parties; victim instigates action and receives compensation or restitution.

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Tort Law

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Based on an obligation imposed by the law with no agreement needed between parties; victim instigates action to receive compensation or restitution.

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Battery

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Intentional and wrongful physical contact with a person that involves an injury or offensive contact.

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Trespass

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Intentionally entering land that belongs to someone else or remaining on the land after being asked to leave.

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Conversion

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Taking or using someone's personal property without consent.

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Fraud

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A deliberate deception intended to secure an unfair or unlawful gain

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Defamation

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Act of harming or ruining another's reputation.

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Libel

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A written defamation of a person's character, reputation, business, or property rights.

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Slander

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False speech intended to damage a person's reputation.

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Facts to Prove Defamation

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The defamatory statement was actually made. The statement is false. The statement was communicated to someone other than the plaintiff. In slander cases, the plaintiff must show some injury that resulted from the defamation.

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Slander per se

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ORAL Slander involving false statements about sex, serious crimes, diseases, and professional incompetence. In cases involving this, the plaintiff doesn't have to prove it.

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Libel per se

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WRITTEN Slander involving false statements about sex, serious crimes, diseases, and professional incompetence. In cases involving this, the plaintiff doesn't have to prove it.

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False Imprisonment

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The unlawful restraint of someone which affects the person's freedom of movement; includes both the threat of being physically restrained and actually being physically restrained. Is against their will and without reasonable cause.

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Intentional Infliction of Emotional Distress

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When the defendant's conduct is "intentional, wrongful, outrageous, reckless, and malicious and done with the intention of causing plaintiff severe emotional distress."

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Assault

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A threatened or attempted physical attack by someone who appears to be able to cause bodily harm if not stopped.

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Tort Reform

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The revision of state laws to limit the ability of plaintiffs in personal injury lawsuits to recover damages in court.

WGU C713: Business Law – Flashcards

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